OK…I’ve had some time to look over the audit of City Utilities and come up with a few thoughts. Overall, I’m very impressed with Susan Montee’s work and she found some items that are in real need of serious discussion. John Twitty has some serious questions to answer (and I plan to make a request for an interview on this blog like we’ve had with the Mayor. We’ll see if he takes us up on it.)
If you want to read the entire report (and it’s worth your time) then click here for the report in PDF format.
First, about City Utilities taking the money they collect from residents and giving it to charities and charitable activities. In and of itself, it seems like a good thing but I don’t see why we as taxpayers should essentially be donating to charities where we have no say as to the dispersal of the money. While there may be nothing wrong with these groups I’m not fond of knowing that the money I have to pay for electricity is going to a group that I might not necessarily support in their actions or political activities. (And yes, some of the charities involved do political activism.)
The State Auditor says that these actions might violate the Missouri Constitution and from the way it looks to me it is in violation. A public entity cannot use their money or resources to benefit a private individual, association or corporation except as provided in the Constitution. I’m sure the Urban Districts Alliance and Wonders of Wildlife and Unite of Southwest Missouri and The Kitchen and all of the other charities that received CU money could use those funds. That doesn’t mean it’s right for CU to give it when it’s taken in abundance from residents.
However, along the lines of things that might be considered “unnecessary expenditures” I’m not thinking it’s such a bad thing for the employee picnic or sending of flowers when a staff member has a death in the family. I want to have City Utilities recruit and keep the best employees possible and keeping morale high is a key factor in maintaining those staff members. Something as simple as a bouquet of flowers when someone’s facing a horrific time in their family’s life can speak volumes to say that person matters more than a number on a piece of paper. Susan Montee can’t look at people as people because her job is only to look at the numbers. She’s not allowed to have compassion or concern because that’s not in the job of State Auditor…so we can certainly understand her calling these expenditures into question. Could they have reduced the costs a bit? Perhaps. It doesn’t mean these are things that need to be eliminated.
As for Montee’s suggestion that CU require all employees to get their permission if they take a second job…Hogwash! If the job doesn’t conflict with the employee’s position at CU then it’s not CU’s business (nor Montee’s) what that employee is doing when they’re not on company time. I’m sure the powers-that-be at CU would love to have that kind of Big Brother power over their staff but it would not be good for morale nor would it really be good for recruiting staff members.
CU’s subsidization of SpringNet is of serious concern. There is NO reason at all for City Utilities to continue pumping money into the SpringNet system when it’s painfully obvious that Springfield has more than enough private companies to fulfill those services. A subsidy of $1.5 million dollars is simply unacceptable when there are more than enough viable alternatives within the marketplace.
Add in that the Auditor has found CU’s SpringNet activities in apparent violation of their agreements with the Public Service Commission and you have a can of worms that I’m sure CU wants to keep closed. Even CU’s internal auditors told the powers-that-be to monitor SpringNet’s cash flow separately to be in line with PSC agreements and those were ignored through March 2007. CU claimed that they discussed this with the PSC and they said there were no violations. The State Auditor came back and said CU had nothing to prove that claim. Someone’s wrong here. CU needs to present the documents to back up their claim if we want to believe it’s not them in the wrong.
CU needs to present a plan to dump SpringNet if they can’t make it profitable on it’s own and not take a cavalier attitude toward someone questioning if they’re in line with their PSC agreements.
It also appears from the Auditor’s report that CU has not been seeking public bidding on items that should have been put out for bid each year. These items could have reduced overhead costs and as a result put CU in a situation that lower costs could be passed onto their customers. Will this be something that CU will improve upon in the future? I certainly hope so. Annual competitive bidding will make things better for everyone involved even if it means some long time vendors of CU won’t be getting the business they had received in the past.
Now, I’ve seen reports of some people connected to CU running down Susan Montee and questioning her integrity and ability to make this audit. I certainly hope that this is not the attitude behind the closed doors at CU. There are legitimate questions that need to be answered and trying to call the people asking the questions into suspicion isn’t going to get the job done. I hope that the board member who disparaged Susan Montee is not representative of all of CU.
Finally, I don’t want to make it appear I’m coming down on the side of those who think CU is some corrupt organization frittering away all they money that comes into the door. They have an internal auditor and it appears they listen to them often. I’m not opposed to the idea of trying to manage CU as a private business but only if they then keep in mind that this is a public entity on top of it. As long as we see some of the attitude we’ve seen from officials within the city this can be a good thing.
And while have low utility rates…it seems we could have them lower. Let’s see CU get that done too.
