Continued Lack of Transparency at City Council

As the public outcry over the recent Electric debacle dies down, the City Council continues to weather the storm and conduct business as usual.  Yet there are several questions that must be answered beyond the green energy contracts themselves, including questions regarding capital planning and funding.

Power costs for the past several years have exceeded the budget while revenues have been lower than what the City thought they’d be, meaning there is less cash coming into the City and less money available for spending.  Knowing this, why would the City switch to a “cash” funding method for Capital Improvements when they had previously issued bonds for these projects?  Remember, these projects are for FUTURE GROWTH.  Why would today’s customers pay for the costs of services for future rate payers?

The City did an Electric Rate study in preparation for the recent 2019 Budget.  Did this rate study identify the power contract imbalance and recommended potential solutions?  Why didn’t the City share that rate study with the public?  All the City said during Budget process was a $4.90 increase was needed to pay for  capital improvements.  Nothing was mentioned about the power contract issues until after the budget was adopted.  The City has delayed most Electric CIP for 2019,  so I assume the CIP increase approved in the 2019 budget is now funding the power contract shortfall.  Not to mention the monthly $12 to $13 increase in power cost the City is passing thru to customers.  That’s nearly a $20 a month increase for the foreseeable future.

I firmly believe an independent Comprehensive Management Audit of the City’s Utility operations is needed.  This audit would go beyond the power contracts and how the City managed them, but also look at operational processes and financing methodology.  The City did a similar successful audit of Airport operations several years ago.  I recommend both Electric and Water utilities be reviewed to ensure that what happened with the Electric fund doesn’t happen to the City’s Water utility.

Boards and Commissions

Last week, the Council approved the Mayor’s chosen representatives to the to various Boards and Commissions, in spite of Council member Jonrowe’s efforts to recommend other candidates that would provide more diversity and balance to the various boards.  Ms. Jonrowe was successful in delaying the appointment to the Georgetown Utility System (GUS) Board.  After admitting that previous GUS Boards, while well-intended, didn’t have the financial expertise needed, the Council agreed to re-open the application process for 60 days to encourage and recruit candidates that have more expertise in utility finance.  Maybe the Council should consider dividing the GUS Board into 2 separate Boards; one for Water Services and one for Electric Services, since both are very different and have very different service territories.

As of yet, the Council has done nothing to change the Boards & Commission process to improve transparency.  Meaning, critical decisions will still be made at various Boards meetings held during business hours thus limiting public participation.  Board members that are also Council members will still vote on items that get sent directly to the Consent Agenda.  An item on the Consent Agenda is seldom pulled for further discussion since it was previously approved by a Board.

We, as residents and customers continue to pay the increases in our tax and utility bills.  Remember, this is our City. We own it. We deserve to know what and how decisions are made. The lack of transparency must end.

One comment on “Continued Lack of Transparency at City Council

  1. March 9, 2019 PJS1

    Ms. Rundell’s recommendation for a top to bottom audit of GUS Advisory Board is spot-on.

    The city should engage one of the nation’s premier auditing firms, e.g. Deloittes, PWC, E&Y, etc., or a first class consulting firm, e.g. McKinsey & Company, etc. to perform the audit. These firms have strong electric utility and energy practices. A second or third string local auditing firm will not do the trick.

    Any audit should look beyond the efficacy of GUS’s operations at two decision points: Open the local market to competition and choice, which is the status for approximately 85 percent of Texans; and determine whether selling the poles and wires business to a large operator would result in a better outcome for Georgetown’s residents.

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