Special City Commission Meeting - 01 May 2013

Tentative Settlement Agreement Reached with Southern Montana G&T

PRESS RELEASE
FOR IMMEDIATE RELEASE
DATE:  April 26, 2013
CONTACT: Jennifer Reichelt, Deputy City Manager – 455-8417

TENTATIVE SETTLEMENT AGREEMENT REACHED WITH SOUTHERN MONTANA G&T

Great Falls, Montana – The City of Great Falls, Electric City Power and Southern Montana G&T, through their attorneys, have reached a tentative Settlement Agreement and Release, which will totally, completely and permanently sever the City’s relationship with Southern Montana G&T.
The proposed settlement agreement includes an owed water credit in the amount of $1,186,061.83 plus a mediated settlement amount of $2,063,938.17 totaling $3.25 million. The settlement is due only after it is approved by the Federal Bankruptcy Court. The settlement will be paid in two payments; one due three business days after the bankruptcy court accepts the settlement and the other on or before December 31, 2013. If the Settlement Agreement and Release is approved by the Commission, the source of the payments and funds will be approved through budget adjustments at a future City Commission meeting and discussed through the 2013/2014 budget process.

On Wednesday, May 1, two special meetings will be held in the Commission Chambers of the Civic Center (2 Park Drive S) to consider the Settlement Agreement and Release.  The Board of Directors of Electric City Power (ECP) will meet at 5:30 p.m. and there will be a Special City Commission Meeting at 7 p.m. Both Meetings will air on City 7 and be streamed live online. The Settlement Agreement and Release are available online at www.greatfallsmt.net.

Media inquiries regarding the Settlement Agreement and Release should be directed to Doug James, with Moulton Bellingham, at 406-238-1565 or Doug.James@MoultonBellingham.com. Written Public Comments regarding the Settlement Agreement and Release should be sent to Lisa Kunz, City Clerk at lkunz@greatfallsmt.net, hand delivered to the Civic Center-Office 204 or mailed to:

Civic Center
Attn: City Clerk’s Office
PO Box 5021
Great Falls, MT 59403

Gregori Retires From SME

On Tuesday, nearly one week before the Nov. 17 creditor's meeting, Tim Gregori retired as general manager. Not surprisingly, there was no emergency meeting called, or any notice given to the trustees. Alan See, the general manager of the Tongue River Electric Co-op, is the interim manager. No vote taken for this decision either.

More details here.

SME Files Bankruptcy

For most folks, this is already old news. There remains though a serious concern that this is a valid filing, considering that a quorum of the SME board was not available to vote on the decision. To top it off, SME refused to seat new Beartooth Co-op board member, Arlene Boyd. After filing for bankruptcy, the board also voted to increase wholesale power rates by 20%. Beartooth is going to fight. Good for them.

CITY SUES SME

On Wednesday, March 16, the city sued SME for the return of its security deposit (792,411), and is also asking Judge Kenneth Neill to rule whether or not the city's various contracts and obligations can be voided.

For more details, check this article in the Tribune and this story at KRTV.

ECP Power Board, Special Meeting Today

When: Today, March 15 at 9:00am

Where: Missouri Room, Civic Center

Agenda:
Special meeting with SME, discussing how the city can exit from Southern.

If anyone attended this meeting, and would like to comment, please do so.

(Here is a very brief Tribune update of that meeting).

ECP March Meeting Is Canceled

In order to give staff more time to discuss the voluntary rate increases with B1 and B2 customers, the ECP meeting scheduled for today, March 7, has been canceled.

On Tuesday, March 1, the city sent SME a letter stating that the city wants "to be relieved of any and all obligation that exist with Southern".

For six months, the city has been requesting documents from SME relevant to allowing the city to make decisions regarding ECP. SME has not been forthcoming, citing confidentiality and proprietary information.

Citizens have been bemoaning this lack of transparency since the inception of ECP, more than 5 years ago.

