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No basis for class action: city

Resident alleges due process not followed, threatens class action lawsuit if council approves municipal utility corporation on Monday
St. Albert Place
ST. ALBERT GAZETTE/Photo

The City of St. Albert is “not aware of any legally valid basis” for a class action lawsuit some residents are threatening to launch, should city council decide on Monday to form a for-profit city-owned utility corporation.

Resident Gord Hennigar alleged in a letter to councillors Dec. 8 St. Albert has not followed due process, as mandated by provincial legislation, to set up a municipal utility corporation (MUC).

“In my mind, I’m representing a fair amount of people that aren’t prepared to put their name up front,” Hennigar told the Gazette, adding he knows of over 30 residents interested in a lawsuit. “There are a number of people who are prepared to throw money in, and there’s a fair amount of money in this community.”

The process to set up an MUC – which council has been deliberating as an idea to drum up new revenue streams – is set out by two pieces of provincial legislation: the Municipal Government Act (MGA) and the Municipally Controlled Corporations Regulation.

They work in tandem to lay out steps a municipality must follow prior to passing a resolution to form a corporation. Two of the main requirements are to put together a business plan for the corporation and hold a public hearing.

Hennigar, who said he has experience crafting business plans, alleges the one drawn up by consultant Grant Thornton is incomplete and does not contain all the information required by legislation.

“This business plan that was put together by so-called ‘experts’ in my mind lacked a lot of figures and so forth,” Hennigar said.

St. Albert corporate communications manager Cory Sinclair said in an email the city “is not aware of any legally valid basis on which a class action lawsuit could be certified by the Court in relation to the process that has been followed relative to establishing and controlling a corporation.”

When asked about the alleged omission of environment risks from the plan, Sinclair noted not all of the business plan was publicly released, including an appendix including a detailed risk assessment. This was to maintain competitive advantage, he said.

Hennigar has also alleged the plan does not adequately explore potential risks or demonstrate the MUC would not be reliant on its shareholders.

After a lengthy public hearing on the MUC that went late into the evening Dec. 2, St. Albert city council closed its public hearing and put off a decision on forming a utility corporation for two weeks.

Hennigar said there is “a lot at play” with the utility corporation idea, and it will affect every taxpayer.

“There’s a lot at play here and I don’t think these people (council) have really thought it all out,” he said.

Another resident, Darrell Kremer, said he hopes “common sense will prevail” and there will be no need for a lawsuit, and he strongly believes the “vast majority of people think (the MUC) is insane.”

“Any positive slight gain that is in the future is fraught with risk and peril,” Kremer said.

Not heard

In advance of their potentially landmark decision Monday on whether to form an MUC, council has “shut itself out from public opinion” and cannot receive any new input or information from residents.

That includes Hennigar’s letter, which city staff responded to, saying it would be held confidentially until after council’s decision.

The issue comes down to St. Albert’s procedural bylaw, which prevents council from receiving any new information on an issue after they have closed a public hearing until after they make their decision. If any members of council do hear new information, the public hearing process could be compromised.

But council had the option to adjourn the public hearing, thereby leaving the option for additional submissions on the table.

Hughes opposed the move to close the public hearing during council’s Dec. 2 meeting, saying if council is not ready to make a decision they should be open to new information.

“I mean, this is a really big decision for this council, and to undo it will be a very expensive procedure,” she told the Gazette. “In my mind, why would you not want to have as much information as possible, from every single source, especially the public?”

She added during her career as a councillor, public hearing adjournments have occurred.

At the Dec. 2 public hearing, Mayor Cathy Heron asked repeatedly whether there was anyone else who wanted to address council, until there was no one left to respond.

But Hennigar said council should be listening to taxpayers right to the last minute, since residents would be paying the bill.

“It concerns me and in actual fact it pisses me off.”

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