WHEREAS section 22 of the Community Charter provides that a council may, by bylaw adopted with the approval of the electors, enter into an agreement that grants an exclusive or limited franchise for the provision of a public transportation system, water through a water supply system, sewage disposal through a sewage system, or gas, electrical or other energy supply system; AND WHEREAS such agreements traditionally include a service fee with utility companies to compensate for the costly disruption and repair of roads, water, sewer, storm drains and other municipal infrastructure caused by installation of the utility system works; AND WHEREAS section 75 of the Vancouver Island Natural Gas Pipeline Act revoked the ability for municipalities and regional districts on Vancouver Island and the Sunshine Coast to set such rates or charge fees by means of section 22 of the Community Charter, thereby passing the infrastructure repair costs onto local taxpayers including those who will never be connected to natural gas: THEREFORE BE IT RESOLVED the Union of BC Municipalities UBCM urge the provincial government to amend the Vancouver Island Natural Gas Pipeline Act immediately in order to restore equal rights on this matter and provide fair and equal treatment for all local government taxpayers in British Columbia; AND BE IT FURTHER RESOLVED that UBCM appeal to the Auditor General to undertake a review to determine if the pipeline has been paid for.
Ministry of Energy, Mines and Petroleum Resources The Province is paying substantial amounts, pursuant to the Vancouver Island Natural Gas Pipeline VIGAS Agreement, to fund natural gas service to Vancouver Island and Sunshine Coast municipalities. Any further funding would not be appropriate. The VIGAS Agreement has a mechanism, the Revenue Deficiency Deferral Account RDDA, to monitor Terasen Gas Vancouver Island Ltd.s TGVI accumulated revenue deficiency associated with the VIGAS Agreement. As of December 31, 2007 the RDDA balance was approximately 29 million. Section 10.04 of the VIGAS Agreement provides that if the Special Direction to the BC Utilities Commission is cancelled or amended such that franchise fees are permitted to be levied by municipalities prior to the RDDA being reduced to zero, the Province would reimburse TGVI for the amount of the fees. This would in effect be a transfer from the Province to the municipal governments involved. However, the payments to TGVI are for the purpose of supporting natural gas service, not to fund municipal services in general. While TGVI does not pay franchise fees to Vancouver Island and Sunshine Coast communities, TGVI does make payments in lieu of taxes, which are typically one percent of the revenues generated by TGVI from natural gas sales in each of these municipalities.