Despite all the criticisms within the 116-page Aug. 30 municipal inspection report crafted by Strategic Steps Inc., Westlock County is in good financial health, although public opinion of the county’s finance and service levels is average at best.
“Finances could have been stronger, but some spendthrift actions were taken in passing on capital projects where officials seemed to try to save a penny and spend a pound,” noted Shari-Anne Doolaege.
Doolaege said that records show that in 2016, the county’s $14.4 million in liabilities included $2.3 million of deferred revenue from grant funding received but not spent, as well as $7 million held on behalf of the Westlock Foundation and Westlock Seed Cleaning Co-op. The county’s financial assets are $19.4 million, plus $28.6 million in capital assets, for an accumulated surplus of $33.7 million.
“We note that recent efforts have strengthened internal controls within the organization and we note that several auditor recommendations have been followed,” Doolaege said.
With that being said, out of eight other rural municipalities compared in the inspection report, Westlock County had the highest non-residential tax rate at 26.195 mills, and the third highest residential tax rate at 4.5785 mills, slightly higher than the average of 4.5175 but below the County of Barrhead.
A mill rate is the tax rate per $1,000 of assessment.
The Municipal Government Act limits a maximum tax ratio of 5:1 for non-residential to residential tax rates. In the county’s case, its tax ratio is 6:1, meaning it’s non-compliant, but grandfathered and can’t exceed that ratio.
The county also had a significantly lower than average equalized assessment per person at $134,102.
“That shows that Westlock County has a slightly lower assessment base than the average municipality in your comparison group,” Doolaege explained. “That also means that Westlock County has less assessment to generate tax revenue from.”
The county also has the highest population in the group at 7,644, putting it in a unique situation where it has a fairly close to average equalized assessment but twice the people and dwellings.
In terms of generating revenue through linear assessments, like power lines, pipelines and oil and gas wells, the county was second lowest at $154 million.
“Having less linear assessment than other rural neighbours means that less tax revenue is generated from linear assessment…and a great property tax burden is borne by residential farmland properties and other non-residential property,” Doolaege added.
When it came to how residents felt, 59 of 66 respondents said the county’s financial condition was weak to average — residents laid the blame on mismanagement, a lack of long-term strategic planning and little economic development.
Out of 80 residents surveyed, 60 said the service level did not meet their satisfaction, ranking overall service delivery between 0 (dissatisfied) and 5 (average).
Gravel roads and a weak Ag. Services Board were noted as areas needing work.
The report recommended improving the budget process by engaging with the public on local community priorities and tying those in with local strategic priorities.
“Greater transparency is needed to demonstrate the overall stewardship of public assets and to communicate the county’s financial picture in a meaningful way to citizens,” it stated.
The report also found that the deputy reeve used to approve the accounts payable list, but that was an improper manner as accounts payable approvals are part of internal financial controls and “far below the higher-level council policy realm.”
Although council could still continue accessing the list, administration would instead provide quarterly or monthly updates with summaries of actual to budgeted expenses and capital projects.
