Residents fear for future of Chestermere amid ballooning utility rates

Bewilderment, anger and frustration over rising water utility rates and property taxes — many residents of Chestermere, Alta., are hoping to flush out members of city council in this fall's municipal election.

Some long-time residents say their property taxes have doubled in less than 10 years. And utility rates have soared, up 65 per cent since 2012.   

The former summer village's population has also seen incredible growth. Since 2006, the population has more than doubled, from 9,481 to 19,715. 

Petitions, death threats, harassment 

The higher cost of living has sparked outrage, petitions, harassment and even death threats. It's hard to fathom in a city that calls itself "Alberta's Oasis." 

"If taxes keep going up and utilities keep going up, nobody is going to want to come to buy here. They're going to go to a different community," said Laurie Bold, a former Calgarian who moved to Chestermere in 2004. 

It was the utility rate hikes that spurred her into action. She started a petition last year urging the provincial government to launch an inquiry into the affairs of Chestermere city council and administration.   

"I didn't have any trouble getting people to sign," said Bold. 

She collected more than 5,400 signatures calling on the province to step in and examine the city's books.  

The fury unfolded shortly after the newly hired CEO of Chestermere Utilities Incorporated (CUI) made a troubling discovery.

Leigh-Anne Palter, whose $344,000 annual salary and compensation package raises an equal amount of rage here, put up her hand and said: Chestermere, we have a problem.

She discovered what was described as an "oversight" in how rates were being calculated by the previous managers who ran the city's new utility company, which was created in 2012 and is wholly owned by the city.

It was revealed that residents weren't paying enough to cover the operating costs.

The board overseeing the utility at the time included several members of the current city council, including Mayor Patricia Matthews, who will not be seeking re-election in October.

Palter said she needed an extra $30 per month from every single customer to help cover the utility's costs. Then things got ugly. The CEO says she received threats and was harassed. The RCMP was alerted, but she doesn't believe charges were ever laid.  

Customers were "very angry, shouting obscenities, threatening physical violence, throwing garbage, bags of garbage at our people, calling them despicable names," said Palter.

"It was not pleasant."

Shocked, dismayed 

At the time, the mayor said in a news release council was "shocked and dismayed" by the discovery and offered an apology. 

"As the regulator, council and I want to truly apologize that we didn't recognize this discrepancy sooner,"  Matthews said in the December 2015 statement.

 "We are sorry to tell you that increased utility rates are coming and will impact all of us."

Basic rates have been steadily rising since then and they're now more than $40 higher per month compared to what Calgarians pay for water, sewer and garbage and recycling collection. 

Basic charges in Chestermere add up to about $115 per month, compared to just over $72 per month in Calgary. That doesn't include the actual cost of the water that's used each month.

The utility had been bleeding red ink and residents were being asked to soak up the losses.

The company doesn't own any water treatment or waste water treatment plants — it pipes in the water from Calgary and pumps sewage back to its big city neighbour.  

Petition sufficient, investigation ruled out 

In February, Alberta's Minister of Municipal Affairs ruled out the need for an investigation into the affairs of Chestermere city council and administration. 

Shaye Anderson said it appears council has made a commitment to strengthen governance processes related to CUI (Chestermere Utilities Incorporated).    

In a letter to the mayor, Anderson wrote, "I am satisfied that this response will improve the utility rate setting process and substantially address the key concerns that led to the petition."

He also determined "that an inquiry into the affairs of the council and administration of the city is not warranted at this time."

Oversight may have lacked rigour

The determination was made despite the department's findings the municipality's oversight of the utility rate-setting process "may have lacked appropriate rigour and may possibly indicate poor management." 

Following the petition, the City of Chestermere hired Stack'd Consulting Inc. to review CUI's mandate and council's process for reviewing and approving utility rates.

Matthews says council adopted many of the recommendations from the Stack'd report that aim to improve transparency and implement a rate-setting process and guidelines that align with the Alberta Utilities Commission.

Possible conflict over consultant

Residents say the city was in a conflict of interest when it hired Stack'd to carry out the review.

 Stack'd was formed in 2015 by a former partner at another consulting firm, Conroy Ross Partners.

Palter, the CEO of the utility company, was a partner at Conroy Ross before she took over at CUI. Both Palter and Matthews deny any claims of a conflict.

"CUI, neither at the management level, nor at the board of directors level, had any involvement in city administration's decision as to who they would hire," said Palter.

"The city selected Stack'd Consulting in June 2016, based on their level of expertise and extensive experience with municipal utilities; very few Alberta companies offer both water utility and governance expertise. There was never a conflict of interest between Stack'd Consulting, the city or CUI," said Matthews.

Tax burden too much 

Residential property taxes haven't gone up significantly in Chestermere — although the rate is the highest in the Calgary region at 5.24 (expressed in mils).

 Municipal taxes on a home valued at $500,000 work out to almost $2,700 — that doesn't include the education portion of the property tax bill. Taxes on a similarly priced home in Calgary would run $700 dollars less at about $1,980.  

Property values in Chestermere have been climbing and some residents say they can't keep up for much longer. 

Unsustainable 

Many residents feel the current path the city is on is unsustainable and it needs to expand the tax base to include commercial and light industrial projects. The current ratio is believed to be the highest in Alberta at 96 per cent residential and four per cent non-residential. The city's goal is for an 80-20 split.  

The city purchased 101 acres of land along Township Road 240 and it's hoped the land will be developed into the city's first light industrial park. The city's economic development department had indicated the land would be ready by 2017, but it's still undeveloped with no signs of road or sewer construction set to begin.

"There's a lot of work to be done and we want to make sure that we are doing it properly so that when we go to market we've got all the boxes checked," said Matthews.

The mayor disputes claims only half of the site is developable. She says while some land needs to be set aside for storm water management, at least 70 acres will be available to develop and purchase. She says conversations are happening with the development community about the site — although nothing has been finalized.

Residents rally for change

A number of residents are closely watching to see who on council along with the mayor will not seek re-election. Allan Kersch, who is one of the organizers behind the website abetterchestermere, is considering a run for one of the six council seats.

He believes the city is spending beyond its means and has not been transparent about the costs associated with developing the 101-acre industrial site, which the city purchased for $8.1 million.

"The attraction of the business should have happened many years ago ... and now we're suffering for it," said Kersch.

"It's time that somebody takes hold of this thing and rights the ship," he added.

Laurie Bold, the petition organizer, also hasn't ruled out an election run in October.   

She says it might be time for Chestermere to ease up on residential growth and focus on attracting more commercial and industrial development — at least to help ease the tax burden on homeowners.

"How long can people keep affording these [tax and utility] increases?" she asks.

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