Unasked questions.

Last night the City Commission elected to give SME a gift. (For you see, when you give someone something without receiving anything in return, that's what it is: a gift.) The City voted to modify our contract with SME to provide that we will put up a deposit to ensure that we will pay for the power we buy from SME, even though we had no contractual obligation to put up such a deposit. As I listened to the City Manger's explanation of this transaction, I was surprised that, other than Commissioner Sandy Hinz's seeking an explanation, not one Commissioer felt compelled to ask a single question. Is it because they already understand the transaction? Or because they do not?

In any event, I thought of some questions as I was listening on tape delay.

If our customer base is so good that we have no reason to expect that they will ever default on the payment of their power bills, can't at least as much be said for the City? In other words, if we will use our customers' creditworthiness as a reason why they should not have to give a deposit to ECP, why is our creditworthiness not a reason why we should not have to give a deposit to SME?

I heard the City Manager's mantra of "city money, city accounts, city interest" ad nauseum. It was designed to obscure the truth. The money might be technically the City's, but it really is not. We'll be missing a couple little incidents of ownership: the right to possess, control and spend the money. For you see, if it were still "our" money, it wouldn't be a deposit, would it? This money will be restricted from use by the City for the City's benefit. Why are we doing that to benefit SME when we have no legal obligation to do so?

SME has other members who buy electricity from it, namely 5 electrical cooperatives. Are each of these cooperatives putting up a deposit equal to two months of their power bills?

The City Manager said this money will not come from any department's budget. The various departments have "excess cash" of at least 1.4 million dollars. So, the City has excess cash of well over a million dollars that it can afford to have tied up as a security deposit until at least 2011, right? Why, then, did we just increase taxes? If the City has 1.4 million dollars in excess cash, and it is willing to put that money away where it cannot touch it, and until last night it had no legal obligation to put that money away, should the city have:

a) Put the money in an account for SME's benefit so that SME would have more money to spend on its activities; or

b) Put the money back into the taxpayers' accounts (in the form of tax relief) so that you would have more money to spend on your budget?


Anonymous said...

How can Lawton separate this 1.4 mil from the Highwood deal as he did last night in response to a question? What happens if God willing this plant is not built and later the city is unable to service their electric customers or the replacement power to meet obligations puts the utility in the red?

How do we untangle this mess so the light of day can shine through?

GeeGuy said...

Mr. Lawton was correct. SME has committed to supply power to ECP regardless of whether or not HGS is constructed, and regardless of whether or not the City ultimately owns a share of HGS.

Anonymous said...

Ditto on the how do we untangle this mess?

Why do commissioners think SME need this gift? Is it because Roundup needs financing?

How is this "gift" to SME different from being renters or do we own more of something?

Anonymous said...

One question, which depending on the answer, may answer much more.

Is Tim Gregori, CEO & Gen Mgr., of SME, and has 2 previous addresses here in GF, related to any of the Gregoris here and do any of them work for the city?

Anonymous said...

We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. .... We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

Anonymous said...

geeguy, what Lawton said is technically true but some clouds remain. Is the city utility now selling future energy contracts believing they will have lower supply costs from Highwood down the road to remain afloat?

I'm not sure how you can really separate the B&W contract language from their goal to own a share in the plant. What are the SME energy supply costs to ECP today or future without Highwood built vs. the cost from a city owned Highwood supply?

I'm not impressed with the city after then water deal and now this. I suspect their financial model of success all hinges on a share of Highwood.

Anonymous said...

Gee, this is surreal. One might think Mr. Gregori uses some Jedi-like mind powers to persuade weak minded people, especially the Commissioners, to do his bidding.

If Mr. Gregori is bent on building his power grid kingdom by whatever means available then how is he spending millions of taxpayers dollars for a plant that will probably never be built?

Commissioners must stand up for right and decency or rally the people to the defense of $5,000,000.00 tax dollars spent on the lifestyle to which Mr. Gregori is accustomed.

Anonymous said...

I'd be kind of interested in knowing where Lawton is going to work after he "retires" as City Manager.
Has he been hired by the coal plant group? Anyone know?

Anonymous said...

The City recently raised taxes saying that it needed additional money to fund essential services. That is inconsistant with the testimony that there was extra money available to fund this deposit.
Which is it--did they need to raise taxes or not--and which story is the lie?

Anonymous said...

What's next, shake out the loose change from everybody's pants
in city hall for the next SME' gift............