TAMRMS#: B06
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Electrical Franchise Fee
Notice given by: Councillor Hughes
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BUDGET POSTPONED MOTION:
recommendation
That the electrical franchise fee rate increase be postponed until 2022.
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Administration’s Understanding of the Intent of the Motion:
That the planned 2.5% increase to the electrical franchise fee scheduled for January 1, 2021 be delayed until January 1, 2022 and that the 2021 net operating revenue of $768,000 be removed from "other revenues" and added to the tax requirement.
Operational or Organizational Impacts if Motion is Approved:
None
Financial Implications of Motions:
Please refer to the background section for complete financial implications.
Stakeholder Consultations:
As per the requirements to change a franchise fee, advertisements were placed in the St. Albert Gazette on October 7th & 14th, 2020 to advise residents of the proposed change and to allow a 45 day objection period. This period has now passed and the City has fulfilled all of it's obligations. Fortis Alberta has submitted our application to the Alberta Utilities Commission for approval which has been received
Background:
On June 25, 2020, Council passed a motion to introduce an electric franchise fee of 10% which was to be phased in over the years 2019-2021. The final planned increase of 2.5% is scheduled for January 1, 2021.
The City is required to designate land right of ways for the infrastructure of an electric distribution system. These lands are consequently not able to generate tax revenue for the City. Under a user pay philosophy, all properties that benefit from an electric distribution system should contribute to the costs and/or lost revenues that this service creates.
The main premise of the introduction of a franchise fee was to generate additional revenue to eliminate the tax subsidization that had been occurring. While virtually all entities use electricity, not all entities pay property taxes. The additional revenue generated ...
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