The City of Yorkton will renew a lease for heated shop space from Yorkton Plumbing and Heating (YPH) Ltd., after finding no other option available in the city.
The City’s lease agreement with Yorkton Plumbing and Heating Ltd. (YPH) for the rental of property at 164 Industrial Avenue expires September 30, detailed a report circulated to the regular meeting of Yorkton Council Monday.
The City currently rents 5,400 square feet of heated storage at this location, said, Trent Mandzuk, Director of Public Works with the City. Heated space is required to store snow removal and emergency response equipment over the winter.
An open tender was advertised in May 2015 which received no inquiries, explained Mandzuk.
The department then looked internally at a City-owned option, but that proved too costly.
“The Public Works Department also looked at the possibility of renting the Agri-Pavillion at the Gallagher Center. This building is not heated but would serve as shelter from wind and is equipped with electrical outlets to plug in vehicles. This option proved more costly than expected. Inefficiency costs associated with storing four trucks at the Gallagher Center and additional employee travel time for 60 days in the winter is estimated to exceed $35,000,” detailed the report.
So the department went back to YPL to submit an updated lease agreement, said Mandzuk.
Cost per square foot has increased $0.50/ft2 above 2013’s unit rate to $10.50/ft2. The new agreement would be $10.50/ft2 for two years with an option to negotiate a third year six months prior to the contract’s expiration if the City requires.
In addition, the City faces a shortfall in property tax revenue by inking the lease.
“It should be noted that YPH is exempt from taxation on the portion of the property rented by the City of Yorkton. Therefore, $8,776.52 typically collected in taxes by the City is lost. If lost tax revenue is factored into the total cost, annual rent becomes $65,476.52/year or $12.13/ft2,” detailed the report.
Council was unanimous is supporting the new lease.
Funds for the lease cost from last year are included in the current budget, but the increase in the fee is not, said Mandzuk.