On Nov. 18, I attended city council to address the municipal utility corporation (MUC). As required by city rules, I pre-registered to speak two weeks in advance, I provided the subject I planned to address and even had several members of the city's Legislative Services department confirm I was on the agenda. Shockingly, halfway through my five-minute presentation, our mayor abruptly stopped me from completing it, suggesting I should wait until the Dec. 2 public hearing.
The whole point of my presentation was to, as a professional courtesy, provide a preview to council of my concerns so they could be addressed in advance, rather than withholding them until Dec 2. The info on the city website about the MUC raised a number of red flags to me. In my professional career, I have reviewed many consultants' reports, so I found it very unusual that this consultant's report says they do not guarantee the info to be correct, they have not even attempted to verify the info is correct and they “specifically disclaim any responsibility for losses or damages incurred” from their report.
My review of the business case financial data in the report is that the MUC:
1. will not make an ongoing profit from the services provided;
2. therefore will not be able to keep our utility rates or franchise fees at current levels;
3. will have to raise rates to return the contractual dividend to the city;
4. without the dividend, will not be able to contribute revenue to offset tax increases.
The city has also provided a second info document for public review. This also raises red flags in that significant facts are omitted. It provides examples of two other cities that have experience with MUCs. It lists Chestermere as having recently shut down its MUC, but it's missing key details, like they tried to make it work for six years, they increased garbage rates by 25 per cent, they increased water rates by 15 per cent, and when they closed it down and moved services back to the city, they were left with a $40-million debt that will take 15 years to pay off and have to pay for severance packages and lawsuits.
However immediately after closing it, Chestermere was amazingly able to lower utility rates by eight per cent. The other example is the MUC for Grande Prairie called Aquatera: the doc says they had a profit of $12 million, however, they only paid a divided of one-third that, or approximately $4 million, and almost 70 per cent of their business and revenue comes from providing water (not a service that will be provided by our MUC).
It also omits mentioning that GP utility rates are almost exactly the same as we already pay in St. Albert, and although the MUC is supposed to help keep taxes low, shockingly the tax rate in GP is significantly higher than in St Albert.
The city website and council repeatedly say they want public input, however when I attempted to constructively provide it, I was not allowed to complete my presentation.
I can only hope there is a more open, complete, transparent dialogue at the Dec. 2, 5 p.m. public hearing.
Mike Killick, St. Albert