Ballot Question 2 Proposes To Gut Article V, Utilities
The most important, long-term decision facing Los Alamos voters is not only choosing candidates but the proposed major changes to our County Charter, our county’s constitution. Ballot Question 2 proposes to gut Article V, Utilities, by repealing that section in its entirety and replacing it with new language. That is, Charter language that has served Los Alamos citizens quite well for over 45 years must be “fixed.” Go figure: Something that ain’t broke needs “fixing!”
Be wary. The so-called “fix” will actually break something that works well. How? Foremost among the proposal’s many flaws is that it inserts several loopholes into governance of our Utilities system. Those loopholes give future County Councils the ability to impose hidden taxes that ultimately increase utility rates. The change also shifts governance from a business-focused board to a politically motivated Council; a shift that violates the industry-standard model for management and oversight of a publicly owned utilities system.
The changes are substantial and arcane. They are so massive and confusing that Article V must be totally repealed in order for the new language to make any sense.
The changes are so detrimental and risky that a bi-partisan group of concerned citizens, Citizens to Preserve Sound Utilities (CPSU), have come to together to inform our friends and neighbors of the proposal’s shortcomings and encourage a vote Against Ballot Question 2.
CPSU members include three former County Councilors who also served terms on the Board of Public Utilities, two former Utilities Managers, one of whom also served 10 years on the BPU, and a former Assistant County Attorney and BPU member. This group has extensive, first-hand knowledge and experience regarding Utilities governance from every possible angle: business, legal, political, and, most importantly, risk.
To prevent improper and imprudent use of Utilities for General Fund revenue, I unequivocally encourage citizens to defeat the proposed Charter changes. Vote Against question #2 on the November ballot.
On the ‘Full Functioning’ of the Los Alamos Board of Public Utilities
Thank you to the Los Alamos Republican Party for hosting a Forum on August 21 on the merits of Question 2 on the November ballot: Should Article V of the County Charter be repealed in its entirety and replaced to reconfigure the relationship between the Board of Public Utilities and the County Council?
Proponents of the new Charter provision stated that it is critical that the Board be “fully functional,” given its important role in County governance. Their focus was on Board members as individuals who might become impaired. On this basis they assert that “accountability is lacking” and a mechanism must exist for Council to remove a Board member “without cause.”
The focus on Board members as individuals is misplaced. The proposed Charter provision is objectionable because it undermines the Board’s full functioning to protect citizens as ratepayers. This point is not yet being acknowledged or addressed by its proponents. The Charter Review Committees are to be thanked for reminding us why the relationship between Board and Council is so intricate but the repeal and replacement of Article V should be rejected.
The current Charter states that an individual Board member may be removed by Council for several reasons: failure to appear at Board meetings for 90 days, moving out of Los Alamos County, conviction of a crime of moral turpitude, an ethical violation or other violation of Charter prohibitions. While it is not unthinkable that an individual Board member could suffer an impairment, it is highly improbable that County Council would ever have to “remove” a Board member, particularly “without cause.” The hypothetical possibilities do not represent a sound basis to replace an entire section of the Charter that has served us well since 1968.
Only by moving from Board members as individuals to the function of the Board as a whole can we can see the dangers inherent in the proposed Charter provision.
The Charter generally vests the County’s powers in the County Council. To protect ratepayers, one of the few exceptions expressly provided in the Charter is set out in Article V, Utilities, establishing a Department of Public Utilities to operate the County-owned electric, gas water and sewer utility systems under the jurisdiction and control of the Board of Public Utilities. Board members are appointed by Council to serve staggered five-year terms; one term expires every year.
Article V sets out a number of express powers for the Board, and limits the reach of those powers by requiring Council approval of all significant actions, including appointment or removal of the Utilities Manager; rate-setting for electricity, gas, water and sewer service; budget formulation; and the issuance of municipal bonds.
This model is recommended by the American Public Power Association. Communities around New Mexico and the rest of the country not operating on this model often find utilities revenues diverted to non-utilities projects so funds are not available when needed for infrastructure, which leads to higher utility rates.
In Los Alamos, the importance of the arms-length relationship has become clear over the last 46 years in at least three contexts: 1) the transfer of revenues from Utilities to the General Fund, 2) the allocation of expenses to the Department, and 3) the expense of providing infrastructure for anticipated development. In each context, the Utilities Board and Department were presented with proposals that would have either diminished reserves intended for utilities infrastructure or had a devastating effect on ratepayers. And in each of these contexts, the current configuration of responsibility and authority among Council, Board and Department prompted discussion and negotiation which resulted in resolution. The special status of the Department and Board assured that issues were resolved at a high level and that the resolution occurred in public, in front of Council.
