Tuesday, April 30, 2013

Lake Worth's Electric Utility

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Lake Worth Utilities
One of our most valuable assets

Last night I attended most of the Electric Utility Advisory Board meeting that has given staff a directive for pertinent information in order to ascertain the feasibility of selling our electric utility.

In a nutshell, so as not to get embroiled with details, the Board appointed by the various commissioners, are fulfilling the majority commission's desire to get a value of our electric utility system in order to determine if a sale is worth our while. They all believe that the high cost of energy is detrimental to Lake Worth and destroying investment. They don't like the fact that we are pulling $6 million out of it every year to operate our city and fill in the pot holes.

The Commission majority, as well as some on this Board, are still perturbed that the sale of our Utility was not on the original RFP even though our expert consultant, Sue Hersey, said that if a sale was desirous, it should have been a separate RFP at that time. Now they plan on putting out an RFP for the sale of our utility which was founded in 1914, once the numbers are declared "logical." The timeline for this RFP is no later than 1.5 years from now.

The conclusion here is this handful of people do not believe experts if they disagree with them. They don't believe in "studies"' either for the very same reason. They are the experts or they will find their own with their desired result. They believe that Lake Worth can't manage its way out of a wet paper bag and shouldn't be in the power business. They have managed to dismantle our police department, our fire department and nearly gave away our 19 acre beach property to a flim flam artist, not to mention they wanted to raise heights of buildings in our low-rise downtown.

Clay Lindstrom, who has been Assistant Director of Utilities ever since Rebecca Mattey resigned, was there to give information on timelines for the various aspects of data accumulation to meet the Board's demands. He had one interesting statement last night which is paraphrased as follows: "If we consider the City the ‘owner’ of the utility, we can consider the contribution to the general fund as the ‘dividend’ paid back to the owner."

There are only three ways to go with our Utility:  1) go out to market and purchase power like we are now doing. The Orlando Utilities contract begins on January 1, 2014 for three years. 2) Upgrade our present system and remain totally independent or 3) sell it which will have to be by vote of the electorate.

23 comments:

Anonymous said...

First ,a thank you to Lynn . She went to the meeting and had to look at this small,horribly vocal group of egomaniacs so that the rest of us didn't have to. For that Lynn the rest of us are eternally grateful.
Why the rush to do this? Why now?As with anything political,follow either the money ,power ,or sex angle.( With this gross group, lets all hope that it's either money or power.)If we could harness this small,self important group's mighty hot air potential, all of Lake Worth's power needs would be taken care of. Hell, probably the entire state of Florida.
If they ever do sell,they'll probably get .25 cents on the dollar,which they'll blow on a huge bash for blowhards at the Casino. Which none of them wanted.

Anonymous said...

Are you citing the "study" we paid for that stated that we'd have to get "well in excess of $200 million dollars" to compensate us for the electric utility? Do YOU believe that?

You were doing very well until your 4th paragraph and your conclusion.
Dismantling the police and fire departments are possibly the only way we have avoided bankruptcy due to the same bloated pension funds you constantly rail against. If he was truly a flim-flam artist, and he may well have been, he would have gone away by himself (unless he could flim-flam the banks) until the BCE fired him and then poisoned the well allowing him to get his payday anyway to the tune of $2.4 million, and "they" (we) wanted to KEEP the heights where they were, and have always been especially East of Federal Hwy.

If the city was the "owner" of an electric utility and had ANY oversight (PSC) they would never have been allowed to gouge us with these obscene rates. The lack of any oversight and the ability to rape each and every month us is that wet paper bag you refer to.

While my first choice would be to get us the hell out of the utility business, that would save each one of us big bucks every month, I'd like to eliminate the sale option if the offers come in too low so that we can concentrate on the other two options.

Lynn Anderson said...

This is an argument that can't really be debated. You have your opinion which is impenetrable.

No, I was not citing the study but obviously you disagree. the "pay day' to Greater Bay was $1.6 million and it was Awarded to him by this commission. Our attorneys approved of this decision. I guess your desired attorney would have done something different like allowing them to continue the farce and never performing and tying up our beach until the cows came home. Grater Bay was going to make a ton of money off of Lake Worth, one way or another. This commission allowed them to "win."

