The Town of Okotoks said it’s received about 150 comments from the public about a proposed fee increase that would take effect next year.
The Town proposes to increase the natural gas franchise fee charged to customers to 35 per cent of delivery charges, up from 20 per cent. The increase would add about $82 to the average natural gas customer's annual bill.
Okotoks CAO Elaine Vincent said in a statement that the proposal is in the consultation stage, which needs to be completed before council can move forward.
Vincent confirmed that around 150 responses had been received by midday on Oct. 20, the last day the public could submit feedback on the proposal.
Not surprisingly, reaction to the idea of raising the franchise fee has been overwhelmingly negative as many have taken to social media to express their opposition to the proposal.
One Okotoks resident who spoke to the Western Wheel said raising the franchise fee amounts to a deceptive tax increase.
“The main concern I've got is that it's a sneaky, underhanded way of going about jacking up our taxes,” said Rick Neufeldt.
It’s a matter of putting charges where they belong, and being forthright and honest with the public, Neufeldt said.
If the Town needs to increase revenue, he said he would rather see the increase included in his property taxes.
“If you're going to put a tax increase in, put a tax increase in," he added.
The Town said an increase in franchise fees often lowers a required tax increase, and said franchise fees help pay for services.
The franchise fee is set by a municipality through an agreement with the Alberta Utilities Commission, and the 35 per cent proposed by the Town is the maximum allowed.
John Nobes, another Okotokian who spoke with the Wheel, called the proposed fee hike a “double hit.”
“You pay your property tax, and you pay your franchise fee, and then you pay your GST on top of your franchise fee,” Nobes said.
With some nearby municipalities charging less than the 35 per cent that the Town is proposing, Okotoks needs to be competitive, he said.
“If I'm looking to put a million-dollar business in your town, I'm going to look at that, because it's going to cost me more to run my business," he said.
Okotoks last raised the natural gas franchise fee in 2021, going from 16 per cent to 20 per cent.
In recent years, total Town revenue from franchise fees and concession contracts has jumped. The Town’s 2021 Annual Report listed revenue from those sources at $1.6 million in 2018. It hit $3.1 million in 2019 and was nearly $4 million in 2021.
The Town estimates the proposed increase to the natural gas franchise fee would add another $1 million if it is approved.
If the natural gas franchise fee is approved, the rate would take effect on Jan. 1, 2024.
