It's back. For the first time since October's election, St. Albert's utility policy has reared its head again looking for policy direction from city council. First presented by administration in 2013, an election year, the council of the day chose to let the succeeding council grapple with this potentially contentious issue.
Billed as an "in-depth orientation," councillors spent Friday in an open committee of the whole meeting being briefed by administration on a number of policy areas including the utility model. The intent was to give councillors a deeper understanding of the issues and the options to manage them. Usually closed to the public, this committee of the whole was open to the public in another sign that this group is serious about public engagement – another topic on the day-long agenda.
The city currently operates with a 100-year utility model in which a portion of the rates go toward replacement costs for things like water and sewer lines. Reserves are built based on a projection of the community's needs over that timeframe and when it's time to replace a line the money is already in the bank. In St. Albert's case, the policy dovetails with another long-standing policy against using debt. It's often referred to as pay in advance or pay it forward.
Another approach is known as “pay-as-you-go” and it typically uses debt to purchase the new lines when the time comes. Supporters of this approach say it makes the most sense because those who use the services are paying the interest on the debt. It would require the city to revisit its policy on debt and revise it.
The issue is made a little more complicated by provincial grant dollars and whether they should be used for this purpose or whether they would be better spent elsewhere. Today a portion of those grant dollars go to utilities. If they were to be re-allocated the money needed for utilities would have to be borne entirely by the rate structure we all pay.
Counc. Brodhead made the point Friday that the 100-year model is misunderstood, "We should abandon that term," adding, "It's not well understood in the community."
Whether council decides to continue to pay it forward or pay-as-you-go, Brodhead has a point: some residents are confused by the terms.
Mayor Nolan Crouse told councillors that a policy position must to be taken and that good policy means everyone plays by the same rules and everyone is treated fairly.
And none too soon we would add. Under the present policy council's decision last year to reduce rate increases to 6.5 per cent and the current council's recent decision to leave them there means reserves are being underfunded and will be in a deficit position by 2018. Something has to give.
