BARRHEAD-It is a fund that the County of Barrhead councillors hope they will not have to use, however, if recent history is any indication, they know they will have to dip into it extensively.
On Jan. 19, councillors unanimously approved the administration's recommendation to top up the uncollectable tax account (also known as the taxation stabilization account) to $980,000 with funds from the 2021 budget ($322,0200 and the 2020 year-end surplus $379,048). The current balance is $278,932.
Director of finance and administration Tamara Molzahn said they set up the account about two years ago to shield the municipality from shortfalls in its budget caused by issues collecting taxes owed.
"In our 2020 budget, we estimated a $750,000 allowance," she said, but adding after they reviewed the linear tax accounts with outstanding balances they believed an additional $230,000 was at risk. "As you know collecting property tax from the oil and gas companies has proven to be a challenge."
In October, for the 2020 budget year, the municipality wrote off more than $450,000 for the 2017-2019 tax years. For the 2019 budget year, the municipality wrote-off $2,2025,142, covering the 2017-2019 taxation years and in 2018 the county was forced to write-off $41,641 in taxes for the 2015-2017 taxation years.
"These write-offs for those companies, which are in receivership and are essentially bankrupt and therefore were unlikely to be able to collect any money from," Molzahn said.
Writing off the accounts from the tax roll, allowed the municipality to collect more than $250,000 in credits from the province through the Provincial Education Requisition Credit (PERC) and the Designated Industrial Requisition Credit (DIRC) programs. In 2019, they received $5,489 in PERC and DIRC credits and in 2020 the amount increased to $244,698. The municipality is still waiting to hear how much they will receive in 2021.
Reeve Doug Drozd noted that municipalities are not guaranteed to receive credits or rebates from the province as both the PERC and DIRC programs have set amounts.
"It is a first-come, first-served type of thing," he said.
Tax write-off
Earlier in the meeting, councillors approved the cancellation of $13,748.28 or half of property taxes owed by the provincial government for properties owned by Municipal Affairs and Alberta Environment and Parks (AEP).
The province doesn't pay property taxes, but gives municipalities grants through the Grants in Place of Taxes (GIPOT) program.
GIPOT grants are based on property taxes the government would pay if the property were not exempt for taxation. The municipality has 91 properties eligible for the program. The total 2020 property tax for the properties is $27,496.50.
At one time the GIPOT grants were for 100 per cent of the taxes owed, but last year the province reduced the amount to 75 per cent and for the 2020 tax year it has been decreased to 50 per cent.
Barry Kerton, TownandCountryToday.com
