In light of the economic situation facing the province and country, the fact Ponoka County had a nice-sized surplus in 2019 is good for its future.
The surplus and the county’s overall financial position were announced in a presentation prior to council’s deliberation on its 2020 budget on March 20.
The final surplus figure for 2019 was just slightly under $2.1 million after figuring in capitalization of certain assets.
Tim Rowland of Rowland Parker & Associates provided council with the details of the 2019 audit, paying particular attention to the risk the county faces from unpaid energy sector property taxes.
Overall revenue reached $21.47 million, which includes $14.16 million in property taxes and $12.17 million in taxes payable by the energy sector, minus about $8.1 million in requisitions for schools and seniors’ housing.
That overall figure is down from 2018 by nearly $300,000, while nearly $4 million in government transfers — $305K for highway fire responses and the rest in infrastructure funds — boosted the money available to be spent.
One unexpected figure was just over $500,000 in investment income, about $300,000 of which was the carryover of accrued interest from 2018 that had to be accounted for.
Meanwhile, tax penalties rose dramatically to almost $453,000, close to $250,000 higher than was budgeted. CAO Charlie Cutforth explained he expects a majority of the figure to be uncollectable as the energy industry continues to see companies file for bankruptcy.
“The challenge from an accounting function is we can’t write those off. The best we can do is continue to grow our allowance of uncollectable accounts because, until a company actually registers for bankruptcy, we carry that as a receivable,” he said.
Rowland added that given the current situation, he could see those doubtful accounts start to snowball.
He cited the example from the audit’s expense side where the allowance for doubtful accounts helped administration expenses balloon to over $3 million, more than $611,000 over what was budgeted.
“That has left that category a bit skewed with around $2.4 million in unpaid energy taxes and only $1.4 million attributed to being in arrears,” he said.
“That still leaves $1 million not provided for, but given what is happening, that money could be in jeopardy. So the number for doubtful accounts needs to be examined going forward.”
Of the $1.4 million in arrears, Cutforth included, the school tax portion is $300,000 and would be covered by the province if the companies go bankrupt.
Another expense that grew in 2019 was the county’s donations, hitting $2.2 million, up about $600,000 from their budget.
That included the county covering the line of credit payments for the Calnash Ag Event Centre and Rimbey Agrim totalling $840,000 as well as paying for improvements to both facilities last year in addition to various contributions to organizations.
Cutforth did explain that some of the funds expended for the facility improvement were transferred from reserves.
As for other expenses, the fire department cost came in just shy of $1.1 million — a rise of $150,000 from spending in 2018 — with public works having spent almost $8.1 million, a drop of about $200,000 from 2018 and about $800,000 less than forecast to be spent in the 2019 budget.
The county’s commitment to getting rid of the giant mining tires, through its agreement with National Tire, saw it spend about $1.16 million last year. While this includes the tire shred the county received for some of its jobs, there was also about $255,000 in revenue the county got for leasing equipment to the company.
All of this contributed to overall expenses reaching $22.9 million, up $1.6 million from 2018, though about $1.5 million less than what was budgeted.