News Flash

City of Chestermere News

Posted on: April 3, 2019

Will CUI exist by the end of 2019?

CUI Update

At the April 2, 2019 Meeting of Council, the CUI Transition Manager presented an update of the progress made to date on transitioning CUI. Below are some frequently asked questions about this process. If you would like more information on this work or have any questions, please contact the City at info@chestermere.ca.


What is happening with CUI?

This past October, City Council asked for a report on what could be done with CUI. Five options were presented, and Council asked that Administration explore three in more detail: municipalization, keeping CUI as a shell company, and partnership opportunities. This exploration was to proceed with the intent to transition CUI and provide utility services at better rates for Chestermere residents. The information below indicates what progress has been made to date.

What has the progress been on transitioning CUI?

Check out a detailed list of actions and a timeline on CUI at www.chestermere.ca/cui

Why is it taking this much time to transition CUI?

CUI is a multimillion-dollar company with extensive assets, contracts, staff, infrastructure, operations, and financial obligations. Decisions need to be made on what to do with every level of the company from the building itself to rewriting contracts. Transitioning the company is complex and City Council wants to be sure it’s done right and that decisions don’t end up costing citizens more in the long run. However, the plan is for CUI to be substantially disassembled by the end of this year.

Can the City just take over the contract between CUI and EPCOR (the current provider)?

The current contracts with EPCOR are all between CUI and EPCOR and changing them is part of the renegotiations underway between all parties. In addition, it is important for the City to examine all options for insourcing or outsourcing services to ensure that Chestermere residents get the best value for costs. Further, negotiations around other components of providing services (meter readings, maintenance, billings, customer service inquiries, etc.) need to be completed to determine whether they should be included in the contract.

Can the City simply absorb CUI and its debt?

The Municipal Government Act and its regulations play a big role in helping to determine how we can dissolve the company and how we manage their debt. As a municipality we have a maximum borrowing limit of 1.5 times our annual revenues as prescribed by law. 

Prior to September, CUI was operating on a business model that would continue to incur more debt. If the company was to continue operating in this way, combining the City’s debt and CUI’s debt puts us over that legislated limit and we need the Province’s approval to do that. In addition, if the City was to take on CUI’s debt, it would hinder the City’s ability to pursue other municipal projects. As well, the City is in discussion with the Province regarding debt limits.

City Council has directed the company to stop operating with the former business model of pursuing new projects. Instead, the City is looking into having future projects built by the development community which would lower the debt the City would need to absorb.

Under Council direction the City continues to explore other alternatives for the future of CUI. This exploration will assist with their decision about if or what, when and how the City will absorb some of CUI’s debt.

Will CUI exist by the end of 2019?

The plan is for all services currently provided by CUI to be outsourced or reorganized by the end of 2019. The company as it currently stands will no longer exist. The City may need to retain the ‘shell’ of the company for legal and financial considerations but the plan is that it will no longer provide services to the public by the end of 2019.  

What will happen to all the CUI staff and assets?

Some of the current staff at CUI may become municipal employees if the City requires their expertise to help oversee the delivery of utility services. The other staff will be provided with a fair conclusion to their employment. CUI’s assets will either be transferred to the City or disposed of.  

How will these changes affect me? 

City Council recognizes that residents are frustrated with high utility bills and service delivery. The intention of this work is to find ways to reduce utility bills in Chestermere. There is also a goal to provide long-term utility rate stability so residents don’t experience any more extreme changes to their utility bills.

What about the projects CUI currently has underway? What will happen to them?

City staff will evaluate all projects CUI currently has underway including infrastructure upgrades. The City will determine whether or not projects should continue, be put on hold or outsourced to ensure residents receive the best value for their dollars. 

What will happen to the services CUI currently provides?

Below is a simplified version of the plan for CUI’s services:

Service

Current Structure

Proposed Future Structure

Water

CUI fields complaints and concerns about water services and coordinates connections. CUI manages the contract with EPCOR (the service provider).

Enhanced partnership with EPCOR being pursued or service may be in-sourced.

Wastewater

CUI fields complaints and concerns about wastewater services and coordinates connections. CUI also looks after coordinating any maintenance or upgrades to lift stations (that pump sewage back to Calgary for treatment). CUI manages the contract with EPCOR (the service provider).

Enhanced partnership with EPCOR being pursued or service may be in-sourced.

Stormwater

CUI looks after ensuring the storm drains are properly collecting stormwater runoff and ensures that storm ponds are working properly. They also manage projects to improve stormwater management and plan for future stormwater collection in new developments.

Enhanced partnership with EPCOR being pursued or service may be in-sourced.

Curbside Garbage, Recycling, Organics Pickup

 

CUI provides waste collection services for garbage, recycling and organics.

A RFP has been issued to explore outsourcing to a 3rd party or service may be in-sourced.

Recycle Depot

CUI provides staff to oversee and manage the recycle depot, remove items when full, and assist residents with questions.

The City will be taking over operation and management of the recycling depot.

Infrastructure Management

CUI manages large scale utility projects that include upgrading old utility lines, making improvements to storm pond structures, helping review utility plans for new developments and ensuring lift stations are operational.

The City will be assuming responsibility for all engineering support functions associated with CUI.

Utility Billing & Customer Service

CUI currently issues bills for water, wastewater, stormwater and curbside collection services. They also have staff to answer questions about bills and assist new residents in getting connected to utility services.

The City is exploring opportunities for alternate service delivery.


Additional Info...
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