BONNYVILLE – MD of Bonnyville council tabled a decision on whether to approve an updated Disposal of Municipal Lands Policy, following concerns that the updated policy did not reflect the intentions of council.
When a deep dive into land titles by the municipality revealed several unwanted properties had been acquired over the years through tax forfeiture and other means, MD council sought changes to the Municipal Land Policy.
Council’s purpose for reviewing and updating the policy was to find a fair and efficient process for selling off property that had no intended or future use for the MD.
RELATED STORY: MD land inventory uncovers properties acquired through tax forfeiture
Proposed amendments to the Municipal Lands Policy were presented and discussed at the committee of the whole meeting on May 16. The revised policy returned to council on June 27 under a new title, Disposal of Municipal Lands Policy.
A key element of the new and revised policy was to allow for the direct sale of municipal lands at fair market value to dispose of unneeded municipal lands.
Council was prepared to approve the updated policy until Coun. Josh Crick inquired about circumstances where more than one person is interested in buying a parcel of land at fair market value.
Explaining how a direct sale between an individual buyer and the municipality would work, the MD’s CAO Al Hoggan stated, “In the example that an individual knows that we have a piece of property, we can sell directly to a single individual buyer if we sell the land at a fair market value... If there is more than one person who would like to land, I would suggest that we would probably at that point, set a public auction.”
The CAO continued, “But in many cases, it's just somebody who knows we have something and makes an offer that nobody else really wants. It could be a bare land parcel in the country, and piece of property we've owned for a long time.”
In response to the CAO’s clarification, Crick said, “I guess my concern is that somebody may come along, want to buy a piece of property, and other people had no idea it was even for sale or that there was an option [to buy it] and they find out after it's being sold.”
Crick indicated that he would like to see all municipal land that is available for sale advertised for at least two weeks before any direct sale can take place. If more interest in a parcel of land is stirred up, then it can be sold at public auction. “That's a pretty minimum time to wait,” he noted.
Coun. Dana Swigart, who had pushed for administration to revisit the policy in March, expressed agreement with comments made by Crick.
"I think it's just for transparency. It would be good to have to list it,” said Swigart. “I guess I was under the impression that when we were going to do this, we were just going to go through realty companies and just list [properties] and sell it.”
Swigart added that he didn’t necessarily like the idea of direct sales if the listings of available lands were not made public.
The CAO noted that an advertising portion could be added to the policy if council wanted, noting the decision reflects “a philosophy and a theory as to how MD should sell land” and “would be a fairly significant rewrite of the policy.”
Hoggan went on to say, “Most of the land, for example, that we currently have in surplus has already come to council through public council meetings, although it's not been advertised specifically for sale… I guess it depends on the definition of advertising. Do we advertise specifically that we are selling a piece of property or when it comes to a public meeting, that there is a surplus property that we would be interested in selling, does that meet the definition of advertising?”
Crick indicated that he felt more traditional methods of listing municipal land for sale, such as through newspapers, would be better.
Other concerns around whether long-term municipal land leasers should be allowed to purchase MD land for market value or whether they must compete in a public auction if there are multiple interested parties was brought forward by Hoggan.
It was also suggested by the CAO that there is a potential for the municipality to lose money through public auction sales as reserve bids are typically set at 80 to 90 per cent of market value.
While Crick expressed there could be a clause in the policy to allow long-term lease holders, who have been good managers of the land, the right of first refusal, more scenarios were brought forward.
“Maybe there's ways around it all, I suppose,” added Swigart. “It's not straightforward.”
Sensing hesitation among council, Reeve Barry Kaliskini said, “I feel that there's a lot of uncertainty here. So, I think we should table this.”
Crick made a motion to table the decision on the Disposal of Municipal Lands Policy to a future council meeting, which was carried. A related policy, Licensing Municipal Lands Policy, was also tabled by council shortly after as it has overlapping elements.
The policy is currently scheduled to return to the next regular meeting of council on Aug. 22, according to information provided by the MD of Bonnyville.
