Starland County found about $4 million in savings in its operating budget to make ends meet in a tough economic year.
Starland County Council passed its 2020 operating budget at its May 27 Council Meeting. Council set the residential mill rate at 8.2917, a 2 per cent increase, its farmland rate at 16.4511, a 1 per cent increase, and its commercial and linear rate at 24.3229, a 4 per cent increase.
This comes after they took a knife to its budget feeling the effect of the downturn in oil and gas over the last couple of years and now the economic crisis caused by COVID -19.
“In the last two years we have written off nearly $7.5 million of bad debt (uncollected taxes) and we are projecting another $4 million in 2020. With nearly one-third of our total annual revenues being uncollected and written off as bad debt for these years, this has caused us to deplete our reserves to cover for this loss,” it stated in a letter to ratepayers.
“With the given situation now and the economic crisis before us, we have totally revamped our 2020 budget, recognizing that realistically there may be even more oil and gas companies in distress and there will be even more taxes uncollected. This together with the 35% reduction in assessment the province placed on the shallow gas assessments, decreased our total assessment for the County back to a similar amount as in 2007, negating thirteen years of progress.”
It notes that about 80 per cent of its tax revenue comes from oil and gas and it estimated 32 per cent of that will not be collected this year. This represents almost one-third of its total revenues.
To make budget, council is introducing no new capital expenditures this year. While the new construction of its shop is underway, this has been covered by MSI funding from the past several years as well as insurance proceeds from when the former administration building was razed.
The County’s road construction program and bridge replacement programs are on hold this year and they have reduced its gravel program, virtually all hauling will be done with county staff. There are currently six positions at Starland that are vacant and will not be filled in the interim, and they have restricted their seasonal hire to just nine. Normally there are approximately 34. There will also be no dust control program, programs such as tree planting, and mulching are suspended and mowing of recreational areas will be less frequent. Cemetery maintenance will remain a priority. There will be no Summer Fun program, and training seminars, conferences are cancelled or postponed.
Council continues to lobby for support from the province.
“Council has been actively engaged in many meetings and discussions with the provincial government, regarding all the downloading that is being put on the shoulders of the municipalities including: No recourse for uncollected oil and gas taxes; a substantially reduced assessment base for shallow gas infrastructure; new policing costs for small municipalities; requisitions based on an assessment base which includes assessment for bankrupt or abandoned oil and gas companies; reductions in grants; etc. These are all heavy burdens to bear and are certainly straining the resources of the County.”
The County concluded its letter to ratepayers with a positive outlook including a great start for agriculture with a “million-dollar rain”. They are also seeing some movement in natural gas prices, and are seeing some positive prospects in the development of renewable resources in the area.