Traverse City Record-Eagle

October 17, 2010

TCL&P's future in question

Voters could return the utility to city commission control


TRAVERSE CITY — A ballot initiative designed to strip Traverse City Light & Power of its autonomy makes perfect sense to Harriet Jones.

Jones lives on West Orchard Drive and plans to vote in favor of the measure on Nov. 2. She believes residents stand to benefit if the public utility is returned to complete city control through a charter amendment.

"I think that the city commission is more diverse, and because you elect them more frequently, they have to be a little bit more responsive" to citizens, she said.

City resident Caleb Smith isn't so sure. Light & Power's board is hand-picked to handle complex energy decisions, and he's not convinced the city is up to the challenge.

"Do city commissioners want the job? Are they ready for it? Can they handle it?" he said.

Residents could drastically alter city operations if they vote to bring Light & Power under city commission control through a charter amendment. A separate ballot item would give residents the right to request a vote on the acquisition or construction of any new power generation facility.

Former Traverse City Mayor Margaret Dodd led the campaign to get both measures on the ballot. She's upset with the way Light & Power officials this year handled now-abandoned plans for a local wood-burning biomass plant.

Now she wants an "additional level of scrutiny" on the utility's operations.

Light & Power officials are concerned the move could produce negative results.

"This has been a knee-jerk reaction, and there's been no public process," Light & Power board Chairman Mike Coco said. "If there are portions of the Light & Power board's role that the community is unhappy with, then let's address those and fix them, but let's not throw out the baby with the bath water."

A big change

Light & Power would fall under city commission control 90 days after the election if voters approve the ballot issue, dubbed Proposal 1.

"Essentially, in the fewest possible words, Light & Power would become a department of the city, like any other department of the city, with the Light & Power board being advisory much like Parks and Recreation," City Attorney Karrie Zeits said.

That isn't a new concept. Light & Power was a wholly controlled department of the city until April 1979, when city voters agreed to break it off from city operations. The idea was to have a specialized, city-appointed board handle the utility instead of leaving decisions to already busy city commissioners.

City staffers aren't doing much to prepare for a potential change, largely because City Manager Ben Bifoss doesn't want to influence the election. If the city readies itself for such a switch, it may give the impression it supports Proposal 1, he said.

If Proposal 1 passes, the city will have "a great deal" of work to do before it takes effect, Bifoss said. Land deeds would have to be transferred, and the city would need to examine power purchase and labor contracts, among other things. Current contracts would be upheld.

"All of the existing agreements that are out there would effectively be assigned to the city," Bifoss said.

Light & Power Executive Director Ed Rice would become a department head who reports directly to Bifoss, and the current Light & Power board would remain intact and serve in an advisory role. Light & Power's money — it has a roughly $30 million fund balance — would become a city enterprise fund and be used only for Light & Power operations.

Bifoss wouldn't say if Light & Power could be downsized, moved from its Hastings Street headquarters, or see other changes if absorbed by the city.

"I really don't want to say anything that could prejudice the election one way or another, and some of the answers to those questions could influence a voter one way or the other," he said.

Proposal 2 would give voters the right to vote on Light & Power's purchase or acquisition of any new power facility. If passed, it would apply regardless of whether voters approve Proposal 1.

More scrutiny

Dodd, Traverse City's mayor from 2001 to 2003, contends Light & Power tried to push for a local wood-burning biomass plant despite substantial and continued public opposition. It's the latest in a "pattern of behavior" that suggests Light & Power needs to be reined in, she said.

"Everybody would be doing the same job that they're doing already, but there would be the additional level of scrutiny," she said of the potential control shift. "There are no checks and balances as it is."

Dodd said the public didn't know about Light & Power's biomass plans until the utility already had decided to go ahead with the project.

"My core belief in public office is that public business should be carried out in public, and that has not happened," she said.

"Under city control, they couldn't get away with this in the first place. It would be out there, and people would know what is happening."

Coco and Rice contend Dodd's claims don't hold much water. Biomass had been mentioned for years at public meetings or in public documents, they said.

