Westlock County is out $400,000 in projected, albeit unbudgeted, revenue due to the province freezing Assessment Year Modifiers (AYM), which determines the amount of taxes municipalities collect on linear infrastructure like oil and gas wells, pipelines and telecommunications towers.
“Had the minister not frozen the AYM, the linear assessment increase in the county would have generated about $400,000 more revenue than what we budgeted for back in December,” CAO Leo Ludwig said during the Feb. 13 meeting.
“We’re not gaining the assessment that we should have because of the minister’s arbitrary decision.”
Back in January, Westlock County sent a letter to the province protesting its decision to freeze the AYM.
Deputy reeve Brian Coleman said they will not rework the 2018 operating budget since they never accounted for the extra revenue.
“In January, it looked like we were going to have a decrease of around $400,000 in revenue, which came in just after we did our budget,” he said.
Ultimately, the revenue loss means the municipality won’t be able to restore some of the services that had to be scaled back due to the economic downturn, said Ludwig.
“The county scaled back a number of essential services in 2016, 2017 and 2018, mainly our gravelling program, to absorb the lost revenue,” said Ludwig.
“We were hoping to take that partial recovery in revenue and invest some of it back into our gravelling program.”
Another area the county will not be able to proceed on is lowering its non-residential to residential municipal tax ratio, which is currently 5:72 to 1.
Under the new Municipal Government Act, municipalities are only allowed to have a maximum difference of 5:1. A clause allows municipalities to maintain a higher ratio if it existed before the rule change, but Ludwig said the province is expecting municipalities to eventually comply.
“For the time being, we’re grandfathered,” said Ludwig. “But I would rather be pro-active and chip away at that ratio before we’re told we’re have to.”
Noting the whole matter is “very confusing,” Ludwig said the province has advised him to expect updates on linear assessment values on a monthly basis going forward.
“At some point in time we will have to decide which numbers we will use to pass our tax rate bylaw,” he said. “We have an allowance in the budget for assessment changes. That may need to be bumped up a little bit, given the increased volatility.”