These "obscene" rates allow the city to stay in business. I would guess you would want to de-charter us next?

We have been in the utility business since we first turned on the lights in 1913 and then sold it to the City in 1914. Why should we get out of this business? I know--we can't manage anything so proved by the escalating union pension and labor costs as well as healthcare.

I will be extremely interested to see the value of our asset using replacement cost, of course.

Anonymous said...

legal expert, building and construction consultant and somehow you're an energy expert too. How is it that with all this expertise you've been unable to raise yourself above poverty level?
I heard you're so flat broke you can't even move to Greenfield.

Lynn Anderson said...

You heard wrong, anonymous. Cheer up. You look very gloomy lately. Is that the best personal attack you can do? I don't think so. One has been turned over to the PBSO. Try and smile more often. :)

You know, we are all entitled to our own ideas on issues. It is a pity that you believe in stifling that right by personal attacks. That's what your side does best.

Tell us why we should sell our Utility.

Anonymous said...

We will NEVER sell this utility, NEVER. These people are dreaming and just want to hear their own voices which just proves they need to check into the first mental health clinic available.

Laurel said...

I admire the enthusiasm of this board, but determining the value of our utility is vastly beyond the scope of their collective expertise. This isn't merely a "book value" exercise. Future cash flows must be calculated and considered, among other things. This is a job for valuation experts, and I trust that this is not lost on Mr Carr. Seems to me as though the manager and Mr Carr are humoring the commission and this board.
I wish the board would focus on utility operations and budget, areas where they could actually make a difference and may not be in quite so far over their heads.
I am adamantly opposed to privatizing public assets. But if it is to be, we will have to make a lot of progress with property values first.

Anonymous said...

One of the reasons our property values are stagnant and way behind the recovery being experienced in the other 35 municipalities is our utility rates.

So which comes first, trying to raise property values with the deterrent of high electricity rates (not to mention lousy schools, but that's a different topic) or try to lower them making our unique town setting more appealing to home buyers and investors?

Seems to me they follow each other.

And as far as the EUAB being over their heads, especially collectively? What was so hard to understand about Shef Wright's explanation of how he came up with "well in excess of $200 Million".

Even you didn't know what you know now before you learned it. Give them a chance. The value of the utility is a moving target and at best will fall in a range between what someone is willing to offer and what we'll accept and sell as a good idea to the voters.

Anonymous said...

So which comes first, trying to raise property values with the deterrent of high electricity rates (not to mention lousy schools, but that's a different topic) or try to lower them making our unique town setting more appealing to home buyers and investors?

Oh no, more poor people? Don't think I can take it. What if I don't think you all should be trying to sell our elec utility. Still can't get the gain in that. I can see it now, more BS, more politics, more signs, more lies and deceit. Throw in a banner or two. Can't wait.

Lynn Anderson said...

The questions that need to be asked, are we getting the truth of the state of our utility? In the condition it is in, would anyone want to buy it or would it be cost prohibitive? Do we have a viable asset that can be improved upon with good management or is it a white elephant where we are pouring good money into a bad investment and at the point where it is no longer affordable for the taxpayers of Lake Worth?

Anonymous said...

When you post comments like 11:53 your blog loses credibilty. Many of us could understand the hateful undertones.

Anonymous said...

That's an excellent question. We are told that most of our generators are either inoperable or inefficient. They are being maintained at a high cost, not to actually run, but to be available to run which gives FMPA "capacity", which is somehow valuable.

One inoperable generator is not worth the scrap price to cut it up and move it out giving us needed space to install new generators if that is what we decide to do.

Another good question should be "why are we in the electric utility business anyway"?

If the only reason turns out to be to artificially tax everybody for the ever-changing commissions' inability to control spending for what ever; pot holes, pensions, high wages and benefits for our top staff, or just waste and inefficiencies, we really need to wean off and sell off.

