My Meeting with Leigh-Anne Palter – our CEO of CUI
October 4, 2017
Do I think CUI is where it needs to be? No, personally I don’t.
I think it has MUCH room to develop into what we need.
Do I think it is the right way to approach all that it handles for the city?
Yes I do, with a qualifier that I am of the opinion that the City Council should revert back to playing a bigger role in it and its operations and overall structure and expenses.
But that is just my personal opinion – what matters to me is what our City’s Residents want to see happen – once they are informed on the whole picture and can make a more informed decision on that ‘want’.
Meeting with CUI executive, Leigh-Anne Palter was informative to me, as a researcher and a resident.
Meeting with our CEO was an invitation she took the initiative to extend to all candidates and one that only a few took her up on. I had never met Leigh-Anne before. I had a list of questions and she answered them all and more. This is a brief summary of my notes from that meeting and I am simply sharing them.
If you are not a reader and what the top few things are as to why we are where we are with CUI – in my ‘not–yet–finished–research’ I would say: Because historically the planning for our City did not provide a slush fund for future repairs, historically for quite some time it appears we were being under-charged (thus not having any extra money to put away for the future) and NOW we are putting away for the future and NOW we are charging people properly (albeit TOO much of a financial challenge right now) and NOW we are bringing lift stations to government standards and NOW …. well that’s more than a few things… so here goes the ramble:
Did You Know:
- Leigh-Anne’s FIRST day on the job at CUI, was the day we had a flood. Normally when running a utility corporation, one would have years to prepare, plan and put in place (including that of a slush fund) all that is possible to combat a disaster in a City’s forseeable future, however, she landed here to the flood which turned an approach of planning to one of demanding immediate attention. The flood revealed deficiencies and they had to be attended to.
- In her short 2 years with Chestermere she has done everything possible to ensure our clean, safe drinking water was never jeopardized, even if that meant recommending rate increases that would bring public uproar and pushback.
- We pay a separate rate tariff (like other municipalities that surround Calgary) but it is a municipal rate not a commercial rate. It is not the same rate that Calgary residents pay. This may be something we appeal to Calgary about, given our present challenges.
- Leigh-Anne recently secured the renegotiation of the contract with EPCOR taking us from 9% interest to 3.25% which results in literally 7+ millions of dollars per year in savings. This negotiation went on for about a year.
- That the absence of a long term storm water management solution means a continued threat to our future development. This is concerning and I need to do more research.
- That all 12 of our lift stations (which are the stations the LIFT sewage to Calgary) were not compliant with government regulations. Getting them compliant means incurring costs of 20 million this year and 20 million next year.
- That it is industry standard to operate at 60% debt and 40% equity.
- The reason it looks like CUI makes a profit is because developer contributed assets and offsite levies are required to be reported as “revenue” on our IFRS compliant income statements. Developer Contributed Assets
- The contributed assets are just that, assets; steel and plastic in the ground, not cash that we can use to pay for day to day operations.
- This can have the result of distorting the understanding of CUI’s financial position.
The Offsite levies, while cash are restricted in their use and therefore also not available to support day to day operations. In 2016 we reported $5.7 million in assets and levies which contributed to a $1.4 m in net income. However, if you take out those assets from the calculations, we actually experienced a loss of about $600,000 last year. These figures are reported in our “Rate Base” results which are appended to the IFRS statements.
These statements are all available here on CUI’s website:
All of the above, made me ask: Who Governs Offsite Levies?
The Municipal Government Act is the overarching legislation to these Offsite levies.
They are established by municipal bylaw for specific infrastructure requirements in each community that are required to support growth. Once those levies are collected you can only use them for those specific projects.
The City of Chestermere OSL Bylaw can be found here: http://www.chestermere.ca/DocumentCenter/View/9275