Kevin Berger – Leader Staff
Facing a revenue shortfall due to more than $4.473 million in tax arrears owed by two oil and gas companies, Woodlands County announced last week it is halting non-essential spending, though it will continue to offer basic services.
The county is also reviewing all capital projects, administrative costs, council expenditures and agreements with other municipalities.
Woodlands County mayor Rob Govenlock said in an interview over the weekend that the dust control program has been curtailed this year, although that was also due in part to the wet weather.
Several shoulder pulls to keep roads from widening have also been delayed, as has a concrete “apron” for the new maintenance shop.
As well, a $100,000 paving project for the Blue Ridge highway has also been suspended.
“We’re not finished with the changes that will have to be made to somehow compensate for that revenue shortfall,” Govenlock said.
“We can’t get more revenue so the only option we have is to cut expenses.”
Earlier this year, Woodlands County councillors were told the municipality was facing a $4.473 million revenue shortfall due to the tax arrears owed by two oil and gas companies. While one company is still in operation and cannot be named, the other company was Trident Exploration, which shut down completely on May 1. The company’s assets have now gone into receivership.
However, a news release put out by the county suggests that the county is facing a $9.5 million loss in tax revenue built up over two years. It’s not clear how much of that is due to the tax arrears owed by Trident and the other company.
Meeting with minister
On Aug. 13, several councillors and the county’s interim CAO met with Minister of Municipal Affairs Kaycee Madu to impart several messages about their current situation.
The meeting took place at the Legislature and involved members of the joint liaison team, including Govenlock, Coun. John Burrows and Coun. Jim Rennie.
The first issue they discussed with the Minister was the fact that the county still had to pay an education requisition to the province despite the tax arrears owed by the oil and gas companies, which the county has few avenues to collect.
“It’s certainly a very unfair expectation for municipalities to have to take other people’s taxes to pay for the education tax that we didn’t receive from the oil and gas industry in particular,” Govenlock said.
“It’s now about a million and a half dollars that we’ve got to steal from Peter to pay Paul.”
Govenlock noted the province does have a Provincial Education Requisition Credit (PERC) program that allows a municipality to write off its tax arrears from oil and gas companies. However, because one of the companies that owes the county is still operating, it will effectively be two years before Woodlands can apply to PERC, he said.
Secondly, Govenlock said this situation is opening the door to other smaller companies to decide they aren’t paying their taxes.
Govenlock said the province needs to look at what actions or sanctions it can take to force companies to pay the taxes they owe to municipalities.
“Municipalities like Woodlands are the victims. We’re caught in the middle of that whole scenario,” he said.
On a final note, Govenlock said they had heard the Minister comment that Woodlands was not playing fair in respect to its negotiations with the Town of Whitecourt regarding an inter-municipal collaboration framework (ICF).
Govenlock said that when they heard Madu make that comment, they better make sure he gets the “whole story” regarding their talks with Whitecourt.
“We have a story to tell, every bit as much as the town of Whitecourt,” he said.
When asked how the meeting went, Govenlock said the minister asked Woodlands to submit some copies of its agreements with Whitecourt to him for review, along with some briefing notes.
He also urged Woodlands to return to the negotiating table with Whitecourt.
His support staff also suggested they would contact the company that’s still in operation which owes Woodlands money. They would encourage that company to pay what they owe, Govenlock indicated.
However, the minister was less open to the idea of forgiving Woodlands for its education requisition.
Govenlock said they and the other municipalities who are in a similar situations will continue discussions with the province on this front, especially when Municipal Affairs representatives attend the fall conference of the Rural Municipalities of Alberta (RMA).
“We are definitely not giving up on the matter, because residents and municipalities cannot be left holding the ... burden for the benefit of foreign investment companies,” he said.
