CUI Rates to increase by 7.8 per cent in 2017

With the approval of a 7.8 per cent rate increase for Chestermere Utilities Inc (CUI) for 2017, Chestermere City council tried to find a balance between the concerns of residents and the needs of CUI.
“Council is very aware of the economic conditions facing every household in Chestermere, including each of our own.
We wanted to ensure that the lowest possible rate was considered while still keeping CUI in a financially sustainable position to provide safe, reliable services,” said Chestermere Mayor Patricia Matthews.
City Council came to the decision after reviewing the past year’s work on a new mandate for CUI and a new regulatory rate setting process. The new process aligns with industry standards and Alberta Utility Commission (AUC) principles.
Matthews said that council weighed the impact on Chestermere residents at each stage of the review process.
With the new processes in mind, council reviewed presentations from CUI asking for a 15 per cent increase, a third-party expert recommending a 10 per cent increase and city administration who suggested the 7.8 per cent increase.
‎Matthews said that there were three reasons that council felt they could fulfill the mandate by approving the lower rate.
First was a reduction in the revenue CUI can collect for certain services, second new funding arrangements with lower interest expenses for CUI and third, a reduced cash demand made possible through debt financing.
“All of the data and feedback that Council received from the third-party consultant and City finance staff indicates that the mandate is achievable with the lower rate,” said Matthews.
The general reaction on social media to the rate increase has been negative with comments ranging from measured unhappiness in the decision and processes to the vitriol and name calling and arguing common to social media platforms.
There have been calls to explore annexation by the City of Calgary and discussions about who should run against the incumbent members of council in the October election.
Like many Chestermerians, resident Janelle Sandboe is unhappy to see more increases coming in the new year but can understand council’s decision.
“My opinion is the same as everyone’s – it sucks,” she said, “No one likes to spend more on something they’ve been getting for less.”
In spite of this, she pointed out that as a member of the community, one has to consider the health of the entire community.
She believes that in the end the rate increase is necessary and valuable.
“I think that what is upsetting right now is compounded expenses.
Some of us have lost jobs, dealt with the expenses of flooding, had increases in taxes and expenses, and have generally felt the pinch of the Alberta economy,” said Sandboe.
With these other factors in mind, she understands the resentment that is being vented by residents.
Sandboe also said that the CUI rate increase won’t have too much of an impact on her family budget.
“It’s another $10 a month, so that means a few less coffees, but it’s not going to break the bank,” she said.
However, the process taken to reach the rate decision still needs to be improved.
“I think the City missed the mark in communicating about this issue,” she said.
Sandboe acknowledges that city council did provide opportunities for residents to ask questions about what’s happening.
In her view people, didn’t seem to take advantage of it.
“That tells me that there needs to be a new way to get information,” she said, “it’s important for people to be and feel informed.”
Sandboe thinks that overall, council did a good job coming to what was always going to be an unpopular decision.
“I think they’ve done a good job,” she said.
“We have good people working for both CUI and the City to make smart, fair decisions.
I’ve seen lots of due process – between audits, reviews, sharing info with the public, etc. – even though they’ve been met with abuse,” said Sandboe.
CUI CEO Leigh-Anne Palter concedes that there wasn’t as much feedback from the public as they were hoping for during the rate review process.
Only 17 people sent in e-mailed questions to CUI.
“Despite all of the efforts both council and CUI made to draw people in to the process it was very clear to me from the questions that we did receive…very few of those people actually tried to review the materials that were available before they asked their questions,” she said.
They do plan on increasing the amount of time for residents to review the material next year. Right now, Palter is unsure of what else they can do different next year to try and improve communication with the public.
While the increase wasn’t what they had asked for, Palter understands council’s need to respond to the concerns of residents while working towards financial sustainability of the CUI.
Palter felt that the proposal that she presented was the strongest path forwards to achieving those goals but isn’t concerned for the coming year with the lower increase.
“We’re not concerned at the 7.8 about not being able to deliver on our capital program,” she said.
CUI will still be able to maintain staffing levels to continue safe and reliable operation of the system in Chestermere.
In light of the lower than requested increase, the city will also be providing a limited amount of additional financial support to the CUI for debt repayments if necessary in 2017.
The rate also means that there will be continued difficult conversations in the future.
“At some point we do need to get to earning an appropriate return so that we can have that longer term sustainability,” said Palter.