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BPU takes no stance on charter proposals

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Board > Uncomfortable with proposed changes but takes no action

By Arin McKenna

Despite voicing many objections to the Charter Review Committee’s recommendations for revising the charter section governing the Department of Public Utilities, the Board of Public Utilities could not agree on a motion last week and the topic was closed.

The board objected to a half dozen proposed changes in charter language that could potentially decrease DPU’s autonomy.

“It is my opinion that the charter is written to maintain semi-autonomy of the Department of Public Utilities from the county, to be run as an entity to provide basic services to the county,” Board member Kevin Anderson said. “I see at least six changes that appear to erode board authority or transfer ultimate authority to the county council that I am not willing to approve.”

Anderson cited five key changes he disapproved of:
• 501.3(C) which allows council to remove a BPU member with a vote of no confidence by all but one of the total council members.
• 502(D) which requires the DPU budget to be submitted for council to approve, disapprove or remand to the board for further consideration. (The current charter requires council adoption of the budget.)
• 503(A) allows special policies and procedures necessary to DPU operations to be proposed by the manager, approved by the board and put in place with the cognizance of the county administrator. Disputes between the utilities manager and the county administrator may be brought to the attention of the board. If the board fails to resolve the issue, either the board or administrator may bring the issue to council for final approval.
• 504(C) allows funds to be transferred from one utility to another with approval by both BPU and council.
• 505.3 allows either the board or council to propose a transfer of a utility already operated by the county to the DPU. The transfer must be evaluated by the manager and the board for operational and fiscal impact and sent to council for public comment and approval.
• 505.5 creates a dispute resolution process in the event council remands an item to BPU, but the board fails to reach a resolution approved of by council. Either the board or council may invoke the dispute resolution process, which creates a working group of board and council members and 90 days to reach agreement. If the working group fails to reach agreement, council can require BPU to implement council’s policy by a vote of majority plus one.
BPU member Chris Ortega also felt the revisions compromise the board’s autonomy.

“The original writers of this charter put a lot of thought into how this utility was created, and the citizens approved it, because it provided for an independent Board of Public Utilities that was appointed and not subject to the whims of the electorate, as are elected officials,” Ortega said.

“They viewed it as totally independent and having an arm’s length relationship with the council in certain areas. They intended for DPU to be created as a business to serve customers only and always have the customers or ratepayers as the primary focus.”

Ortega contended that political influence has “caused some serious financial problems” both in Los Alamos in the 1990s and with other utilities departments he is aware of.

“If the decisions of management and operations are allowed to be influenced by politics instead of sound business practices, financial instability can result,” Ortega said.

Ortega also noted that the board and council have successfully negotiated differences throughout their history.
Board member Steve Tenbrink asked County Attorney Rebecca Ehler to explain the liability concerns that prompted the proposed changes.

“The laws place the ultimate responsibility for everything that belongs to the county, including the utilities, with the governing body, which is county council,” Ehler said.

“One of the concerns expressed with the level of control the board has was that there could be some ongoing problems in utilities that the board would not address for whatever reasons, either environmental or with personnel, that could be quite costly to the county to have to pay, because it falls to the governing body to come up with a way to remedy these situations or to pay to remedy them.

“The board isn’t responsible to the laws in that way, so a situation could continue that could potentially be very expensive, and not address it in the way a body that was responsible for the cost might address it.”

Tenbrink was concerned about council having the final word in the dispute resolution process, in part because council itself might not be able to reach the necessary majority. He suggested sending disputes to arbitration with an outside entity as the final step in the process.

Deputy Utilities Manager for Finance and Administration Robert Westervelt also raised concerns that the policies regarding transfers to the general fund were too restrictive. For the most part, the language proposed is the same as that in the current charter.

Westervelt’s concern centered around clauses such as being able to maintain a reserve to finance replacements required by “normal depreciation,” since it makes no allowance for repairs that may exceed normal depreciation.

He was also concerned that the charter allows for funds to “redeem and pay interest on any bond issue for the utility which shall become due and payable during the next fiscal year,” but makes no allowance for paying a bond early.

“I have problems with this describing so precisely what you can spend money on and the rest goes back to the general fund,” Westervelt said.

Board chair David Powell had designated vice chair Timothy Neal to serve as chair for this item, since Powell represented BPU on the Charter Review Committee. Powell made a motion to endorse the changes recommended by the CRC but with specified recommended amendments. Powell and Tenbrink, who seconded the motion, were willing to undertake drafting those amendments. The motion failed by a 3–2 margin, with Powell and Tenbrink voting for it.

“There are plusses and minuses in the Charter Review Committee’s recommendation. I wish I could pick just the plusses, but the prospect of picking the plusses–since my plusses would not necessarily be the other people’s plusses–that is a very long and arduous process. I think it would be slow and painful,” Neal said.

Powell then made a motion to accept the CRC’s recommendations without changes, which failed for lack of a second. Neal then declared the topic closed.

The CRC’s recommendations are tentatively scheduled to come before council during a meeting set for Dec. 3. If council approves the recommendations, the revised charter section will be put before voters for possible ratification.