Dear Honourable Tracy Allard,
Starland County is extremely concerned with, and opposed to, the changes to the assessment model for regulated properties such as wells and pipelines that was announced recently. Following our meeting in Stettler on September 4th our Council was pleased to hear that no decision had so far been made and that you were going to proceed with input from the Rural Municipalities that this affects the most. Based on the analysis that we have done as well as the data provided by the Province it is safe to say that Starland County’s viability is very much in doubt if any of the four scenarios that were presented come to pass.
As your government is committed to keeping taxes low to encourage investment in the province it is critical that you understand that these measures are guaranteed to result in a major tax hike on farmers, small oil and gas companies and commercial businesses in our area. As it has been implied by the oil and gas industries as well as certain commentators that municipalities should just cut their expenses we would emphasize the changes that have already been made by our municipality over the last 3 years in the course of reducing our operating budget from $12.3 million in 2016 to $8.4 million in 2020.
• Reduced staff by nearly 30%.
• Increased taxes over 15%
• Reduced basic maintenance operations for playgrounds, parks, road grading and gravelling, bridges and weed spraying.
• Hiked water fees over 200%.
• Eliminated all capital purchases besides what grant programs will allow.
We have also done this while the provincial government has increased costs and reduced grants. Policing costs for our Municipality will rise from $90,000 a year to over $160,000. Grant programs such as STIP and Water for Life have moved to funding based on usage and location which essentially excludes municipalities like ours from any assistance in maintaining our critical infrastructure. If the provincial government will not provide any more support and indeed will reduce our revenues then next on the chopping block will be:
• The decrease or elimination of funding for community groups, local charities and children’s sports teams.
• Further reductions in staffing.
• Reduced business and support for local contractors.
• Further deterioration of our rural transportation networks.
• Further cost hikes for basic services such as water and sewage.
• Cuts to mental health supports for residents suffering in this downturn.
I should be clear from the above that major tax increases with assessment changes are a certainty. In reality we will cut all we can to prevent this however we are barely able to function in the current budget environment brought about by oil and gas companies not paying taxes. So far we have taken the hit of over $6 million in uncollected taxes from the oil and gas sector and we are budgeting an additional $4 million this year. This has been an ongoing issue as you surely know and fixing the issue of companies not paying taxes should come before any talk of structurally reducing their taxes.
As you stated in the meeting in Stettler your Ministry will be gathering input into the process as it moves forward and in this spirit we have several recommendations as follow.
1. Delay the implementation of any changes until 2022 tax year at the earliest. The timelines currently under discussion are unreasonable and ensure that harsh changes will be forced on businesses and residents at a time when we neither can afford it.
2. The fours options under discussion should be thrown out with new options developed with the input of residents and municipalities.
3. Ensuring that municipalities can collect taxes through the AER including unpaid taxes as a reason for oil and gas companies to have their license removed.
We would be pleased to provide you with further information on this issue and have included a fact sheet along with this letter which shows the impacts the proposed changes will have on our farmers and residents. We would also encourage you to contact the Rural Municipalities of Alberta for more information on the province-wide impacts of the changes.
Steve Wannstrom, Reeve