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Innisfail gets ready to battle big utility

Council draws a line in the sand on franchise fee decision date notice
MVT Innisfail town hall franchise fees
The Town of Innisfail is sending FortisAlberta and ATCO Gas a notice that the municipality finds it unreasonable to send the town an early fall deadline for franchise fee rates for the upcoming year when the town's budget process has not yet been completed. File photo/MVP Staff

INNISFAIL – Town council is refusing to bend to a demand by FortisAlberta to make a decision by Nov. 1 on whether Innisfail will raise franchise fees for 2022.

Council also approved motions at its regular meeting on Oct. 12 that administration contact Fortis that the Town of Innisfail would have an answer to them by Dec. 1 on whether it would be changing its franchise fee rate for 2022.

The town will also be asking Fortis why the utility company is changing its timing requirement from last year when the town was granted an extension into January 2021.

As well, the town will be reminding Fortis, as well as ATCO Gas, of municipal budget cycles, which begin this time of year and end in November, and the challenges the town faces in making franchise fee decisions prior to the budget process.

Council was told by Erica Vickers, director of corporate services, she did not know why Fortis would not give an extension this year, believing last year might have just been “an anomaly.

“We already did send off an email to Fortis and they were very firm in the timeline,” said Vickers.

The Nov. 1 deadline given to council angered most council members, who some believe it’s “unfair” to force council into a decision before going through its traditional early fall budget process for the coming year, and less than two weeks after a new and mostly inexperienced council is sworn in following the Oct. 18 general municipal election.

“All it is, is just a computer entry for them (Fortis). It’s not built into the numbers they deal with, or their numbers on the bill. It’s just a number,” said outgoing mayor Jim Romane at his last council meeting on Oct. 12 before his retirement. “And yet they are telling us they have it in advance.

“We haven’t done our budget totally, and we have been working on it but golly how can we say we need this much, a two per cent increase when we don’t know the shortfalls in the budget to deal with that would cause it to be required? To me they won’t look very smart if they say, ‘well it’s too late now you can’t do it.'

“That’s baloney,” the mayor added.

Coun. Jean Barclay agreed, and initiated the move to have Fortis contacted to say the town’s decision would be decided at “an appropriate time” like the town did last year.

“They make a lot of money out of this community and we’re their customer. I think we need to try to drive this boat a little bit rather that Fortis telling us what to do,” said Barclay. “This belongs as in-budget where we can determine exactly what we need going forward. I have never liked this coming at this time of year.”

Barclay added she wanted administration to “push back a little bit” because she believed other municipalities may be facing the same issue and that the Alberta Urban Municipalities Association (AUMA) may want to get involved and start advocating for municipalities that are being forced to make a decision that comes at an “inappropriate time every year.”

Vickers brought both utility company 2022 franchise fee discussions to council on Oct. 12. For ATCO Gas, Vickers proposed the 2022 ATCO Gas franchise fee to remain unchanged from last year at 27 per cent, which would generate revenue of $726,378, an increase of $98,785 for 2022.

Council passed the motion to keep the ATCO franchise fee rate at 27 per cent but then passed another motion to send the utility company a message of concern that was similar to the one being sent to Fortis.

For Fortis, Vickers initially proposed a two per cent franchise fee increase from 15 to 17 per cent.

Council was told that by increasing the Fortis franchise fee to 17 per cent it would then generate $1,648,653, which is an additional $193,959 from what 15 per cent would bring in. It would also result in a monthly $1.92 increase for each Fortis customer in town, from $10.18 to $12.10.

Vicker’s report to council on Oct. 12, said the proposed two per cent franchise fee hike for Fortis would also help the town deal with numerous high expenses for the coming year, including:

• RCMP increase - $250,000;

• annual helipad costs - $80,000Staff merit costs - $90,000;

• staff COLA costs - $200,000;

• increased carbon tax costs; and

• other smaller increases coming in from many different suppliers, such as CAEP and Alberta One Call

However, council defeated the motion to raise the franchise fee to 17 per cent. Council then moved and approved the second motion to send Fortis a notice that it would have an answer to the utility company by Dec. 1 on whether it would change its franchise fee for 2022.