Over the past few weeks there have been several references to the City of Swift Current needing to borrow in order to pay the compensation awarded by the Saskatchewan Municipal Board in their annexation hearing.
The ruling was that the City was to pay the RM of Swift Current 15 times the tax assessment of the annexed area over a seven year period. The total amount was determined to be approximately $3.1 million. This was to be paid as seven annual payments of about $450,000. Over this period however the City acquired the tax base of the area which according to the RM tax assessment at the time was $211,000.
Since that time a provincial tax reassessment has been undertaken which would increase the tax base of the annexed area.
Even using the old assessment, the net cost yearly for the annexation of the ‘west end strip’ to the city would be less than $250,00 per year ($450000 - $211000) for a total of only about one half the awarded amount. Why then do the press releases indicate that the city needs to borrow $3.1 million to pay off the RM?
The city has offered to pay off the tax loss compensation as a lump sum at a reduced rate of approximately $2.2 million or about a million less than ordered. This proposal was turned down by the RM since it was felt important to follow the ruling of the Saskatchewan Municipal Board even if it was flawed.
I find it disturbing that the City does not appear prepared to live up to their obligations and in addition blames the RM for their self inflicted financial woes.
Since there are no immediate plans to develop the area perhaps the City should consider transferring these lands back to RM jurisdiction, as to remove the financial burden from the City.
Jerry Knipfel - RM of Swift Current 137