Starland County Reeve Steve Wannstrom gave his two cents on the news announced on Mon. Oct. 19 from Municipal Affairs Minister Tracy Allard regarding the new look at the oil and gas assessment model review,.
“These new decisions announced are still expected to have a negative impact on Starland County including the shallow gas assessment reduction which was implemented two years ago.
The county saw a reduction in revenue equaling approximately $800,000 annually.
Additional depreciation adjustments for lower-producing wells is estimated to be approximately four per cent of Starland tax revenues, which is approximately another $450,000 annually.
These two reductions amount to a loss of approximately 10 per cent of our total tax revenue.
Legislation still needs to address the issue of unpaid property taxes from oil and gas producers.
Presently there is no legislation requiring them to pay, and no recourse for the municipalities to take when they do not pay.
“We are an uninsured creditor, basically last on the list for recovery if they do go bankrupt,” he said.
At present, Wannstrom noted Starland has seven oil and gas companies not paying taxes.
Three are bankrupt, but the assessment remains active on their rolls, with requisitions for school and senior’s facilities based on this assessment.
In 2018, over $4.5M was left unpaid out of a total tax levy of $13M, a large portion due to Trident’s bankruptcy.
In 2019, another $3.7M was left in unpaid taxes from a total tax levy of $13.8M.
2020 wasn’t much different as there was $5.4M unpaid from oil and gas.
Starland County has been in discussions with three large oil and gas companies who expressed concerns about making their tax payments in one lump sum.
“We have entered into Tax Repayment Agreements with these companies for full payment of their 2020 taxes totalling $2.8M, still leaving $2.6M unpaid and unlikely to collect.”
Wannstrom noted these uncollected taxes also include the Alberta School and Senior’s Housing requisitions which is paid to the Province of Alberta.
“This shortfall of money collected comes out of the general funds (everyone else’s taxes) to pay our requisitioned amounts.
There are four companies still actively operating, just not paying their property taxes, some have not paid for the past two or three years.
“Minister Allard has acknowledged this concern from our rural forums and we are hopeful she will address and make changes in the very near future.”