So what about the other stuff?
“I received a response yesterday from the City Clerk. As you can see, according to the City of Great Falls, the City has not contributed $2,000,000.00 in capital to SME, but has contributed $2,049,409.58.
The most recent entry on the documents is 2/14/07. So we will say that after that wire transfer on 2/14, (and the approval of the expenditure on 2/20) the City had paid $2,049,409.58 to SME for development of Highwood.
Since 2/14/07, at least an additional $189,970.68 has been spent on related matters. (I used this information, and subtracted the debt payments and the payment for development costs.)
In 2006 I found $67,785.97 in additional payments to Luxan & Murfitt, Dorsey & Whitney, and RW Beck.
In 2005, $39,328.24. That brings the total to $2,346,494.47 and does not include any payments to Water Right Solutions.
Then we have the water credit, which last I heard was about $900,000, and the $1.4 deposit to SME, $100,00 bond for ECPI, and the 5 years of unaccounted employee wages for the City Manager, Colleen B., Martha C., and at least a couple other clerical staff.
SME has attorney fees for the FERC action, zoning lawsuit, BERC issue, potential legal action from Yellowstone, but apparently the City as a member of SME does not have to help pay for any of those. The only payments to SME in 2008 have been classified as power purchases.
The questions keep coming, and they aren’t all about money. In todays Tribune, Commissioner Bronson makes a point that has me wrinkling my brow. (Hopefully the local newspaper interpreted his words correctly.)
“For his part, Bronson told Jolley that if the city drops efforts to purchase its own energy, it would be forced to go back to buying power from NorthWestern Energy.”
Can we drop efforts to purchase energy? I think everyone knows we need to purchase it from someone. I was under the impression that we signed a long term contract with SME and would continue to purchase power from them regardless of construction of Highwood, or any City interest in it. But I didn’t know we were considering dropping efforts to purchase energy altogether.
I am also curious why, when ”Yellowstone Valley requested quite some time ago to be relieved from any further exposure associated with the development of Highwood Station,” they got booted out, and no return on the ”more than $4.3 million invested to date in the Highwood project.” The City is considering the same option, and SME is fine with it.
Interestingly, in that same April 29th Gazette article, we have this quote. “”We’ve run a very long race, and we’re very close to the finish line, and I think we should just finish it,” said Scott Sweeney, general manager for the Fergus Electric Co-op. Sweeney said it is a “huge question” that costs for Highwood-produced electricity could end up being more than electricity on the open market.”
Published in the June 2008 Fergus Electric Coop member newsletter, but written just a day or two after the Gazette article, Mr. Sweeney had this to say: “In conclusion, regarding HGS, issues remain to be resolved – the biggest of which is funding for the $790 million facility. The SME Board and manager Tim Gregori, are working hard to get the funding in place. I believe that it is prudent for our cooperative to wait a few more months to see how the financing goes. If a good package can be put together, HGS could begin construction and in 2013, it would become the future source of our power. If the financing package cannot be put together, then it will be time to look at a different source for future power.”
I am not sure how comfortable Fergus really is.
I do note something very refreshing at the bottom of the newsletter. The Annual Financial Report, taken from complete financial statements which, together with the auditor’s report, may be examined at the cooperative headquarters in Lewistown.
In comparison, GeeGuy gets this on City faxes when he requests financial information: ”This message is intended only for the use of the individual (s) or entity to which it is addressed, and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If the reader of this message is not the intended recipient or the employee or agent responsible for delivering the message”…
Nice huh? I wonder if the “entity” could be considered the citizens of Great Falls.
9 Responses to “So what about the other stuff?”
1 Jerry 29 June 2008 @ 11:20 am
Good report Firfly,
It should give pause to the likes of “Washington State Grant County PUD” to do their homework and demand REAL facts such as engineering and financial data from SME before joining with the HGS project.
Lets hope they (PUD) do not drink the SME koolaid before due diligence on this and do not act as most of our Great Falls leadership has done on this issue, ignoring the public’s concerns and REALITY……….
2 Truman 29 June 2008 @ 9:51 pm
Don’t forget the $80,000 spent on RW Beck study in Feb 2007, another $35,000 for infrastructure study regarding impact of Highwood on city and
also another $45,000 regarding more water rights/infrastructure business…..
3 gffirefly 30 June 2008 @ 7:34 am
I think I got all the RW Beck charges in there, and give me a general date for the $35,000 and I will check.
I didn’t include any water rights work, because while some of it may certainly be attributed to Highwood, much of it cannot, and should have been done regardless.