Maybe another charter amendment is in order that stipulates the commission cannot use ANY of the utility slush fund to supplement the budget thereby giving us the absolutely lowest cost electricity available.

Lynn Anderson said...

It's free speech anonymous. Guess you haven't heard about that one. The post at 2:04 was a personal attack by a moron. I would guess that you approve of that one.

Lynn Anderson said...

9;36... not sure if what you said is true in your first paragraph. Under the FMPA all requirements contract we are not allowed to run our generators are we?

We are in the electric utility "business" to bring a benefit to our residents and ultimately our taxpayers. This has been a "business" for 100 years. It sustains this city and allows us to stay out of chapter 8. By charging more, we can operate our city.

As far as a charter amendment is concerned to disallow using any money from our utility to run our city, this would be overall detrimental to the health and welfare of Lake Worth, IMO. They would have to figure out a way to have special assessments in the range of $9 million (elec and water)taxed to the property owners in the city. That would be an unfair tax. The city commission may be able to figure out how to reduce our budget by 20% a year for 5 years, but good luck.

Anonymous said...

I do not approve of the 2:04 comment. Hateful comments by a person close to a man who may have been electable doomed any chance for him in the future.

Anonymous said...

I am sure you know who I mean. But anyway, there are many capable and qualified people who will not run because of the personal attacks they would have to endure. So shame on us look whats left to choose from.

laurel said...

I disagree with the assertion that our property values are not rising because of electric rates. Our property values are not rising because properties are run down. If rates aren't too high for poor people and immigrants to come here, then why are they too high for middle class families?? Trying to blame all of our woes on electric rates is lazy and political. I'm not buying it. People don't move here because of crime and blight in the neighborhoods.

The EUAB is utterly unqualified to assess the value of the utility. It will be a complete waste of time. But most of their time to this point has been wasted anyway, so why not spin their wheels for another year?

The comment about the value being a moving target is non-specific nonsense. Trust me, FPL already knows what they'll pay for our utility. If it wasn't a highly profitable opportunity for them, they wouldn't be sniffing around.

Lynn Anderson said...

11:25--i have NO idea who you mean.

Anonymous said...

My charter amendment was hypothetical, sort of. Imagine that we treated the electric utility like any other function of government. That is to, like you say, " bring a benefit to our residents and ultimately our taxpayers". Like all other departments in the city, should bring in no mare than what it costs to provide. Isn't that how it's supposed to work?

That would truly be a benefit to us and we would possibly be paying LESS than FPL for electricity.

Now couldn't THAT be a marketable asset to the city? Wouldn't that attract all kinds of business and families?(of course, the low rise kind)

Why is it so hard to fathom the concept that we should be paying for electricity when we receive our electric bill and not fire and police pension costs, beach construction, illegal hiring halls and any other thing 5 staggered elected officials want each time the majority changes?

Get rid of the slush fund!!
This so called "profit" or "dividend" is derived solely on the backs of us rate payers. We are sick of it. We are also sick of every campaign promise to do something about it and then silence.

Yes, it seems like they are doing something now, but me have to keep their feet to the fire. Let's look at all options. See how we can operate like every other city in Palm Beach County that balances their budget without a slush fund squeezed out of the poorest people in Palm Beach County.

Anonymous said...

Laurel, at a recent event attended by thousands of people a survey was done. People were asked would you move to Lake Worth, if no why not. #1 utility rates #2 crime #3 blight. Would you vacation in Lake Worth, if no why not. #1 no hotels. Our commercial rates are 42% higher than FPL. Political or just the facts. As long as factions muddy every issue the city will remain like it is.

Anonymous said...

an aquaintance of yours

Lynn Anderson said...

@ 11:47--where was the event? Who sponsored it? Do you have a copy of the original survey?

Anonymous said...

When you post comments like 11:53 your blog loses credibilty. Many of us could understand the hateful undertones

And what "undertones" did an illegal banner hanging on the Gulfstream send? What "undertones" did a Commission that kicked out an entire P&Z board that was legally appointed send? Go stick your head back up some developers backside!