How much more in tax payer dollars will it take to resolve this impasse?

Special ECP Board Meeting

When: Monday, Feb. 28 at 5:30pm
Where: Civic Center, Gibson Room

Agenda:
Jim Williams, Basin Creek Power Services will present his findings regarding rates.

Balzarini Resigns

Coleen Balzarini, the Fiscal Service Director for the City of Great Falls, submitted her resignation, effective the end of the year.

She'll be working in a similar position for the McLaughlin Research Institute.

About Time

Finally. The Great Falls Tribune is finally reporting on the problems plaguing ECP.

Why did it have to take five years and 5 million dollars (including water credits) later to finally report the reality of this gross misuse of taxpayer's money?

See here for an abbreviated version of Sunday's (Nov. 14) article.

ECP Out Of Lawsuit

This is good news. According to this article in Saturday's (Oct. 30, 2010) Tribune, Electric City Power and the city have been dropped from the lawsuit that was filed by Yellowstone Valley Electric in December 2008.

The city though is still losing $5,000/day from the boondoggle that is ECP.

Aug 2010 ECP Meeting

When: Monday, August 2 at 5:30pm

Where: Gibson Room, Civic Center

Here is a draft copy of the agenda for the August 2 ECP meeting.

SME July 2010 Board Meeting Agenda

H/T: A.D.

City Manager Doyon recently wrote to Southern Board members that although the city has not recently sent a representative to its meetings, the city still needs to receive copies of its agendas. Note that after five years of doing business with the city, Tim Gregori lost the city's email address.

It IS Considered Spot Zoning

The Montana Supreme court ruled in favor (page 31) for the plaintiffs and appellants.

According to this ruling, Cascade County illegally spot-zoned the property for the coal plant when they changed the zoning from agricultural to heavy industrial.

Not surprisingly, Tim Gregori says that SME will ask the court to reconsider their decision, because it was based on "outdated and erroneous facts".

ECP Debt

H/T: A.D.

Here you will find the ongoing debt calculations of ECP. The final tally includes the infusion (page 21) of $1.4 million of monies that was "borrowed" in 2007 from other city funds as a "security deposit" to SME. On page 37, the security deposit was supposedly released, but ECP has yet to pay back the city for the initial loan.

Posted debt as of May 2010 SME billing: ($2,018,250)

Actual debt, which includes the initial $1.4 million loan from various city funds that is still outstanding: ($3,418,250)

SME Is Sued By The Billings Gazette

Hat tip: Travis

The Billings Gazette has sued SME after one of its journalists was denied access to SME's board meeting last Friday.

Let's hope the City of Great Falls gets involved as Travis has suggested.

SME's 990s from 2004-2009

Here is a link to SME's 990 reports from 2004-2009. Interesting reading. Enjoy.

The Ongoing Quest For Open Meetings

The following email correspondences represent an ongoing struggle citizens have had to gain admittance to SME board meetings. It is truly a pathetic situation when citizens have to work so hard and put up with so much in their quest to uphold their constitutional rights. The beginning of the exchange begins at the end of this posting.

Dear Mr. Brooks,

I thank you for your timely and professional response on this matter and for advising the police accordingly. My regrets the fax wasn't available for your office as I thought I had successfully transmitted from Fort Carson, CO, but I think we're all up on the issue now. We shall now see how Southern will deal with our constitutional rights, open government and citizens who insist on transparency, accountability and oversight.

Very Respectfully,

Richard D. Liebert

----- Original Message -----
From: "Brooks, Brent"
Date: Wednesday, June 16, 2010 12:54
Subject: FW: police enforcement of co-op's closed meeting

Colonel Liebert:

I am forwarding to you as promised the recent email I sent to Arleen Boyd which also contains an additional email as an attachment. That attachment is another email sent to an attorney for SME advising what I mentioned to you a few minutes ago-that I have recommended to the Billings Police Chief Rich St John that the police respond to reports that a crime is imminent or actually in progress concerning SME meetings in Billings. I do not know if SME will have private security in the future and that is a matter for its decision.

