Netook projections 'not realistic'
The Netook Crossing developers’ fiscal impact analysis is flawed by unrealistic assumptions, Mountain View County’s director of corporate services reported to council’s policies and priorities committee last week.
Greg Wiens told P&P that the developers’ projections for both revenue and rate of growth at Netook are questionable, “which brings into question the viability of the area,” he said.
The fiscal impact analysis concluded that the development at Highway 2/27 could generate $17.3 million over 20 years, but Wiens said that figure “doesn’t seem to be realistic.”
“That key assumption I would say is somewhat questionable. There’s not any municipality that is generating that kind of surplus in their operations.”
The high revenue assumption was based on a projection of $906,800 for operating and capital expenses, which works out to $520 per capita.
“That’s probably the number that’s most questionable,” Wiens said.
Recent stats peg the average per-capita expense for towns, villages and municipal districts in Alberta at between $2,000 and almost $4,000. In 2010, the county’s per-capita cost was $2,578, while the median cost for similar municipalities was $3,237.
At 25 per cent of the lowest cost, the developers’ $520 figure “just doesn’t appear realistic to us,” Wiens said. “It just calls into question using that $17-million figure.”
The growth projections, based on the local real estate market absorbing 671 “high-end residences” and 350 acres of industrial land, are also risky, he said. “I think it would be very difficult to sell that many” over the projected 20-year period.
Wiens opened his presentation by saying it’s difficult to respond to financial projections because “no individual knows the future,” but added that he can look at the $520 per capita figure and “say it doesn’t seem realistic.”
He ended his report on a more positive note, pointing out that the increased residential tax base from Netook “would pay toward the fixed costs of running the county, so there would be that benefit for all our residents. It would also give the county a more diversified tax base. So there are some financial benefits.”
Moving forward, the key thing for the county is to ensure that the project’s “cost be managed very carefully,” he said.
“In the end the Netook question is primarily a land-use issue. What is the best use of the land?”
Reeve Bruce Beattie called Wiens’ report “very useful” and said it “clearly indicates that a document is only as good as the assumptions upon which it is based.
“Thank you,” he said. “It gives me some comfort in the position we’ve taken to date.”
CAO Tony Martens said the county would come up with “a bit of a communication strategy” to counter the developers’ claims – “because we know that $17 million is going to be pushed hard as part of the MDP discussions,” Martens said.
He added that Wiens’ critique was not intended to discredit the Netook Crossing concept.
“We’re not saying the project is a bad project. All we’re saying is … here’s maybe where there’s some holes in their assumptions,” Martens said.
“We’re just concerned with the assumptions and the message the developer is giving to the community.”