British Columbia

Former B.C. Liberal government failed to properly assess value of surplus real estate, report says

The B.C. government didn't properly evaluate the costs and benefits of selling off surplus land under the Liberal government, according a new auditor general's report.

Ministry focused on revenue rather than the other major benefits: economic activity and cost savings

B.C. Auditor General Carol Bellringer is responsible for auditing the finances of the provincial government. (Auditor General of British Columbia)

A B.C. Liberal program to sell off government real estate assets to balance the books failed to properly assess the land's value, according to a new report. 

The report by B.C. Auditor General Carol Bellringer was released Tuesday.

It looked at the sale of government real estate assets such as lands and buildings under a program known as the Release of Assets for Economic Generation (RAEG), set up by the B.C. Liberals in 2012.

The purpose was to sell under-utilized real estate assets to help balance the 2013/14 and 2014/15 budgets.

Full value not obtained

According to Bellringer, the team running the program didn't take a wide enough view of the impacts of selling off the assets. 

The team "should have done more to assess the costs and benefits of selling versus holding surplus assets prior to their sale," she concluded.

"More specifically, the Ministry of Citizens' Services only focused on the revenue target, rather than all three of the planned benefits of the RAEG initiative: revenue, generation of economic activity and cost savings."

Bellringer  also took a close look at 14 of the 101 sales made under the program and concluded the government didn't get full value for the assets. 

"Of the surplus property sales we reviewed, government obtained, on average, 97 per cent of their appraised value," concluded Bellringer.

Burke Mountain concerns

In 2015, the NDP claimed the provincial government lost taxpayers' money rushing the sale of 14 parcels of land on Burke Mountain prior to the end of the 2013 fiscal year, but the government maintained it got the deal it wanted. (ekistics.com)

One important sale that was not included in that calculation was the Burke Mountain Lands, where the government allowed bids for both individual parcels and groups of land parcels.

Bellringer says this made it difficult to conclude if the government was getting full value for the land. 

"Government felt doing so would create more competition for each property, but it also meant that it couldn't directly compare the Burke Mountain Lands bids," wrote Bellringer

"Had government required bidders to provide a breakdown for each parcel as part of the bidding process, it would have better been able to identify low bids for individual parcels and compare parcel bids," she concluded.

Bellringer was careful to point out she did not find any evidence of bid rigging or collusion in the process. 

Minister responds with changes

In response to the report, the Ministry of Citizens' Services said significant changes to the replacement program are already in place.

These changes included consultations with First Nations and wider review of the costs and benefits before the sale of government real estate assets. 

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