The Saskatchewan Municipal Board's Municipal Boundary Committee has ruled in favour of the City of Swift Current’s annexation application in a decision handed down late Friday afternoon.
In the Municipal Boundary Committee's 40-page ruling they determined the City will pay the RM of Swift Current 15-times the annual tax loss rate for the annexed land over a seven year period. The total amount paid for the property will be approximately $3.17 million, with an annual payment of just over $450,000.
Swift Current Mayor Jerrod Schafer admitted it was important to have a final resolution to this long-standing annexation dispute.
"I had a couple of reactions off the bat, the first one was relief. I think more for the residents and businesses of this region that are tired of hearing about annexation, and are tired of the battle and the fight over it. This is an end to it," Schafer said. "Now we can focus on growing the region."
This was the third time the issue of annexation has been debated in the community. A 2008 application was dismissed when the Provincial Municipal Board ruled they did not have jurisdiction to rule on the annexation as a published map advertising the annexation did not identify all properties in the application. A second application was rejected in Dec 2009 when the board rejected the annexation specifically pointing to lands which included the Research Station. The decision stated the commitee would have approved annexation of lands located to the west of the current city boundary, including the highway commercial parcels, as well as the lands located to the northeast of the city boundary. However, as the Committee could not approve only a portion of an application, the entire request was rejected.
"All in all it's a good process, but most of all I'm relieved that it's nothing that we have to focus on any more and now we just worry about growing this community for the next 20 to 25 years," Schafer said.
At a Nov. 29 hearing before the Municipal Boundary Committee, the sole focus of the evening was the issue of compensation, with the committee ruling on a 15-time annual tax loss rate.
The City had expressed the position that the 15-times rate was in line with the Committee's Dec. 2009 decision. It was the position of the RM that a tax loss compensation multiplier of between 22.5 and 27 times the annual municipal taxes would be appropriate, as the lands are mature commercial property. The RM was also seeking a payment from the City for existing infrastructure, along with a request for an annual $58,500 payment to compensate the RM for the impact of heavy traffic on the RMs remaining roadway system.
"The Committee notes its position that this compensation amount is not meant to replace the annual municipal taxes that the RM collects from the subject lands. Generally speaking, and while not being a 1:1 relationship, taxes paid by a property are meant to pay for services rendered to the property. In this instance however, the Committee heard that 96 per cent of the annual municipal taxes paid to the RM by the owners of the subject lands are used to pay for other municipal operating costs. Only about four per cent of the annual municipal taxes paid on the subject lands are used by the RM to provide direct services to the subject lands. As there clearly are no additional servicing costs to the RM associated with the exempt municipal properties, the Committee cannot support the RM’s request to include an implied tax for these properties in the tax loss compensation calculation," the ruling noted.
"The Committee heard the wish expressed that this boundary alteration ought to benefit both municipalities. The Committee is in agreement with this desired outcome as it is not prepared to decide this application with the result being that there is a “winner” and a “loser”. The Committee looks to the future development proposed by the City to occur on some of the subject lands in terms of how these developments and the added economic activity flowing from these developments will positively impact the Swift Current region as a whole."
The Committee decided to spread the payment period to seven years, noting City of Swift Current taxpayers would be disadvantaged if the City had to borrow the funds or deplete financial reserves to make a lump sum payment.
"The compensation formula in this decision is clean and simple," the ruling notes. "The Committee encourages more creative or innovative solutions through negotiations between municipalities early in the process, not at the point where it comes to us for a final resolution. Municipalities have their “say” when they negotiate in good faith with each other, face to face; when municipalities put the matter into the Committee’s hands, their “say” is greatly diminished and, in accordance with the law, they are bound by the Committee’s decision," the ruling noted. "Payment over time also allows both municipalities to budget in the longer term to mitigate the relative effects of this settlement on both."
"Obviously the financings of it are very good for the city in terms of the fact that it's payable over seven years," Schafer said. "We're just pleased it's in line and shows that the offers we were making were fair and reasonable."
The report also dealt with a series of procedural and jurisdictional issues raised by the RM of Swift Current during the Nov. 29. Their ruling pointed out a series of reasons for why these concerns would not have an impact on the process.
"The RM did not attempt to demonstrate how these flaws prevented the Committee from making an informed decision or could somehow mislead the Committee; rather, this was simply an attempt to have the matter dismissed on what the RM sees as a technical breach of the law. The flaws identified by the RM are minor in the Committee’s view, could be easily remedied, if the Committee chose to seek such remedies and we see no need to delay this proceeding to do that, and, most importantly, are certainly not sufficient on their face to invalidate this entire proceeding and force the City to start over, as the RM requests."
The RM of Swift Current will be commenting on the ruling following their Feb. 12 RM Council Meeting.
Schafer noted with this issue behind them, the City and RM can now cooperate on other issues and plans.
"The report emphasizes quite strongly that people that want to invest their dollars into an area or region, they want to hear that local governments are getting along and that they're focussing on opportunities and synergies," Schafer said. "Moving forward one of the most important things that we can do is rather than sort of fighting or clinging to the differences between the City and the RM, is recognizing that we're all the same. We're all part of the same service area. We all enjoy the same services. We all enjoy the same shops and restaurants and contribute to the same local economy. So lets work together collectively to grow that and benefit our services and be on the same team. I think this can certainly be a catapult for that."
"I know that the RM had expressed some thoughts that they didn't want to proceed with any other topics until after annexation was done. Now it's done and hopefully we can move forward."
In their ruling, the Committee also passed on the following comments on the need for cooperation during the existing annexation process.
"It is always preferable for municipalities to come to a negotiated agreement on their own terms rather than to have one imposed on them by the Committee. The number of undisputed annexation requests received by the Minister of Government Relations has increased recently and continues to be the majority of applications, and the number of disputed requests made to the Committee is relatively small and is, by far, the minority of all applications."
"This dispute should have been resolved long before it came to the Committee. Even mediation failed to assist the municipalities to come to an agreement," the ruling notes. "The ability to come to the Committee for a final determination may have gotten in the way of a negotiated agreement, each side seeing that if their position does not win out, they can always “roll the dice” with the Saskatchewan Municipal Board. This is not how the process should work."
"Harmony amongst municipalities is something that attracts and encourages developers and investors to an area while local disagreement and bickering is not conducive to encouraging the growth that both municipalities obviously want and that will benefit the people of the entire region."