Monday, July 19, 2010
Crucial vote under Electric Committee at council meeting tonight
A Cost of Service / Rate Study Proposal for the Electric Department will be voted on at the regular council meeting tonight. This is a proposal that was recommended by IMEA officials for the purpose of providing a detailed evaluation of how our electric department is operating and how we can expect it to operate in the coming years. This is essentially an audit that will provide an accurate account of how efficiently the department is operating and how it's operation can be improved. As far as I'm concerned this audit is years overdue.
The Peru Electric Department, like the majority of city departments in Peru, is in serious need of review. We need an accurate accounting of operating expenses, capital requirements for future funding of improvements, and here's my favorite. Overall Debt Analysis. I have often wondered how the Peru Hydro-Electric Plant pay-off has progressed over the years or if it has progressed at all. I know there have been re-issuing or re-financing of the hydro debt at least a couple of times in recent years and it will be interesting to see if we are making any progress in paying off that debt.
What we are likely to hear from at least one alderman tonight(Dave Potthoff) is that this study is not needed and is to expensive at $22,850.00. Alderman Potthoff will tell us that this study will only provide us with advice on how to bill our residential, commercial, and industrial customers. In fact, it will tell us how the department has been run in previous years under the supervision of Joe Prazen and Don Baker, with Dave Potthoff as Chairman of the Electric Committee and how it must be run now in order to always be profitable for the citizens of Peru.
I have recently confirmed that there have been instances in the past ten years where the city of Peru was actually "losing" money on a regular basis on at least two of it's biggest industrial customers. That's right, O'Neal Steel and United Steel Deck were paying us less than it cost us to provide them with electricity. Exactly how this type of mis-management could have occurred is open for discussion and I will not comment on it just yet. Hopefully this study will shed some light on this issue and point our electric department in the right direction. The consultant is Barnes, Henry, Meisenheimer & Gende, Inc. of St. Louis and they are also experts in the field of Water and Wastewater systems operation and management. How bout' that!
I suspect there will be at least a couple elected officials and contractors in the council chamber tonight who will be quite uncomfortable knowing there are knowledgable professionals nearby who could expose their sweetheart deal in no time at all if just given the opportunity.
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24 comments:
Lois,
What is this sweetheart deal you keep mentioning from the council?
What happened to the crucial vote? Bloggers this is the same scam as the pool. The mayor wants to justify raising the electrical rate on residential customers and needs a consultant to tell us so he isn't the bad guy. If he had any stones he would just raise the rate and save the 22K.
Why are the meeting minutes not being posted for July at the cities website? Is there a transparency blocking my view?
Lois, here you go AGAIN. What has the last 10 years got to do with today? I agree with anyone(Possibly Mr Potthoff) NOT wanting to spend $22,000+ dollars so we could understand the cost of electricity.
C'mon now, what are the elected offical administration responsible for if not to run the city. Do we really need to pay AGAIN AS TAX PAYERS other then the $30,000 mayor salary and $55,000 city clerk salary, $6000 treasurer salary, to actually KNOW WHAT IS GOING ON IN THE CITY UNDER THEIR CONTROL?
Remember how there was all of this support for the Treasurer and the great work he was doing about identifing costs and cost reductions.
Now Spend $91,000 in salaries, Peru citizens, but also spend $22,000+ more for a outside study. How stupid do they think we are?
Alderman Wren is front and center and no better for suggesting to bring up a motion to spend the money.
I guess there is not a budget problem , right ? Get off my back! Ignorance is bliss!
3:31PM
You might want to ask the contributor of the post.
6:11PM
Please put on your reading glasses, do you see my name at the bottom of that post you are referring to?.
If you see my name you are hallucinating again.
5:07PM
There is usually a 2 week delay before minutes are posted online.
First they need to be approved at the following city council meeting.
Stevey Boy, nice to see you posting again. Let's see, $22k to figure out if we are making money? Maybe we need an expert in charge of the department instead of a lineman. Team Harl rolls on. Once again, Joe and Don. Get over it. We are over $100k for "experts" to answer the questions the mayor can't. How long have the two empty buildings paid below cost? How much less were they paying? What was the total cost? Did the IMEA recommend the study or the company? Show some proof before you throw 6 "I"'s in a post.
