Tonight, Chestermere’s City Council took back control of utility services. By choosing to bring utility services in house, they are expecting a utility rate reduction of up to 8%.
“Today is a historic day,” says Mayor Marshall Chalmers. “We have been working at untangling our utility issues from the very first day we took our oaths of office and I am so proud to announce this new path forward for our community. We heard that our residents wanted relief from high utility rates and took action.”
When elected in 2017, City Council vowed to get to the bottom of what could be done about the utility company, a corporation long embattled by complaints about rates and operations.
Of the many options examined, Chestermere’s City Council voted to maintain a legal ‘shell/hybrid’ of a corporation in order to hold the debt of CUI.
“By choosing a shell/hybrid option, we ensure that the utility company’s debt remains separate from the City and does not handcuff our ability to pursue needed municipal projects for transportation and recreation for the future,” says Mayor Chalmers.
The ‘shell’ corporation will only have one employee and will not be allowed to incur any new debt nor will it bear the name CUI. The option to pursue complete municipalization will remain open to City Council under this model.
“Last fall, we put the brakes on CUI’s operations and told them that we would no longer allow the status quo. Since then, we have been working hard to turn the ship in a direction that would provide the best utility services and rates for our community. Today is the first step forward in that new direction,” says Chalmers.
Now that Council has chosen a new legal structure and service provider for utilities, work will commence to wind down CUI’s current structure, choose a name for the shell corporation, draft agreements for the City to provide utility services, and apply for an official rate reduction. All this work, and the end of CUI as we know it, is expected to be implemented by the end of this summer.
“Although there is still a great deal of work to be done to implement the decision made here tonight,” says Mayor Chalmers, “I am confident that we are on the right path forward and will be able to continue our journey to building an amazing community.”
For more information on the progress to address utility concerns in Chestermere, visit www.chestermere.ca/utilities.
Questions & Answers about the Decision:
Q. What were the options presented to Council to consider?
A. Council was provided with the following options. Their choices are indicated by the green arrows.
Q. Why did Council choose the option it did?
A. Each member of Council has his or her own reasons for voting the way they did. However, there was discussion that the benefit of the hybrid/shell legal structure option was that there was more flexibility to pursue other projects in the future without the City being hindered by CUI’s debt. This option also allows the City to pursue full municipalization down the road if it chooses to do so.
Q. When will this take effect?
A. While the legal structure of utilities will be a ‘shell/hybrid’ for debt purposes, the rate structure and utility service operations will be provided by the City of Chestermere. Agreements and staffing structures will need to be set and should be in place by the end of the summer.
Q. How long will it take to pay off CUI’s debt?
A. Approximately 15 years.
Q. Will CUI be renamed?
A. CUI as we know it will cease and a new named company for the purpose of holding the debt will be formed.
Q. Will I notice a difference in my bill or the service?
A. The City of Chestermere will provide all utility services once the implementation is complete. Water and sewage services will continue to be provided by EPCOR.
Q. Why did it take this much time to transition CUI?
A. CUI is a multimillion-dollar company with extensive assets, contracts, staff, infrastructure, operations, and financial obligations. Decisions needed to be made on what to do with every level of the company from the building itself to rewriting contracts. Transitioning the company is complex and City Council wanted to be sure it was done right and that decisions don’t end up costing citizens more in the long run.
Q. What will happen to the CUI staff and assets?
A. Some of the current staff at CUI may become municipal employees if the City requires their expertise to help oversee the delivery of utility services. The other staff will be provided with a fair conclusion to their employment.
Q. Where can I get more information?
A. www.chestermere.ca/utilities. You can also contact the City for more information at firstname.lastname@example.org.