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City must do environmental assessment for MUC

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Honorable Mayor and Councillors;

We have reviewed your Municipal Utility Corporation preliminary business plan and do not see any reference to or the results of an environmental risk assessment having been completed.

It is our position that a professional environmental risk study must be completed and included in the business plan for a municipally controlled corporation.  Section 4 of the Municipally Controlled Corporation Regulation 112/2018 says in part:

"4.  For the purposes of section 75.1 (4) (e) of the Act, a business plan must include the following information:
(d) any potential environmental, financial, labor or other liability risk in controlling the corporation; "

Therefore, it is our position that before council passes any bylaw authorizing the creation of a Municipal Utility Corporation, it is mandatory that they complete a professional environmental assessment which delineates the environmental risks involved.

Secondly, Municipally Controlled Corporation Regulation 112/2018 provides in part:

"4.  For the purposes of section 75.1 (4) (e) of the Act, a business plan must include the following information:
(e) information demonstrating that the corporation will not be dependent on the shareholders for its ongoing operation”

A reading of the Municipal Utility Corporation preliminary business plan does not demonstrate that the Municipal Utility Corporation will be operating independently of the City of St. Albert. One simple example will show the co-dependency between the shareholder and the controlled corporation.   

Under the business plan heading “Financial Projections” it is stated: “Office Lease: It is assumed that the MUC would share office space from with the City's offices until 2024 for a consideration of $1 annually. Subsequently, the MUC would lease a separate office space starting in 2025 for $120,000 annually.” Essentially the controlled corporation is being subsidized by the shareholder in excess of $100,000.00 per year for several years.

Thirdly, under Division 9 – Controlled Corporations of the Municipal Government Act, Section 75.1 (2) states in part:

“75(2) A municipality ... may establish the corporation ... only if the council of the municipality ...
(b) is satisfied that ...
ii) the controlled corporation will provide a service or a benefit to residents of the municipality ...”

Since all the utility services are now provided to the residents of St. Albert, it is difficult to suggest that this new Municipal Utility Corporation will be providing any new or improved service to the community. Additionally, an analysis of the cash flow statement provided in the business plan clearly shows that the MUC will be operating at a loss for many years into the future. Therefore; it is difficult to understand how any municipal council can be satisfied that this venture is a benefit to the St. Albert community.

If council proceeds with a motion to implement this Municipal Utility Corporation without full compliance with the provisions of the aforesaid Act and Regulation, we will have to consider pursuing a class action for this noncompliance with the Municipal Government Act and Municipally Controlled Corporation Regulation 112/2018.

Gord Hennigar, St. Albert




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