DIDSBURY - Didsbury town council has received an update on the purchase of the former AG Foods building by the town and the subsequent sale of the property.
The review was presented by Ethan Gorner, the town's chief administrative officer, during a recent council meeting before the election.
Located at 2405 - 20th Street, the building was sold to the Town of Didsbury by Buy-Low in 2019.
The total purchase price of $1.1 million was paid to facilitate the sale of Lot 9 in Shantz Crossing to develop the new Buy-Low Foods store, said mayor Rhonda Hunter.
This summer the town sold the building to the local Home Hardware for $771,709. Taking away $18,669 for holding and other costs, the town’s net cash return was $753,040.
“The purchase and sale of the building have a value to the community; the value being new development, which equates to tax dollars and has the potential to spark further growth,” Gorner told council on Oct. 12.
“When assessing this value we look at both the tax dollars forgone, if this investment did not go ahead, and the cost of holding a vacant building.”
At the current non-residential tax rate, the annual property taxes that would have been brought in is expected to be $80,000, he said.
“The annual cost of holding the vacant building, including basic utilities and maintenance work required is at least $25,000. It will take approximately three years to recover this value; or less than three years if further growth and development occurs,” he said.
At the time of the sale of the building to Home Hardware, mayor Hunter called the exchange an investment in Didsbury.
“It is an investment in our development and our growth. What we realize in development and assessment will add to tax revenue, and more importantly we will see Shantz Crossing grow and thrive and welcome new jobs, new shopping traffic, likely new residents.
“When we had the opportunity to expedite the building of Buy-Low Foods over in Shantz Crossing, council unanimously agreed it was an investment. When you start to get returns on an investment it is a good investment and that’s what we’ve seen already.”
Council received Gorner’s report as information.
Report looked at town finances
In other news from the recent council meeting, councillors received a passing grade in a recent financial survey conducted by Alberta Municipal Affairs.
In his monthly report to council, presented at the recent regularly scheduled council meeting, CAO Gorner told council that the municipality is deemed to be “not at risk” and has a “healthy standing” based on financial and governance risk indicators examined during the survey, conducted to ensure municipalities are viable and accountable.
The survey examined 13 specific indicators, including tax base balance, tax collection rate, accumulated surplus/debt, debt to revenue percentage, debt service to revenue percentage and investment in infrastructure.
The tax base balance is the percentage of the total tax revenue that is collected from residential and farmland properties. A rate of 95 per cent or higher of the municipality’s tax revenue would trigger an indicator; Didsbury’s rate is 90.84 per cent.
The tax rate indicator is triggered if a municipality collects less than 90 per cent of the property taxes levied; Didsbury rate is 90.84 per cent.
The debt to revenue percentage indicator is triggered when a municipality’s debt is greater than 120 per cent of its total revenue; Didsbury’s rate is 32.93 per cent.
The debt service to revenue percentage indicator is triggered when principle and interest payments on borrowings is greater than 20 per cent of the municipality’s total revenue; Didsbury’s rate is 5.20 per cent.
The infrastructure age indicator is triggered when the net book value of the tangible capital assets is less than 40 per cent of the original cost; Didsbury’s rate is 62.89 per cent.
“The ministry has compiled and verified the data collected from Alberta’s municipalities for the 2020 financial year and is pleased to inform you that your municipality did not trigger the required number of indicators to appear in this year’s municipal indicator results report,” assistant deputy minister Gary Sandberg said in a letter to the town.
Councillors also accepted Gorner’s report as information.
The Town of Carstairs also recently received a “not at risk” rating in the survey.
