City leaseholders will be given some more time to weigh in on suggested lease rate increases for 2024.
At the December 7 city council meeting, Callie Matthews, manager of city property, partnerships and public relations, brought forward a recommendation that the city’s lease rate bylaw be given three readings in order to establish 2024 lease rates for city land and improvements, and that staff be directed to prepare options for council consideration in 2024 that would establish a new approach to setting lease rates for city land and improvements starting January 1, 2025.
She said her presentation to council would focus on putting a structure in place for 2024 as a temporary extension to the existing bylaw, so that in 2024, staff can provide council with an in-depth analysis and proposals with sufficient time for consideration.
Matthews said the current bylaw suggests a minimum rate for different categories of city-owned land and improvements. She said in conducting a consistent approach to assessing what market values for these different categories are, the city engaged external appraisers Cunningham and Rivard to assess the market values so the city could update the lease rate bylaw to assess market rates.
“Staff looked to other municipalities once this report had been received to compare our lease rates,” said Matthews. “We were surprised to find out we are somewhat alone in the way we assess our leases.
“Other municipalities tend to appraise each property on a case-by-case basis, thus ensuring a market rate, and avoiding a situation where there is a significant jump from one year to the next.”
Matthews said in consideration of the report received from Cunningham and Rivard, staff have prepared a table that proposed lease rate increases for 2024.
“We do not wish to create a situation where, for example, commercial tenants are unable to cope with the proposed increases suggested,” said Matthews.
She said the consultants had suggested for commercial improved properties, a jump from $11.50 a square foot to $13, which was a 13.04 per cent increase. Staff were suggesting a $12.25 per square foot charge in 2024, which would be a 6.52 per cent increase.
According to a staff report, if the proposed 2024 lease rates in the report were implemented, there would be an increase in city profit from lease rent of about $35,000.
Consultation question
Councillor Cindy Elliott said because this was the first time council had seen and had the opportunity to debate the report, she wondered if giving first and second reading instead of all three, would that allow council a better opportunity for consultation?
Elliott asked, for the purpose of allowing the public to engage on this bylaw, was there a functional difference between two and three readings.
Corporate officer Chris Jackson said if council gave first two readings and referred the matter to the December 21 council meeting for third reading, council would have to wait until January to consider adoption of the bylaw.
Elliott asked if that was problematic, and if the city would be without a bylaw in place.
Matthews said the existing lease rate bylaw ends in 2023 and the city has been assessing for 2024.
Councillor Rob Southcott said the proposed lease rate increases were fair to taxpayers because it would make lease rates more market-oriented.
“The system proposed for 2025 is a whole lot more accountable than the system we’ve used in 2023,” said Southcott. “I support this.”
Councillor George Doubt said he has similar concerns to Elliott’s and he said the changes should not come about overnight.
“I’d like the public to have an opportunity to think about it,” said Doubt. “It’s way too quick to bring this to council and see if we can get it done before Christmas. I would rather take some time and I would be in favour of going to second reading and have the public see what we are doing, have them comment on it, and come back.”
Chief financial officer Mallory Denniston said the implication of not passing the bylaw before the end of the year would be that the city would maintain the current rates in the existing lease rates bylaw, and renew the 2024 leases based on those rates.
Matthews said her suggestion, if the bylaw was not passed before the new year, is that the 2023 rates be assessed until a new bylaw passes and new rates are established.
Doubt made a motion to give the bylaw first reading. He said he wanted to get the bylaw out for discussion among the public and allow affected businesses and organizations to be aware.
Council carried a motion to give first reading to the lease rate bylaw, with councillors Earl Almeida and Southcott and mayor Ron Woznow opposed.
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