Kimberley Mayor Don McCormick held his monthly brown bag lunch meeting on Wednesday, November 13, 2019, where he and CAO Scott Sommerville discussed the City’s asset management strategy with residents.
Specifically, the sale of the Kimberley Riverside Campground and Bootleg Gap Golf Course were the topic at hand.
The discussion revolved around why the City has chosen to sell these two non-core assets, and how it might affect the community going forward.
Questions brought up by residents included, but weren’t limited to, how much revenue each asset makes, operations costs, the transition of public to private, why there was no referendum, if there will be a tax exemption for the buyer, the relation to the Waste Water Treatment Facility (WWTF), and what would stop re-sale or development of the land.
Many of those questions can be answered by reading the list of frequently asked questions that was recently compiled and published on the City’s website under Recent News – Frequently Asked Questions – Recreational Asset Sale. See that document, page 11.
McCormick explained that the sale of both assets is part of a much larger asset management strategy that Council and Staff have been working on for several years now.
He says that Council wants what is best for the entire community, and that comes with being financially responsible for the current infrastructure deficit that the City has.
McCormick’s presentation explained some of the major challenges that the City currently faces including meeting service level expectations, infrastructure renewal and expansion, taxes and fees (water, sewer, garbage), and bringing in new money, without having to raise taxes.
“Our approach is incremental improvement; we need to look within our own resources to continue to move the community forward,” McCormick said.
The infrastructure deficit that the City currently faces is $67 million, according to the latest report.
“That’s a difficult thing to talk about,” said McCormick, adding that there are many unfunded capital projects that need to happen in the next few years, including the proposed WWTF that will cost the City $10 million.
“We have no option with [that facility]. We’ve been told that the current facility needs to be replaced in the next five years,” said McCormick. “It has been described as one of the most at-risk facilities in the province.”
Nearly two years ago the City received a grant of $2.5 million for the engineering of a new WWTF. McCormick says there are other, less expensive options going forward, but the engineering has to be done before they can proceed with other grant applications.
He adds that the WWTF is only one of many major financial decisions that need to be made. The Civic Centre needs updating, the second half of 4th Avenue needs to be done, all of the sewer, water and storm pipes downtown need replacing, the list goes on.
“Right now we are spending $700,000 a year in payments on that [infrastructure] debt,” said McCormick. “With $10 million added to that from the WWTF, we would need to raise taxes by seven per cent just to cover the debt.”
He explained that most new money goes to the City’s reserves, of which there are 25.
Reserve funds are then used to provide match-funding for grant applications, which typically require a one-third investment from the City in order to secure each grant. Leveraging can secure as much as three to five times the amount of grant money. This is the case for the WWTF.
In terms of ensuring that the campground and golf course stay as such, the City’s FAQ on the sale explains it best.
It explains that the zoning and restricted covenant on both assets protects the land-use from any type of residential or similar development. The City will be protecting public access to the trail and park areas near the St. Mary River via the campground.
McCormick told residents at the meeting that the City is working hard to make sure they have the right owner for both assets, who will continue running either business the same way or better. He says that with the right owner, nothing will change from a usage point of view.
“The campground and the golf course are businesses, and we are selling the businesses, not the land,” said McCormick. “The City is not in the campground or golf business. These assets make money and that’s why we’re looking to sell. We want buyers who want to invest in these businesses.”
Councillor Sandra Roberts was at the lunch and added to the conversation. She says that this is best for the long-term well-being of Kimberley.
“We need to complete these projects that have long-term impact [such as the WWTF],” she said. “As we invest in them, we can literally strike them off of the deficit list. We need to keep focused on these priorities, to improve, repair and protect what’s vital to our community.”
The process from now until the sale is complete involves many steps from potential buyers, City staff and Council, and allows the community time to speak with their elected officials about any questions or concerns they might have.
Sommerville explained that the City will soon be asking for Requests for Proposals (RFP’s). The time frame to accept them will end some time in late December or early January.
All of the proposals will be evaluated using specific criteria, outlined in the City’s FAQ, and the proposals with the highest scores will be brought to Council, in a closed meeting.
Council may then provide direction to negotiate the terms of a contract for the purchase and sale with a preferred proponent. There will be no referendum on the sale of either business, which is also outlined in the City’s FAQ.
“If we get a good proposal we’d like to have them in place by the next season,” Sommerville explained.
Sommerville says that RFP’s will be available (marketed) to most people, whether it’s online, through BC Bid or the Alberta market, but the hope is that someone fairly local purchases each one of the businesses.
He adds that the sale isn’t a package deal. For example, one might sell and the other might not.
Mayor McCormick invites community members to chat with him and Council directly about this and any other topics that residents might have questions or concerns about. Head down to City Hall or find Council’s contact information on the City’s website under Staff Directory.