INNISFAIL - There will be electrical and gas franchise fee hikes in Innisfail for 2019.
The approved rates are not as dramatically high as first proposed but a significant jump nevertheless, and enough to inject a significant cash infusion to town coffers as council prepares for budget deliberations that are scheduled to start in mid-November.
During council's Agenda and Priorities Meeting on Oct. 1, council said no to a proposed massive ATCO franchise fee hike from 23 to 30 per cent, and another of nine to 20 per cent for FortisAlberta, which would have more than doubled franchise fees on consumer power bills, from an average of $5.36 to $12.71 per month.
Council then suggested to administration to look at utility franchise fee increases of three per cent for ATCO, from 23 to 26 per cent, and two per cent for FortisAlberta, from nine to 11 per cent.
However, Heather Whymark, the town's director of corporate services, came back to council's regular meeting on Oct. 8 with a number of increase options for council to consider but recommended an increase of four per cent for ATCO and three per cent for FortisAlberta, which council accepted. The increased franchise fee for ATCO will bring in $555,806 in revenue for the town, which is almost $60,000 more from the forecasted 23 per cent rate. The average gas consumer will see a monthly bill increase of $1.54.
As for FortisAlberta, the approved increase will bring in revenues of $1,018,759, which is over $275,000 more than what the town would have received at the nine per cent rate. The average consumer power bill will increase from $5.36 to $7.63 per month.
Council approved the new utility franchise fee rates by a vote of 3 - 2, with Mayor Jim Romane and councillors Danny Rieberger and Donnie Hill supporting the recommendation and councillors Doug Bos and Gavin Bates opposing. Councillors Jean Barclay and Glen Carritt were absent from the Oct. 9 meeting.
Romane said he supported the four and three hikes because the town had to make up last year's ATCO revenue shortfall of $36,268. He also noted there has been no franchise fee hike in four years.
"There has been a bit of a shortfall for those reasons as well," said Romane. "We don't have many revenue sources. It is either taxation or user fees. Ultimately if we don't get it (revenues) from somewhere it goes back to taxation."
He said the town is concerned about lower tax assessments for 2019 due to the lacklustre economy and council has to keep its "guard up," and raising franchise fees for more revenue is one measure to do that.
In the meantime, Bos said he voted against the four and three hike because he did not want to add an extra burden to citizens and businesses who are struggling with the poor performing economy.
"I would have voted for half of what we approved," said Bos.
Bates said he voted against the hike because he would have preferred to hold the line on franchise fee increases this year. He said his preference would be to pay for the ATCO shortfall out of surplus monies, and come out of this year's budget deliberations with a more accurate picture of town finances and make a prediction on what franchise fees should be set for the following year.
"I think there are a lot of people in town, both business and citizens who are going to feel it (increase) even though it is small," said Bates.
