Ponoka County, like other Alberta municipal jurisdictions, is taking a revenue hit as the oil and gas sector continues to struggle.
Chief administrative officer Charlie Cutforth says the amount of tax outstanding has increased in 2019, reaching a level not seen before.
“Our accounts receivable are about $4.8 million, but typically prior to the last three years, a normal year would see that figure around $250,000 to $300,000,” he said.
“Of that current number, about $3 million is in oil and gas, with the rest primarily residential and some commercial arrears. This is not a good indication of things.”
Where the trouble for the county lays is with companies that have gone under, according to Cutforth.
“We have already written off nearly half a million dollars when Waldron (Energy) went down,” he stated.
“Sequoia Energy managed to get all of those assets in a judicial sale of $1, operated for two years, and then went belly up.”
Cutforth noted the total taxes, and penalties, for those two years added up to more than $600,000, “and that is quite likely also going to have to be written off.”
A few years ago, the county established an $800,000 reserve, because of the troubling issues that the energy sector was experiencing, to make up any uncollectable taxes.
The county also has around $25 million in reserves overall.
“Thankfully, we are in a position that we can absorb these losses, at least for a period of time, without having to significantly impact the rest of the taxpayers of the county,” Cutforth said.