Run with the PAC, get shot like a dog.
Lois - I think they were just too anxious to start blasting my post. They will figure it out soon, but will have to wait until I have time to respond.
To 3:31 - The sweetheart deal I refer to most often is the Operations and Maintenance contract between the city and TEST, Inc. For any new visitors who are not yet aware of the situation, I will explain. TEST, Inc. was founded by Tim Perra in the 80's as a contract operator for water and wastewater services. Mayor Baker "helped" the new company get started in several ways. Most notably by terminating the existing operations contract at the time with PSG, Inc. who Tim Perra had previously worked for.
Long story short.....PSG uncovered some duplicate invoices from Complete Industrial and another local contractor that were signed off on by Perra and Don Kowalczyk for work performed at the wastewater plant. (Complete was doing the work and the billing was being recorded on the city books as being done by another contractor). Shortly after they notified city officials of these billing irregularities PSG, Inc was out and WET,Inc. which later became TEST, Inc. was in as the new contract operator for Peru. Just like that. This contract has never been competitively bid in almost thirty years now and has been renewed no less than five times with significant increases each time. The most recent contract was five years at more than $2.5 million. TEST was always protected and promoted by Don Baker and most of the other aldermen. Primarily Jack O'Beirne. The cozy relationship between Peru elected officials and TEST has been one of gifts of catered lunches after committee meetings, appreciation dinners at the IML Convention for city officials and spouses, and trips to ball-games in Chicago.
5:01 - You know what happened, you couldn't stop it.
Just like the municipal pool conditions report, we will get an honest and ethical evaluation from experts in the field who will provide the information that will allow our electric department to function as it always should have but never did. How about that tie-breaker by the Mayor?
Stones you say......If you had any you wouldn't have to comment anonymously!
1:31 a.m. - Point by Point - Insomnia can be a real bitch can't it? That 22K will be money well spent and will include so much more than just a rate analysis.
Jim Potthoff is more than qualified to supervise the Electric Department and has brought something to that position this city has needed for a long time. Credibility, Honesty and the respect of the employees.
If you are in favor of selling power for "less than" the "cost of service" you must be a Baker era hold-over. I hope we will find the answer to the questions you pose. As for who recommended the audit. (I) did. Not really. I don't care who recommended it as long as it's done professionally.
Your last comment proves what you really are.
Be glad you can threaten anonymously.
I will repeat my statement for "steve" who has difficulty reading. This mayor is hiding behind consultants instead of making a decision. We the people should just have voted for a consultant because this is the administration's answer to everything. Maybe you don't get it the mayor obviuosly voted to hire a consultant because he doesn't have the guts just to raise rates.The quote will be " it was recommended by the consultant" Hold on to your pocketbooks folks were in for a rough ride.
By the way, does the electric department need more money? or is this a way the administration can just rob from a much larger piggy bank in the future.
ANON 3:40 Don't you get it? While I agree we have to count our pennies this amount of money is a drop in the bucket compared to the debt left us by our previous administration. Why do you people never address this issue and the fact that the same 8 aldermen today let this happen yesterday.
FYI 3:40PM
The electric committee chairman brought forth the proposal which was suggested by the IMEA.
The pool was a no brainer as it had to be done because no one and I repeat no one had a clue as to what to do beside patch and paint and we were way beyond that point.
Would you rather that we consult specialists in their field instead of leaving the choices up to the elected officials? You know that is a downright scarey thought!
I just bet that if you personally had a problem you would be finding the best doctor, lawyer, accountant etc. Well the people of Peru deserve that same treatment.
Why do you want to blame the Mayor for everything, you know there are 8 other people sitting in the council making the final decisions.
To Anon 3:40PM
I am with you . But guess what , the Mayor FINALLY VOTED TO BREAK A TIE. Hold on to your bottom, here comes a electric rate raise.
This guy the Mayor Harl is a typical liberal and knows nothing about running a city but to raise your rates or taxes. What has he done positive.