The proposed Charter provision undermines the arms-length relationship by allowing Council to unilaterally make decisions that must currently be shared or negotiated with the Utilities Board. It further allows Council to unilaterally remove Board members “without cause.” The proposed Charter provision will compromise the Board’s ability to fully function as a Board to guide the operation of the Department and continue to maintain reasonable rates for Los Alamos ratepayers.
As this community considers whether to move to a model of utilities governance that does not allow the Board to fully function at arms-length from Council, the discussion on the way to the ballot should be focused on the probable consequences, not the improbable ones. Vote “no” on Question 2.
Current Shared Utilities Leadership Protects Us
A principal argument to justify the proposed restructuring of County Utilities is to increase its “accountability,” to its customers, all of us, by fundamentally altering the relationship between the Board of Public Utilities (BPU), the Department of Public Utilities and the County Council. Increased “accountability” was rejected by voters in 1966, has proven unnecessary since, and carries great risks. Voters who value their utility service and their pocketbooks should reject it again. This is about control, not accountability.
The first proposed county charter (basically, our constitution) was rejected in 1966 largely because citizens feared that a political body, the County Council, with direct control of Utilities could pad their revenues via the back-door path of requiring substantial sums to be transferred from Utilities to general county coffers, with resulting higher utility rates or inadequate operating and capital reserves. They also were concerned politicians would tinker with rates and services to favor special interests.
A completely independent utility presents challenges, too. The compromise embraced by voters in 1968 was the present semi-independent system. It is a work of genius that has served us well for 46 years.
Under our present Charter Article V, all major actions involving Utilities require approval of BOTH the Board of Public Utilities and the Council. These include Utilities department budgets, rates, bond issues (borrowing), major purchases and contracts, and all personnel actions involving the Utilities Manager – hiring, firing (which has never happened), performance appraisals, and salary adjustments.
Proponents of the proposed restructuring raise the boogeyman of a renegade BPU (which has also never happened). Yet, under the present system, Council could simply not concur with dubious BPU actions, protecting us.
Our present Charter also protects us citizens from undue politically-motivated influence in Utilities. This is common in communities where utilities are directly controlled by the political body. It has been attempted here.
The restructuring proposed via Question 2 is not really about accountability but about control. While the argument is made that the proposed new Article V would not be dramatically different than the current, it is indeed fundamentally different in that Council would have unilateral control. The protection from politics in the current Article V would be removed. Council could exert complete control either by unilaterally acting on matters which now require BPU concurrence or by firing BPU members and replacing them with compliant Council loyalists.
Vote “no” on Question 2.
Charter Change Would Hurt Utility Customers
All those who have served on both the Utilities Board and the County Council – and have seen the relationship between them from both sides – feel strongly that the proposed change in the Charter would be damaging both to Utility users and county citizens in general.
I have been overseeing or watching Utilities Department operations for more than 30 years. My experience during the 10 years I spent on the County Council and my 10 years on the Utilities Board make me believe that the present charter affecting utilities has worked very well.
The proposed change could lead to utility funds being drained to support other County undertakings instead of being reinvested in utility infrastructure.
The proposed change would also expose utility rates and services to politically motivated manipulation that often benefits special interests to the detriment of most customers.
Please vote “against” Question 2.
Charter Change Poorly Thought Out
Rio RanchoI read with great interest the proposed changes to Article V of the Los Alamos Charter, which rewrites the existing Article V regarding the Department of Public Utilities (DPU).
Of course the initial question is why is something being “fixed” when it’s not broken? Full disclosure. I was the utilities manager in Los Alamos for more than five years from 2003 to 2008 and have been a utilities manager in both Gallup and Las Cruces. Which begs another question. Neither I, nor at least one other past utilities manager were contacted regarding this Charter change. Odd!
If the charter committee wanted to make a fair and unbiased proposal it seems that they would have wanted to hear both pros and cons regarding any changes. While it’s unfortunate, elected officials can and will go after money where they can find it. In this Charter change, the council can demand cost reduction from DPU while raising rates providing more “funds” being transferred to the General Fund (504(g)). 505.5 Dispute resolution. The council can do what it wants in manipulating DPU. They can, for instance, rid themselves of a Board member who does not do their bidding by voting no confidence in that member. The Board member needs to do nothing wrong, other than displeasing a majority plus one of the councilors.
As someone who has spent many years in the management of municipal utilities, I have time and again seen elected officials make demands on a utility aimed at furthering some project or agenda of a mayor or councilor(s). As an example, one municipality where I worked a mayor talked a majority of the council into approving a transfer of $1 million from the electric utility rather than raising taxes or utilizing general fund money for a pet project.
In every budget cycle proposals come forward from General Fund staff for more money. Development of a General Funds budget is a zero sum game. If one department gets more, another has to get less, except where the council has another bucket of money to draw from. Don’t give them Carte Blanche to draw from utilities. This Charter change is poorly thought out and will result in residents being taxed while not knowing it.