Kneehill County council approved a tax hike at their regular meeting April 28, with staff stating provincial government policies in certain areas left the municipality with no choice but to raise taxes.
Several agenda items were linked to the 2020 budget and tax rate bylaw.
Director of Corporate Services Bill McKennan presented councillors with the tax rate bylaw for their consideration, noting things like provincial government shallow gas well changes and the education requisition either left Kneehill County handcuffed or with no authority over changes.
“In previous Committee of the Whole meetings in which council deliberated the budget, the direction was to increase property tax rates as follows, residential & non-residential increased by three per cent which maintains the ratio and farmland increased by 10 per cent,” stated McKennan in his memo to council.
“At the March 24 council meeting council was presented with a capital and operating budget that was balanced. A balanced budget has revenues that consist of grants, reserves, user fees and taxes.
“The municipal residential tax rate has increased by three per cent which is generating 7.7 per cent more in total dollar collected.
The increase in the dollar collected is due to two factors: the three per cent rate increase and ‘growth’ i.e. new properties/changes in assessed values. 2019 levy was $1,399,755; the 2020 levy will be $1,516.645.
“The municipal farmland rate and dollar impact are more consistent since assessment valuation related to farmland is highly regulated and not related to market values.
“The municipal non-residential rate has been increased by three per cent, however, the dollars being collected by this assessment class will be reducing by -9.6 per cent.
The total amount levied in 2019 was $20,683,180; for 2020 the amount collected will be $18,874,578 or a reduction of $1,808,602.
This reduction is predominantly due to the 35 per cent assessment reduction imposed by the provincial government for shallow gas producers.
“The Alberta school rate impacts are misleading but the dollar per cent changes are in-line with the impacts.
The provincial formula is using 2018 property values; however, we are using 2019 values as required by legislation. This results in slight variances.
“Although the per cent change in the rate for the DIP (Designated Industrial Properties) has increased by three per cent the dollars collected and remitted to the province will be reducing from $111,062 in 2019 to $93,688 in 2020.
“Although the per cent change in the rate for the (Kneehill) Housing Corporation seems large (seven per cent) the overall change in the requisition is approximately $100,” added McKennan.
McKennan stated the shallow gas well changes in particular had a significant effect on Kneehill ratepayers, as the roughly 35 per cent reduction in shallow gas well assessment cost the county about $1.9 million in revenue, adding that the provincial government is aware of this issue.
McKennan stated councillors developed a budget that coped with all these challenges but didn’t reduce services.
He noted Kneehill County has a lot of capital projects in its budget this year but also faces reduced revenues due mostly to provincial government policies.
Coun. Wade Christie said, all things considered, the budget and tax increase were sustainable.
“Considering the economic times we’re in, we’re in pretty good shape,” said Christie. “But we’ve got to keep going the right way.”
McKennan stated Kneehill County tax notices, to be mailed out June 15, would include a note explaining how provincial government policies affected Kneehill’s budget so noticeably.
Deputy Reeve Faye McGhee stated she would like a copy of that note beforehand as she predicted getting phone calls from ratepayers after the tax notices were mailed.
Councillors unanimously passed the tax rate bylaw.
Earlier in the meeting councillors read an update on education requisition.
McKennan stated that the provincial government has all authority over funding collected for the school system, and the county simply collects the money and sends it to Edmonton.
McKennan stated there tends to be confusion over this, as some people think the county sets the education requisition rates, which isn’t accurate.
Stu Salkeld, Local Journalism Initiative reporter