Town of Ponoka council voted in favour of third and final reading of the borrowing bylaw that paves the way for a new town hall and learning centre at the old hospital site.
There’s still some work to be done but the decision was made March 28 during council’s regular meeting. Councillors and administration met with Landrex the week before to discuss the proposal.
A new proposal sets changes from the one originally presented to council March 14. Among those changes includes an option for the town to buy the building at market value after the second year of the lease and presents the deal as a capital lease.
Mayor Rick Bonnett said that the borrowing bylaw is needed to cover legislation under the Municipal Government Act and for future potential changes to international accounting rules for leases. If future councils decide to buy the building, a new borrowing bylaw will be needed, explained Bonnett. “We’re getting the best of both worlds because we’re getting a private developer to build it and then at the end of two years they’re still giving us the option to (buy).”
A price of $25 per square foot has been firmed up for 28,000 square feet.
Approximately 7,000 square feet are being set aside for the Ponoka Jubilee Library, and 5,000 sub-leased to Campus Alberta Central. That leaves 16,000 square feet to town use and marks annual lease payments at $575,000 — which includes the library cost. That cost alone represents an estimated 2018 property tax increase of 9.75 per cent, however, that does not necessarily mean residents will see that increase due to other lease potentials.
CAO Albert Flootman added that rather than a straight 35-year lease the initial term will be 10 years and first renewal would be another 10 years. This would be subject to the rental rate equivalent to the previous five years’ consumer price index. Town lawyers are still finalizing the wording on the contract.
Future councils could add years to the lease but it would not exceed 35 years and the buyout option would remain for the entire lease term. In the event of a building purchase, the proposal sets out that both parties will be able to get the building valued by independent appraisers and the average of the two will be used as the purchase price, explained Flootman.
Landrex has made some concessions to the initial proposal including the creation of approximately one acre of land for green space as well as arranging for a strip of land on the east side of 50 Street for parking. Add to that the company expressed a desire to have a seat on the town’s Economic Development Board.
Seeing no petitions on the borrowing bylaw, council voted 6-1 in favour of the bylaw with Coun. Loanna Gulka voting against. Her biggest concern appears to be over the costing.
“We’re using public funds and we’re paying public funds to a private developer and until we actually own that building we don’t have an asset,” said Gulka.
Bonnett replied that there is that new option to buy. “They can build it probably cheaper and probably quicker on better timing than we could.”
For Gulka, the money side poses some worry. “My concern is my obligation to the citizens of the municipality fiscally,” said Gulka.
However, for Bonnett, this plan creates a way for the town to have a new town hall while still being able to use borrowing for the proposed field house. He added that the RCMP K-Division has been pushing for a new detachment as well.
There could be other financial benefits to this new deal. Landrex has indicated some interest in other development opportunities, plus the current library space and economic development office (the Visitors Centre) could be leased as they would not be needed.
Coun. Marc Yaworski voted in favour of the bylaw pointing out that if everything moves forward a post-secondary learning site will be housed in Ponoka.
How does the library fit in?
Coun. Yaworski asked how the lease cost for the library is considered.
Flootman replied that the obligation to pay for that space falls to the town. “The library board is a corporation under the Libraries Act, however, town council appoints their directors, town council approves their budget and provides most of their funding.”
Part of the library’s funding comes from the town and county of Ponoka. Flootman said that since this is a town project, the responsibility falls to the town and no discussions have been made with the county.
Regulatory process must take place
Approval is still needed in the regulatory and development areas, specifically in amendments to the land use bylaw, subdivision, and then development permits. When asked by council, Tim Schmidt, director of planning and development, said there still needs to be a public process of three readings and public hearing. That includes amending the land use bylaw.
“Following that we would receive and process subdivision applications,” said Schmidt.
A public referral process to adjacent landowners will be undertaken. If the land use bylaw is approved by council the next steps include development and building permit applications. It takes some time.
“Each and every process, from amending the land use bylaw to the point that the shovel goes in the ground has its each and individual public consultation process,” explained Schmidt.
Due to construction season approaching, these processes will run concurrently and will include a demolition permit application needed to deal with the old hospital and outbuildings demolition.
It takes 30 days after passing third reading before the bylaw is considered valid.