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Welcome to The Asylum. Just as before, Josh is always right.

Wednesday, July 1, 2015

The Time For Privatization Has Come

Every time I've said this in the past six weeks, something new has come up, so let's see what happens this time:

Never let it be said that nothing ever happens in this town.

...any new scandals break in the few seconds since I typed that?

Seriously, if the Good Ol' Boys had set a goal to keep me on my toes this week, they're succeeding.  Not that they're pushing me to my limit -- far from it -- but there's so much to cover in this space right now that you'd think we're approaching critical mass of corruption and incompetence in local government.

Well, you know, now that I think about it...

  • BPU Director Rick Rose was "suspended" just days before his unrenewed contract expired... because he threatened to get a gun and kill the four council members who voted against renewing his contract.  In front of a BPU employee meeting.  With plenty of witnesses.  And this is the guy who, in that very unrenewed contract, was given a glowing review in which he was praised for his "character" and how "professional" he supposedly is.  Given that the language was written by Interim City Manager Doug Terry and City Attorney Lew Loren with input from the BPU Board, it is absolutely infuriating to look back at that assessment in contrast to what has come out in the time since.  This is the professional character that Terry, Loren and the BPU Board members admire so much?  What does that say about their character and professionalism?
  • That "suspension" was originally an outright termination for cause.  Sources tell me that Terry changed his tune after he had informed the City Council of the termination, and that preferential treatment of Rose is very much thought to be the reason for it.  Yes, Rickie J. Rose threatened to murder City Council members, and he was merely "suspended" after it was announced that he had been fired.  Can you think of any other motivations for that change?  Because I certainly can't.
  • Hillsdale Community Health Center was named in -- and almost immediately settled out of -- a federal antitrust lawsuit brought by the Justice Department and State Attorney General Bill Schuette.  Community Health Center of Branch County, Allegiance Health up in Jackson and ProMedica Health System in Toledo, Adrian and Tecumseh were also named in the suit, but according to the Hillsdale Daily News, the suit "lays much of the blame on HCHC administrator Duke Anderson as the one who 'orchestrated agreements to limit marketing of competing healthcare services,' which is an anti-trust unreasonable restraint of trade."
  • Anderson, as a member of the Board of Public Utilities, has also been behind the push to keep Rose on as director and seemed to play the lead role in the Board hiring an independent attorney -- which the City Council abruptly shut down, as the BPU Board does not have that authority.  This and Anderson's involvement on other local governing boards has all raised many questions about conflicts of interest that go well beyond simple "gentlemen's agreements."
  • Oh, and by the way; that lawyer the BPU hired to find a loophole in the Council's authority over them?  That's going to hurt the Board more than help them.  You watch.  They're not going to like what's coming.

That all of this ties together through Duke Anderson -- though, let's not kid ourselves, he's far from being the only guilty party -- shows just how much power one corrupt person can accumulate in this community when we aren't paying attention.  Trust me, it is no coincidence that these events have only occurred since you and I turned our attention to local affairs again.  The Good Ol' Boys were betting on us not looking in their direction, and they've lost that bet.

And then we have the failure of The Great Litchfield Municipal Power Experiment.

The Michigan South Central Power Agency has, essentially, collapsed in on itself, forcing them to shut down the 55 megawatt coal-fired Endicott Generating Station in Litchfield, their largest production plant, next year.

Sure, you might blame the once-impending EPA regulations that the Supreme Court just overturned and are no longer a factor (and let me be the first to double-sarcastically say "thanks, Obama!").  But truth is, this is a municipal power consortium operating a small plant that just isn't worth the hassle anymore, and municipal power isn't viable to begin with.  Word has it that the books are a disaster.  That it's lasted this long -- since 1982 -- is only a result of stubborn refusal to admit failure.

So I take it back.  We're not approaching critical mass.  We're there.

Last night, a special meeting was held at the BPU between Hillsdale Mayor Scott Sessions, Councilperson Adam Stockford, Doug Terry and MSCPA General Manager Glen White.  I'll have further details on that in a later piece, but the basics should be pretty obvious.  We're all fairly familiar with the power generation technology out there and the scale to be considered.  We don't want to do anything off-the-wall crazy and, say, build solar roadways across the county -- though I do admit, that would be pretty awesome.  Expensive, as-yet unproven, and entirely impractical on a local meteorological basis... but awesome.

No, in the grand scheme of things, we've got three options available to us.

Option A -- and this was discussed at the meeting -- we can go back to local power generation... which is just as unviable as the MSCPA was.  That was why the consortium was formed in the first place and why it failed: government owned-and-operated utilities do not generate enough revenue to work.  They simply don't.  That has been proven repeatedly.

Option B -- also discussed at the meeting -- we shift sources around.  Not all of our power is coming from Endicott.  According to Stockford, the Litchfield plant currently accounts for 41% of the city's electrical generation.  The remaining 59% comes from several sources: 29% from American Municipal Power (AMP) at their Fremont Energy Center (AFEC) in Fremont, Ohio; 22% from various hydroelectric plants mostly co-owned with AMP; and 8% from other sources in the market.  The plan Stockford says is most likely to be considered is to increase the amount from AFEC to 35%, 26% from hydroelectric plants, and the remaining 39% from the market and/or some other source or sources yet to be named.

Option C -- and this is what we need to be considering -- we simply privatize.  Sell off the equipment and contract with a private company.  I'm sure Consumers Energy would be glad to step in.

Option C would also give us the opportunity to do the same with the waterworks side of the BPU which, in all honesty, is a complete disaster.  It's not just the ancient and inadequate pipes that we have to replace every time we repair a road or one of them breaks -- with no money to do so.  It's that the utility is so environmentally unsound right now that the regulators have just about had it with us.  Which, again, we can thank Rick Rose's mismanagement for.  Why should we spend piles of money that we don't have to make the necessary repairs when we can take the short-term financial hit and benefit from contracting with someone who is capable of stepping in and doing the job?  The prudent choice is pretty clear.

We always complain about the streets in this city.  Think of the money privatization would free up to do something about them.  Indianapolis did it.  And while we're not quite on the same scale as Indiana's largest city, if there's a chance that we here in Hillsdale can free up some capital by selling off our municipal utilities, we need to seriously look into it, especially if that money can be applied to the one recurring complaint that everyone in this city can agree on.

Don't get me wrong: I'm under no illusions that everyone would just jump on board with the idea.  Of course, the Good Ol' Boys hate it.  Kevin Shirk -- who, keep in mind, was Lew Loren's partner -- was asked by the City Council to research the idea, and he came back with the answer that it was "unrealistic."  I wouldn't expect any different from their side.

On top of that, we're talking about local jobs that local people fill.  Those are hard to come by these days, and suggesting anything that might eliminate some of them isn't exactly going to be the popular thing to do.  But I'm willing to live with being unpopular.  I've been through that phase before.  It was called junior high school.

And I'm not the only one.  There are others out there floating the idea.  When the jobs come at the ever-increasing expense of the taxpayer and they're not making economic sense in the long run, something has to give.  We can't just keep throwing money at the problem because... well, we don't have any money.  It would take a three-fifths majority in a ballot referendum, but it's doable.

Besides, this whole municipal utility business has been one of the biggest (and growing) sources of corruption and controversy in the past six months.  If we sell it and contract with a private company instead, we're not only saving money in the long term, we're eliminating one of the institutions that the Good Ol' Boys rely on to force their will on the public.  Take away their opportunities and you take away their power.

Pun very much intended.

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