A change in market conditions has caused Ponoka County to take a u-turn on a previous decision to not trade-in three graders for the coming year.
During the presentation of the public works superintendent report at its regular meeting on Tuesday, Nov. 24, council revisited the topic of trading in three used graders and purchasing three new ones - as has been recent practice for the county as part of their equipment renewal strategy.
Back on Oct. 27, council approved foregoing the annual trade-in based on information provided by administration that showed the benefits wouldn’t be realized considering the low Canadian dollar and the growing difference between the value of a new grader and what the county would receive for its used ones at auction.
Since that time, the price for used graders - similar in model and hours of use to what the county has - has become more favourable, prompting administration to request council adjust its thoughts on the process.
County chief administrative officer (CAO) Charlie Cutforth explained to council that some 2013 graders were recently sold at auction for $485,000 - a significant difference than the $350,000 - $400,000 price tag that had been discussed in October.
“If that’s the value our pieces of equipment could fetch, the difference between the lower dollar and the price for a new grader doesn’t matter too much,” Cutforth stated.
“However, there would still be a risk attached going to auction as our graders may not realize that value.”
That said, the suggestion from Cutforth and public works superintendent Herb Schwingel was that the county look into purchasing the three graders - as per the regular replacement schedule - while negotiating on pricing with Finning, a company that trades such machinery, as well as with Ritchie Brothers Auctioneers on a value of the used machines that would be sufficient and acceptable to the county.
Schwingel explained that the delivery time for the new graders would remain the same as usual - late March - however the price of the new orders would be locked in now, if the go-ahead was provided. He added the order could be set aside, if the used graders don’t meet the re-sale value the county is looking for.
“In the long term, given the economy, if we don’t get back the value for the graders we can always wait and maintain the previous stance of trading in six graders next year,” explained Cutforth.
In the end, council determined it would be best to try and stay with its regular replacement program, so it approved the order of three new graders subject to evaluation of the trade-in value of the used machines with a final decision expected on the purchase during the county’s 2016 budget discussions.
Road projects
Discussion took place among council members on whether to move forward on a pair of road construction projects administration have targeted to start this coming spring.
The projects - one involving about five miles (eight kilometres) of Range Road 43 plus Township Road 440 and the other being the widening and paving of 5.5 miles of Menaik Road - were brought to the table so the county could begin the process of getting landowner agreements and other permits in place so work could begin on the two projects as soon as spring arrives.
Council did approve the two projects proceeding, however council will still have the final say in whether construction starts when they finalize the funding during 2016 budget discussions.
Penalty taken off table
Council approved a recommendation from administration that will see one company catch a break on paying its 2015 property taxes owing.
The company, which was not named, had agreed to a payment schedule that would see the final payment made next February. However, as Cutforth explained, doing that would incur some tax penalties for the company, which may not be to the county’s advantage in the long term.
“In the MGA (Municipal Government Act), any taxpayer can ask for consideration to enter into a payment schedule for their property taxes without penalty. Normally though, those payments are completed before the end of the tax year, and since this particular payment schedule extends into the new year, the company would then be subject to penalties,” he told council.
What Cutforth suggested would be a more prudent course is that council approve the payment schedule and exempt it from the approximate $22,000 in penalties as the company is a big employer in the region, deals with a number of other municipalities and has been very diligent in working with the county on paying its dues.
Cutforth added he anticipates the county will be receiving more requests to enter into payment schedules from companies given the present economic conditions facing the oil and gas industry.
Funding request
Council approved their annual contribution to the Blindman Handi-van Society in Rimbey, despite the request for 2016 coming a tad early. The $20,000 from the county - which was going to be added to its 2016 budget anyway - will be used to assist in paying the salary for the handi-van’s driver.