Tuesday, January 26, 2010
Monday, January 25, 2010
Wednesday, January 20, 2010
For quite sometime, several concerned citizens have expressed discontent with the lack of public meeting coverage supplied by Cable 7. Last year, the city cut Cable 7's budget (page 8) and currently has only 1 part-time employee.
Suffice it to say Cable 7 has not been taken seriously for a very long time.
Last night, Mayor Winters asked if anyone would be interested in sitting on Cable 7's board. If you are, visit here for the application or contact Kevin Manthey at 761-8123 or firstname.lastname@example.org.
This is a very good decision.
Monday, January 18, 2010
When: 5:30 PM - Gibson Room
Thursday, January 14, 2010
Jergeson 'report' on Electric City Power wrong, out of lineBy BOB PANCICH
Last Saturday, the Tribune published an article by reporter Richard Ecke which featured PSC Chairman Greg Jergeson's criticisms of the Burns and McDonnell consulting report on the city of Great Falls' energy ventures.
Notable among the criticisms was that the consultants "failed to include a deferred supply credit given to customers for the year." This was important because it skewed the comparison of NorthWestern Energy's rates with Electric City Power's rates.
According to Public Service Commission Chairman Jergeson, "ECP customers barely eked out $112,000 in savings compared to taking power supplies from NWE for the five-year period"
There is only one problem with this analysis. It is wrong. Dead wrong.
I asked the city for the calculation used in the consulting report. It shows that the deferred supply credit was subtracted from NWE rates for the years being compared. The comparison in the consulting report is correct. ECP customers saved approximately $2.6 million for the period shown.
Remember that 25.88 percent of ECP's customer load consists of agencies supported by the taxpayers such as the schools and city operations. So part of the savings directly benefits the taxpaying public.
Chairman Jergeson calls the report's conclusions "sophomoric." This characterization is an insult to sophomores everywhere.
I would suggest that any competent high school sophomore could do better research and analysis than the PSC chairman. All he had to do is ask for the calculation rather than making it up.
The chairman states that he did his work on nights and weekends. It shows.
If the staff of the PSC had analyzed the consultant's report, this mistake would never have been made.
The Tribune bears some responsibility as well. Sadly, print journalism seems to have devolved to a process of running back and forth between people who are opposed to each other and reporting what they say. There appears to be no independent analysis or verification.
In this case, there wasn't even an attempt to check the facts or to get an opposing viewpoint. The call to the consultants was merely "cover" since they could not possibly have had time read the Jergeson report to make intelligent comment.
The chairman delivered his work and it was rushed into print as "news." If I were a cynical person I would say it was meant to influence the discussion between the City Commission and the ECP Board on Monday evening.
The Public Service Commission is a statewide regulatory body, not a policy-making body. Why is the titular head of a state regulatory agency spending time and effort bullying a local policy-making body, the City Commission, into acting on his conception of what local energy policy should be?
State law and common sense require public officials, in their official capacities, to act within the scope of their responsibilities. The Public Service Commission chairman might benefit by reflecting on this basic ethical requirement.
The Tribune might do some reflecting on its responsibilities as well. It might save future embarrassment.
Mr. Pancich knows the "Jergeson report" is wrong, because he asked "the city", aka Coleen Balzarini, for the calculations used in the Burns and McDonnell report. And imagine that. The numbers used by B&M were correct!
Tuesday, January 12, 2010
Goals for 2010
New council formation
When: Thursday, Jan. 14 at 7:oopm
Saturday, January 9, 2010
It pretty much says it all; the city paid $60,000 for a whitewash:
Thursday, January 7, 2010
HERE WE GO AGAIN. MY RESPONSE TO “A LICENSED CPA”
My background was posted on this blog a number of months ago, with a link to that posting kindly provided yesterday by Sandra Guynn. I suggest that our "Licensed CPA" read it.
As noted in my prior response, I am a CPA, and maintain my license in Texas, where I first became certified, and have for the last 34 years. I do so, as does apparently our “Licensed CPA”, by meeting my required annual 40 hours of Continuing Professional Education, and payment of an annual license fee. As I also mentioned in my prior response, I am a member of the American Institute of Certified Public Accountants and have been a member for the last 14 years. Obviously, to be a member of the AICPA one must be a Certified Public Accountant.
One thing we may infer is that our “Licensed CPA” is unaware that Montana is among 39 other states, including Texas, that have passed mobility legislation providing reciprocal recognition to CPAs from other states. Such legislation has been enacted in recognition of the uniform exam we take to become CPAs, together with, in almost all cases, identical Continuing Professional Education requirements. As my practice as a CPA is in my employment with the U.S. Department of Justice, Office of the U.S. Trustee, however, I have no need or requirement to be licensed in the State of Montana. I do not engage in the practice of public accounting and never have in the State of Montana.