I am also attaching the May 5, 2010, letter I sent to Mr. Frank Willett, husband of Arleen Boyd which is self explanatory and contains specific statutes that authorize a challenge to an open meetings violation.

If you have any questions on any of these items I am forwarding to you feel free to email or call me as needed.

Thanks,
Brent

Brent Brooks
Billings City Attorney
P.O. Box 1178
Billings, MT 59103
(406) 657-8205 (work)
(406) 672-8316 (cell)

From: Brooks, Brent
Sent: Monday, June 07, 2010 10:28 AM
To: 'Arleen Boyd'
Subject: RE: police enforcement of co-op's closed meeting

Mrs. Boyd:
Attached is a brief email I sent last Friday to Mary Jaraczeski, one of the attorneys representing the SME Board. Billings Police Chief St John, Assistant City attorney bonnie Sutherland and I have previously met and discussed the issues on these meetings and the attach email is the result of that meeting, several phone calls from me to attorneys John Crist, Jim Santoro and Mary Jaraczeski so I could learn more facts.

Please let me know if you have any additional questions on this and I will attempt to help as much as possible. I encourage you to work with anyone within SME or within one or more of the member cooperatives to resolve the open meetings issue.

Thanks,
Brent

Brent Brooks
Billings City Attorney
P.O. Box 1178
Billings, MT 59103
(406) 657-8205 (work)
(406) 672-8316 (cell)

From: Arleen Boyd

Sent: Monday, May 24, 2010 8:08 AM
To: Brooks, Brent
Subject: police enforcement of co-op's closed meeting
Importance: High

Dear Mr. Brooks,

I am preparing my complaint regarding the closing of the May 20, 2010, Southern Montana Electric Generation and Transmission Cooperative, Inc. board meeting. As we have discussed, the meeting should have been open to the public, yet General Manager Tim Gregori declared it closed. I am attaching, again, Great Falls City Attorney James Santoro's memorandum stating the legal case for declaring Southern's meetings open.

The Billings police enforced this order of closure by parking a Billings police vehicle directly in front of the door of the building, 3521 Gabel Road, and stationing Officer Peterson at the site to remove any "uninvited" persons from the property. Officer Peterson confronted me, several other Beartooth Electric Cooperative members, and Great Falls resident Aart Dolman in the parking lot and told us that we could not even approach the door of the building. He said that we had to stay on the sidewalk.

Following are a few facts regarding this May 20 event:

* Officer Peterson was at the site at 8:20 when I arrived and the police car was parked parallel to the building, directly in front of the door.
* The officer drove the car around the parking lot after I arrived and was talking with Mr. Dolman who had arrived earlier. The officer then parked it, again, in front of the door.
* The officer told us, in the parking lot, to leave or go to the sidewalk.
* I told him that the meeting was an open meeting.
* The officer told me that the meeting was a closed meeting.
* When I pointed out that my car was in the parking lot and that I needed to be on the property to enter it he said that it was unlikely that it would be towed away but that could legally happen.

* Aart Dolman asked for a police report to be filed so that he would have a record of exactly what had transpired and what legal action was taking place to remove us from the property.
* Officer Peterson called Sergeant Berry, his superior officer, to come and discuss a report.
* Sergeant Berry gave us a report number and explained, exactly as Officer Peterson had, that the meeting was closed by the board, that the building owner had secured police support to enforce the closure, and that we would have to leave. The officers were polite. I believe they were put in a very bad position by someone in charge of police activity. They were enforcing an illegal closure of a public meeting. I have many questions about this police action including:

* Who told them the meeting was legally closed?
* Why did they accept and repeat the contention that it was closed?
* Is it a Billings Police policy to enforce "closed meetings" on private property?
* How much does it cost to station a Billings Police officer in a parking lot for three or four hours?How much does it cost to police to use a police vehicle for three or four hours as a signal that the police support the closure?