"If they're asking if we had leanings toward biomass, we did," Coco said. "But this was no secret, this wasn't a back-room deal. We put it out there at our meetings, in public, that we were considering local generation and we were considering biomass."

But Coco acknowledged the utility "made some mistakes in the PR realm" during the biomass process.

"I believe we need to re-think our communications with the public. We need to, and we can, and we will do a better job communicating with the public," he said. "I believe in my heart-of-hearts that we put forth a full-fledged, genuine effort to connect to the public ... some people will say we failed in that process. I'm willing to look at how we can do a better job."

Proposal 1 opponents suspect a move to city commission control would politicize energy planning.

"Do you want those who stand up and scream loudest in the room, or those who finance city commissioners' campaigns, to have the greatest amount of input?" Coco said. "One of the benefits of our current structure is that we're de-politicized."

Dodd doesn't believe political pressure is a bad thing.

"They need public pressure, they need it to be politicized. Prior to that, they could do just what they wanted, and it didn't matter," she said.

Coco also is concerned that Light & Power, with its robust fund balance, could be used as a "cash cow" for other city operations, and that rates could rise in the new system.

Dodd called suggestions that rates could rise "blatant fear-mongering."

"Unless (commissioners) deliberately go out and sign bad energy contracts, we're not going to see anything different," she said.

Corey Schichtel, a Light & Power lineman, is union president for Utility Workers Union of America Local 295, which represents the utility's roughly 30 unionized workers. The union is against commission control, he said, in part because they believe the already busy commission could make "hasty and uneducated" decisions about Light & Power operations.

Commissioners, public weigh in

Mayor Chris Bzdok is against bringing Light & Power under commission control, though he supports the second proposal.

"With public relations, it's been one error after another, quite frankly," he said of Light & Power. "But in terms of running a business, they do a really good job."

Bzdok contends the Light & Power board's separation from city government helps it make sound decisions.

"Light & Power is a business owned by city residents and operated for the benefit of city residents," he said. "If the city wants to own a business, the members of its board need to exercise business judgment, and they need to have some independence to exercise business judgment."

Bzdok isn't concerned about extra work involved in managing Light & Power, but doesn't think commissioners would do as good a job at it.

"The record of this utility and its core business is stellar," he said. "It's a leap of faith, at best, that we would do as stellar a job at the core business."

Commissioner Barbara Budros, who supports commission control, doesn't believe commissioners would be clueless in power decisions, largely because Light & Power staff still would be at work.

"I don't think that bringing it back under the purview of the city commission will mean we're not going to have experts advising us," said Budros, who believes Light & Power is out of touch with the public.

"They don't seem to understand that they are a municipal entity who is responsible to the public," she said. "I think having them back under city commission control will ensure that."

City resident Richard Purvis, 89, was on the city commission from 1969 through 1973, and served as mayor in 1972.

"I guess I'm not really gung-ho about bringing it back," he said. "As I see it, city commissioners aren't really up to speed about the power business, and it takes up a lot of their time that probably should be spent on better things."

He kept up to speed on the 1979 election, and believes the split was wise.

"I'm afraid that's the best way to manage it," he said.

Jones, the West Orchard Drive resident, supports Proposal 1 because she believes Light & Power needs more scrutiny after biomass, an issue that struck a nerve in what's become an environmentally conscious community.

"I think that this is a city that really has a changing population from what it once was. I think people are a lot more careful about environmental decisions." she said. "I think that whole way of dealing with the public when there was clearly a lot of unhappiness over the biomass was sort of the last [straw]."

Smith also opposed biomass, but is concerned that a Light & Power shake-up could result in worse leadership.

"I kind of believe that the right people should be in the right jobs," he said. "Are city commissioners qualified to run a power company? It kind of seems like we're breaking the specialization open."

Resident Alice Tang, 66, thinks Light & Power is "all right the way it is." The utility might have pushed biomass, but stopped in the face of public pressure.

"Obviously, they listened," she said.

Plenty of residents questioned by the Record-Eagle knew little about the proposals.

"I don't know that much about it, so I really can't say," east side city resident Nancy DeGraw said. "I probably will find out a little bit more about it."