A gear box for one of the conveyors for the tire shredding machine had to be replaced before production could begin at National Tire Recycling’s facility north of Ponoka. The hope was the work could be completed last week and operation getting rolling. Photo by Jordie Dwyer

Ponoka County seeing almost $2 million in unpaid taxes

Nearly half of 2018 tax roll yet to be paid comes from residents

A record amount of unpaid property taxes, hovering around $2 million, has Ponoka County administration scratching their collective heads.

CAO Charlie Cutforth informed council at its meeting July 17 that around $1.9 million — about 7.5 per cent of the county’s $26.5 million in expected property tax revenue for 2018 — remains outstanding as of the end of June left unpaid.

Most comes from bankrupt energy companies accumulated over the past few years.

A significant amount of the 2018 unpaid taxes comes from one company — Sequoia Resources — at about $500,000.

The company, which was formed in 2016 and wound up purchasing the assets of bankrupt Waldron Energy for $1, declared itself insolvent in March. That will likely mean the county will never see payments for taxes owed and the province left holding the bag for the abandoned pipelines and natural gas wells the company held.

In it’s notice of insolvency to shareholders, the company explained its policy of buying up natural gas assets at what was thought to be the bottom end of low prices. Unfortunately, natural gas prices continued to slide — falling more than 50 percent, to around $1.15 by early 2018 from the $3.07 per gigajoule when Sequoia began its program.

The company was further hindered by what proved to be an overly aggressive well reclamation project and was not successful in getting municipalities such as Ponoka County to reduce its property taxes.

Residential shock

The more puzzling figure is that of ordinary landowners still owing nearly $900,000 of the $1.9 million.

“The individual property taxes still payable has surprisingly gone up considerably,” Cutforth stated.

“It’s a pretty good sign that there a lot of people out there hurting. We have never seen numbers like this.”

Coun. Doug Weir wondered aloud if the continuing economic struggles, particularly in the energy sector, has something to do with the issue. Cutforth agreed with Weir that the pressure on the oil and gas sector is a big part of why people have been late in taking care of their taxes.

“Typically, people come in and pay or make some arrangement, then we know it’s coming and further penalties are not assessed. We do like to work with people,” Cutforth added.

While the tax notices have been out for a few months, the next reminder for payment isn’t set to be sent until later this fall about a month prior to the next late payment penalty deadline in November.

Rest of budget

Also of significance in the budget report to council were some changes to several revenue numbers and a few increased expense items.

It was noted that adjustments to the county’s linear assessment has resulted in a higher property tax levy than was expected, a better return of about $300,000 came from the sale of three graders at $1.6 million.

Also an unanticipated $50,000 came from the province as payment for municipalities performing property assessment work on its behalf.

On the expense side, about $78,000 has been spent — nearly double than was budgeted on planning services this year. Most of the money spent on planning is for professional services by West Central Planning as well as work by consultant Bob Riddett on three area structure plans.

Also, $73,000 — over double the $35,000 budget — has been spent on in-service training for the East District fire service. A chunk of the fire training is connected to invoices from consultant Ken Kendall, but a grant was also received that covers nearly all of the training spending to date.

National Tire

Council also re-treaded on the subject of tire recycling with Cutforth giving them an update.

As of the meeting, the large conveyor from Quebec had been installed and ready to go. However, a gear box on a conveyor connected to the shredding machine from North Carolina had to be replaced and was due to be installed that week.

The hope was to have everything up and running by July 20, with three shifts shredding tires 24-hours a day to fulfill contractual obligations.

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