Lets not forget all of this BS at election time. We can recind all of his actions or maybe we should join together and impeach him before it is too late.
Change for Peru -- PLEASE START UP YOUR BLOG AGAIN WE NEED IT NOW NOW NOW NOW.
anon 5:14 ARE YOU KIDDING, KIDDING, KIDDING?
3:40 - You are likely an insider so you already know how the previous administration operated its financials. You will never get it, but many people in Peru would rather know the truth in terms of our actual financial position. Not the "inflated perception" of the past that we have plenty of money and all our funds are healthy and paying for themselves. We now know that is not the case and has not been the case for years. I hope my electric rates will not have to be increased and I know that each and every fund the city operates must be self sustaining. The financial shell game used by the past administration of robbing from Peter to pay Paul has brought us to the shortfall we are having today.
Honesty is always the best policy. But maybe not for you.
Steve, Again your facts are not correct. This is the administration that moved 600K out of the electric department after the election. To my knowledge this had not been the practice in the past. As it was stated in the paper this report is meant to raise electric rates. Again, if your contention is that all departments need to be self sustaining why does the electric department need more money from citizens ? It was also stated in the paper that the electric department made 1.3 million dollars last year. Folks follow the money and you will see the light.
Lois, You keep throwing around a 45 million dollar debt figure. This city has a 30 million dollar budget. They would need 2-2.5 million dollars a year to fund this debt. It doesn't seem to be an issue. That would be like an individual person having an income of 30K per year living in a 45K house nad having a 200.00 per month house payment.
11:18 - My facts are correct. The $600,000 you are referring to was the Inter-Fund Loan which was recommended by Harl and Hylla because there was no money left in the general fund to pay the bills and make payroll. They brought the facts and figures to the aldermen and the aldermen voted in favor of the loan. Why was it necessary? It turns out the half-cent sales tax meant for Parkside School was being collected and used by the city to pay the bills because the general fund was tapped out. That payment of about $300,000 was due shortly after Harl took office. That is the ambush left by the previous administration who used to tap the Electric Fund and any other fund at will. No committee or council oversight. No full council vote.
They just played the shell game with our money. Aldermen did not know or did not want to know what was going on.
Yes, every department must sustain itself. If they did we would not be tapping the Electric Fund to make payroll.
If the Electric fund made money last year, let's hope the Cost of Service / Rate Study will enable us to make more. Without raising rates.
The N-t story did not say the purpose of the study was meant to raise rates. Dave Potthoff said that.
Stevey boy, please answer the question.
1. How long have the two empty buildings paid below cost?
2. How much less were they paying?
3. What was the total cost?
Btw, Mr. Insamnia is always two steps ahead of you.
You can't avoid the truth.
Mr. Insamnia,
I did some research and made some calls and I can answer your first question.
1. They have always paid the same rate, but what the superintendant was stating was that they pay below the rate charged for power purchased form the agency. The true cost of peru's power is also made up from the power from the dam. It was used as an incentive to lure these companies to town. It is misleading to say that they are paying below cost because the cost is made up from differnet sources
Dear Mr. Insania and 10:58 a.m. - My response is that I cannot answer any of your vague and misleading questions. Nor have I ever claimed to have answers to those questions. If you know why don't you share with us?
What I do know is that much of how the Electric Department operates in terms of what it costs the taxpayers of Peru to provide the service, how each customer is classified, how each customer rate is determined, how efficient the Hydro Plant operates, and how much it generates in electricity and more importantly in dollars. And if it generates any dollars at all. And if the Hydro debt is being paid off. And if there is any hope of us ever paying off that debt.
I just don't know! It's all rather confusing and in need of some clarification. Good thing somebody was hired to sort it all out for us.
I advise you to request a copy of the Cost of Service / Rate Study when it comes out.
That study is expected to "generate" some answers.
By all means Mr. Insania please stay ahead of me. I suspect you're not the kind of guy anybody would turn their back on.
To Anon 10:58AM
Your are correct and I agree with you. Steve once again is Wrong.
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