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Woodlands County applies for $195K education credit on $888,000 in uncollectable taxes

Councillors also approve transfer of $1.4 million from education credit program to equipment reserve
Woodlands County Sign
Woodlands County councillors authorized administration at their Oct. 5 meeting to apply for the Provincial Education Requisition Credit (PERC) and receive nearly $195,000. Of course, this money is only available due to the fact Woodlands County must write off nearly $900,000 in uncollectable taxes owed by oil and gas companies.

Woodlands County is hoping to recover nearly $195,000 in education taxes paid to the province as a result of writing off $888,000 in uncollectable property taxes owed by oil and gas companies. 

County councillors passed a motion at their Oct. 5 meeting authorizing administration to write off a list of accounts identified as uncollectable and to proceed with an application to the province for the Provincial Education Requisition Credit (PERC). 

Back in 2015, the Alberta government introduced PERC to assist municipalities like Woodlands County who were having difficulties in collecting property taxes from oil and gas companies. 

PERC doesn’t cover all of the lost revenue, but it does compensate municipalities for the education requisition on property taxes, which municipal governments are still obligated to pay. 

The PERC program was originally meant to last until the 2019 tax year but it was extended for two years as municipalities continued to have difficulties collecting taxes from oil and gas companies. 

Noting that PERC Is expiring this year, director of corporate services Alicia Bourbeau told council that Oct. 31 is the deadline for the last submissions to this program. 

She said the county is applying to recover a total of $194,980.77 from PERC and the Designated Industrial Requisition Credit (DIRC). 

Noting that the $888,000 in uncollectable taxes was accounted for in Woodlands’ recovery plan, Bourbeau added that she is hopeful the county won’t have to do this again. 

“We still have some conversations with a few companies that we’ve been working with and we’re waiting to see if they continue to fulfill their promises to pay,” she said. 

Transfer to reserves 

Council also opted to transfer $1,464,615 that the municipality received through its 2020 PERC application to the public works equipment reserve. 

Coun. Ron Govenlock questioned why Bourbeau had requested the money should be placed in an equipment reserve and not the general operating account. 

He pointed out that the $1.4 million was just a reimbursement for the money the county had paid to the province for the education requisition, which would have originally come out of the general operating account. 

"This isn’t new money; this is money we had to give up, and we’re simply getting it back,” he said. 

In her report to council, Bourbeau cited a few minor bookkeeping reasons for the transfer, but her main argument was that it would help department managers plan for future capital expenditures knowing that the physical funds required had been set aside. 

However, she indicated that administration was open to putting the money anywhere councillors desired. 

Govenlock said he had a concern over whether or not this money was factored into the 2021 budget discussions. 

“Protecting that money so it doesn’t become part of a slush fund is also part of my concern,” he said. 

Coun. Dale Kluin pointed out that that the county has been criticized over the past few years for using the operating fund as a slush fund. 

He also noted the county is looking at a major expense in the next few years relating to the replacement of graders. For that reason, Kluin said it made “perfect and common sense” to set the money aside in the equipment reserve. 

Ultimately, council passed a motion made by Coun. Bruce Prestidge to transfer the nearly $1.5 million to the equipment reserve.

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