Ponoka County

Ponoka County sees small 2016 surplus

In spite of a million dollar tax default and a few other increased expenses, Ponoka County has wound up with a surplus.

In spite of a million dollar tax default and a few other increased expenses, Ponoka County has wound up with a surplus.

Tim Rowland from the firm of Rowland, Parker and Associates present county council with the results of the annual audited financial statements during its meeting on Feb. 28, with the final outcome being a surplus of just over $203,000.

In his presentation, Rowland explained that much of the loss in taxes from the bankruptcy of one oil company and the potential of a further loss with another company since going into receivership, had allowances made through in the budget through the uncollectable tax category in both 2015 and 2016.

“That allowance caused administration expenses to increase by about $490,000,” Rowland told council.

“The actual amount of uncollectable taxes is about $595,000 for this year, something that I have never seen to this extent in the past 20 years.”

One area of concern for council in 2016 was the county’s overall fire services operation.

Through the audit, Rowland found the department exceeded both its budget expenses and revenues for the year which CAO Charlie Cutforth readily admitted were forecast lower due to not knowing exactly what to anticipate.

Operating expenses, not including the purchase of a new building for a fire hall, hit nearly $1.1 million or about $440,000 over budget. Meanwhile, operating revenue came in $290,000 over the $95,000 that was budgeted, which amounted to the department being over budget by about $155,000.

“Much of the excess spending came as a result of several one-time costs,” stated Rowland.

Most of the savings, that offset increased expenses in other areas in 2016, came in the public works department that came in about $903,000 under budget. Parks and recreation contributions were also well below budget by about $420,000.

Cutforth stated the final numbers turned out better than expected.

“We managed to absorb the tax hits, plus allow for similar ones in the future, instead of having to take the entire hit in 2017,” he stated.

The small surplus, which council approved a motion to transfer to reserves, will provide a bit of flexibility when budgeting begins this week on the 2017 numbers according to Cutforth.

Given that the major paving project for Menaik Road has already been approved for this summer and knowing there will likely be more uncollectable taxes ahead, he told council being on the positive side of the ledger will assist the county in trying to diversify its tax base.

“It’s something that all rural municipalities are facing and we are in the same boat, we need to diversify our assessment and we will be able to do that since we do have the Highway 2 corridor,” he said.

 

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