Traverse City Record-Eagle

June 17, 2013

Light & Power board balks at price of proposal

By BRIAN McGILLIVARY bmcgillivary@record-eagle.com
Traverse City Record-Eagle

---- — TRAVERSE CITY — Traverse City Light & Power board members balked at a $60,000-plus, no-bid proposal to plot the city-owned utility’s future.

Tim Arends, utility board executive director, solicited the proposal for an in-depth strategic planning process from Hometown Connections, a firm that recently conducted a comprehensive assessment of the utility’s management and operations. Board members expressed concern about the price, as well as an open-ended clause that left the utility board to pay all travel and lodging expenses.

“It seems like an awful lot of money. I know we need something, but do we need this?” said board member and city Commissioner Barbara Budros. “These expense are wide open and could get out of hand fast.”

Planning sessions with the consultant would run from August to November and hotel expenses easily could hit $300 a night or more, said board member and city Commissioner Jim Carruthers.

But the board agreed with Arends that more time and study is needed than the usual one-day process to produce a list of goals.

“It’s a critical time,” Arends said. “The board is going to be faced with multi-million dollar decisions that will impact rate payers for the next 20 years.”

Board members must decide if they will invest in some form of power generation or resign the utility to being only a power purchaser, Arends said. It also will have to address the utility’s renewable energy and conservation goals.

“This strategic plan will be the basis for all of that,” Arends said.

The company’s proposal calls for eight meetings and $14,000 worth of focus groups and community surveys. Hometown Connections wrote that most public utilities operate under the radar, but that’s not the case in Traverse City.

Hometown also will help the utility implement its strategic plan to make sure it’s relevant and doesn’t end up collecting dust on a shelf.

“That would be the concern: we spend all of that money and we could have a tremendous product, but if we don’t pay attention to it, it would be a total waste,” said Pat McGuire, utility board chairman.

The board instructed Arends to check with two other Michigan utilities that used Hometown Connections for strategic planning and to get a better-defined estiamte of expenses.

Arends said he expects to have a new, leaner proposal back before the board at its June 25 meeting.