Council approves utility rates and franchise fee increase
Thursday, Dec 07, 2017 06:00 am
Airdrie residents will see their utility rates and the amount they pay in franchise fees to FortisAlberta go up in 2018. Airdrie City council approved bylaws setting the utility rates for water, sewer and wastewater management and the Fortis franchise fee during its regular Dec. 4 meeting.
“The FortisAlberta franchise fee is currently 13 per cent and the Utilities Commission has set a cap at 20 per cent. The Council Budget Committee included a recommendation to increase this franchise fee to 15 per cent with the 2018 budget,” said Shannon Schindeler, manager of treasury and utility administration.
Franchise fees affect anyone paying a utility bill, including homeowners, churches, schools, renters and governments (provincial and federal) that are exempt from paying municipal tax. The fee is paid not just by taxpayers but also by anyone using the utility. Revenue generated in 2017 from the Fortis franchise fee is estimated to be $3.6 million.
An increase to 15 per cent will generate $500,000 for the City and add $1.24 per month to the average customer bill.
Schindeler said staff compared the percentage Airdrie has approved for the Fortis franchise fee to other benchmark communities and found it to be less. Stony Plain and Spruce Grove are both at the maximum – 20 per cent – while Cochrane is at 15 per cent.
Council unanimously approved increasing the Fortis franchise fee from 13 per cent to 15 per cent.
Council unanimously approved the utility rate bylaw, which will see rates for water, sewer and waste management go up in 2018.
Schindeler said the City expects to pay a total of $15.3 million for water in 2018, with that cost recovered through a combination of fixed and variable rates. The impact on the average homeowner will be an increase of $2.10 to $46.32 per utility bill from $44.22.
The cost to provide sewer services in 2018 is expected to be $15.7 million and is also recovered through a combination of fixed and variable rates. The impact on the average homeowner will be an increase from $47.94 to $54.23 ($6.29) per utility bill.
Waste management is operated on a breakeven basis, according to Schindeler, and includes operation of the recycling depots, transfer site and waste collection. Increases in 2018 will be minimal with the overall impact on homeowners being an increase from $27.72 to $28 per utility bill. This is an increase of $0.28.
The total impact on a homeowner with average usage is an increase of $8.66 per utility bill.
Schindeler said staff compared Airdrie’s utility rates to other benchmark communities. Chestermere’s rates are 30 per cent higher than Airdrie’s. Chestermere receives water and sewer services from the City of Calgary, as does Airdrie.