Edmonton

Willingdon residents angry about huge tax increases

One-hundred and sixty-four residents of Willingdon have signed a petition asking Alberta’s minister of municipal affairs to dissolve the village and make it a hamlet within the County of Two Hills.

The 275 residents of the Village of Willingdon have seen their property taxes double

Mila and Selmer Komarnisky got a property tax bill this year of more than $4,000 for their home, which has an assessed value of $191,000. (CBC News)

When Selmer Komarnisky opened this year’s tax bill, he felt like he was having a heart attack.

Property taxes on the modest bungalow he built with his wife in the village of Willingdon almost doubled: the bill now more than $4,000 for a property assessed at $191,000.

“My husband was so shocked,” Mila Komarnisky said. The new tax bill is equal to two months of payments from the couple’s modest federal pension – and about half their life savings.

“He was so sick he couldn't breathe.”

Emergency room doctors reassured Komarnisky that her 79-year-old husband’s symptoms were related to severe anxiety, not cardiac problems. He has been on anti-anxiety medication since then. But there are no signs the worry will be lifted soon.

Terrible financial management

Residents of Willingdon, a village about 130 kilometres northeast of Edmonton, have seen their residential property taxes almost double to pay for years of financial mismanagement by municipal staff. They have asked the provincial government to step in.

So has the village’s new chief administrative officer.

Robert Jordensen, chief administrative officer, said the municipality needed to charge a higher property tax rate this year to make up for red ink spilled in several previous budgets.
"Nothing balanced. The bank reconciliations were incorrect. All the information was done wrong," Robert Jorgensen said. He was shocked by the “terrible” state of the books when he started the CAO job in March.

Jorgenson told property owners the large increase was due to a simple clerical error in 2013, but CBC has learned the problem started much sooner than that.

“The CAO in 2013 inadvertently put the wrong mill rates in the computer, thus your taxes remained virtually the same as in 2012, and some even went down,” he wrote in a note on the back of this year’s tax notices. “This error has caused a short fall [sic] in tax revenue for the village of over $45,000.”

But Jorgenson admitted in an interview with CBC the municipality needed to charge a higher property-tax rate this year to make up for red ink spilled in several previous budgets.

Errors and Omissions

“If you go back to 2010, and in 2011 and 2012, the auditor was saying the village was running a deficit and that we can't do that,” he said.

"So, in actuality [the taxes] should have gone up last year. They should have gone up over the previous years more than they were increased."

He said Willingdon, a village of 275 people, racked up operating budget deficits for 2010, 2011, and 2012.

In 2013, the village logged an “accumulated deficit,” which is when operating losses rise above any surplus funds the municipality has saved. Running an accumulated deficit is a breach of Alberta’s Municipal Government Act.

Problems with the village’s 2013 budget were also flagged by independent auditors, who called the financial records “incomplete” and insufficient.

“During the year, several different individuals were appointed as CAO,” reads the independent auditor’s report from Wilde and Company chartered accountants, written in August. “As a result, errors in most accounts are pervasive and significant.”

‘Please, do something quickly’

The Village of Willingdon has since hired another accounting firm to help straighten the financial records and Jorgenson said the books are now “balanced.” But residents are skeptical.

The population of Willingdon is declining and the median age for residents is 59 years old. A hand-painted sign scrawled on a store on main street reads: “Willingdon ... where positive growth continues!”
When Ron Rudkowsky moved there in 1968, Willingdon was a bustling agricultural hub. “You couldn’t find a place to rent,” he said.

Over time, young families moved out – and so did the non-residential tax base. The hospital and the school closed. The service station and one of the main stores also shut their doors.

Today, the bustle sounds more like a whimper. The population is declining and the median age of residents is 59. A hand-painted sign scrawled over peeling plaster on a store on main street reads with heavy irony: “Willingdon … where positive growth continues!”

"We are just too small and not enough tax base to be financing all of these costs of operating a separate municipality," Rudkowsky said.

“They’re telling us, ‘Please, do something quickly.’”

He and 163 other people (the majority of eligible voters) signed a petition addressed to Diana McQueen, Alberta’s minister of municipal affairs, asking her to dissolve the village and make it a hamlet within the County of Two Hills.

They think the move will cut costs and will eventually give them relief from the current property tax hike.

Provincial responsibility

"I'm surprised that the province hasn't already stepped in,” said Scott Hennig, vice-president of communications for the Canadian Taxpayers Federation.

He said the province should do “whatever is necessary” to make sure Willingdon is back in the black and stays that way.

"There needs to be some adult supervision at this point,” he said. “Have someone come in and take over, because it's clearly not happening and residents are bearing the brunt of that."

Ron Rudkowsky and 163 other Willingdon residents (the majority of eligible voters) signed a petition asking Alberta’s minister of municipal affairs to dissolve the village and turn it into a hamlet within the County of Two Hills.
CBC News requested an interview with the municipal affairs minister and asked for additional details about this specific case. Those requests were not granted.

Village staff say they’re meeting with provincial representatives this week to talk about starting a viability study, which would look at whether the village is sustainable as a separate municipality.

The process to complete the study could take up to 18 months.

Seniors on fixed incomes, including Selmer Komarnisky, say they can’t wait that long.

"Why should we pay for their mistakes?” he asked. “It's just unbelievable."

CBC News

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