Ponoka council challenged on payments on new building

Resident continues worries the town is paying over $94,000 per month on something it may never own

Edwin Geuder

A well-known Ponoka resident who has challenged town council before over Town Hall was back looking for more answers.

Edwin Geuder, who last year fired off a letter to the province alleging Mayor Rick Bonnett was in conflict of interest during construction of the new building, appeared as a delegation at Ponoka town council’s Jan. 9 meeting. His presentation focused on the legality of the borrowing bylaw — especially concerning the lease payment amount — and just how much ‘extra’ the town will pay for a building it may never own.

“I think we have a question which needs to be solved,” Geuder began, “The problem has to do with the finances of the town.”

He explained he doesn’t quite understand the transactions regarding the new Town Hall.

“Please don’t get upset with my questions. They are not asked to upset you, they are asked to clarify some troubling questions I have myself to understand this undertaking.”

First off, Geuder takes issue with council’s position on property taxes for this year.

“You want to keep the increase in property taxes as low as possible, at around 2.2 per cent, but there is also still $2 million unaccounted for,” he stated, adding the town has made three lease payments of $94,500.50.

Geuder’s $2 million reference relates to a Nov. 28 article in the Ponoka News prior to budget being approved.

“I was under the impression that the town is looking for saving money in order to operate better and with a lesser tax burden, but now I am baffled and can’t add things up.”

READ MORE: Ponoka mayor denies allegations of conflict

Geuder then turned his attention to the borrowing bylaw needed to get the building constructed — that was subject of a lawsuit in 2017 — which he still believes is wrong.

“(The bylaw) doesn’t reflect on anything of the transactions made for the new learning centre/town hall, which doesn’t even authorize the council to make such high payments,” he said.

Geuder claims that the bylaw states lease payments at $700,000 per year — approximately $58,333 per month — for the first 10 years, based upon the price of $25 per square foot.

“So why do you think you are authorized to make payments of $94,300.50 per month, which is $35,967,20 — or 62 per cent — more?” he asked.

“And not included in those numbers are the inflation or lease increase factors which are determined by the landlord,” he claimed.

He also feels that even if the town decided to buy the building, which is owned by Landrex, that the purchase may work out to about double the estimated $6 million back in 2016 for the downtown design.

RELATED: Town of Ponoka resident serves council regarding borrowing bylaw

Geuder also presented a list of questions that, in his words would, “inform us people what the real cost” is for the new building.

These included how much the town must pay in the lease for property and improvement taxes, any amount of tax that maybe exempted, the town’s cost for landlord insurance and loss of rental income, how much and to whom will be paid for landlord administration and management costs.

“In other words, who is the landlord?” Geuder asked.

Further, he requested the purpose of the lease requiring the town pay into a capital reserve and how much that would be along with what the monthly advance payment for operating costs are.

“So, if the council is not authorized — as per Bylaw 380-17 — to make those payments at the moment, which will also increase because as per lease agreement the landlord will determine all the cost and the timing, don’t you think there is something fundamentally wrong in this picture?” asked Geuder.

“When I see what the town has in mind to invest and to build, which is right and you should be, we should also look at the cost. We should look at when we invest in something that we get the value back.”

“Now we are paying leasing costs and if you invest in the field house, we probably never have the chance to buy this building back.”

Following his presentation, Geuder was thanked by Bonnett and that administration will get back to him with answers to his questions.


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