In April, council approved that city “administration prepare a Municipal Utility Corporation (MUC) services bylaw for Council's consideration no later than end of Q3, 2019”. It is my understanding that essentially this proposes that the city create a totally separate Municipal Utilities Corporation to deliver public utilities like water, sewage, storm water, garbage, recycling, organics, etc., and that this separate utility company would have the ability to set its own rates to cover its costs.
Another aspect of the proposal is “council may wish to consider a bylaw restricting the provision of utility services by others within St. Albert,” essentially eliminating any other company from providing competing services, competition which could drive down costs. In the documentation, it references that other municipalities “have successfully created wholly owned organizations like the proposed MUC” and it lists Chestermere Utilities Inc ( CUI) as an example (City of Chestermere just east of Calgary).
Interestingly, on June 18 it was announced that after years of ballooning rate hikes, in 2016 of 25 per cent rate increase for waste services and a 15 per cent hike for water services, that Chestermere would be dissolving its separate utilities company after six years of failure, increasing debt load and increasing rates. The provision of utility services will be brought back into the control of the city and water and sewage would go back to being provided by EPCOR (like we have today in St. Albert). The rationale for dissolving the CUI was that the city could achieve a “substantially lower costs to deliver services” and was targeting a utility rate reduction of up to eight per cent. Unfortunately, it will take Chestermere taxpayers 15 years to pay the approx $40 million debt incurred by the failed utility corporation and pay severance packages to the staff.
I hope that our council takes a very in-depth, rigorous analysis, (maybe even hire an independent, expert financial auditor to review the data of the proposal) before approving it so that we the tax/utility ratepayers don’t end up six years later like Chestermere with a massive debt and sky-high utility rates.
Mike Killick, St. Albert
