Well, just as expected, the announcement that came from Chestermere Utilities Inc. (CUI) and the City of Chestermere just weeks before Christmas, has residents fuming mad and looking for change. Requesting everything from an early Municipal election to the firing of the utilities company CEO, residents have been making their voices heard.
Questions from residents ranged from how did this happen? How does a company that is governed by the City lose approximately $1.4 million over the past three years? Who is to blame?
I tried to reach out to Ray MacIntosh as he had been with CUI since the beginning. MacIntosh had been the Director of Finance with the City of Chestermere from October 2006 until October 2012 at which time, the Certified General Accountant, became the President and Chief Operating Officer of Chestermere Utilities Inc. However, MacIntosh vanished from CUI in August 2015. I contacted MacIntosh and asked him if I could ask him a couple questions regarding the recent rate hike announcement from CUI. MacIntosh responded with “It is probably not a good idea for me to talk to you. I’m not on the inside and I haven’t been in contact with anyone from CUI either, so I would only be making guesses and that is never a good idea”.
When I asked current CUI CEO Leigh-Anne Palter about Macintoshes departure, she commented, “Ray was the President & Chief Operating officer from 2012 until his departure. Ray reported to Don Roberts who served as CUIs CEO from 2012 to mid-2014. Ray left CUI at the end of August. I’m sure you will appreciate that out of respect I will not discuss individual employee matters”.
Palter also added that there have been some recent shuffling on the CUI board of directors as well. “Gord Lowe, Andy Edeburn, Kelsey Johnson and Chris Steeves are no longer serving as members of our Board. Their terms were concluded by resolutions of Council earlier this month; December 3rd for Chairman Lowe and December 8th for the others. At the same time Councillor Heather Davies was appointed to serve as a Shareholders’ representative and we understand there will be a process in the New Year to recruit new board members. As for the reason for their departures I need to direct you to the Shareholder”.
There has been some confusion as to the Mayor’s involvement with the CUI board of directors. Here is the list from the CUI website that shows past and current board members:
Town of Chestermere Mayor, Patricia Matthews, Board Member, Aug 2011 – October 2013
Town of Chestermere Councillor, Patrick Bergen, Board Member, August 2011- April 2013
City of Chestermere Councillor, Christopher Steeves, Board Member, Jan 2013 – December 2015
City of Chestermere Councillor, Stu Hutchison, Board Member, October 2013 – October 2015
City of Chestermere Councillor, Heather Davies, Board Member, December 2015 – present
City of Chestermere Councillor, Jennifer Massig, Board Member, November 2015 – present
Business Owner, Fred Clarke, Chair, August 2011 – April 2013
Business Owner, Dr. Catherine Connolly, Chair, August 2011 – July 2014
Entrepreneur, Kelsey Johnson, August 2011 – December 2015
Retiree, Gord F. Lowe, Chairman, Public Board Member, November 2013 – December 2015
Business Owner, Andrew Edeburn, Vice Chairman, Public Board Member, October 2013 – December 2015
Lawyer, Patricia McLeod, Director, Public Board Member, July 2015 – current
Lawyer, Leslie Weekes, Director, Public Board Member, July 2015 – current
As for staffing at CUI, Palter stated, “CUI has 15 staff members including me. This does not include the EPCOR people who are assigned to help operate our water and sanitary systems”. In the interview a few weeks ago when this announcement first came out, the CEO also mentioned that CUI had just gone through some staffing changes as there were complaints coming in from residents about the lack of polite customer service they were receiving when calling of going into the office.
There has also been some confusion and speculation regarding the amount of the rate increase. One thing was clearly stated when this was all first brought to light – residents were not being punished for the amount of money that had been lost over the past three years. The rate increase is what we should have been paying the whole time and so this is on a go forward basis. CUI was not taking the lost $1.4 million and trying to now recoup it from its customers. However, there is something interesting when you look at the math of this.
Chestermere Utilities CEO told us that there are about 5500 residential customers and 220 business customers. So…if we use those numbers and the $30 approximation of what we’ve been told the rate increase will be per month….that means that in the first year of the increase, CUI customers will pay out approximately $2,059,200. In one year, the amount lost over three years plus some will be paid to CUI.
One Chestermere resident, Tyler Bishop, sent an email to the CEO regarding how this loss happened and about the increase. CUI again states that the residents are not going to be responsible for repaying the lost funds. “I can assure you that the rates that are being developed for 2016 reflect the expected costs to serve customers in 2016. Operating shortfalls from previous years are not being recovered through this rate increase”, Palter told Mr. Bishop.
Bishop then created an interesting comparison showing Chestermeres utility rates versus Okotoks, Strathmore and Cochrane. Bishop authorized us to use it in the article which is the below photo.
The utility CEO also told Bishop, “There are many reasons why the rates in Chestermere are different than other Alberta communities. As a result; a direct comparison of rates from one community to another is extremely challenging. A key point of differentiation between CUI and all of our neighbours is that CUI is an arm’s length, municipally controlled corporation. That means that the costs to serve our customers must be fully accounted for in the rates that we charge customers for our services; there is no ability for CUI to access the municipal tax base to cover shortfalls if we do not set our rates to cover these costs”.
The public is encouraged to attend the January 18th council meeting where Palter will be presenting a detailed report and the purposed rate increase to council. Mayor Matthews has confirmed that there will be time allotted for questions from residents.
