Minnedosa hit with financial shock over ethanol plant property reassessment

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This article was published 13/01/2017 (3373 days ago), so information in it may no longer be current.

Bracing for a financial hit, the Town of Minnedosa’s elected officials started saving money a few years ago to help ease them through a potential rough patch.

When this rough patch finally arrived, it was much larger than they’d anticipated.

In 2013, Husky started the appeal process for its Minnedosa ethanol plant’s 2013 property reassessment.

Last year, the appeal process concluded, with the ethanol plant coming $3.9 million short of its previous $22-million assessment.

“I don’t think anybody on our side of the fence thought it would come out as it did,” Minnedosa Mayor Ray Orr said, noting that they’d only saved up about $175,000 in reimbursement payments.

Now, the municipality owes Husky Oil Ltd. about $700,000, backdated to 2013 including interest.

While this is a financial shock to the Town of Minnedosa’s 2,600 residents, Orr clarified that there’s no ill will toward Husky.

“They’re certainly entitled to pursue that and if the assessment was too high, fine then; that’s a business decision and they got a result … They’ve got a business to run — they’ve got to keep themselves viable. I don’t blame them at all.”

Even when assessed at $3.9 million less than it previously was, the ethanol plant continues to carry a significant and positive economic impact to the Town of Minnedosa, Orr clarified.

Still, he’s not without his grievances, which have been forwarded in a letter to three prominent provincial officials, including Premier Brian Pallister, Indigenous and Municipal Relations Minister Eileen Clarke and Education Minister Ian Wishart.

One grievance relates to the thee years it took for Husky’s appeal to go through the processes, during which the amount owed back to the energy company incurred interest, which the Town of Minnedosa is now responsible for paying.

Secondly, the Town of Minnedosa is now responsible for not only the municipal share of Husky’s property taxation back-pay, but also the education portion.

Orr said that he has already met with Rolling River School Division chair Terryl Maduke, who has joined the division in looking into it.

An elected official, Maduke declined comment to media on Thursday.

Regardless of these outcomes, the Town of Minnedosa is bracing itself for the impacts of paying back Husky Oil — a process that began last year with the first

of four annual $175,000 payments.

The next three payments will be more difficult now that they’ve depleted their savings, Orr said.

“We didn’t quite think it would be cleaned out in 2016 in one fell swoop,” he said.

“We’re just going to have to look at our spending and see if we have room somewhere in something that might be discretionary, and look really hard at our expenses,” Orr explained, noting that it will all come down to either cutting expenses or increasing taxation.

The Husky Energy Minnedosa ethanol plant opened in 2008, around which time the Town of Minnedosa marked its 125th anniversary.

Ethanol — branded by Husky and Mohawk as “Mother Nature’s Fuel” — is a high-octane, alcohol-based fuel additive produced from grain, with ethanol-blended fuels offering reduced tailpipe emissions and greater protection from gasoline freezing.

» tclarke@brandonsun.com

» Twitter: @TylerClarkeMB