Attending the Dec. 2 public hearing on the municipal utilities corp (MUC) was like watching the Titanic actually steer TOWARD, not away from, a massive and very real financial iceberg. In the City's own presentation and Council's Q&A, some disastrous facts were provided by the City.
1. Confirmation that the $ dividend being “forecast” can only be applied ONE TIME to potentially reduce taxes. Since the divided does not increase year over year, it just holds taxes at the current rates. So it is false to claim that it will help reduce taxes year over year. It’s like a shell game where we will pay more for our utilities just so some money can be said to be a “profit” that can be moved over to lower our tax bill. Like robbing Peter to pay Paul.
2. The promise that the dividends will be paid from new revenue sources from outside the current residents is also false. The business plan (which it seemed some councillors have either not read or not understood) data factually shows that the net revenue from new services will not even cover the overhead staffing costs of the new MUC. These double costs would not be required if the services proposed for the MUC stayed within the current City management. This duplication is projected to cost $1.1 MILLION dollars but the net profit indicated was only $288,000 so this means the MUC is in the hole by over $800,000!
3. Even after five years of operation, the budget document actually shows the MUC will be in the financial red (negative) by $437,000.
4. After 10 years, it actually gets worse (in today's economy, who has a magic crystal ball able to look 10 years into the future?) with the overhead costs exceeding net revenue from new services by $484,000.
All these financial risks could simply be avoided and the potential revenues could still be quickly achieved by our Council directing the City CAO and administration to aggressively pursue these new revenue sources within the existing city structure without the costs, risks or delays of setting up an MUC. This begs the question ... if these new services can supposedly generate positive revenue (the report is less optimistic saying “potential revenue”) for the MUC, why isn’t our Council already pursuing them, like solar power generation, or expanding solid waste collection to condos or businesses, or providing hydro-vac services or generating energy from waste (interesting that the trial plant won’t even be located in St. Albert, even though our tax dollars are paying for it.)? It also seems that the MUC has just lost a potential new customer with Sturgeon County tabling a bylaw (eerily similar to the one passed passed in St. Albert granting the MUC a monopoly to provide utilities that protects it from real business competition) that would prohibit any other business (like our MUC) from providing utility services within Sturgeon County.
It's not too late to steer away from the MUC iceberg as Council will vote on the MUC on Dec. 16. I hope our Council takes an honest, informed, hard, detailed look at the financial data provided by the City administration and consultant, sees by their own numbers that it is a risky, money-losing ponzi scheme, and votes to protect the best interests of the utility bill and taxpaying public by not supporting the MUC.
Mike Killick, St. Albert