When we tried to attend the Southern Montana Electric Generation and Transmission Cooperative's annual meeting, March 19, 2010, we were met by a police officer in the lobby of the building and threatened with arrest if we did not answer all of his questions and immediately leave the property. He was not as polite as the officers who met us on May 20. He repeated several times that we were subject to arrest if we did not cooperate with a police officer's instructions. What legal right did he have to give me and several other polite and orderly people who were making no disturbance whatsoever instructions?

I will call you this morning to ask about this complaint which relates to actions taken by Tim Gregori on behalf of the Southern Montana Electric Generation and Transmission Cooperative, Inc. board and by the Billings Police Department. We did record the May 20 morning's activity with a video camera and I have pictures of the police officers talking with us.

Yours truly,
Arleen Boyd (328-6645)

SME Board Minutes

Here are the SME board minutes from April 2008 through April 2010.

Balzarini Resigns

UPDATE: Here is Coleen's resignation letter.

I did not attend the ECP power board meeting last night, but according to this article, she resigned her position as executive director.

It's about time.

The ECP board, which is the City Commission, will appoint her replacement.

I certainly do not favor appointing someone within the Fiscal Service Department or any member of the City Commission. It's more than time to get an unbiased third party involved, whose main concern will be the interests of the City of Great Falls and its residents, not those of SME.

ECP Bailout

Last week, Larry Rezentes, a CPA and watchdog for the ECP boondoggle, wrote the mayor and city commissioners in anticipation of the May 3 ECP board meeting. Below is his analysis of the resolution reached at that meeting to potentially exit the power business. Included is a link to his documentation:

At Monday night’s meeting, the Electric City Power Board approved resolutions to have city staff develop a city strategy to potentially exit from the electric power business, and for the ECP executive director to approach customers about their willingness to move pricing of their contracts with ECP to cost plus. A major element of the city staff work will be done by our new city attorney in assessing individual contracts and exposures to litigation against the city from ECP customers and from SME. I cover what I believe are premises that should exist to actions by the city, the suggested action course to shut down ECP, and the correction of misconceptions as to the risks presented by the potential for customer and SME litigation, in the attached material, and so I won’t belabor them now.

Suffice it to say, however, that the current parallel track action course to “explore” shutdown and increased pricing is both a trap and an implicit acceptance of the assumption that the city has the authority to continue in its misguided and illegal operation of ECP. This, while ECP loses additional taxpayer money ($234,674 in the first three months of this calendar year) in violation of ECP’s founding ordinance in the meantime, and with the same individuals in charge who were and are in charge while these losses occurred and continue to occur. A trap, because it continues the never ending saga with no decision ever being made to terminate ECP, while giving cover to the city while the losses continue. A mistake, in its implicit premise that to make a decision to shut down ECP there must be assurance of zero risk of litigation in doing so. It is interesting though that suddenly, at this late hour, ECP is going to approach customers to obtain price increases to stanch the losses. A part of the suggested solution of cost plus, incidentally, would come by increasing pricing of power that the city itself purchases from ECP, resulting in the passing on of the burden of ECP losses even more directly to the taxpayers.

I addressed his honor, the mayor, as ECP Board Chair, and suggested others (by inference, the city attorney) could elect to respond on the issue as well, of the basis under which the city continues operating ECP in violation of the law while losses continue to mount. The mayor simply would not answer the question, other than to say that it would take time to exit the business. However, as City Attorney Santoro correctly was quoted in the Great Falls Tribune as stating, the resolutions passed do not even place us in the position of having made a decision to do so.

So, another jovial meeting of city government and staff, while the taxpayers continue to lose money in the interest of the few businesses that have benefited from subsidized pricing that in large measure resulted in the losses ECP has sustained.

Larry
Rezentes