One city councillor is not happy St. Albert spent $63,000 on an advertising campaign for a supposed solution to falling municipal revenues before a business case for the idea of a municipal utility corporation was even examined.
The advertising campaign centres on St. Albert’s proposed MUC, which city council held a public hearing for last week. Just over 50 residents showed up, and the vast majority of speakers expressed opposition to or concern about the MUC’s business case.
No advertisements promoted the MUC itself, said an Oct. 8 memo from administration to city council that was provided to the Gazette. However, the campaign’s timelines were in sync with the MUC’s timeline.
Advertisements began one week before a business case for the MUC was discussed behind closed doors at a city council meeting, and ran for six weeks leading up to the MUC’s Dec. 2 public hearing.
“The campaign dates will be adjusted if the public hearing does not take place on December 2,” the memo stated.
Funding for the campaign came from a surplus in St. Albert’s corporate communication budget due to vacant positions, and “consulting budgets” for the mayor and chief administrative officer.
Hughes said she has never seen a campaign like this happen before, where without council approval, administration “takes it upon itself” to run an advertising campaign.
“I’m not happy about it,” she said. “First of all, the business case doesn’t support what’s being stated. It’s not supported by the business plan.”
One aspect of the campaign was a video entitled “Preparing for Prosperity” that featured Mayor Cathy Heron and chief administrative officer Kevin Scoble speaking about the need to hunt for new revenue streams in an environment of falling traditional revenues.
“One potential solution for some new revenue is the concept that St. Albert is exploring, and that is a municipal utility corporation,” Heron says in the video. “(The corporation) will be able to bring in new lines of services that will generate revenue that will then feed back to the municipality to help offset taxes.”
Hughes said the MUC case demonstrates a one-time tax relief, which will not be sustained in future years of the corporation. A 10-year financial outlook shows dividends transferred from the municipal utility corporation are not set to increase or be maintained, but are projected to fall.
During the Dec. 2 public hearing, Hughes confirmed from city staff dividends from the corporation to St. Albert would serve as a “one-time cash injection into taxes,” since they are not increasing. Although the dividend would help subsidize taxes, it would only directly impact the tax rate for the corporation's first year. After that, the dividend would not be counted as new revenue.
Hughes said the utility corporation promotional video puts council objectivity into question, since St. Albert was promoting starting a new business it had not seen a business case for yet or had a public hearing on.
Coun. Ken MacKay told the Gazette he does not share Hughes' concerns, and the advertising campaign does not prejudice a decision by city council on the MUC.
"I don’t think it specifically says that this is what we’re doing; it identifies what’s next for us (and) it identifies that as an opportunity as to what we’re looking at," he said. "We may decide that that's not where we're going to go ... but that doesn't say that our ad campaign in relation to the whole benefit is lost."
MacKay said generally speaking he has always thought St. Albert has been "missing opportunities" to attract new residents or developments by not advertising in places like movie theatres to the extent neighbouring municipalities do.
A request for interview was not granted by City of St. Albert communications. Instead, a version of Hughes’ information request on the advertising campaign was provided. Heron was not immediately available to comment for this article.
Waste of money?
Currently the city is obtaining feedback on the advertising campaign until Dec. 14 through an online engagement tool. At press time, it had garnered eight responses, many of which described the campaign as a “waste of taxpayer dollars.”
One respondent said the campaign is “misleading in title and approach” and it is “masked propaganda” for the city’s pursuit of a MUC and waste to energy plant, without providing any information supporting the projects.
Another respondent referenced the "tough" financial position of the city and called the campaign "a poor use of my tax dollars."
"I am entirely unimpressed. These are my tax dollars and this is certainly not how I care to have them spent," wrote a third respondent.
The campaign involved a variety of television, radio, digital and move theatre advertisements.
