City CAO Kevin Scoble gave councillors two choices Monday night: approve the inception of a Municipal Utility Corporation or face an impending financial crisis.
There was no grey in Scoble’s presentation, which was laced with a handful of pot shots at the media. Scoble talked about the limited revenue sources in “the box”, as he called it: taxes, fines, fees and grants. Fine revenue is on the decline, and the city can’t count on the province to provide stable, predictable funding with the current economic climate.
The panacea? A Municipal Utility Corporation, which Scoble said would provide long-term sustainability (financial, environmental and social). It would provide new revenue streams to offset declining ones. It would provide alternative servicing to improve offsite servicing competitiveness, which would increase non-residential growth rates.
Scoble told a packed house at Monday night’s public hearing that administration is currently looking for new revenue opportunities, but they pale in comparison to what could be realized if council votes for an MUC – the former would result in nickels and dimes, while the latter would bring in loonies and toonies.
A slide in Scoble’s presentation asked, “What are the risks of having an MUC?” The first point admitted, “Yes, there are risks to having an MUC and these will be discussed.” The rest of the slide asked, “What are the risks of not having an MUC?” It added, “Council has to weigh the risks of doing nothing against the calculated risk of mitigating them through establishing an MUC.” One could conclude the information had a certain leaning.
Another slide, which identified challenges, noted those challenges are met head-on by “recruiting highly trained, invested board of directors.” Meanwhile, the challenge of potentially escalating utility rates would be met by council’s ability to set the rate. On opening day, the MUC would be supported by a core customer base.
There’s an attempt at revenue projections in the presentation that looks out five and even 10 years. In today’s world with rapidly changing technology, and the resulting impact on expected profit margins, depending on the businesses the MUC gets into (which is, of course unknown), it’s akin to trying to shoot a moose at 1,000 yards with a 50 km-per-hour crosswind.
Coun. Sheena Hughes did an exemplary job Monday night, trying to sift through the jargon and refusing to accept information at face value. It was a performance in critical thinking. She came prepared, and her questions were pointed and relevant. Many of the presentations from the public gallery touched on Hughes’ concerns and were clearly researched. Coun. Ken MacKay noted that if St. Albert does this, it will come into the marketplace at the bottom of the food chain, with the likes of Epcor out there swimming the waters.
Every St. Albertan would love to have a profitable MUC working for them. Minimal tax increases and the promise of money for capital projects is alluring. The devil, however, is in the details. If administration’s plan is sound, it should be able to withstand public scrutiny. Council should delay their decision, scheduled for Dec. 16, until this plan has had an intense public engagement process beyond Monday’s public hearing.