Can we get some clarity here?
On April 17th, 2007 at a City Commission meeting, City Manager John Lawton stated that: “all indications were that the City’s participation in the Highwood Generating Station would go forward although some adjustments in the project structure could be made. To deal with any uncertainties that may come up with respect to City participation in the Highwood Generating Station, the follow-on contract with RW Beck was written so that the City could stop work at any time it appeared to be infeasible to continue. Costs would stop if work stopped. Because of a variety of pending decisions, the most significant risk period will be during the next three weeks while various project components would be in a fluid state. City staff will monitor pending decisions daily, inform the Commission, and if it appeared there was a negative development, adjustments would be made accordingly.”
But we all know of course, there is no risk. And now we know that one of those non-risks that the City Manager may have been talking about was the fact that SME can, apparently, change our ownership interest anytime they wish. At least we can be confident that, since Staff was monitoring daily, they were prepared for the change in ownership percentage.
They go on to discuss financing. “In the event the bonds were not sold, or if the City Commission chose to fund the RW Beck work from another source, the cost could be paid from balances residing in several funds including the Economic Development Revolving fund.” Which you do notice, I am sure, is just a bit different than “We have consistently said that our long-term contracts with large customers will be used to back our portion of financing for Highwood Station and that taxpayers will assume zero risk for construction of the project.”
Now, at an April 2, 2007 ECPI meeting, The Development Agreement is discussed. You will recall several other discussions here and on Electric City Weblog about that Agreement.
I. Draft Development Agreement Between the City and SME. Executive Director Balzarini reported to the Board that the purpose of the draft Development Agreement is to provide the general structure of the relationship moving forward, acting as an “agreement to agree” on general financing, ownership, power supply, and other issues.
Dawn Willey asked who had prepared the draft agreement. Balzarini responded that most of the work was completed by a member of the City’s bond counsel team, David Swanson of Dorsey and Whitney, LLP, and SME’s counsel, Mike McCarter of Luxan and Murfitt, PLLP.
Mary Jolley asked about a 17.5% equity investment in SME made by the City and a projected 25% investment in Highwood Station.
Executive Director Balzarini explained that the 17.5% investment was an initial investment by the City in the SME organization because the City represents one of six members. The projected 25% relates to the City’s ownership share of the Highwood Station facility. Remember, this is April 2, just a couple weeks before Mr. Lawton assured us that the project would be prepared for any changes. And a month later, not only is the 25% ownership decreased, but the 17.5% is too.
So right now SME owes us for 2.5% of the capital contributions we have already made on the 17.5% and who knows what on the 25%. Anyone want to discuss interest? (But don’t forget the water credits, and selling power at a loss, and don’t forget ECP has “saved” it’s customers at least $500,000 so far. You’ll need to factor all that in to get an accurate picture of the money situation. But don’t worry, everything you need is on the city website.)
In Commission Minutes from 2005, Our City Manager “reminded the City Commission that the purpose for this project was to provide stable electric rates far into the future for the City and its residents.”Our Fiscal Services Director “reported that Ordinance 2925 would provide for the creation and organization of a non-profit corporation to be known as “Electric City Power, Inc.” to own, operate and take all other actions necessary or desirable in connection with the municipal electric utility of the City, including the provision of electricity supply services to consumers and others located within or outside of the City. The non-profit corporation would operate for the primary purpose of securing and providing reliable, long-term supplies of electricity to the City, its residents and electric consumers.
The proposed ordinance identified and defined the duties and obligations conveyed to the non-profit Board as well as the duties and obligations retained by the City Commission. It included items such as the purpose, powers, rules of operation, and tax-exempt obligations of the non-profit corporation and its board. The ordinance was carefully written to ensure that ultimate authority for ratemaking and the appointment and removal of governing board members remained with the elected City Commission.”
All well and good. Well, except for a few minor glitches. Here are a few specifics you may need to reference in a moment. Remember, this is part of the Official City Codes.
5.20.050 Purpose of the Corporation.
The Corporation shall operate for the primary purpose of securing and providing reliable, long-term supplies of electricity to the City, its residents and electric consumers. In furtherance of such purpose, the Corporation may acquire or construct electrical facilities, participate with others in the acquisition or construction of electrical facilities, may enter into contracts to secure supplies of electricity and related services and, in order to achieve economies of scale and other benefits, may own, acquire, construct or contract for long-term sources of electricity that are in excess of the present requirements of the City, its residents and consumers and may enter into contracts for the sale of electricity to any consumer outside of the City or any investor-owned, cooperative or municipal utility or other purchaser. (Ord. 2925, 2005; Ord. 2861, 2003)
Now imagine my surprise at reading this.
“ECPI’s statement of purpose is as follows; ECPI serves the community with locally controlled, reliable, and affordable electricity. Our key roll is to provide competitively priced energy to assist major employers to locate and grow in Great Falls”.
Uh, did the purpose of ECPI change somewhat when I wasn’t looking? Has any part of this not changed? And don’t get me wrong, I understand things change, this is a work in progress.
But I want to know, how has the ownership interest change affected the capital contribution change?
Why does the purpose of Electric City Power change at the whim of…someone. It was started to provide economical power to one group, and now seems to have changed focus entirely.
How have we gone this far with nothing but a draft of an “agreement to agree”?
Where are the records that document these actions? I have numerous liks in this post, that partially document these changes. What I am questioning is the actual communications, the correspondence between parties that confirms when, and by whom, these changes were made. I am somewhat familiar with the documents provided to GeeGuy relative to this. I do not get the feeling he is particularly satisfied with the degree of documentation he received. If I am incorrect, I am sure he will let me know.
And since that is where I ended up, I’ll share this with you.
“One of the primary objectives for the office of the City Clerk/Records Manager is to maintain the history of the City of Great Falls as an organization. The accomplishment and accountability of municipal government is documented by the creation, maintenance and preservation of public records. Public records are the measure of competence for public officials and their adherence to the public interest. Public records guard the rights of citizens and chronicle local history.”
(All emphasis in this post is mine)
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