One of the major issues during my election campaign was the need for the Town to distribute profits from our new hydro plant to all wards in an equitable manner. At the Finance and Admin (F&A) committee meeting May 19, I introduced a motion to begin negotiating a sharing policy. The majority backed my motion. The debate begins at a special meeting of Council June 13, 6 PM.
I talked to almost every councillor before I introduced the motion. The good news for rural residents is that a majority favor sharing the hydro revenue, including the mayor and two Almonte councillors. The devil will be in the details.
The new hydro plant generates millions of dollars annually selling electricity to Ontario Hydro. In its first year of operation, the new hydro plant made $2,759,000—almost $500,000 more than projected (rain = money). In addition, the Town owns part of the transmission lines and gets money from this source each year too.
The majority of the revenue pays for the plant's debt and operations. Also, the plant's creditors insist we must build up a special cash stash of $1.7 million as a cushion in case of catastrophic failure. Still, a chunk of cash is available to the town annually. In 2010, the Town received $250,000 for generation and transmission. All of it went to pay for water and sewage systems in Almonte ward.
With my motion, I proposed a policy framework. To me, a sharing formula is not complicated. You simply decide what projects and programs should be assisted by the funds, you assign priorities to those projects, and you allocate the funds on a hierarchical basis. My proposed policy framework is as follows:
All hydro revenues would be apportioned on a hierarchical, three-tier basis. The intent is to apply the money in a manner that benefits all of Mississippi Mills while recognizing that the needs of some areas are greater than others.
Tier 1. A fixed amount of money will be directed each year from hydro revenues to pay for capital costs, interest and operating costs related to water systems, sewer systems, and sewage treatment infrastructure. (Council needs to set that amount.)
Tier 2. When funds are available in excess of the set amount for Tier 1, the funds will be used each year to pay for capital costs, interest and operating costs related to septage treatment.
Tier 3. Any funds in excess of those earmarked for Tier 1 and Tier 2 each year will be used for Mississippi Mills capital projects and reserves. The exact allocation will be determined by Council.
* Hydro revenues in this context mean:
- funds from MRPC for generating electricity
- funds from ORPC for transmitting electricity
- income from the rent of town property by MRPC and ORPC
- funds from any other source connected to MRPC and ORPC
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