Our “Licensed CPA’s” petty and patronizing assessment and resentment to the contrary, I challenge him or her to compare credentials to mine. I am not impressed by their petty resentment of my use of the credential that I have held for well-nigh thirty-five years. Yes, as they indicate, I am well able to analyze financial statements to assess the financial results of businesses. That comes from my educational background with an undergraduate degree in accounting from Fairleigh Dickinson University, an M.B.A. in finance from the University of Chicago Graduate School of Business; followed by three years in public accounting with Arthur Andersen; and then two years as Senior Financial Analyst for Friedrich Air Conditioners. A 25 year career followed that as CFO in public, venture capital and private equity financed businesses. These included businesses in both high-growth and turnaround settings. I have served as CFO of two businesses in chapter 11 bankruptcy. This, of course, is now abetted for the last 5 years initially assessing, and then monitoring, all chapter 11 bankruptcies filed in the State of Montana. I also was active for 15 months prior to that in participating in the liquidation of Touch America, working with Protiviti. I possess hands-on CFO experience in multiple industries; including manufacturing, retail, high-technology, medical technology, telecommunications, e-learning, and support services; with one experience in such a role for two years on-site overseas in the Middle East. As shown above, yes, I also am a CPA.
And what do we know about you, “Licensed CPA” that qualifies you to judge my credentials? You have chosen to hide behind the anonymity provided in the blogosphere.
Lawrence C. Rezentes, CPA
Tuesday, January 5, 2010
Interesting that an assumption has been made that a video conference is going to take place. Publicly, there has not been an announcement made to that effect.
I'm wondering why Burns and McDonnell would even make an effort to "show-up" at a video conference. They've been paid in full (here and here) for their services in spite of the fact that our city manager, Greg Doyon, said the report didn't answer all of the questions about ECP.
And if they do agree to a video conference, how much are they going to charge to tell us what they should have told us initially?
And speaking of full payment for this report, who authorized it? To the best of my knowledge, the Commission certainly didn't. Once again, payments were "authorized" after they were made.
There was no viable excuse for not meeting last night. There was plenty of business to conduct besides the B&M report. For starters, they could have followed their own bylaws, which indicate they are to appoint officers at their "regular January meeting". And if following the rules weren't enough reason to meet, there are always the monthly financial reports and updates on lawsuits they can pretend to discuss.
Monday, January 4, 2010
Perhaps it has everything to do with the fact that the IP address of the computer used to make the comment is in Billings, the headquarters of SME.
I find it interesting this little tidbit couldn't be posted sooner.
Consultant report on Electric City Power incomplete, whitewash
At a cost of $60,000, Burns and McDonnell satisfied city government's need to self-justify, but missed the mark recommending that Electric City Power continue in business providing electric power to its 18, primarily business, customers.
In supporting the city's history operating ECP while it generated large losses in violation of Ordinance 2925; of botched investment; and of wasting millions of taxpayer dollars; the report is a whitewash, and unconvincing.
The consultants acknowledge the city's violations of Ordinance 2925; as do auditors' "Special Emphasis" reports on ECP and prior City Attorney David Gliko.
The only valid use of the consultant's services would have been development of an exit plan. Ironically, but not surprisingly, such a plan was not prepared.
The consultants reported to the city commissioners and mayor and had as primary sources of information, together with them, city managers (current and past), and the city finance director/executive director of ECP.
Other than Commissioner Mary Jolley, these are the very individuals who spearheaded the program; supported its continued operation in violation of the ordinance; oversaw and managed the program; and watched as millions of taxpayer's dollars were wasted.
The city engaged the consultants to provide support for a decision that under city law they had no right to make, and stacked the deck to assure they would obtain the recommendation desired. The report, touting savings for ECP's customers (the list including big business enterprises such as FedEx and General Mills), ignored that those savings occurred at a cost to the taxpayers of millions of dollars, and resulted from initial subsidized pricing to these customers.
What benefit did the taxpayers of Great Falls get from these losses and subsidies? How did any such supposed benefit compensate for loss of the ability to fund (without proposing additional tax burden rejected by the voters) needed hiring of police officers and firefighters? What benefit will the citizens and taxpayers of Great Falls receive from continuing this diversion of city time, attention and finances?
Now the theory is that ECP is in prospect of making money. Is this prospect real, and enough to justify the continued diversion of the city's attention in light of its history of misspent millions? Is the consultant's solution of negotiating rate increases to existing customers (suggested at 32 percent but settling at 10 percent to avoid loss of customers) realistic given existing contractual rate commitments to customers?
The report erroneously states: "In the last full fiscal year alone that trend reversed and ECP for the first time showed a positive cash flow by collecting more revenues from its customers than the amount paid to SMEC (Southern Montana Electric Generation and Transmission Co-op) for power purchases."
In fact, ECP financials show an excess of payments over receipts from customers of $318,885 for the fiscal year ended June 30 ($9,027,329 customer receipts and $9,346,214 payments). The cash drain has continued.
Further, Burns and McDonnell's assessment of ECP profitability is based on use of the "transitional/blended rate" for ECP cost of power in ECP's financial reporting. Out of pocket, ECP in fact continues to pay for power what it paid before.
