Nina Bifolchi

Newsroom – Beachfront 2015 Preliminary Year-end Financials

(Posted February 14, 2016)

In a previous newsroom article called; 2015 Year in Review, I commented that “based on the plan we have today, the business (consisting of the beachfront properties purchased) showed a loss of approximately $800,000 in 2015.”

Since then the plan changed as there have been some general maintenance items and roof repairs that did not occur and were postponed till 2016. On February 9, 2016 a staff report was presented to Committee of the Whole regarding the “beachfront properties 2015 preliminary year-end financial report.”

Taking out the maintenance and repairs not completed in 2015 and factoring in the timing of debenture payments (as it was not a full year’s worth in 2015) it seems that the business of owning these beachfront properties is now only a loss of approximately $401,411 in 2015.

I’m not sure what to expect the financial outcome for 2016 to be but I do have concerns. For the 2016 season, it seems (so far) the town has received lower bids to lease the buildings, a full year of debenture payments will need to be considered as well as the repairs put off from 2015 and those already scheduled for 2016.

On a number of occasions now I have heard members of council repeatedly compare the beachfront purchase to other land purchases previous councils have made and that we aren’t doing anything different or breaking rules. They are right, council by a majority vote, can purchase land and use reserves, taxes or borrowing to pay for it. By a majority vote this council purchased the beachfront properties, chose to borrow the entire amount and use reserves (for now) to subsidize the short fall.

As I have said before I see the beachfront purchase quite different from other purchases made in the past. You can make up your own mind. Let’s compare:

2015 Beachfront Purchase $13.6 Million ($13.8 million minus $200,000 for roof repairs the seller didn’t complete), the full amount was borrowed with interest to be paid. There was an approximate loss of $401,411 in 2015. A business plan/vision has yet to be created beyond leasing the properties. At this point, in my opinion, expected financial loss again in 2016 and beyond.

950 Powerline Road purchased with reserves for $1,224,389 and is approximately 120 acres. The opportunity to purchase this property was seen as beneficial due to its proximity to our sports park. It is my understanding that this property is exempt from taxes as it is not commercially assessed or used at this time. While minimal maintenance is required there certainly is no major yearly financial loss to have this property in the town’s ownership to ensure that the town has land available in the future to expand the sports park or provide some other SERVICE to its community. In my opinion, this property is not a burden to the community/tax payer nor is its success dependent on negotiating leases, weather, visitors or major maintenance and repair costs.

I think it is very important that when any municipal council looks to purchase property on behalf of their residents the pros and cons must be weighed out and some sort of a business plan considered to ensure Council is making responsible decisions.