Sale of T or C electric facility ends in a whimper

Whether the city commission is incapable of gathering information and asking questions until they can make an informed, evidence-based decision or not is immaterial, because the result is the same: decisions based on ignorance.

Mayor Rolf Hechler said, “We still don’t know enough” and Mayor Pro Tem Amanda Forrister said “We don’t have enough information” to determine if they should sell the electric facility or not during the Jan 24 meeting. The city will therefore not be selling, they said.

It’s been nearly three years since then-City Manager Bruce Swingle said, without asking city commission permission, he was looking into the city selling its electric facility to Sierra Electric Cooperative.

During that time the citizens of T or C and Sierra Electric Co-op members have split the cost of six studies. Plenty of time for the city commission to absorb and ask questions of those experts to their hearts’ content until they understood if the sale was good or bad for the people.

The whole time the city commission has insisted on being the sole evaluators. No experts spoke, no public presentations, no questions and answers, no studies shared.

I made two Inspection-of-public-records-act requests for the studies, but was refused the documents.

There is an IPRA exception for “trade secrets,” and Hechler said the discussions were in executive session because Sierra Electric Co-op had “proprietary” information.

The city could have redacted that information from documents and could have not answered questions concerning Sierra Electric Co-op’s trade secrets, if they have any.

The city didn’t cite which IPRA exception they were using to refuse my IPRA requests, probably because there is none. The response was: “The documents you are requesting contains confidential information and cannot be released at this point.  Information contained in the study will be used by the city for determining the value of city property in negotiations with Sierra Electric Coop.  The information shall remain confidential until a decision is made to sell the electric property or not, and negotiations are complete.  If the commission decides not to sell, the report will become public.”

After excluding the public for nearly three years, the shallowness of the city commission’s conclusions is breathtaking.

Hechler said “We still don’t know what a sale would mean to the city.” He also said the electric company is in much better shape than it was three years ago, and the “cash balance is O.K.”

Forrister said the studies taught her that “we are lacking that administration piece” of running an electric facility.

City Commission Merry Jo Fahl, in a similar vein, said she learned that “It’s a government enterprise,” and “It’s a company. I never thought of it that way.” Fahl noted that “Bo [Easley, the director of the electric department] is not a CEO. Arnie [Castaneda, director of the water and wastewater department] is not a CEO. That’s where we were failing.”

Hechler said the city needs to hire an “administrator over the electric facility,” and also “find a firm to do a five-year plan on how to rebuild the infrastructure.”

Fahl said that a “CEO for utilities,” not just the electric department, should be hired.

City Commissioner Destiny Mitchell agreed that the electric department “has improved,” and repeated that “We need more information.”

City Commissioner Ingo Hoeppner enigmatically said, “We have to think about revenue.”

A little history for the reader. All except Hoeppner have approved budgets that transferred millions out of utility funds to pay for deficit spending in the general fund. Some of the money paid for the swimming pool, golf course and airport, which are also supposed to be run as government enterprises. That means customer user fees are supposed to pay for the operation, maintenance, repairs and capital projects of the enterprise. It has only been last year’s and this year’s budgets that have not raided utility fees to subsidize the general fund and other enterprise funds. We are half way through the second budget year, which ends June 30, 2024.

A mere year and one-half has barely touched the massive needs for long-neglected repairs and replacements. The most recent financial statement made public was in the Nov. 15 city commission packet, which included an “income statement” from the beginning of the fiscal year, July 1, 2023, to the end of October 2023, or the first four months of the fiscal year.

That income statement said the electric department’s expected yearly income is $6.7 million and the budgeted expense is $7.3 million. In other words, the city commission budgeted over $631,000 in deficit spending for the year, which would presumably be paid out of cash left over from last year.

By the end of October, nearly half or $3.2 million of the revenue had already been collected in utility fees, but $5.5 million of the expense had already been “encumbered.” The electric facility owed about $2.2 million more than it had earned. Evidently the city can wait to pay its bills, unlike electric customers. The income report said it had about $609,000 cash in the electric fund at the end of October.

The income report does not give the cash balance from the beginning of the year, so there may have been more than $609,000 cash in the electric fund altogether, but just looking at this year’s activities is by no means impressive. Claiming that the electric fund is in much better shape than nearly three years ago may be true, but that merely points out how badly it has been exploited over the years.

The city commission significantly increased electric fees in January. Increasing utility fees is the city’s go-to solution for having exploited utility funds for years and years and years. But again, a year and a half is not sufficient to make up for years of deferred maintenance.

Water fees have gone up about 80 percent in the last five years yet the same end-of-October 2023 income statement shows the city commission budgeted over $377,000 in deficit spending.

Solid waste fees have gone up over 30 percent in the last five years, yet the city commission budgeted about $419,000 in deficit spending.

The wastewater fees have also gone up over 30 percent in the last five years. The city commission budgeted about $150,000 in deficit spending.

Hechler has been a city commissioner for more than eight years, Forrister for five years, Fahl for two years and Mitchell for two years. They are just figuring out that utilities need to be administered? That five-year plans should be in place? That you can’t defer maintenance without drastic problems? And these are the people who feel they are fit to decide whether the city should sell the electric facility or not?