Recognizing the full cash paid for power, ECP continues to lose taxpayer's money. ECP's reporting may, at the margin, conform to acceptable application of accounting principles, but does not conform to reality for the taxpayers.
Year-to-date ECP financial statements continue to reflect this fiction. Adjusting ECP financial statements to reflect full cost paid for power, ECP continues to lose money.
It belies common sense for ECP to recognize benefits from the "transitional rate," assuming ultimate recovery of the associated "deposit," pending resolution of the Yellowstone Valley Electric Cooperative lawsuit challenging its availability to ECP, among many uncertainties.
Repayment to SME of a $1.2 million liability for the "water credit," resulting from initial subsidized ECP customer pricing, is a major such uncertainty.
Unstated is that the zoning of the land owned by SME, to be used for Highwood Generating Station, is currently under appeal before the Montana Supreme Court to overturn the resultant conversion of farm land to heavy industrial use.
Should the justices conclude the zoning was improper, the project itself, even as currently configured as gas-fired, would fail.
Repayment would be demanded from ECP without the consumption of water by HGS in prospect as the source of repayment, placing deposits in the hands of SME in jeopardy.
Overstated are risks of claims resulting from a shutdown, including that of a claim by SME for "stranded cost." ECP in fact possesses limited assets as a source of recovery for such claims, should it simply be liquidated.
Additionally, the consultants mislead when they state that "...Ordinance 2925 does not state any time period for its criteria of 'revenues sufficient to pay all ECP expenses,'" without continuing the citation to include "at all times."
They take the position that the break-even requirement does not state a time period and "has been an ineffective tool."
What do the consultants not understand about the meaning of "at all times"? Their recommendation that the city amend (they say "update") the ordinance ex post facto,seemingly to render "matter-of-fact" the city's violation, is outrageous. The major deficiency in the report, in fact, is its lack of a plan to exit Electric City Power, given the requirement to comply with Ordinance 2925.
Our new mayor and city commissioners will need citizen support to terminate ECP despite the recommendation of the consultants, and without such a plan. I suggest that they first ask Burns and McDonnell to "update" (in fact to complete) the report to include such a plan, at no further cost to the city.
Electric City Power Meeting
As discussed at the December Electric City Power Board meeting, scheduling the date and time for the next ECP Board meeting will be determined subsequent to the video conference meeting with the City Commission and Burns & McDonnell.
I see ECP is off to a great start for the new year. Tonight is supposed to be their board meeting and it's not listed on the city's calendar nor on ECP's city page either. The Tribune doesn't have it listed either in today's public meeting column.
Nothing like keeping the public guessing. And then they have the audacity to wonder why members of the public don't trust them.
Friday, January 1, 2010
* Approve payment for invoices BEFORE they are paid; not after.
* Change the $5,000 report to $1,000. A lot of bills can be paid for under $5,000 that can add up to really big bucks that miss public scrutiny. (This report used to be $500., but was changed, without commission approval, a few years ago when ECP came into existence). How convenient.
* Concerning the above report: Quit combining all utility bills together under one lump sum. Break it out like it used to be so the public can see what departments are paying what amounts for services.
* Ask that all advisory boards give at least quarterly reports concerning their activities. We NEVER hear from most of the boards, and as far as the others are concerned, we only hear from them when they want money.
* Require that city staff give the pros AND cons of suggested projects. Right now, we only hear about the up-side to everything proposed. There is no such a thing as a win-win situation when the government is involved.
* ALWAYS allow enough time at work sessions for public comment.
* Don't schedule a work session about an actionable commission agenda item on the same night it is scheduled to be acted upon. This minimizes public involvement.
* Get the microphone system fixed in Commission Chambers and then speak into it!
* Gavel Brett Doney (director of the Great Falls Development Authority) as out of order when he mentions for the umpteenth time "shove-ready" projects. Just kidding, but in this article from USA Today, "shovel-ready" is one of the words that has been included in the '09 banned words list. Thank you Lake Superior State University's Word Banishment Committee.
* Under Old Business; require Coleen Balzarini, and any other department head, to have available, at the next regularly scheduled City Commission meeting, the answers to questions she/they couldn't or wouldn't answer at the previous meeting. No exceptions.
* Tell the city manager the Commission will have an office in the Civic Center where they can meet with the public. And no, it's not going to be a room tucked away in the bowels of the building or miles away from an elevator.
* LISTEN to Neighborhood Councils and quit leaving them out of the process. Invite them to participate in the budget process.
*Quit fooling around with the animal shelter. It's been 2 1/2 years that the police department has been running the show. It's more than time they focus all their energies and budget on public safety. After all, that's what we're paying them to do.
* Require that the ECP board, not Coleen Balzarini, give at least a quarterly "advisory" report to the Commission. Oops. I just remembered. This can't happen. Nobody currently on the board is qualified enough in public power to "advise". (Learning about power, public or otherwise, from Tim Gregori doesn't count).
* Give the city manager direction so he can start earning his pay.
* OBEY THE LAW! Yes. I'm primarily thinking of ECP when I say this.
If you have other ideas for improvements, please feel free to let us know what they are.