A very big money decision will come to Edmonton city council in the next few weeks.
A review by independent consultant Grant Thorton was released Thursday. The review saw “strong merit” in a proposal from EPCOR to have the city spin off the drainage branch over to the utility company.
“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.
The deal would be worth more than $1 billion in assets, and would relieve the city of more than $600 million in debt that’s self liquidating through monthly fees on residents’ utility bill.
Watch below: EPCOR looks to take over City of Edmonton’s drainage department. Filed by Vinesh Pratap in June 2016.
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 five per cent operational and 10 per cent 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 three per cent annual rate increase and no staff layoffs during that period.”
“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,” Coun. Bryan Anderson said.
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 consumers pay, quality of service will remain the same and employees will still be well taken care of.
The report goes to city council on Nov. 8.
All of the attachments from the city council agenda can be found on the city’s website.