Franchise fees debate continues at municipal council meeting 0
The Municipality of Crowsnest Pass has franchise fee arrangements with both Fortis Alberta Inc. and ATCO Gas and Pipelines Ltd. These fees are levied on residents through the respective provider's bills and the revenue collected is then remitted to the Municipality. Think of these fees as taxes. In many cases these are used to pay off the non-residential taxes that would be levied on the companies, but they can also generate additional revenue for the Municipality, as is the situation in Crowsnest Pass.
Currently, Fortis and ATCO face yearly linear tax levies of $19,000 and $43,000, respectively. The amount collected in franchise fees by Fortis for 2012 will be roughly $300,000, calculated as 14% of the gross revenue from the Distribution Tariff rates charged for Distribution Access Service within the Municiaplity. ATCO will bring in around $268,000, a number derived from a 20% charge on the non-gas portion of its customers' bills.
Both these percentages reflect an increase from 2011, ATCO going from 15% up to 20% and Fortis moving from 8% to 14%. The overall increase in Municipal revenue is expected to be $195,461.
The triennial budget process which the Municipality recently went through has incorporated further increases in these franchise fees, raising both to their maximum allowable amounts in 2013. At 35% for ATCO and 20% for Fortis, revenue is expected to jump to $336,945.
These increases for 2013 will be realized on average as a $30.24 increase to homeowners' Fortis bills and a $67.08 jump in their ATCO charges. Together they represent an average increase of $97.32 per year, per home.
During the September 4, 2012 edition of council it was the Administration's recommendation that these increases be officially implemented.
"Council is aware that during the triennial budget process we did establish the franchise fees for 2013, 2014 and as such, we need to firm that up through contractual arrangement, both with ATCO and Fortis," said CAO, Myron Thompson.
Councillor Brian Gallant immediately spoke out against these increases, stating that he has never been for them and suggested that the additional revenues should be sought through development and land sales rather than additional taxes.
While not against the increase entirely, Councillor Saindon had problems with the 15% increase in a single year for ATCO, saying that it was far too much at one time.
Thompson reiterated that these increases had already been discussed and changing them now would necessitate major changes to the budget.
"We had this deliberation at budget time and so this just formalizing what we established over the course of that process," said Thompson.
In the end, the discussion was tabled until the next council meeting on September 19, 2012 so that all parties could have sufficient time to research and understand the issues. Mayor Bruce Decoux had the closing words, urging everyone involved to not delay any further.
"We need to make a decision on this. We've waffled along on this for far too long and a decision has to be made," said Decoux.