But right now we appear to have about $3,446,494.47 invested for a $2 million investment in an plant that is only worth anything if it gets built, and another $1.4 million that is tied up for about 40 years.
4 Jerry 30 June 2008 @ 10:45 am
So, darn near 5 million of our city tax dollars wasted. I hope the Police Chief and Fire Chief are aware of this as they ask for more funds for their departments. I recall both of them making supportive statements for the HGS project at various commission meetings.
No New Taxes Fellas until this boondoogle is put to bed……..
5 Mary Jolley 1 July 2008 @ 10:27 am
1
Memorandum
To: John Lawton, City Manager
CC: City Commission
From: Cheryl Patton, Assistant City Manager
Date: 3/02/07
Re: Development Costs for Highwood Station.
I have reviewed documents cited by Mary Jolley as indicating that the City
Commission has authorized two $2 million commitments to Highwood Generating
Station by the City.
1. On April 19, 2005 the City Commission approved Resolution 9476 which
authorized payment of the City’s share of development costs (up to $2M) for
the Highwood Generating Station to Southern Montana Electric G & T from
existing City funds. The $2M in development costs would ultimately be repaid
from the total Revenue Bond Package which the City would issue to
permanently finance its share of the HGS. The Fiscal Services Director said in
her report that she was seeking proposals from banking institutions to obtain
the $2M in interim financing which would repay the City funds being authorized
by this resolution. Again, the interim financing would ultimately be repaid by the
revenue bond issue to finance the City’s share of the plant.
2. December 6, 2005 the City Commission approved Resolution 9537 which
declared the City’s intent to participate in development of the HGS and
authorized the City Manager take all actions necessary in connection therewith.
3. On December 6, 2005 The City Commission also approved Resolution 9534
which approved the issuance of $1.5 M in general fund obligation bonds to
provide the interim financing for the City’s share of the development costs of
Highwood Generating Station. The agreement was with Ist Interstate Bank.
The report indicated there was still $500,000 in financing to be provided at a
later time in order to complete the City’s total commitment of $2M for the
development costs. This bond sale repaid the City funds that were
authorized to cover the payment to SMEby the April 19, 2005 action
approving Resolution 9476. While the City Commission has authorized up
to $2M in development costs to be paid to SME, the bond issue only raised
$1.5 M at that time with the understanding the City would issue the
remaining bonds when necessary to make its full payment to SME. That
2
final payment has not been made to SME and the City has not issued bonds
beyond the $1.5 authorized by Res. 9534.
What this amounts to is two different transactions relating to the same $2 million,
the first being a general authorization and approval to temporarily use City funds,
and the second being the actual issuance of debt. Ms. Jolley appears to be
counting these as two separate commitments. This is not the case.
6 Mary Jolley 1 July 2008 @ 12:00 pm
I posted the above because my real question to Commissioners at an agenda meeting before the MEMO was - The city OKed 2 mil from existing city funds and then issued a 1.5 mil bond. That adds up to 3.5 mil spent on the coal plant right?
Close to the fugure you got to Firefly.
I bet the 1.5 mil did NOT go to pay back city
funds.
Good News
We will have a real budget this next year. Manager will not be allowed to move money from fund to fund.
7 firefly 1 July 2008 @ 5:14 pm
I find it troubling that on 3/2/07, the Assistant City Manager told the City Commission “That final payment has not been made to SME and the City has not issued bonds beyond the $1.5 authorized by Res. 9534.”
Yet the City provided documents to GeeGuy showing that as of 2/14/07 they had in fact given $2,049,409.58 to SME.
If it wasn’t part of the bonds, where did the $549,409.58 come from?
8 Mary Jolley 2 July 2008 @ 9:14 am
500,000.00 was the Oct. 2004 commission action to “use 2 million from existing city funds” Per the Comprehensive Annual Financial Report 2006? - it was expected that the city would bond 500,00.00 in 2007. That did not happen but the money was spent.
When the city voted to spend money on the RW Beck report I asked at an ECP board meeting if that money was coming from the 500,000.00 I got no answer but, Coleen saying that I had not made myself clear for 6 months (my questions at ECP meetings,) and former Mayor Gray saying he did not like it that I was accusing city staff of bpocketing money. Questions about money were never answered.
9 Ed McKnight 2 July 2008 @ 9:17 am
The first time I met with Colleen last year, she gave me a figure of approximately $3.5Mil in development costs. I saw no proof, that’s just what she said. That did not include expenses for costs that were not considered development costs like legal or consulting fees for the city exploring options.
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