BARRHEAD - Despite Woodlands County’s latest cost-cutting measures, they still have close to a $1.4 million deficit for the 2019 calendar year.
That is what Alicia Bourbeau, director of corporate services, told councillors at their March 3 Whitecourt meeting.
The deficit is due to the non-payment of taxes and associated penalties largely from two energy companies amounting to more than $4.8 million ($4,802,588).
“I caution you not to panic at this point,” she said. “There is still active activity going on in an attempt to recover those accounts.”
Bourbeau noted of the two companies in arrears, one is still operational.
Although she didn’t name either company, one is Trident Explorations, which ceased operations in May 2019.
She said the company that is still operating accounts for a significant portion of the outstanding amount.
“So we are hopeful that some funds will come from it,” Bourbeau said.
Earlier in her report, Bourbeau notes that as of Dec. 31, 2019, the county collected “in the door” $28,858,290.82 of total revenue.
However, when funds such as the school requisition ($5,531,301.46) and seniors requisitions are deducted ($497,088.46), as well as transfers from capital ($1,500), it leaves an adjusted revenue for operations of $23,858,290.82.
The school requisition are the taxes municipalities collect for the province for education, while the senior requisitions are funds collected for the operation of senior living facilities.
“Once I take off the unpaid taxes and penalties of $4.8 million it leaves us an adjusted revenue of $19 million ($19,055,702.99), she said.
As for expenses, as of Dec. 31, the municipality has spent $34,127,437.73. This is less than the budgeted amount of $40,836,970. Depreciation is pegged at $7,285,351. The county also has another $290,960 in spending committed.
Whitecourt Central Coun. Ron Govenlock asked Bourbeau specifically what steps administration was making to recoup unpaid taxes and penalties from energy companies.
She replied that aside from letters and phone calls they had few tools to recover taxes owing from an energy company.
“As you are aware, we have no ability through Alberta Land Titles to attach any caveats on [well sites] because they aren’t considered not being part of lands. We are following up with other municipalities and looking into different collection methods,” Bourbeau said.
Govenlock said it sounded like the solution would be more political than accounting driven.
“Would that be an accurate statement?” he asked, noting a legal action was unlikely to succeed.
“It quite likely is,” she admitted. “But I hate to think that in the accounting world we can do nothing. I think it is important to keep sending letters and trying to keep making that contact.”
Govenlock then suggested they ask for the assistance of their two MLAs, West Yellowhead UCP Martin Long and Athabasca-Barrhead-Westock UCP Glenn van Dijken, to lobby the province on their behalf.
“I hope that they [Long and van Dijken] would assist us in bringing our concerns to the province to put pressure on the [government], especially considering one of those entities continues to operate,” he said. “That’s good because we want employment for the municipality but Woodlands County is paying the school requisition on their behalf. That is a serious issue that needs to be addressed.”
Govenlock then asked when the 2019 audit report would be available.
Bourbeau said she expected councillors would have it by no later than April 21.
Govenlock said that had not taken steps, starting in the summer to scale back spending, the municipality could be facing a much larger deficit in the range of $5 to $7 million rather than $1.4.
He added he was concerned they were not as prudent with the 2020 budget that council approved Feb. 4.
“[We] need to budget based on 2019 actuals and plan for 2020 in a much more fiscally restrained manner than I saw approved recently,” Govenlock said.
Councillor compensation reduction
Mayor John Burrows asked if the changes in the councillor pay structure will result in a reduction overall costs.
Bourbeau said it should.
“We will be following up and comparing the actuals much closer in the next couple of months to ensure we are on track,” she said.
In January, councillor compensation moved to an annual honorarium instead of a system where they are largely paid based on the number of meetings and events they attend and their duration. The mayor of Woodlands County will now be paid an honourarium of $70,000, while councillors will earn an honourarium of $50,000. Councillors will also have access to $15,000 each for professional development and registration at conferences.
In 2019, a total of $533,032 was budgeted for councillor remuneration. Under the new system, remuneration expenses are expected to drop to $475,000. When professional development is added in, the overall reduction will be 10 to 11 per cent. The change takes effect Jan. 1, 2020.
It should be noted that in the 2019 budget deliberations, councillors approved a 15 per cent increase in their compensation. This was in response to the federal government’s decision, as part of the 2017 budget, to eliminate the one-third income tax exemption for municipal elected officials, effective Jan. 1, 2019.
Barry Kerton, TownandCountryToday.com
