Over two million bucks moved into reserves as financial recovery continues in Woodlands County

Woodlands County Council moved a large chunk of change into reserves on October 5. Last year, Administration applied for the Provincial Education Requisition Credit (PERC) and successfully received 1.5 million. PERC provides municipalities with a tax credit for the education property tax on behalf of delinquent oil and gas properties, which was a big problem for Woodlands County. The credit puts money back into the municipality’s bank to cover the loss they incurred.

Alicia Bourbeau, Director of Corporate Services, explained that one of Administration’s targets in the financial recovery plan adopted by the Council in October 2019 was the rebuilding of reserve funds. “It is our recommendation that we move that physical cash to a reserve fund for future consideration for the public works equipment.”

Councillor Ron Govenlock didn’t like the idea of putting it in that specific reserve. Bourbeau explained that Administration is open to placing the funds into any reserve that Council chooses. She said that she only chose the Public Works Equipment Reserve as an idea. “In discussion with the senior management team, we identified that Infrastructure Services is a large component of the County’s operations and made the choice simply for that reason.”

Councillor Govenlock respected that answer but stated concern. Councillor Dale Kluin understood what Councillor Govenlock was saying. “We as a council have been criticized over the last couple of years as having this operating fund that we use as a slush fund. We have money now that we could be setting aside, and one of the biggest ticket items coming out in the next few years is the replacement of graders. To me, it makes perfect and common sense that if we have the money that we can set aside right now, let’s do that.” Council voted unanimously to place the money in the recommended reserve.

Also, as part of the same meeting, Bourbeau brought forward a new application for PERC for the 2021 year. “The Provincial Education Requisition Credit (PERC) is winding down. I believe October 31 is the deadline for submissions on this program, so we wanted to get this into them so that we would have a good chance of having it approved by the end of 2021.” The application represented approximately $888,000 worth of written-off taxation revenue. She stated that hopefully, they wouldn’t be in this position again. “We still have some conversations with a few companies we have been working with and are waiting to see if they continue to fulfill their promises to pay.” Council had no questions for her and unanimously voted in favour of applying to PERC again.

The third and final finance-related matter Bourbeau brought forward had to do with transferring $950,000 into reserves. Within the 2021 Operating Budget was a planned transfer to reserves of $935,928. Currently, 85 percent of the 2021 tax accounts are in, and Administration felt it was time to move the intended transfers into their own interest-bearing accounts. Any transfers into or out of reserves requires a motion from Council. Separating funds enables easy maintenance and reporting on the activity in each account.

“Transferring to reserve accounts and making the physical move of money from the general account to a separate bank account provides that additional level of transparency as anytime that council wishes to see the bank balances, they can ask for a printout to come forward. And having it in a separate account would then allow any motions to be tied directly to movement of funds in or out of the account,” explained Bourbeau.

“The final number when we finished the budget adjustments in April of 2021 was $935,928 to be moved to reserve allocations, so I’m simply rounding up by going to $950,000.” As she previously stated with the transfer before it, the only reason she chose the four listed (Admin Operating Reserve, Infrastructure Reserve, Airport Capital Reserve, and Water Operating Reserve) was to provide options and fill in the lines.

Councillor Govenlock raised his hand. “One of the reserves is called Admin Operating Reserve. Can you tell me what that is?” Bourbeau said she wasn’t sure and would have to go back into Council minutes to see. “In my personal opinion, an Admin Operating Reserve potentially would be an unforeseen expense such as the server going down that runs all of our software programs. We would come to Council for approval to use this money. That would be one example that I can think of.”

Councillor Govenlock said he understood her reasoning but added that he felt uncomfortable putting $312,000 into the Admin Operating Reserve. He then offered an alternative, saying that it could go into the Infrastructure Reserves instead. “The priority for myself and the residents I represent is the infrastructure area. The maintenance and repairs of the roads in this municipality are their number one priority. I want to dedicate every dollar that I can to prevent the misappropriation of reserve dollars. I’d like to reaffirm my expectations that that money should be dedicated towards infrastructure.”

Bourbeau said she agreed with Councillor Govenlock. She then offered a suggestion. “Perhaps it would be beneficial for the $312,000 to be moved into the Working Capital Reserve, which we are trying to bring back up to 2.5 million dollar balance.”

Councillor Govenlock was happy with her suggestion, and moments later, all of Council voted unanimously to place the $312,000 into the Working Capital Reserve. The group also moved $432,221.76 to the Infrastructure Reserve, $100,000 to the Airport Capital Reserve and $105,778.24 to the Water Operating Reserve.