The City of Chestermere and the Chestermere Utilities Inc. (CUI) Board announced the hiring of Richard Quail as interim CEO and Transition Manager for CUI effective Nov. 14.
“He comes to us highly recommended,” said Chestermere Mayor Marshall Chalmers.
“He comes with deep breadth of knowledge on how the municipal government act works and how cities work,” said Chalmers, “he understands utilities, he brings all sides…that will really assist the city.”
As Interim CEO and Transition Manager, Quail’s role will be to assist the city in the transition from its current corporate structure to one of a number of possible options that the city is still deliberating on.
“His sole focus will be working with the city as we move through this transition of CUI,” said Chalmers.
“At the last meeting we refined our direction to administration and there’s going to be changes,” he said.
Council has asked city staff to prepare an analysis and report on providing additional details and implementation options for three possible options for restructuring CUI.
Council has narrowed the options down to: Municipalization, Retain CUI as a shell to hold the company’s debt while operations are brought back into the city, and Partnership or Outsourcing.
“It’s all about the transition, this isn’t about trying to operate CUI as a separately owned corporation anymore,” said Chalmers.
As the new Interim CEO and Transition Manager is welcomed into the company, CUI Board Chair Lou Doiron has left.
Doiron tendered his resignation from the CUI Board on Nov. 14.
With his resignation, all of the members of the board who are not city councillors have left.
“All the independent board members have since resigned, the bulk of them in the last two months,” sad Doiron.
With Chestermere City Council now also the entire board of CUI, Doiron said they have come full circle since 2016 when board members independent from city council were hired.
“It was decided they needed to get the politicians off the board and bring in an independent board,” said Doiron, “Which is when myself and the others were hired.”
Doiron cited the process of transitioning CUI as one of his reasons for resigning.
“It’s not that I disagree with the end result or what’s trying to be accomplished here but what I do take an issue with is the process that’s gone through,” he said.
“They had unbelievable expertise on the board to help them make these decisions, but they chose to ignore that and go out to third parties like KPMG and a legal firm and spent $65,000 to get basically a report that we as the board have been telling them for almost three years now,” said Doiron.
He said that the board has been raising concerns about the financial sustainability of CUI since 2016.
While he disagrees with the process, Doiron is happy that this council is acting on the board’s concerns.
“I want to make sure the general public understands is this was not some great epiphany by a bunch of politicians.”
“This has been championed by the board of directors who have fiduciary responsibilities and have had for quite some time [tried] to finally get somebody to listen,” said Doiron, “fortunately, this council did,”
While happy that work is being done, Doiron is concerned that the process is rushed, with council being pushed by residents asking, in his opinion, the wrong questions.
“The big question is nobody’s been able to articulate, it doesn’t matter what it ends up looking like whether its inside the city, not inside the city.”
“The question is how is this going to reduce our rates,” he said.
Doiron said that from his role as Board Chair, he knows that many of the costs of utilities are fixed.
He is concerned that none of the presented transition options will lead to rate reductions, which he believes is what the residents of Chestermere really want.
“I’m afraid from my perspective knowing the dollars and cents of it all that that’s just not going to happen,” said Doiron.
“The costs are the costs,” he said, “75 per cent of the fixed costs of the utilities in the city are driven by six contracts with the city of Calgary and those aren’t negotiable, they’re set by the utilities commission.”
Knowing these costs are fixed, Doiron wants to know what the plan is to reduce rates and that if CUI is brought back into the municipality that utility costs will be buried inside of the tax bill.
Despite his concerns, Doiron said it was a pleasure to serve on the CUI board and wishes council success in the transition.
“I wish no ill-will to the members of Council and I hope the choices they make are successful.”
“Their job is daunting, and I don’t envy them at all,” he said.
Mayor Chalmers recognizes the concerns that Doiron has brought forward but is certain that the city is moving forward responsibly with the changes to CUI.
“We thank Lou for his time on the,” said Chalmers, “I appreciate Lou’s concerns but we’re confident that we’re moving in the right direction.”
“We’re confident that we’ll have our processes in place,” he said.
Chalmers said that council would be establishing a transition team at the Nov. 20 council meeting.
“That’ll include a member of council, the fellow that’s in charge of CUI now, and Bernie the CAO and legal,” said Chalmers.
“So, its step by step and council’s following through to find their best path forward,” he said.
