Significant relief for Woodlands County after speedier-than-expected financial recovery

Following devastating financial news at the Council table in 2019, Woodlands County Council
adopted a five-year financial recovery plan to get the municipality’s finances back on track. The
multi-year plan included a fifteen percent cut to the County’s operating budget, a three percent
tax increase each year of the plan, and a one percent cost increase through 2022-2024.
“In 2019, we had no idea, as Council, the dire situation we were in. We had a Council meeting,
and we were looking to buy two graders, and we were supposed to have six million dollars in
reserves, and there was none. In the same meeting, we found out we were out twelve million
dollars. I can distinctly remember we had a brand-new CAO. He was there for two weeks, and
his comment after was, I just started the job, and I find out the County’s broke. Our five-year
plan was basically of necessity. We had our backs to the wall. We had to do something, or we
would not be able to operate,” reminisced Councillor Bruce Prestidge.
Fast-forward to May 2024, and things look vastly different. During its May 22 regular meeting,
Woodlands County Council got the news they’d been waiting for. Andrew World, Interim Director
for Corporate Services, explained that the plan’s goals had not only been achieved but
surpassed.
With the savings measures in place, the plan projected that Woodlands County would have just
over eighteen million dollars in the bank by the end of 2024, a vast difference from the just
under two million they had in 2019, which brought things to screeching a halt. However, by the
end of this year, it’s projected that Woodlands County should have around twenty-seven million.
That’s a turnaround of about twenty-five million dollars, and roughly seven million more than the
plan expected.
Not only that, but Council also spent a bit more on capital and operational expenditures last year
and is doing the same this year. “In 2023, Council approved 2.9 million dollars in extra capital
and operational expenditures outside of the recovery plan; in 2024, that number was 4.7 million.
That’s beyond the recovery plan.” The expenditures didn’t lower the gains made by the County,
showing even more financial strength.
World said the only thing the numbers hadn’t captured was how inflation played a role. He
added that one reason Woodlands County brought in substantially more money than expected
was low tax write-offs and higher collection rates. One of the big reasons the County faced the
uphill financial battle in the first place was oil companies’ nonpayment of taxes.
“We did write off a lot of taxes, but we made sure we secured our requisitions back from the
province, and our collection rate in 2023 was 96.8 percent. We’ve seen a good collection rate.
We do have some concerns about a few ratepayers (currently) in terms of cash flow from
natural gas prices, but we are in much better shape on our sub-ledger than we were in 2019, by
a long way,” said World.
A significant change through the five-year recovery plan was changing how much money was
set aside each year to cover unpaid taxes. Previously, setting aside around $40,000 was the
norm; however, when the oil companies didn’t pay, that accumulated to millions in one year
without the cash to cover it. The plan set aside 2.6 million yearly to cover unpaid taxes, called
uncollectables. “In 2020, we had three million (in unpaid taxes) we did not collect, but in 2021,

we were at $378,000. In 2022, (it was) $458,000 thousand and in 2023 it was zero. So, we had
significant extra dollars, and that’s what you use to help fund our operations back to pre-
recovery levels,” said World.
Setting aside 2.6 million every year and not having to use more than half a million in 2021 and
2022, and none of it last year, resulted in millions of dollars saved. World recommended either
continuing to set aside funds each year for uncollectables or creating a reserve that is only used
when needed and kept at a specified amount.
For 2024, World said they would be drawing down on reserves a bit due to purchasing graders.
“Council did approve four grader purchases, and we will see an additional contribution from the
savings on the lease that was going to be used for the graders and the sale of equipment that
was in the budget. So, overall, the drawdown is 1.388 million in 2024.”
He also said that some projects budgeted for 2023 would carry over into 2024, drawing down a
bit more, but that he anticipated that there would be projects planned for this year that would be
bumped into next year, balancing it out. “So, I’ve put in a drawdown of about $450,000 for that,”
said World.
“At the end of 2024, we’re expecting to have restricted reserves of 15 million dollars,
unrestricted reserves of approximately 8.2 million dollars, for total reserves of 23.3 million
dollars. Cash balance of about 27 million dollars,” said World. “We have significantly recovered
our cash and added significant operating and capital expenditures into the budget. So, if you
take it all into perspective versus what the plan was looking for, we’ve achieved every part of the
plan.”
World added that Council would be working on its reserves this year, specifically the
unrestricted reserves of eight million. He explained that such a large amount is usually allocated
for various projects and moved into restricted reserves, essentially piggy banks for specific
projects like road repairs, equipment purchases or replacements, etc. “Council is going to want
to sit down and maybe move these reserves around,” he said.
World said they would also compare the County’s reserves to those of other municipalities to
see what kind of reserves they should have. He said the County currently had about twenty-
eight different reserves. “We need to look at the whole idea of what we need for reserves,
including with an investment plan, because we are now sitting on fairly larger cash balances.
We think interest rates are going to start going down so it’s time to maybe start looking a little
longer term on our investments.”
Woodlands County was one of many municipalities left holding the bag when oil and gas
companies didn’t pay their taxes. The province’s new quarterly reports from municipalities will
flag companies in arrears. If those same companies tried to purchase a new license, the
province would know they owed a municipality and could deal with that first.
Councillor Prestidge said that compared with the Administration, their role in 2019 was easy.
“Council had the easy part of making a motion and putting our hands up, but it was
Administration that pulled us through. So, a big thank you to you.”