A very big money decision will be coming to city council in the next few weeks. A review by independent consultant Grant Thorton was released Thursday. It sees “strong merit” in a proposal from EPCOR to have the city spin off the drainage branch over to the utility.
“Based on the quantitative and qualitative analysis presented in their study EPCOR’s proposal to transfer drainage has the potential to yield net benefits to the city, to taxpayers, and to rate payers,” the report said.
This would be a deal worth more than a billion dollars in assets, and would releive the city of more than $600 million in debt, that’s self liquidating through monthly fees on your utility bill.
The report also quotes EPCOR saying it can run the operation more efficiently generating a larger return for the city.
“EPCOR has indicated a high level of confidence that the 5% operational and 10% capital efficiencies described in the Quantitative Analysis section of this report can be achieved by year five following a transfer. Further, EPCOR
has noted the internal pressure to maximize efficiencies given the commitments made to a 3% annual rate increase and no staff lay-offs during that period.”
Coun. Michael Walters said his big question will be around EPCOR’s ability to gain provincial and federal grants. He is worried as an arm’s length private company owned by the city, they may be ineligible. “I think that’s what citizens expect, their drainage system to be able to keep up with changing weather, which is capital work galore and if they can do it quicker than what the city was proposing to do, which it seems to suggest they can, then I think it would be irresponsible of us as a council to not to give this serious serious consideration.”
“On your behalf citizens we have asked for a third party analysis by a credible company and their bottom there are no negatives, no reasons for council to not seriously consider this request,” said Coun. Bryan Anderson.
It would see the dividend EPCOR pays to the city increase by $20 million taking it to $161 million a year. City council will still be the regulator of the rates you pay, quality of service will remain the same, and employees will still be well taken care of.
The report goes to city council November 8.
All of the attachments from the city council agenda can be found here