Some Chestermere residents are pushing back against a proposed 25 per cent hike in their monthly utility bills, after the city-owned utility corporation CUI mistakenly undercharged residents for three years.

"Thirty dollars a month is a huge amount of an increase for a small town," concerned resident Debbie Varner told CBC News.

"They better take a look at their CEO, because that's something that they should have been on top of. It's not fair to expect the community to cover their mistakes," Varner said.

'For goodness sake, you set up a subsidiary and you don't have the accounting in place to manage that? What is going on?' - Allan Kersch, Chestermere resident

In 2012, utilities in Chestermere went from being a city department to being run by CUI.

Mayor Patricia Matthews says at that time, the way the rate was being calculated should have changed too.

Instead, people have been paying less than the going rate, and left uncorrected, the company is set to lose more than $3 million in 2016. Officials only discovered the error late last year.

'Absolutely ludicrous'

Nearly 200 residents of Chestermere sounded off at city council Monday night.

Chestermere resident Allan Kersch

Chestermere resident Allan Kersch says the utility company should be dissolved and someone held responsible. (Colleen Underwood/CBC)

Resident Allen Kersch, says he has a hard time believing city council and utility board members took three years to figure out the accounting problem.

Kersch says the utility company should be dissolved and someone held responsible.

"For goodness sake, you set up a subsidiary and you don't have the accounting in place to manage that? What is going on?," asked Kersch, one of dozens who lined up to question officials.

"Who gets a 25 per cent [hike]? That's absolutely ludicrous," he added.

'Never again'

Mayor Patricia Matthews says that city council has already replaced some utility board members and it's looking to add experts to help oversee the operation.

"We are looking for specific skill sets on the board, so that we can help to ensure we are never in this position again, and we are putting so many checks and balances in place," said Mayor Matthews.

"No one wants to relive this," she added.

Matthews said the increase would not cover the losses incurred by the miscalculation. It would only help bring it closer to the going rate.

Council will make a final decision on Feb. 1.

With files from the CBC’s Colleen Underwood