City commissioners claim they don’t have the electric-sale studies

The six studies that were conducted over three years to determine if the city should sell its electric facility to Sierra Electric Cooperative are being withheld by city commissioners.

They are withholding them from the press (me) and by extension, the public.

Unless you believe their excuse for not producing the studies.

Mayor Rolf Hechler, Mayor Pro Tem Amanda Forrister, City Commissioner Merry Jo Fahl and City Commissioner Destiny Mitchell were asked to fulfill my Inspection-of-Public-Records-Act request for the six studies by City Clerk Angela Torres. (Commissioner Ingo Hoeppner is too new to be involved, since he took office in January and has not been part of the numerous executive sessions held over three years.)

City Clerk Angela Torres told me the city commissioners told her they never had the studies, Sierra Electric Cooperative has them.

Torres was diligent and conscientious enough to call Sierra Electric for the documents, although they are not subject to IPRA law. She received one of the five studies done by Burns McDonnell of Kansas City, Missouri, a “limited desk-top” environmental study of the city’s electric yard, which is attached to this article below.

Because she now had a name, Torres was then able to address the other part of my IPRA request for documents showing the cost of these studies to the public. The financial documents related to Burns McDonnell are also attached to this article below. The city paid half of the $74,000 Burns and McDonnell invoiced to Sierra Electric Cooperative.

Although I explained in my IPRA that previous-City Manager Bruce Swingle said, about three years ago, that the National Rural Electric Cooperative Association would do the first study, no related study or financial documents were found. Swingle initiated the possible sale shortly after he became city manager. He knew the electric, water and wastewater systems were falling apart faster than they could be fixed and the city needed cash.

The nature of or cost of the NRECA study are unknown, but the five studies conducted by Burns and McDonnell are priced and described in the invoices as:

Task 1: Environmental Review, $2,000

Task 2: Confirm Capital Expense Assumptions, $10,000

Task 3: Financial Model Analysis, $30,000

Task 4: Existing Power Supply Contract Review, $7,000

Task 5: Workforce Transition $25,000

The environmental review is described as “limited” and “desk-top” by Burns McDonnell. It revealed no need for environmental clean-up of the city’s electric yard, which is probably why I received this study.

I don’t believe for a second that the city commissioners don’t have copies of the studies, let alone City Manager Angela Gonzales, Electric Department Director Bo Easley and a slew of others on city staff.

I think they are hiding them from the public because they demonstrate the utter dereliction of duty by the city commission to ensure the electric facility was being competently managed and run.

I think the capital expense study probably shows that most of the facilities’ assets, such as transmission lines, transformers, telephone poles and other equipment, need to be replaced.

I think the Financial Model Analysis probably shows Sierra Electric Cooperative will have to buy and install these assets/equipment/lines in a very short time frame, since it is subject to Public Regulation Commission schedules for inspections and replacements.

That would mean Sierra Electric, if it bought the facility, would have to pay huge up-front costs, including hiring an army of skilled and certified workers. I would not be surprised if the study showed that the current value of physical assets was less than the estimated repair-and-replacement capital expense.

During the Jan. 24 meeting, the city commissioners finally broke their secrecy after three years of holding secret discussions on the proposed sale. Hechler said Sierra Electric made a verbal, not a written offer. Two years ago, Hechler said the city needed $14 million to make the sale worth it. I bet the offer was well short of that. The offer was probably based on the future value of 4,000 more customers, the poor physical-asset value probably hurting, not helping the deal.

Hechler and Forrister said the city wasn’t going to sell, “because we don’t know enough.” They also said, “We didn’t know we were missing the administrative piece.” They claimed not to know that it was insufficient to have a director who was a “field guy” but not an administrator. They also claimed not to know that running the electric facility was a “business-like” activity. Then they have never looked at or understood the city budgets they have been passing or the yearly audits they must turn into the Department of Finance and Administration.  For more detail on what they said Jan. 24, see: https://sierracountycitizen.org/sale-of-t-or-c-electric-facility-ends-in-a-whimper/

I think the city commissioners knew darn well that they and city commissions before them are guilty of dereliction of duty as the people’s representatives. Their hiding the six studies shows guilt over not carrying out their required fiduciary oversight. The excuse that Sierra Electric has the studies, that they never bothered to get or study them makes them look even more derelict.

I think their pretended ignorance during the Jan. 24 meeting and the claim they never had the studies is to avoid the even worse censure and criticism the documents would incite. Third-party confirmation of the actual monetary cost of their fiduciary neglect; they don’t want that to become public.