Town parting ways with EPCOR

Posted on September 7, 2016 by Taber Times

By Trevor Busch
Taber Times
tbusch@tabertimes.com

Rather than yield to EPCOR’s demands for a 68 per cent rate increase, the Town of Taber has elected to negotiate the termination of the present contract, which could involve returning the management of water, sewer and storm water utilities back to the municipality.

EPCOR had previously asked for significant fee increases in order to continue its operations of the town’s water, sewer, and stormwater utilities under an agreement negotiated between the two parties in 2007. With EPCOR forcing the town to reconsider how it provides water, sanitary sewer and storm water services to town residents and businesses, administration believes that the town can provide “equal or better service than presently provided by EPCOR” without yielding to the utility company’s demand for a huge rate increase.

“We have to look at our long-term plan, as to how we’re going to go from here,” said Mayor Henk DeVlieger, in an interview following council’s Aug. 15 regular meeting. “So we have a number of options we can look at, but it’s all very preliminary yet.”

Originally to be considered and discussed by town council in open session, before the adoption of the agenda at council’s Aug. 15 meeting, Mayor DeVlieger put forward a special motion to remove discussion to the closed session (in-camera) portion of the meeting, which bars the public and media from participation. DeVlieger cited an exception under Sec. 25 of the Freedom of Information and Protection of Privacy Act (FOIP) as justification for the move, which allows for discussion in closed session to protect “economic and other interests”.

“The reason that we went in-camera is because once there is a contract, there’s a lot of legal aspects to it, and some of those legal aspects are better for our town right now, and for the taxpayer, to do that in closed session because I think if that is in open, I think it will do more damage than good for the town,” said DeVlieger. “When it comes to legal aspects, it becomes sometimes a little dicey. Going into closed session, in this case, was for the best of the town.”

Section 197 of the Municipal Government Act (MGA) states that councils and council committees must conduct their meetings in public unless the matter to be discussed is within one of the exceptions to disclosure in Division 2 of Part 1 of the FOIP Act (Sec. 16-29). Under guidelines laid down by Alberta Municipal Affairs, as an elected body municipal councils should avoid conducting business in-camera, including discussion of difficult topics such as budget deliberations, capital expenditures, tax recoveries, salary ranges or hiring of additional municipal staff, bylaw amendments, subdivision proposals, and “any contentious issues such as sensitive local issues.”

According to administration, council recently adopted a resolution stating that it “expects EPCOR to adhere to the agreement”, and EPCOR has responded, although the response letter was only included as part of the in camera agenda “so as to not jeopardize any future negotiations by publicizing it.” Administration did state that in summary, the letter presented the town with two options, using the dispute resolution process set out in the agreement to arbitrate the fee increase issue, or negotiate an end to the agreement.

“The request came actually from EPCOR,” said DeVlieger. “So now we’re in the process for how we’re going to do this. There’s a one year period of time to work on that, so we have to work out the details, and work on what’s best for the Town of Taber, to each go our own way. The details on that I cannot reveal yet, because there’s a lot of legal stuff involved. So we want to make sure it’s done right, and in the best interests of the town.”

Investigation by town administration, with the assistance of MPE Engineering, has indicated the town could provide the services currently provided by EPCOR at approximately the existing fee level. According to administration, agreeing to a large fee increase proposed by EPCOR “does not seem to be in the best interest of town utility users (the town’s practice is to balance utility rates charged to customers with its costs)”.

“We’re looking at the options right now as to what direction we should go, but just at the first glance — you can’t pin me down on that — but it looks like there is a good possibility that the rates for sure are not going to go up. If anything we can keep them stable for a few years,” said DeVlieger.

Taking over water, sanitary sewer, and storm water utilities would represent a significant change to the town’s organizational structure and employment levels. Administration has obtained preliminary information regarding this requirement, but this information was only available to town council in closed session (in camera) “to protect the town’s negotiating position”. The changes would require significant management time, both for negotiations and for establishment of a new division in the town’s Engineering and Public Works department. Administration also noted the potential establishment of a “more independent utility corporation” could also be explored at a future date.

“I don’t think the residents themselves would see a change,” said DeVlieger. “The water will still flow, the sewer will still go down the drain, and the storm system will still be there, so really people won’t notice any difference. We want to protect our residents from high utility bills, so hopefully we can keep it the same and not up it for a number of years to come. To go down, I wouldn’t want to make that comment yet, because as I said we’re still in the preliminaries stages to look at the different options.”

At the Nov. 9, 2015 regular meeting of council, EPCOR had discussed the terms of its current contract with the town, which covers the town’s water and sanitary sewage systems as well as portions of the town’s storm water system. The contract also includes a debt repayment schedule related to the town’s sanitary sewage treatment (biological nutrient removal) plant, which EPCOR funded. At the time, EPCOR proposed an increase of $1.3 million annually, amounting to a 68 per cent increase to its current fee structure.

“The main thing — that probably everybody’s aware of — is EPCOR came with a proposal to increase out rates, or their fees, by $1.3 million,” said DeVlieger. “First of all, that was very unacceptable to us, we can’t pass that on to our utility rates and that would have increased them substantially. Our utility rates are already high compared to a lot of other communities in southern Alberta. So that was not an option. Secondly, we think that’s not fair that they came with that compared to the existing contract that we have with them.”

No set timeline is in place for the implementation of an alternative to EPCOR’s contract, but DeVlieger stated his belief that time is of the essence.

“We’d like to do it sooner than later. There’s a one year window frame according to the contract, but we’d like to do it sooner than later. I think EPCOR would also like to have it done sooner than later.”

As confirmed by CAO Greg Birch, following the in camera portion of their Aug. 15 regular meeting, town council voted to accept EPCOR’s proposal to negotiate for an orderly and safe termination and transition of the Operations, Maintenance and Capital Works Agreement between the Town of Taber and EPCOR Water Services Inc., dated Feb. 1, 2008, on a reasonable and agreeable timeframe.