A survey by the Alberta Association of Municipal Districts and Counties (AAMDC) has found that rural municipalities share at least $160 million annually with urban and regional municipalities.
Al Kemmere, AAMDC president and a Mountain View County councillor, said the results show the ongoing importance of linear taxation to the funding of rural-urban agreements.
Linear taxation is collected from oil and gas facilities such as pipelines and other infrastructure, many of which are located in rural Alberta.
“We need our urban partners to understand that if there is a push to change the way linear is being dealt with, then these agreements may not be able to withstand the test of time and then there is no assurances that the counties are going to able to stay committed to the agreements, because the money may have been taken away from them,” Kemmere told the Gazette.
“We want our urban partners to know that the agreements are only as good as the ability to pay, and if the government from above is going to change the models it will change the way things can be dealt with too.”
In 2014 rural municipalities collected $649,161,078 in linear property tax revenues. The survey results indicate that, in total, about 25 per cent of linear property tax revenue collected by rural municipalities is shared with urban municipalities, he said.
The AAMDC is calling on the province to continue to allow linear taxes to remain with the municipality where they are collected.
“It should remain where it is collected, and we need to work with our members to encourage them to come up with good working relationships between the different levels of municipalities,” he said.
“Let's face it, some of our people (in rural municipalities) do use some of the facilities that are within the urban centres, whether they are arenas or libraries or pools. We need to have some kind of agreement and we are saying that local agreements are the best agreements.”
Conducted by the AAMDC over the past several months, the survey saw 93 per cent of rural municipalities (including Mountain View and Red Deer counties) surveyed about inter-municipal financing agreements including cost sharing, revenue sharing, in-kind services, and regional service commissions.
Cost sharing refers to arrangements where the cost of service delivery, operating expenses, or a capital project is split between rural and urban municipalities; revenue sharing refers to the direct financial contribution from the rural municipalities to the urban municipality; and in-kind service delivery refers to services provided by the rural municipality to the urban municipality for no cost to the urban municipality.
In 2015 rural municipalities made $74,485,752 in cost-sharing contributions, $35,847,697 in revenue-sharing contributions, $3,378,500 in in-kind services, $20,487,224 in regional service commission contributions, and $26,470,971 in other contributions.
The survey results were made public on Jan. 16.
Sixty-one of 65 rural municipalities contacted responded to the survey, reporting that a total of $160,670,125 is shared annually with urban partners.
The AAMDC says the survey resulted in six broad conclusions (as reported in the survey result report):
• rural municipalities collaborate for the benefit of their residents, their urban neighbours, and to promote regional development and prosperity.
• rural municipalities are very likely contributing in excess of $160 million identified in the survey.
• rural municipalities are sharing a considerable portion of the linear property taxation revenue that they receive with their urban neighbours.
• rural municipalities are using a number of different types of arrangements with their urban partners to share services and funding.
• rural municipalities are sharing and collaborating with their urban neighbours.
• the values contributed by each municipality vary widely within each of the contribution types, and by the total contributions for each municipality.
Part of the survey looked specifically at rural municipalities' sharing of industrial property tax revenues and linear revenues with urban partners. Commenting on the survey results, the AAMDC said, in part, that, “As the government undertakes the review of linear assessment, additional factors should be considered including the estimated five per cent loss in province-wide linear revenue in both 2015 and 2016 as a result of low oil prices, and the changes in revenue, both positive and negative, as a result of the modernized well drilling equipment tax.
“The review should also consider the rates of non-payment on property taxes and in particular those associated with the energy industry, the impact of which is unclear at this point. Each of those factors inhibit the ability of rural municipalities to meet their needs of their local resident and the communities they work with to meet regional goals.”
Kemmere, as well as representatives from Municipal Affairs and the Canada Association of Petroleum Producers, spoke at an Alberta Urban Municipalities Association meeting in Calgary last week.
“We were able to present a lot of different things on linear, with the key message (being) that the best result is a local decision on collaboration and that collaboration between municipalities is the only way to survive in the future,” said Kemmere.
The AAMDC represents 69 rural municipalities in Alberta.
"We want our urban partners to know that the agreements are only as good as the ability to pay."Al KemmereAAMDC president
