SANDRA M STANWAY
The county’s finance manager urged council on Thursday to ensure they are directly consulted by the province regarding future assessment models for wells, pipelines and machinery and equipment before any finalization.
The province has not updated the assessments for wells, pipelines and machinery and equipment since 2005 so, over the past year, municipal affairs has been developing assessment models to ensure new technology is included as well as the current costs.
“The initial results from the technical phase of the review indicate potentially significant shifts in assessment,” states a letter to reeve Molly Douglass from Kaycee Madu, municipal affairs minister.
“This is us. Over two-thirds of our assessment is linear, oil and gas. It has a real impact on our ability to have sustainable long term financial plans,” said manager of finance Matt Fenske.
As a result of the “consequential impacts,” the ministry has determined it will meet with industry and municipal associations before any decisions are made.
The county will be represented by the Rural Municipalities Association (RMA), however, Fenske doesn’t think that’s enough.
“We’re dealing with some shocking adjustments in our reality,” he said.
He urged the county to be directly involved as the municipality most significantly affected by last year’s 35 per cent shallow gas initiative.
Although the $2.2 million in municipal taxes was covered through the flow-through provincial school requisition that is collected by the municipality, that will not be the case this year or in the future.
“It would be nice if they can keep those models current moving forward so it may be a little easier to absorb the impacts.”
In 2019, the county was forced to absorb $2.191 million in municipal taxes.
While that loss is in place, the county will also begin paying for policing.
As of April 1 the cost will be $200,000 which will be due in 2021 but the costs will ramp up to $858,000 over the next four years.
“That’s a big program change for us,” said Fenske.
He said during his time at the county there has never been an expectation to add a $200,000 line item that will be ramped up to close to $1 million for something the municipality doesn’t control.
“I think it’s a whole new world we’re entering into,” he said.
Fenske said there are always assumptions when budgeting and forecasting beyond one year but to have major impacts can leave councils and staff wondering if plans are good enough, sustainable and whether more money should be put into reserves while balancing the industry’s ability to bear the tax burden.
“To have this big of an impact and to not have certainty where things are going in the future, it really leaves you feeling unsettled about how robust are our plans.”
Division 8 councillor Brian de Jong said he agrees with the philosophy of putting money away but he believes it is hurting municipalities.
He believes the province looked at the 14 counties affected by the shallow gas incentive and thought they should be tagged because of the money that has been set aside.
He said if the county had spent like ‘drunken sailors’ there would be no money to cut.
“While I agree with what you’re saying there is another part of this that says, ‘If we’re collecting it maybe we should be spending it.’”
Municipal tax bills are likely to include a policing line item so ratepayers can see their portion.