Medicine Hat Ratepayers Society

The latest decisions made by council and the City Admin demonstrate the disconnect from the Taxpayer. The decision to pay the fees for Credit Card payments on property taxes is a good example. While some on Council, Mr. Turner, Mr. MacIntosh and Mr. Hirsh opposed this move it was approved 6 to 3. To understand why this is a carless costly move you need to understand who is responsible to pay the property tax. Most people with a mortgage are required to have the bank collect a...nd pay on their behalf. The Tax lien takes first position on any property and will be paid before the bank receives any funds from a forced sale. This means most Taxpayers who pay their taxes do so through the bank as part of the PIT and are unable to use this option. However, those who have the property paid for or a low ratio loan pay their taxes themselves which demonstrates they have available funds. The next situation is for someone to be able to pay this amount they require a Credit Card available balance of over $2000. Then there is the problem of paying the Credit Card company with the average lowest rates of 8.9%, this would make no sense for someone to pay their taxes this way. The only people who this would appeal to are the ones with loyalty cards and receive points. They would have the funds to pay off the balance before any interest payments kicked in. Therefore, they should also pay the 2% convenience charge not the Taxpayer. The excuse that this is a service during Covid is unfounded since you can pay your Taxes by bill payment on your online banking without ever going to City Hall. This is careless action taken at a time there are Taxpayers who can not make their mortgage payments, buy food etc The city is helping to finance others vacations. See more

This weeks announcement by the City of Medicine Hat concerning the $66 million borrowing for the expansion of the electrical generation is misleading and demonstrates why the City needs to exit the business. The City states the reason for the expansion is so they can supply their customers with power even with the loss of the largest generator (N-1). What they are not saying is they can still supply all customers by importing power from the grid during these situations withou...t spending $66 million. They also stated just look at the profits we made in the past, so surely, we will make them in the future. The real reason is: Part 8 of the Electric Utilities Act provides Medicine Hat with an exemption from retail competition. This exemption is due to the City’s ability to produce enough electricity to satisfy its own electric requirements. Electricity generation, distribution and retail are all performed by the City of Medicine Hat this makes us unique in the province of Alberta. This allows the City to maintain a monopoly on the utilities in Medicine Hat. A monopoly is never a good business model for any business since there is no incentive to reduce costs and maximize profits. This is the reason other Cities, Edmonton (Epcor) and Calgary (Enmax) formed separate companies to run their Utilities. The expanding of this facility is equivalent to a house that currently has 2 cars and 2 workers borrowing to purchase a brand-new car in case one breaks down and both require a separate car at the same time and not considering using a Taxi for the duration of the repairs to the existing car. The Taxpayer needs to ask, what is wrong with having competition, if we are running a truly efficient Utility? The taxpayer was told these same stories when we borrowed to buy the natural gas fields that are now drawing us deeper in debt. I ask the City to please tell the Taxpayer why they can not just import power when required, and not encumber us in $66 million in debt at a time there are more pressing needs for this money, if it is not just to maintain the only Monopoly in Alberta. See more

"Those who cannot remember the past are condemned to repeat it." These words were first mentioned in modern times in 1905 just 1 year before Medicine Hat was incorporated. Recently there was great outrage from council concerning the city ownership of the Utilities when the Canadian Taxpayers Foundation made the statement that the City should not be in business. Then at the July 20 council meeting the City approved $66 million of borrowing to finance the building of power gene...ration station Unit 17. The justification for this was so we can ensure the citizens will not experience brown outs in the future and it could attract more industry. This same argument was presented in 2007 (Pengrowth purchase) and 2012 (Manyberries purchase). In just 9 years from the last Natural Gas acquisition we find the City bleeding from these moves. The City Administration has not displayed what economical models were used to determine this need. They did not say what future impact new technologies such as quantum computing for energy efficiency of other methods of power generation could affect the future economic models. They have also ignored, if other producers switching from coal to gas either expanded capacity or installed tie ins to expand later. The only way the City can attract business with increased power generation is to compete on pricing. When the City drops pricing to gain business then the return on the capital employed is reduced in return for perceived tax income, jobs and increased economic activity. The question that should be asked is How did that work for the Gas?. The City is not diversified enough to compete with global companies in these markets and does not have the capacity to absorb the negative impact of these decisions. The days of physical boundaries are disappearing and markets are quickly becoming consolidated for optimization. The Taxpayer in Medicine Hat cannot afford another failure such as the Gas Department. Those who cannot remember the past are condemned to repeat it. See more

I wonder what profitable assets the City will sell? Notice how in the last 10 years we have gone from net assets of $75 million to net debt of $211 million. This is a net loss of $30 million per year.https://financialpost.com//canadas-gas-city-looks-to-sell-

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