GOP Mayoral Candidate's Bold Plan for Burlington: Sell! Sell! Sell!

Tweet

* Updated below: BED's true debt load, plus Kurt Wright responds to the claim his math is wrong. *

Republican mayoral candidate Kurt Wright promised he would unveil a "bold plan" with "bold solutions" to address the serious fiscal challenges facing the city of Burlington — and on Wednesday, he delivered.

At a city hall press conference, Wright revealed his bold plan to shore up the city's finances: Sell one its most prized assets, the Burlington Electric Department.

Wright claims the sale would bring a one-time windfall to the city of more than $100 million.

Aside from BED, Wright said he'd entertain the notion of selling off Burlington International Airport — or at least having its ownership regionalized, or getting the state to take some ownership — as well as Memorial Auditorium, which he claims loses money annually.

What other city departments and services could Burlington auction off? The bike path? City arts? Church Street? The Waterfront?

(Fire away down in the comments section.)

Wright, who has served on the city council in three different stints over the past 15 years, acknowledged his bold solution to sell BED is, actually, not new.

"People have talked about it in the past, but I don't think the climate was right for this in the past and I think it is now," Wright said. "Would I have proposed this 10 years ago? I wouldn't have and I don't think voters would have reacted to it favorably 10 or 15 years ago."

The difference today is the sheer amount of debt facing the city, thanks to Burlington Telecom, the Burlington airport and a flagging pension fund.

In sum, the debts caused by these three entities easily tops $100 million: BT is in debt more than $50 million ($17 million owed to taxpayers and another $33.5 million to CitiCapital); the pension fund is at least $50 million short; and the airport is nearly $10 million in the hole thanks to a parking garage that was built with no bonding.

Republican Mayor Peter Brownell floated the idea of selling Burlington Electric during his two-year stint in office (1993-1995), but voter and city council disapproval put the kibosh on his plans.

Brownell told Seven Days he talked up the idea during his time as mayor to "anyone who would listen." But not many people listened. Or at least, not many took the idea seriously.

For Brownell, the issue of selling BED was not financially driven but philosophically driven.

"It wasn't necessarily because we needed to make money on it," said Brownell, who was facing structural budget shortfalls of $700,000 to $900,000 during his time in office. "Philosophically, I don't think the city has a reason to own an electric utility or an airport for that matter. The liability to taxpayers is something that would keep me up at night."

Selling off an asset to meet ongoing budget shortfalls is not recommended, Brownell said. However, selling off an asset to pay off one-time liabilities "could make sense."

The question remains, however, whether selling of BED would even achieve the "nine figure" windfall that Wright predicts. BED General Manager Barbara Grimes told Seven Days that, in reality, BED's bonded debt is not the $65 million that Wright claims, but closer to $100 million. Under the best case scenario, BED would net the city roughly $50 million, Grime said. (See update below.)

A $50 million windfall would essentially either cover the pension shortfall or make BT whole. Take your pick.

Wright's proposal raises a host of other questions: Would BED's payments in lieu of taxes and other charges to city coffers be covered by ongoing, annual payments by a new owner? Would the new owners assume all of the pension liabilities owed to BED workers? Would the Vermont Public Service Board allow a windfall profit from a utility sale to be spent paying down non-utility costs?

The other question is: Who would buy it? The only power company buying up other Vermont utilities is Green Mountain Power, er, GazMetro out of Quebec. GMP is currently trying to purchase Central Vermont Public Service.

Three of the four Democratic candidates vying to challenge Wright in the general election completely dismissed Wright's plan outright. Only Miro Weinberger said it's an option to consider, but not one he would undertake lightly.

Here's each Democratic candidate's response, in full:

State Sen. Tim Ashe (D/P-Chittenden): "Usually people throw Hail Marys at the end of the game, not the beginning. This is an astonishing proposal. Burlington became a national leader in energy efficiency and broke it off with Vermont Yankee in favor of renewable power precisely because the people of Burlington own it and it reflects our values. Why would we throw away our say in power policy? Totally half baked, not to mention unfair to BED's employees and leadership. We should be commending them, not throwing them to the mercy of multinational power investors."

City Councilor Bram Kranichfeld (D-Ward 2), who previously served as chairman of the BED Board of Commissioners: "BED is a model for municipally owned utilities and has successfully promoted renewable energy, including creating an award winning energy efficiency program, while keeping our electric rates affordable. Leadership requires a steady hand and this is no time to make ill-informed proposals. While I will consider every option, my plan to put Burlington’s finances back in order will not include a fire sale of its assets. Selling BED is a short-sighted approach that could increase our electric rates in an already challenging economy, halt our progress towards renewable energy, and may not resolve any of our long term financial issues."

Rep. Jason Lorber (D-Burlington): “Kurt Wright is trying to sell out our city and Burlington values. Selling out Burlington Electric to private hands would be committing financial malpractice. Burlington Electric saves residents money, while reducing energy consumption. I believe that energy-independence and efficiency are paramount to sustainability. That's what Burlington Electric does, while saving money. Burlington Values our people, our environment, and workers far above a fast buck.”

