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Council votes unanimously to take next step towards proposed Lloydminster Utility Corporation

City Council have had their regular bi-montly meeting this week.

The key topics of discussion were the Taxi and Ride-For-Hire Bylaw and once again, the proposal to create the Lloydminster Utility Corporation (LUC), in partnership with EPCOR, to fund and build the new wastewater treatment plant.

With respect for the changes to the Taxi Bylaw, Councillor Jason Whiting was most concerned with the bylaw covering the sprouting ride-for-hire or ride-sharing businesses in the industry, like Uber.

“It’s something that all municipalities are kind of keeping in their mind as they’re moving forward. It’s an evolving industry and I just wanted to be sure that it was considered when this new bylaw has been created, and it was confirmed to me that it was. So I look forward to this coming into play and hearing any feedback from users, from companies that have comments about the bylaw,” said Whiting.

The bylaw was first implemented in 1976 and hadn’t actually been fully overhauled since its initiation. Councillor Larry Sauer said that it had received revisions over the years but nothing as comprehensive as what Administration has done recently with the bylaw.

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Sauer made a comment that in his opinion, it shouldn’t have taken 40 years for major updates.

“That shouldn’t be happening in today’s standards, in my point of view. Administration are working through that… that was one of the things we tasked Administration with was to take a look at all of our bylaws, and policies… I would say it was around October or November, that our City Clerk came up with a whole number of them, that said they were outdated, and we repealed them,” explained Sauer.

Also, at the meeting, Council voted unanimously to proceed to the next stage with regards to the LUC, what Councillor Linnea Goodhand, calls phase 2.

The project still has a large price tag, but if the EPCOR partnership goes through, the cost projections come down by about $20 million. The initial estimate on the project was $94 million; with the LUC proposal, the cost is $73.8 million.

Goodhand explained that if the City of Lloydminster were to tackle the project on their own, the cost would be higher due to bringing a number of outside consultants. EPCOR brings financial means and a level of expertise with major capital projects.

Despite the unanimous Council vote to proceed with the development of the LUC, Councilor Ken Baker was not without reservations. Even though a solution has been found for the needed wastewater treatment facility, Councilor Baker was adamant that all possible options for business partners should be exhausted before confirming plans with EPCOR.

“We’ve just gone through the revised Purchasing Policy for the City, and I know that it’s been said that we don’t really need to get a second opinion about who we may want to be partners with, if we want to be partners. However, I think, for the good of the community, I think it’s important that we review that avenue and make sure that we have the best partner we can possibly get out. I think that’s absolutely critical,” said Baker.

Baker also wanted to make it clear to the public that at this time, the City has no legal obligations to EPCOR.

On the contrary, Goodhand said that the Purchasing and Procurement Policy doesn’t apply to wastewater management and there’s very few potential partners out there.

During the meeting, Deputy CAO Kirk Morrison made a presentation offering more insight to how the LUC would work, being backed by both the City and the Edmonton Power Corporation.

Morrison stressed to Council and attendees that the project is not a P3.

“I think there’s been some confusion around exactly what this project is. So, we hear a lot about P3s, which is where a company will come in, and for a defined period of time–typically 30 years–they will design, operate, finance a facility… that’s really project-related. What we’re contemplating here is a new ownership model, and with a strategic partner, will meet not only this project’s needs but all of our utility projects’ needs for the longterm,” said Morrison.

Morrison also explained the breakdown for funding the new mechanical wastewater treatment facility, saying it will be done by industry standard in both Saskatchewan and Alberta: 60% of the project would be financed through debt, and 40% would be financed through equity. According to Morrison, that’s the way new capital is financed through the utility model.

The next steps in reviewing the potential LUC include development of the financial model, term sheets, and definitive agreements. 

LUC would be created in a 50/50 partnership with EPCOR, in order to build the new wastewater treatment plant to meet the water-quality requirements put in place by the Saskatchewan Water Security Agency, taking effect July 2017.

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