Oil price slump cuts into county rev­enues

The Drumheller Mail - - FRONT PAGE - Pa­trick Ko­lafa

When you put it all to­gether it is a se­ri­ous thing we are try­ing to deal with. How do you come up with $2 mil­lion as com­pen­sa­tion for that?” Bob Long Knee­hill County Reeve

The trou­bles fac­ing oil com­pa­nies in light of a pro­longed slump in prices is tak­ing its toll on mu­nic­i­pal­i­ties.

Reeve of Knee­hill County Bob Long says that last year the county wrote off $600,000 in funds owed to the county by oil com­pa­nies. “The po­si­tion that you are in is there is re­ally no as­sets you can go after to re­coup,” said Long. “The as­sess­ment is based on the pro­duc­tion on those sites, and there was $600,000 of that as­sess­ment that wasn’t paid for. It is a big im­pact.”

On top of the lost rev­enue from those as­sess­ments, he says the prov­ince still ex­pects the mu­nic­i­pal­ity to col­lect the school req­ui­si­tions. The Al­berta As­so­ci­a­tion of Mu­nic­i­pal Districts and Coun­ties (AAMD&C) has be­gun lob­by­ing.

“The AAMD&C has res­o­lu­tions that are mov­ing for­ward ask­ing the gov­ern­ment for that re­lax­ation, but it is still in the works,” said Long.

He has also heard about some landowners who are also hav­ing trou­ble col­lect­ing what is owed from trou­bled com­pa­nies.

“I would as­sume that some of the stuff we are ex­pe­ri­enc­ing, they would be ex­pe­ri­enc­ing as well,” he said.

The trou­ble in the en­ergy sec­tor hits mu­nic­i­pal­i­ties in other ways. “There are all kinds of things. The im­pac t from the oil to this re­gion on our lin­ear, last year we lost $200 mil­lion of as­sess­ment, which was about a $2 mil­lion ab­so­lute cash hit to us,” said Long. “When you put it all to­gether it is a se­ri­ous thing we are try­ing to deal with. How do you come up with $2 mil­lion as a com­pen­sa­tion for that? “

He ex­plains that as­sess­ment was as of July 2015, so cur­rently they are wait­ing to see the im­pact for this year.

“You hear so much about the roy­al­ties that oil com­pa­nies pay at the provin­cial level, I don’t think a lot of peo­ple truly un­der­stand the im­pact oil com­pa­nies have on the fi­nan­cial sit­u­a­tion at a lo­cal level,” he said. “We know first hand what their con­tri­bu­tion is, and it’s ma­jor. We value that re­la­tion­ship highly.”

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