WHEREAS Alberta Municipal Affairs provides linear assessment for all municipalities and the Municipal Government Board (MGB) may overrule an assessment with each decision not binding on another; andWHEREAS the Designated Linear Assessor uses some information from the AEUB record to arrive at an assessment resulting in discrepancies in assessment for similar wells; andWHEREAS a municipality can not get the AEUB to make corrections in the board records;
THEREFORE BE IT RESOLVED that the Minister of Municipal Affairs review the department’s policy, guidelines and regulation by using all AEUB information so that similar wells be assessed in the same manner.
In each of 2005 and 2006, Northern Sunrise County (NSC) filed linear property assessment complaints with the Municipal Government Board for certain wells which were assessed by the Designated Linear Assessor (DLA) as crude oil flowing when the wells were in fact injection/disposal on October 31st of the applicable assessment year. These are referred to as complaints as “wrong well status” complaints. NSC recently received Board Order 068/06. The Board did not allow the wrong well status complaints for this type of wells for 2005. The 2006 wrong well status complaints remain outstanding, and a merit hearing is scheduled for early November of this year.NSC has researched the matter further and finds the following;Well Type Code Active Wells Bottom hole zone Total inj hrs Well depth Schedule D depreciation factor Average well assessmentInjection/disp WL40 214 Single 7,596.4 1,858.8 1.0 185,495Injection/disp WL110 5 Multi 7,584.0 1,284.8 1.0 224,320Cr-oil flow WL80 7 Multi 7,596.4 1.858.8 0.1 19,493The seven wells coded WL80 are actually injection wells as per EUB records, which have a second or more zones either sus-cr-oil (suspended) or stndg (standing). The five wells coded WL110 also have a second zone sus wdisp (suspended water disposal), drain or stndg. All 12 wells use zone 2 except one well uses zone 3 for disposing the water. NSC has requested that the seven wells coded WL80 cr-oil flow be correctly coded WL110 (injection) and the schedule D (extra depreciation) be adjusted to a factor of 1.0 instead of 0.1 (10 per cent), since the total injection hours are similar 7596.4 vs. 7584. The wells coded WL80 are deeper yet their assessment average at 19493 compared to 224320 for the other muti zone wells. If these seven wells were treated as single injection (WL40) would result in an average increase of 166002 per well or total increase in assessment of 1,162,014 (based on average well assessments).Municipal Affairs needs to change the department’s policy, guidelines and regulations so that a fairer and more equitable assessment is achieved on all wells.
Resolution 9-06S requested the Government of Alberta to change the definition of improvements and/or property in Section 284 of the Municipal Government Act to include underground storage caverns. The government response indicated that the injection wells associated with storage caverns are assessed as linear property, but the assessments do not include these underground storage caverns. However, some of the equipment associated with the caverns (for example, dehydrators) would be assessable as machinery and equipment. Any amendments to this will require extensive stakeholder input, and will only be possible with a review of the Municipal Government Act.
Municipal Affairs conducted a review of their processes in order to address this concern. In fall 2008 sitting, they amended the Municipal Government Act to give more powers to an assessor if they have reasonable grounds to believe that the specifications and characteristics of a linear assessment are inaccurate. If this happens, an assessor has the ability to prepare an assessment based on the most accurate information available.