Just when it seems there could be no new twists and turns in the saga of the proposed Erin re-use centre, another one crops up.
Now it seems that while discussions on whether or not to use the former Erin public utilities commission (PUC) building at 1 Shamrock Road were going on, someone has wanted to rent the building all along – but no one had gotten back to her.
Prior to discussion of the matter CAO Kathryn Ironmonger removed herself from the discussion, declaring a pecuniary interest.
Mayor Lou Maieron asked if the CAO could describe that pecuniary interest. Ironmonger responded, “I don’t actually have to, because I’m staff.”
Re-use centre proponents are asking council to consider having the town provide the PUC building rent free for nine months and to cover insurance costs for that period as well.
Nyola Holliday was before Erin council on Feb. 4 advocating for the proposal. She said that unfortunately Debi Clare and Keri Simpson were unable to attend to present the business plan for a re-use store.
“As requested, the re-use group presented a simple plan and I have a list of the volunteers (more than 20) who verified their interest and willingness to participate in the centre.”
The business plan presented included no dollar figures, but rather something more generic including the purpose behind such a centre:
– to divert reusable materials from landfill sites while generating funds for local not for profit community groups;
– to have accessibility to lower-cost items;
– to support and develop volunteers in work-related activities;
– to aid in training and mentoring of youths in the community and provide community hours.
“I have a letter from East Wellington Community Services saying they are very much on board with the idea, but that they will not do the insurance right now,” said Holliday.
She believed the reuse group could handle the insurance without the town’s involvement.
Also outlined in the proposal were marketing strategies, hours of operations, and a more detailed listing of what would and would not be accepted at the centre.
A report from finance director Sharon Marshall stated she had consulted with Steve Smith of Frank Cowan Company, the town’s current insurance provider.
Those comments stated that in order to provide insurance protection, council would need to formally appoint the reuse operators as a “committee of council”, by resolution or bylaw.
It would mean council would also be assuming the risks and liabilities of the operations and facility.
From a financial perspective, Marshall noted the recommendation of the town’s auditor firm that if the town was to provide substantial funds through waived fees or insurance costs, the group should be a committee of council or a recognized not-for-profit group.
The operation would be subject to full annual audit. An annual budget would be required.
Holliday’s primary concern was with a second portion of Marshall’s report.
In that report, Marshall stated there could be direct cost implications to the municipality which could impact the tax levy through lost revenues.
Prior to January 2013, the Office space at 1 Shamrock Road was leased to Community Living Guelph for $1,180 per month ($14,172 per year).
Tenants of the office space were required to pay for 46% of the actual cost of utilities for that building. The other 54% of the utility costs were recovered from the water department.
“Therefore, when the office space is leased out, there is no cost to the town taxpayers and the general tax levy is reduced by the $14,172 per year realized from rent revenue.”
Marshall stated the potential “lost revenue” for nine months rent is ($10,620). The 2013 cost of utilities at 1 Shamrock Road were $6,673. The lost revenue from recovery of 46% from the office tenant is ($3,069).
Therefore she pegged the total cost impact for lost revenues at $13,689. She stated clearly, “there is a continued negative financial impact if the space is not leased out.”
From that report, Holliday stated, “In all good conscience, I’m having difficulty in recommending (a resolution to get the building rent free for the re-use group).”
Holliday had seen the “for lease” signs on the building for months and thought no one wanted to rent the property.
She said that was why the re-use centre was proposed there.
However, then she read the letter from Deborah James (Accounts Receivable Management Services Inc.) “… and I was livid, because here is a person, a community member who approached the town last April asking to start talks to rent the building – for real money.”
James’ letter states, “I am a long-term resident of Erin and have been reading articles on the leasing of the old hydro building location to a re-use centre. To say that I am shocked is an understatement.”
After her initial discussions with the municipality, she believed the town would get back in touch with her and said that never happened.
She also questioned the reasons behind looking into relocating the water department to give the re-use centre more space – and pass that cost to the taxpayers of Erin. Further, she questioned the idea of renting the building at no charge, when someone was willing to pay rent for the building.
“In my humble opinion this is one of the reasons that companies never consider running their businesses out of our town at all,” James wrote.
“The lack of communication and unwillingness to support businesses to operate in Erin is discouraging. Instead of collecting revenue for this location for the past seven months the town has chosen to consider giving the location away for free and also pay their liability insurance which in essence would mean that this cost would be passed along to the taxpayers.”
Marshall’s report noted she was aware of two other interested parties to rent the building.
“I recommend that the office space be leased as soon as possible,” Marshall said, noting that any party other than the re-use group would be paying monthly rent and sharing in the cost of utilities.
Holliday agreed. She then asked whether the building was renovated or any further actions taken to rent the building.
However, since Marshall was away and Ironmonger excused herself from the discussion, there was no staff able to provide an answer.
“Can you ask the CAO?” Holliday said.
Holliday said she was not blaming council, since there were resolutions on record that stated council wanted to get the building ready to rent and get real money coming into the town.
Councillor Barb Tocher said she believes council would need to ask Marshall because it was her report.
Holliday asked whether any of the three potential renters were ever contacted. She said the town now has lost a whole year of rent and, “I’m steamed.”
She said that income would have meant taxes might not have had to go up quite as much.
“Someone needs to be accountable for this lost revenue,” Holliday.
She added that instead of asking for the building for the re-use centre “the municipality needs money coming in.”
While she said there is a lot of support for a re-use centre and that she continues to believe it is a great idea, “It is time we dealt with this.”
