Time To Pay The Piper

In a somewhat interesting turn of events, it is not a given that an additional 16 firefighters will be hired.

As indicated here, the mayor and two other commissioners assured members of the fire department that regardless of whether the levy passes, any new firefighters would be able to be retained.

In an article in today's print edition of the Tribune (I could not find the article online), the city is still pondering whether they should go forward and hire 16 firefighters with the hope that the public safety levy will pass. If it doesn't, then the city has to come up with the $$s, which are not there, or give back the grant.

Fire chief Randy McCamley is not in favor of hiring new firefighters only to have to lay them off later. The City Commission has asked him to explore other possible income sources, such as: Charging homeowners to put out fires; increase the fees to inspect businesses; send a bill to people involved in car accidents at which the fire department responds.

You've got to be kidding.

Aside from the fact that many of us residents are already paying for fire services, providing fire protection is a core responsibility/duty of a city. Had the city not squandered millions on the HGS and ECP debacles, which had absolutely nothing to do with benefiting/helping the individual residents of this city, we wouldn't find ourselves in as dire straights as we are.

Chief McCamley said he would look into these options (what else could he say), but indicated these ideas would not generate enough income and would come with drawbacks.

Our so-called leaders don't have a clue, other than Commissioner Jolley, who was quoted as saying, "If we do hire the firefighters without a public safety mill levy, we'll have to chop the budget somewhere else. And that's a perfectly reasonable thing to do because every house in America is chopping their budget".

16 New Firefighters, Regardless

My public safety levy post and Gregg's, have generated several interesting comments.

In a very recent conversation I had with Commissioner Jolley, regardless of whether the levy passes, the fire department will be able to keep their new manpower.

The story goes like this:

At the special meeting held January 28, the fire department came away with the impression that even if the levy would fail, they would be able to keep the new firefighters. I was at that meeting and did not get that impression. Neither did Mary. (Even after rereading the minutes of that meeting, I still don't).

I believe Mary indicated it was at an agenda setting meeting this month that a representative from the fire department said he was concerned about an article in the newspaper (I can't find it) that gave the impression that if the levy did not pass, the newly hired firefighters would have to be laid off. The mayor and one or two other commissioners assured this fellow that would not be the case.

So. As of right now, the majority of the City Commission is telling the fire department that regardless of what happens with the levy, the new firefighters will stay. Of course, where the money will come from if the levy doesn't pass, isn't being addressed.

No New Firefighters...

if the public safety levy does not pass.

This new information came out at last night's Council of Councils Meeting by Fire Chief McCamley. He said he has been instructed, he didn't say by whom, that if the public safety levy does not pass, the city will not hire 16 new firefighters.

Since the January 28 special City Commission meeting held to discuss accepting the SAFR grant, firefighters and members of the public have been led to believe that regardless of the levy outcome, new fire personnel would be hired.

This is welcomed news since there isn't any spare change lying around City Hall.

Fire Department Has Grant

I attended the special City Commission meeting this afternoon and by a 5-0 vote, the City Commission approved the FEMA grant awarded to the fire department. This means that 16 firefighters can be hired.

Commissioner Beecher asked what would happen if the city could not adhere to the grant. According to Chief McCamley, any proceeds received up to the point of non-compliance would have to be paid back and all other monies from the grant would be canceled. Of course, it would also mean that 16 firefighters would have to be laid off.

Commissioner Beecher also mentioned that a couple of assumptions are being made: That SME will continue to pay their Fire Service Agreement and that any increase to the General Fund will go toward the grant. No further discussion about these assumptions ensued.

To help pay for this, the city will be asking the voters to approve a public safety levy this year, which could come as early as May.

Mayor Stebbins and Commissioner Bronson are convinced the public will vote in favor of this levy, because they believe, the public understands the importance of public safety.

So, what do you think? Will the public safety levy pass? Vote in the CC poll.

Involvement Causes Another Problem

For regular readers, you know that the city's involvement with private entity, SME, has caused major problems (here, here, here, here) for the city. Well, it looks like we've stumbled into another negative byproduct of that relationship.

In today's Tribune, we learn that the fire department applied for a grant last spring that would increase their staffing levels. According to presentations I have heard Chief McCamley give, the fire department is currently staffed at 1960s levels, even though the responsibilities of the department and the size of the city have grown. According to the chief, the city has fallen behind in national guidelines.

The good news is that the fire department was awarded a $1.73 million grant. The bad news is that the city has to absorb about $950,000 and agree to keep on the additional 16 firefighters this grant would allow. Right now, the city doesn't have the money.

