At the June 15th, 2016 City Council meeting, EPCOR Utilities Inc. asked Council to consider transferring Drainage Utilities Services over to their operations. EPCOR currently provides water treatment, water distribution and wastewater treatment services, however the City’s Drainage Utility operates the wastewater and stormwater collection system.  They believe that bringing all of Edmonton’s water utility operations under one roof will benefit the City in many ways.  

EPCOR Drainage

EPCOR Drainage

Based off the discussion, here is the motion that was passed: “That Administration complete an independent assessment of the EPCOR proposal, and be reimbursed by EPCOR for the cost of the assessment, and return to the October 25, 2016, City Council meeting with a full report, with the analysis to include:

  •         review of EPCOR’s eligibility for Federal and Provincial grant funding
  •         confirmation on asset transfer decision making (roles of Council or Shareholder)
  •         how governance and responsibility around risk and liability, such as for flooding, climate change and other unpredictable factors would be managed
  •         implications of assets and liabilities reverting back to the City in the future
  •         comparison of EPCOR’s proposal against known utility-type transactions in the marketplace

and that Council hold a non-statutory public hearing (to be scheduled after the October 25, 2016, City Council meeting) on the EPCOR proposal before Council makes a decision on the proposal.”  You can read the agenda (item 6.4) and motion here

EPCOR was created by the City of Edmonton twenty years ago with the City transferring its power generation, transmission, distribution, and customer service operations to the company in 1995. The City’s water utility was later transferred in 1996, and the Gold Bar Wastewater Treatment Plant in 2009. EPCOR’s operations are overseen by an independent Board of Directors and the City continues to serve as the regulator for all water and wastewater rates.

While I remain skeptical about the proposal, I voted in favour of this independent assessment for a few reasons.  First of all, I believe that a crucial part of my role as City Councillor is to gather the best information available in order to make decisions that best serve the residents of Edmonton and Ward 1. This third-party independent report will provide that information at no cost to the City, as EPCOR agreed to pay for this.  Secondly, we were assured that all employees would keep their employment status at comparable salary, benefits and seniority, so while this could impact certain aspects of their employment, job security will not be threatened thereby not leaving employees in a state of limbo over the coming months while this analysis takes place.

There are a few additional points I want to share about the current proposal. The City would continue to be responsible for drainage planning and development for new neighbourhoods. Council would continue to regulate and approve rates just like it does with EPCOR Water. EPCOR would hold Drainage rate increases at 3% for five years, the annual rate increase in the current Drainage budget. The City would continue to be the sole shareholder of EPCOR and maintain 100% ownership of these assets. And lastly, we made sure to schedule a non-statutory Public Hearing before making a decision so that residents are able to voice their concerns or support for the proposal.  Hearing from the public is always an important part of any decision making process, even more so when it comes to critical public infrastructure.  I encourage all of you to read the full report when it’s released in the fall, and take the opportunity to engage with Council on this very important decision.

Link to proposal from EPCOR here

Link to City Council proposal from administration here

Co-authored by Andrew Knack and Kasey Machin

4 Comments

  1. Gary on June 24, 2016 at 11:23 am

    To be honest, I have to say that the “fear factor” of this proposal, as innocent as it seems, is huge… for several reasons.

    First, just because EPCOR is wiling to pay for the assessment doesn’t mean that it will be open or honest. Edmonton taxpayers have been taken for many rides based on these reports in the past. They are always biased towards achieving the desired outcome. Most often, not in favor of the taxpayers. Just look at the arena and airport projects.

    Perhaps the biggest issue in this is the skullduggery that will happen. The tax component of what we currently pay will certainly not be removed from city taxes. Much the same as EPCOR taking over the billing of garbage fees that USED to be included in taxes… are now being billed as a “service”. Yet when garbage collection is missed, the fee still has to be paid. Both the city and EPCOR point fingers at each other saying its out of their control.

    The costs of drainage will be billed by EPCOR, increasing the amount paid out by taxpayers. There will be no reduction in taxes to citizens. In fact, and as pointed out by EPCOR, this will (cough) now allow the city more room to borrow money. Something the city seems to need to do because they can not control the waste of money spent by the various city departments.

    “you”… are the stewards of OUR money. It is up to council to control those expenditures. Something council has been failing miserably with over the past few decades. We as individuals, are required to keep our house in order, otherwise we have no money for essentials. We.. have no “pockets to pick”. Not that there is much left for the picking by anyone, anymore.

    “you”.. need to stop thinking that our pockets are bottomless, and you must start on cleaning up your house and control spending.

    With all due respect.

    • Andrew Knack on June 28, 2016 at 1:21 pm

      Thank you Gary for being the first commenter on the website. Although EPCOR is paying for the cost of the assessment, they have no involvement in the selection of the company that will do the assessment or the writing of the report. They will have no say and we will have full ownership of that independent assessment.

      I agree about the fact that there are valid concerns around transferring the cost of doing the work from the City books, which is paid for by our tax dollars, to EPCOR’s books, which will be paid for by our utility rates. With that said, I still believe there is a need to get that independent analysis to help inform any decision we make.

      In terms of making room to borrow, the city has quite a bit of room still available regardless of whether or not this proposal went through. If you haven’t had a chance to read it yet, the Debt White Paper will breakdown our current situation and thankfully it is good.

      To the last two points, the full program and service level review will give us the first opportunity since 1997 to do a detailed look into every aspect of our business to determine what changes should be made. Are there areas of business that we should no longer be in? Should we provide more or less of an existing service? All of those questions will be answered in the review with full participation from the public. This will help the next Council when they complete the next Operating Budget in 2018.

      Thanks again for the reply Gary.

      • Gary on July 7, 2016 at 3:13 pm

        Thanks for approving the comment. Blogs like this help convey a public message, which is needed.

        I have to say again, that any “impartial” report created, no matter who pays for it, will *always* be in favor of the person or corporation that is requesting the report. I’m pretty sure that you could consider that as a “fact” in many cases. Hence, I just don’t trust them. Especially (sorry) when it comes to anything involved with the City.

        With that said, no matter how you slice this up, its still a city taxpayer expense. Shuffling off some costs to a different area of the city (ya ya, arms length.. paperwork stuff) and then saying “Hey look, we have less debt now” is really an oxymoron. Its the same debt… just billed under a different entity or name. The City pulled this same stunt when they transferred the garbage collection portion out of “taxes” and made it a “service fee”… Taxes did not drop, they went up.

        Council will still end up spinning this, and taxpayers will end up paying more for the same thing.

        Why? 🙂

  2. Randy on February 8, 2017 at 8:42 pm

    I entirely agree with Gary’s comments.

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