Housing developer and Burlington Airport Commissioner Miro Weinberger: "The Burlington Electric Department has been a valuable city asset for over 100 years. Public ownership of our power company has allowed the city to invest in renewable energy sources and energy efficiency initiatives. Unlike Kurt Wright, I do not want to sell Burlington Electric and would not consider doing so without careful analysis of all options. The financial assumptions Wright has based his proposal on are contested by BED and may prove inaccurate. That said, the legacy of the Kiss administration is that we have no choice but to consider highly unpleasant options. It would be irresponsible for any mayoral candidate to take any serious option off the table at this point."

For nearly three decades, the ongoing mantra of Democrats, Progressives and like-minded independents has been that Burlington should be open for business, but not for sale.

Clearly, Wright is challenging that credo.

* update - posted 4 p.m., October 20 *

Turns out that neither BED General Manager Barbara Grimes (who spoke to Seven Days from her car) nor Kurt Wright had BED's debt exactly right.

According to BED's Chief Financial Officer, Daryl Santerre, the total indebtedness of the municipal utility as of October 17 was $84 million. That is almost $20 million higher than claimed by Wright. According to Santerre, the bond breakdown is as follows: $43 million in general obligation bonds and $41 million in revenue bonds.

Wright had claimed BED's debt was $65 million, while Grimes thought it hovered closer to $100 million. With that higher debt, Grimes argued that BED would net the city only about $50 million if sold, not $100 million.

Wright stands by his claim that the market valuation of BED would fetch a net of at least $100 million for the city taxpayers.

"I went back and spoke to the people who were crunching the numbers with me and they didn't flinch," said Wright.

Wright said BED's value in the marketplace is more than just the utility's balance sheet - but includes its assets, its cash flow and its location in the market.

"That said, if Barb Grimes is right and this sale would only net the city $50 to $55 million, then I wouldn't do it."

Also, our initial post neglected to include the statement issued by Burlington Mayor Bob Kiss — remember him?. Turns out the two-term Progressive mayor believes Wright's idea is just plain wrong. Go figure.

"Kurt Wright’s proposal to sell the Burlington Electric Department is short-sighted and irresponsible. BED is a tremendous asset of the city. As a municipally-owned utility, it reflects important values of local rate-payer control and public accountability. BED is widely-acknowledged as one of the nation’s leading utilities with respect to the use of renewable energy sources. Selling an asset like BED for a one-time benefit undercuts Burlington’s future. It’s a short-term gimmick that lacks prudence and vision," said Kiss. "The urgency suggested by this proposal is misplaced. The city is working towards constructive solutions for issues such as Burlington Telecom and the pension fund. Proposing to sell BED under these circumstances is an erratic solution to circumstances that require steadiness and careful consideration."

Comments

[dale tillotson]

I would like to personally thank Mayor Kiss for having a leading hand in this financial mess.
His unwillingness to acknowledge that Burlington residents like to hear the truth so they can help solve problems, led him and his CAO Leopold to hide the failure of BT, thus creating an absolute disaster financially, and faithfully for the city. Now even The Mayors own party does not trust him and he is a long shot if he decides to seek his parties nomination.
His failure to even admit that the State auditors office 77 item checklist on internal control pertains to the city is disgusting.
He seems to think the checklist was devised for smaller towns and cities and does not pertain to the way he operates this city.
Wrong Bob because if you look at the checklist under your leadership your office as well as city depts. fail to follow the internal controls listed.
Sad we have gotten this far that we have to take such drastic action, but with looming huge budget cuts, greatly increased taxes if we do not make the budget cuts, to help pay off BT, Pensions, water bonds and the like, bold action is needed.
Oh wait our savior is coming to town, according to figures provided to the Mayor by the Ice Factor their are 80,000 ice climbing enthusiasts in the Northeast corridor of the United States knocking down our doors to climb the Moran Ice wall.
I look forward to meeting them all to help pay off our debts with their generated revenues.
I must add it would be a good thing if the Mayor resigned immediately so we could move forward without his presence.

[Ward 2 Resident]

Let's sell Burlington schools to the University of Phoenix.

[Tim]

Selling BED might be popular if the alternative was municipal bankruptcy or a substantial property tax hike. Like amputating a limb to fight an infection, the prospects will have to be absolutely dire before people consider this.
Pols are lining up to denounce this but nobody else has come up with an actual plan to raise the tens of millions of dollars that Burlington is on the hook for.
Assuming Grimes' figure is correct, Wright's plan is still $50 million dollars ahead of any of the others.
These other pols are telling voters what they want to hear: happiness, rainbows and unicorns. Right.
I don't recall any of them objecting or predicting doom when Governor Schumlin sold GMP in a deal that smacked of crony capitalism. Short memories?