The key issue, "Where's that money going to come from?"

Somehow, I don't think it will be coming back from SME.

6th Question: Levies

Here are the answers to this question: Why did the city police and fire special levies fail, and what should be done, if anything, to improve staffing in those departments?


COMMISSIONER CANDIDATES
John Rosenbaum:I believe they failed because of the timing in the current economic climate. We could look for ways to be more efficient in other areas supported by the general fund. Those savings could then be used to fund public safety, one position at a time.

Donna Zook:The police and fire special levies failed because the residents could not afford or would not pay an increase in property taxes. Many citizens whom I have talked with believe that they are held responsible through taxation because funds are being shuttled from one program to another, and there is a drain on reserve money in order to compensate for budget problems. These citizens feel they should not be taxed to compensate for a financial loss due to the ECP (Electric City Power), animal shelter, City Planning and possible other ventures.

Fred Burow:One big reason the levies failed is the current economic condition. Second, people are tired of being asked to vote for more taxes. Fire and police are very important. I think everyone has great respect for both. Let's look at the whole city budget. We may have to slim down or, in some cases, cut nonessential programs and services in order to fund the most vital (ones).

Kathleen Z. Gessaman:Difficult economic conditions locally and nationwide helped to defeat the special levies. Most people I spoke with strongly support our local police and fire personnel, but were unable to afford the requested mill levy tax increase. The city manager, while maintaining a balanced budget, could use some of the additional money generated by the increase in property taxes (associated with new property appraisals) to fund critical staffing needs in these departments. Neighborhood councils could help the police by coordinating and promoting Neighborhood Watch. Reducing police involvement at the animal shelter could also help lighten the workload.

Robert G. Jones:I believe the special levies for city police and fire departments failed due to existing economic conditions. The additional hiring of 33 personnel and their placement also surprised many citizens because they were not informed of the personnel numbers needed prior to being asked to support the levies. A continued effort of informing the public of staffing needs is very important. We may want to consider smaller increments of personnel to improve staffing in the police and fire departments. To do so would require us to resolve the continued subsidies being taken from the general fund.

Rolland Leitheiser:The economy is the largest reason that the police and fire special levies failed. I am not convinced that a large staffing increase is needed at this time.

Ed McKnight:The proposed levies failed because the majority of voters said no to raising their taxes. According to the Tribune, City Manager Greg Doyon called this year's budget "relatively static," so as commissioners work with the public to check and balance how taxpayer dollars are being spent, then restore priority services with ample funding, that will bring peace of mind to citizens and increase confidence in our bravest and finest.

MAYORAL CANDIDATES
Bill Bronson:The levies likely failed because the majority of voters were concerned about the financial cost to them personally over the next few years. As a property taxpayer myself, I understand and appreciate that view, although I still supported the levies as necessary for improving public safety. The needs of both departments remain the same, regardless of the outcome of the levies. I will work to find other sources of funding for these needs over the next few years, including grants and the Montana Legislature, so that we can provide effective public services at levels that neither compromise public safety nor the safety of the police and firefighters.

Sandra Guynn:I believe the levies failed due to the tough economic times, although I do think citizens are also getting sick and tired of fiscal irresponsibility on the part of the city. Funds continue to lose money and, with the support from the incumbents, the city's reserves continue to be spent to cover these shortfalls. I am not at all confident in the numbers presented by the city, and I am not positive that we needed a public safety levy in the first place.

John Hubbard:We are in a recession and the people are over-taxed as it is. Considering the economic condition, nothing (should be done) at this point.

Michael Winters:I believe it was too much, too fast, too soon. While both levies were and are necessary and important for our community, the public felt put upon considering the increased tax burden imposed over the next several years. Most folks feel more effective management may very well be the right answer — more effective use of personnel and better time management.

Mike Witsoe:I believe the fire and police levies failed because of the misappropriation of reserve funds and general city funds by the present and past administrations. Funneling those monies in to ECP, SME (Southern Montana Electric Generation and Transmission Cooperative) and other various harebrained programs has caused the people to not have trust in their city government. Fire and police are sworn to protect and serve the people. City government has stolen from them and us. Vote for change; it's the only answer.

The Burns & McDonnell Report, A Waste Of $$s

In today's Tribune is an editorial by Larry Rezentes on the Burns and McDonnell report:

Consultant report on Electric City Power incomplete, whitewash

By LARRY REZENTES (A certified public accountant who works for the U.S. Department of Justice, Office of the United States Trustee. The views expressed herein are his own and are not intended to represent the views of the Department of Justice of the Office of the United States Trustee).

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.