Woodlands County provides relief for ratepayers with five months of grace and may consider incentives for those who can pay on time

As property tax season approaches for Woodlands County residents, administration looked to council for direction on a bylaw to extend the penalty for late payments on taxes. The Director of Corporate Services, Alicia Bourbeau, provided the bylaw during a special meeting on Wednesday, April 29. “The reason this bylaw is before you today is because administration was tasked to find the balance between what is right and what is necessary,” she began.

“The bylaw, as written, provides for a due date of November 30, with the penalty for late payment to be levied on December 1. These dates accomplish two things; firstly, it provides ratepayers additional time to pay their taxes, and the second thing is it allows the county to remain compliant with requisition deferrals that the province laid out for non-residential ratepayers.” She added that while everyone agrees that providing additional time to ratepayers is the right thing to do, the extension to pay without penalty “could potentially negatively impact the county’s cash flow” should most payers chose to delay their payment.

“Annually, the county depends on payment of taxes by June 30 to sustain operation for the remainder of the current year, plus the first part of the following year. A delay in generating this necessary cash flow is going to make it difficult for the county to sustain their operations,” explained Director Bourbeau. The bylaw keeps June 30 has the due date but extends the penalty time frame. The county would still like to receive payments by that date, but if you cant, you will not be charged a late fee. Administration then asked council to consider implementing an incentive to encourage on-time payments. 

Councillor Jim Rennie liked the idea. “I don’t know why anyone would pay on-time unless we offer some incentive.” He wondered if the cost of using debt to cover the hole left by ratepayers who take advantage of the delayed fees would be the same as offering savings to those who paid on time. “I do think if there’s an incentive that we will have more money coming in at the regular June 30 date as opposed to waiting until November 30.”

Councillor Kusch agreed, as did Councillor McQueen. Councillor Govenlock did not. He said that there was a missing component in the decision about an incentive and that it was the financial impact on the budget. He noted that impact on businesses and residents was one thing but that the two forestry industry players in Woodlands County should pay in full. “COVID-19 has had no impact on its operations whatsoever. Those two companies can pay their taxes every bit as much this year as they were able to last year. When you calculate three million or five million dollars and a three percent reduction, specifically for those people, it is a giveaway.”

His comments led to a full-on discussion about who should receive an incentive and who should not. Govenlock stated that the loss to the county, from an incentive to big companies, would be high. “Four percent of Woodland’s revenue is based on the tax interest penalties that are in place. I mentioned something about the calculation of what that dollar amount would look like, and it is in excess of 20 million dollars of tax revenue. Ten percent would be two million dollars, and five percent would be one million dollars.  So, four percent is $800,000 that is potentially at risk on the revenue side of things.”

Director Bourbeau said that though he was correct in the potential loss to the county, there was a silver lining elsewhere. She noted that a considerable amount of penalties currently on the 2019 actuals would likely end up as part of a “bad debt write off.” That, along with a budgeted amount of $146,000 for penalty revenue, means that there is room to maneuver around a loss from giving an incentive. She also said that information about the “bad debt write off” would be before the council soon.

Councillor Rennie chimed in and said that he would like to see all the numbers around an incentive, and how it could negatively impact the county before voting on it. He also wondered if the program could be for residents and small businesses rather than everyone. Councillor Govenlock then brought up his reasons for why he is not in favour of a “carte blanche” incentive. “We are in a deficit position, and we are already working with the loan from the Bank of Commerce, and we no longer have cash of our own. How are we going to restore the financial capacity of this municipality to operate within its means?” He added that he is not a fan of “giving away tax dollars that the municipality requires to continue to operate based on industry or residential players who have the capability to pay their taxes.”

Mayor John Burrows addressed the incentive by saying that the idea of it is not to “pick and choose who gets it.” He said that usually a due date is set for taxes and ratepayers that are late pay a six percent penalty. He wanted council to understand that the bylaw before them would move back the date where late penalties begin, by five months. “That means there is no incentive to pay taxes until December. The position now is that we need revenue to operate, and an incentive for people is the way to go.” Director Bourbeau reminded council that the decision before them was for a due date and that specifics about an incentive could be decided later. She said that having the due date would allow them to “move forward with preparations in getting ready to print taxation notices,” which need to be out by June 1 at the latest.

Councillor Rennie made the motion to put the bylaw forward, with the understanding that they can look at potential incentives and revisit the topic at the next meeting. Once that was confirmed, he made the motion to put the bylaw through the first reading. Councillors Klein and Prestidge made the following two motions for second and third readings, and Councillor Kusch made the last, signing the bylaw into place. It passed with full support. Administration will present options for incentives at the May 5 regular meeting.