Phoenix Gas to present options on future of Hwy 36 gas pipeline

Written by Terri Huxley

General manager Mark Hughes of Phoenix Gas came to Forestburg council looking for the direction the council wished to go in regarding a gas pipeline known as the Hwy 36 Gas Pipeline owned by the village.

The pipeline is currently being used by Phoenix Gas as a transmission line for their services.

This was a revenue-neutral agreement between the company and the village.

Phoenix Gas agreed to manage the village gas system where they provide gas through their transmission pipeline at no cost to the village in exchange for them using the Hwy 36 pipeline.

In the event there is a leak or other issue, the village would be responsible for all repairs and related costs.

The Hwy 36 pipeline does act as a backup for the village’s distribution system if there is an upstream issue with Phoenix’s line.

Information was brought forward to council in April of 2018 and September of 2020 about this but councillors mentioned as well as Hughes that it has been closer to 10 years since this specific pipeline has been in conversation.

Administration in the past recommended that if council should consider selling this natural gas system, Phoenix Gas would need a formal motion to enter discussions to transfer the asset.

There is also an old abandoned pipeline from Hwy 36 to the Alta Gas installation.

Administration is unsure of its exact location but with it being no longer in use, there is a liability issue if there is any residual leakage or if the province requires us to take further action with the line.

The current profit of $100,000 which is used to offset property taxes could be recouped through a franchise fee arrangement with Phoenix Gas.

If the system was sold to Phoenix Gas, the village would no longer have any liability with the system.

The current natural gas distribution system in the village generates approximately $11,000 in property taxes which is currently paid to themselves.

If the system was owned, these taxes would be paid by Phoenix Gas Co-Op.

Since that time, the line has continued to age and Phoenix Gas has informed administration that the line will need to be coated in 2021 at a minimum cost of $20,765.

This cost would be assuming that no mature issues are discovered as the line is exposed for inspection.

Council asked what the average lifespan of a pipe like this is. 

Hughes explained it was built in the ’70s so it was just about time for it to be replaced at approximately 40-50 years of use.

Administration was concerned that as the line continues to age and deteriorate the liability held by the village will become unaffordable.

After the chat between Hughes and council, it was agreed to have Hughes come back with a few different options that the parties can assess together.

He will give potentials with worst case and best case scenarios to give better direction and expectation to start things off.

Penalty request waived

McNabb Construction, one of Forestburg’s well-established construction companies, sent in a request asking for $2,251.90 in tax penalties to be waived as their office administrator was terminated in early October.

Coun. McNabb immediately recused himself from the conversation due to conflict of interest as the person who made the request, Brian McNabb, is his father.

“However, the past 18 months our office administrator, who deemed to be competent for the position, at the time of hiring, had to be terminated in early October. 

Her top priority, over her many duties, was to ensure all McNabb Construction Ltd. payables would be paid on time. 

I, myself, was never made aware of the situation of long overdue accounts, until vendors called requesting payment of overdue accounts,” stated Brian McNabb in his letter to the village.

The remaining four councillors were torn over the issue, finding there are two sides of the coin to consider.

“It’s your business,” began Dep. Mayor Coutts. 

Coun. Giroux added, “I mean I’m sorry that your person screwed up but ultimately you are responsible for that person.”

Coun. Fossen said, “I understand that their business has been here for over 50 years and they have done an excellent job but if we do it for one, we are going to end up doing it for everyone.”

Mayor Young ‘wanted to go in a different direction’ asking how many months the company missed on payments but Interim CAO Newman said they paid as soon as they knew about the issue after only missing one month even though this was the extended deadline set out in bylaw.

“They are not someone who willingly ignores it. Their intention is always to pay. They got screwed by an employee,” said Coun. Giroux.

“That sits on you as the owner of the business,” said Fossen.

When it came to a vote on a motion to waive the penalties, council passed the motion with Coun. Fossen opposed.

COW discussion

During the Committee of the Whole (COW) portion of the council meeting, councillors discussed various issues and updates from around the village.

Coun. Elaine Fossen went first, mentioning that the total number of people utilizing email services for invoices and utility bills was quite low at only 57.

She stated that about 400 people still prefer getting their paperwork sent in the mail.

“I was quite shocked,” said Coun. Fossen.

She then questioned this total, asking if it was the older population that were wanting paper forms still but interim Chief Administrative Officer (CAO) Corinne Newman said that it was a mix of both the older and younger population.

Councillors agreed with Coun. Fossen that it was strange.

Dep. Mayor Bob Coutts asked if this new form of communication between the village and its residents has been promoted enough which they found was only once.