Attendees of a public meeting on high power prices raise hands on Aug. 29 at Higdon Hall in Medicine hat. Organizers now say they hope to formalize the group as a municipal watchdog advocating for lower utility fees and municipal taxes.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
A group that pressured City Hall to re-examine power rates last summer will formalize into an association to press for reform on other fees and eventually city spending as it affects taxes.
The “Medicine Hat Utility Ratepayers Association” says it plans to stage another meeting in January to engage and gather members for what it says will be a concerted effort to pressure council on lowering utility fees and negating tax increases.
Local business owner Sou Boss helped stage a protest meeting over high power prices in August and said at a press conference Thursday she hopes momentum will continue with action to lower taxes, lower fees and cut city spending.
“The mandate is to ensure accountability and transparency of our council and administration,” she told reporters. “We are committed to finding fairness and efficiencies to support ratepayers of Medicine Hat.”
That will include lobbying to use more utility revenue and reserves to offset tax increase (the 2024 rate is budgeted to rise by 4 per cent in 2024), while lowering the profit margin earned on local customers.
That will include further pressure to address non-commodity fees charged on utilities that members say are too high.
A letter sent this week to council asks for examination and action to eliminate the Municipal Consent and Access Fee as well as reconsideration of a budget update that calls for a four per cent tax increase.
At least one city council member said work is already underway on a major review on the utility company and how the city’s municipal side uses that income. Coun. Shila Sharps says the city cannot become bogged down or make major decisions until that report is completed in 2024.
“We’ve agreed to a third-party review,” said Sharps on Thursday. “It’s like deciding on new carpet when you don’t know what you’re doing with the house.”
Boss says fast action is needed to help residents and business owners.
“We are hoping that the city really looks at their expenses and asks itself where it can cut so it’s not being passed on to taxpayers,” said Boss. “As citizens, I wonder why when we’re making huge revenue (from power generation), how can there be a deficit?”
The city’s power plant is poised to pay a $130-million dividend to municipal coffers in 2023, but most is destined for reserve funds for future capital needs, operating contingencies as well as an income-earning fund that helps offset taxes.
However, the municipal operating budget will still require $6.3 million in direct payments from reserves to balance the budget, though that could be eliminated in 2025, according to city finance officials.
This year, the difference is smaller due to the tax increase, an increase in MCAF revenue and higher than expected investment fund income. Those gains are offset by general inflation and wage increases in recent union settlements.
Overall, the budget requires $5 million more in tax revenue this year.
In 2015 the operating deficit was $24 million after the natural gas dividend was eliminated, but it has shrunk in a plan to phase in tax-rate increases, contain costs and add other revenue sources.
That includes the creation of the MCAF in 2019. Often known as franchise fees, it is charged by utility companies to recover costs of property tax on or use of municipal utility right-of-ways.
The practice is common throughout Alberta, but typically involves independent utility providers, but in Medicine Hat’s case, the city owns both the distribution systems and is collecting the tax revenue.
Ron Noel, one of five directors of the ratepayers association introduced on Thursday, argued before council last summer that arrangement makes it patently unfair.
Along with Boss and Noel, other interim directors of the Utility Ratepayers Association are Gord Cowan, Wesley Pratt and Cameron McNulty.
Cowan said the process has begun to form a registered society. Priorities and administrative matters would be determined at a public meeting tentatively planned for late January.
The group is not aligned with a similarly named group “Medicine Hat Ratepayers Association” that was formed by eventual mayoral candidate Alan Rose in 2019.
