Traverse City Record-Eagle

March 13, 2013

Report: City commission, TCL&P board are utility's biggest problem

Traverse City Record-Eagle

---- — TRAVERSE CITY — A final report on the efficiency of Traverse City Light and Power points to constant political conflicts between the city commission and the utility’s board of directors for the organization’s overall “disarray.”

The city commission and TCL&P contracted with Hometown Connections, a subsidiary of the American Public Power Association, for a comprehensive assessment of the city-owned utility’s efficiency. The 98-page report gives strong marks to the utility for its low rates, reliability, customer satisfaction and strong balance sheet. But governance, the report said, is an area that needs significant work.

“We believe that many of the utility’s challenges can be traced back to the two governing boards and the struggles that have defined their relationship for some time,” the report said. “Fingers are pointed, causes are cited, board members turn over, and executive directors are terminated.”

The report’s authors concluded the economic downturn exacerbated the situation as the city struggled with declining revenues while TCL&P built up cash reserves. But the biggest issue is not about money or who the executive director may be. Instead, it’s the “highly visible struggles for control of the utility’s direction,” according to the report.

City Manager Ben Bifoss said much of the conflict has resolved itself over the last four to six months with a change in the executive director and makeup of the TCL&P board.

Former Executive Director Ed Rice was dismissed from the utility in October.

“There was a tendency for the Traverse City Light & Power board to become more independent from the city,” Bifoss said. “Communication has improved substantially at the board level and at the staff level.”

The report found a disconnect between the role envisioned for the utility when the city charter was drafted and the role envisioned by current leaders. It recommends engaging the community in deliberative discussions about the utility’s future, followed by joint meetings between the commission and TCL&P board to find common ground. It also recommends more training for utility board members about the public power industry.

“Unfortunately, in Hometown Connections’ opinion, without stronger dialogue and alignment around community priorities, the result has been different factions working at cross-purposes,” the report states.

Board member John Taylor said the disconnect was a lot worse when he joined the TCL&P board three years ago. He said cooperation improved tremendously since the board started to look at more partnerships within the community.

“The call to action is to pursue serious strategic planning coordinated with the city commission,” Taylor said. “We don’t have a firm strategic position on which the two governing boards are in agreement.

“A common vision would help tremendously,” he said.

The report and its 77 recommendations wasn’t due until March 25 but came early. Tim Arends, interim executive director for TCL&P, received the report Monday evening and distributed it by email. Arends went over the recommendations with staff Tuesday morning.

“There are many, many opportunities to be more efficient,” Arends said. “My presentation to the Light & Power employees is to embrace the recommendations and immediately implement the things we can right away, and thoughtfully consider the other things long term.”

Arends disagreed with an assertion in the report that staff morale is low.

“I see employees and staff who need to know what the direction is, who the leader is, so they know what direction to follow,” Arends said. “Until that becomes clear, nobody knows what to get on board with.”

Arends said the full report would be posted at today.