Some energy sites in Ponoka County may get back into production despite the county having to write off more than $250,000 in taxes for two bankrupt companies. File photo

Ponoka County writes off quarter of a million in taxes

Bankrupt energy companies hitting county financially

While no one was pleased, Ponoka County council didn’t have a choice when approving the cancellation of property taxes for a pair of now bankrupt and defunct energy companies.

Council passed a motion at its Jan. 14 meeting that took away over $250,000 in outstanding taxes and penalties with likely more to come.

Just over $154,000 in tax arrears and penalties from 2018 plus unpaid amounts from 2019 for Sequoia Resources, who went belly up in March 2018, were written off by the county.

And, almost $100,000 was taken off the books that was owed by Questfire Energy, who declared bankruptcy in Nov. 2017. Around $30,000 of that figure was late penalties.

CAO Charlie Cutforth explained there is a positive side to the situation as Forden Energy, whose owner is based out of Drayton Valley, had its offer to purchase all of Sequoia’s assets in the county approved last month by the receiver.

“As part of the process, any tax arrears from the previous company have to be written off,” he said.

“However, the new owner has inspected all of the sites and there has been considerable theft and damage. So, in order to get them operational there will be some significant investment needed.”

Cutforth added the owner would like to come talk to council to make the request that taxes only be applied as each site starts operating as they are all currently abandoned.

“It seems like a very reasonable approach, as taxes on a typical well site are about $300 a year,” he said, while noting the owner would still have to pay the linear taxes as assessed.

“If that helps get these wells producing again that’s good, since our alternatives are not that great.”

Despite the write offs, the county is still sitting on about $2.2 million in unpaid taxes, with over half that figure owed by energy companies.

Enforcement year-end

The peace officer report was received by council with officer Les Squires attending a total of 250 calls in 2019.

The majority, 36, saw him check into damage to or interference with a highway.

Three other categories that saw significant volume were — unsightly premises (29), abandoned or unsafe vehicles (22), public assistance (21), dog complaints (19) and other (28).

The report also outlines that 28 tickets for various offences were issued along with 83 warnings.

Other business

The purchase of a new Bomag landfill compactor was passed, which will cost the county about $765,000. Council will also follow the recommendation by administration to not trade in an older unit, instead choosing to send it to auction as it is expected to garner a better payback for the county.

Normally, capital purchases like this are left until budget, but there is a six month delivery for this kind of unit so the decision had to be made as soon as possible. The reason for selecting the Bomag over the slightly lower priced competitor, Cutforth stated, is that staff feel the Bomag model is better at handling the work at the landfill site.

“As we use this equipment for upwards of 13 years or more and our operators like them, then I think we should what is best for them,” Cutforth told council.

“Though, when it comes right down to it, the Bomag is specifically built for this use and for the applications used at the landfill.”

Council approved 2020 operational funding support of $60,000 for the Ponoka Jubilee Library, the same amount the county provided for 2019, and also approved $1,500 for Rimbey’s Health Care Professionals Recruitment and Retention committee to continue its efforts in attracting medical personnel to the community.

Lastly, council approved two agreements with neighbouring municipalities.

First was the final two readings of the Intermunicipal Development Plan (IDP) agreement with Lacombe County, followed by all three readings of the Intermunicipal Collaboration Framework (ICF) with Clearwater County.

The document was made mandatory by the province to have in place with their neighbours by April 1 and formalizes how the municipalities plan on working together on a variety of issues.

In addition, in accordance with recently changed provincial legislation, council passed a motion confirming an IDP isn’t necessary with Clearwater County.

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