[Peggy Luhrs]

This is the usual Republican crap that you would expect from Kurt Wrong. BED is a very successful publicly owned utility and because of it Burlington has had the lowest rates in Vermont. The mishandling of Burlington Telecom should not be an excuse to attack public utiliities. Take a look at where Cities have sold off their public assets and see how well that is working out for them. It isn't. Wright is Wrong as usual and will offer the usual Republican profitization is the cure for everything that is destroying the country. I don't think Burlington is dumb enough to fall for this.

[dale tillotson]

I would ask Peggy Luhrs where the attack on utilities is.
This is a proposal to help Burlington become somewhat solvent, not an attack on utilities.
It is not an attack on anything, just a proposal to get us out of the mess that Kiss has helped attack us with.
As always Peggy is so far out to the left, anything from deep left in is considered to the right.

[murphy]

Mr. Machado,

As with virtually all posts from Peggy Luhrs, I would ask if this latest example of a drive-by shooting meets your civility requirements?

[Jimmy]

Ditto to everything that Tim said, and...

"That said, the legacy of the Kiss administration is that we have no choice but to consider highly unpleasant options. It would be irresponsible for any mayoral candidate to take any serious option off the table at this point."

Well said. Getting into the mayor's race without anything resembling a plan to get Burlington out of a nine figure hole is infinitely more irresponsible than proposing a possible solution - one that would still require voter approval. Ashe in particular insults voters' intelligence by saying things like we'll just get more BT subscribers. How anyone would ever consider voting for this guy is completely beyond me.

Interesting piece. Opens and closes by mocking Wright, and the rest basically highlights the fact that he's the only one who's had any ideas at all, and that his idea may be the only option we have. I'm sure the Catholic Diocese didn't want to sell off their properties either, but they realized that simply not wanting to do something didn't excuse them from having to do it.

[Tyler Machado]

It's fine, Murphy. Carry on.

[Morgan M]

Well I think the idea of selling BED stinks.

But I have to give credit to Kurt. This is the first utterance from any politician, city official, BT employee, or any other public figure since BT started drilling horizontal tunnels, that is bathed in . . . DAYLIGHT.

And it ain't pretty.

[Rob R]

Sell minority shares in the airport to Winooski and South Burlington, they've wanted in on it for years, let them put their money where their mouths are.

[one_vermonter]

Might as well sell off the parks, too.

[Murphy]

"Might as well sell off the parks, too."

Why not? City Hall Park is of no use to anyone now except a bunch of squatters who think its theirs.

[Verplanck]

Food for thought: The city of Chicago sold its parking meters to a multinational for billions less than it was valued for. Now residents are stuck with jacked-up rates and there's nothing they can do about it.

I think the problem is that Wright is trying to fix a long term problem with a short infusion of cash. It sure would be satisfying to eliminate a multimillion dollar hole in one shot, but there will inevitably be unforeseen long-term effects on ratepayers in the city. This isn't "tough choices", this is the easy way out.

Wright deserves no credit for offering a shitty plan. Here's mine: tax everyone earning more than 100k/ yr in the city whatever it takes to pay off the debt in 15 years. Wow, isn't that great outside-the-box thinking?

[Lea]

Kudos to Kurt for bringing an issue of substance to the campaign table. This is not a time for canned campaign speeches worshiping small town values and opining ideological platitudes. Kurt's stink bomb sent everyone scrambling, shook everyone up, and gave candidate forum audience a front row seat on how our prospective mayors handle a new idea (even though it's an idea that is 100 years old in Burlington) and think outside the box. Miro won that round. There will be tough realities to face in the years ahead: will we implement austerity measures, declare bankruptcy, sell off assets, or raise taxes? The pots and kettles are calling Kurt names -- irresponsible? LOL, that one from the most irresponsible of us all, who ironically is currently trying to find a buyer for a city utility that he says is the best fiber optic network to home system IN THE WORLD.

[Jimmy]

Verplanck, a few problems with your "plan":

1. Municipalities don't get to tax citizens based on income. They don't even have access to that information.
2. Even if they did, you're talking about $50K/person/year. Which means every single one of them would leave immediately.
3. When the BT bill comes due in the form of a verdict, it won't be payable on an installment plan.

Maybe this is why all of the candidates and most of the peanut gallery prefer to bitch about Wright's plan rather than propose their own: there really aren't any very good alternatives.

Finally, since there seems to be some confusion on this point: BED's rates are higher than GMP's.

[Jcarter]

So let's get this straight : BED is $84,000,000 in debt and...

Bran "BED is a model for municipally owned utilities"

Miro "The Burlington Electric Department has been a valuable city asset"

Peggy "BED is a very successful publicly owned utility"

I think we have identified the problem in Burlington. Math. An entity that is 84 million in the hole is not an asset, nor is it successful. For full disclosure, I am not sure I am on board with this, however it deserves to be investigated.

Burlington is 150 Million in the hole and that means drastic times and thinking outside the box. The norm clearly isn't working.

[~]

This whole plan is based on the assumption that there's a company out there with a pile of cash who's going to hand it over for BED, then everything goes back to normal. In reality, the buyer is going to have to take on debt of their own, which can only be covered by raising rates.

The common refrain from the right is that private businesses operate more efficiently than government, but electric service to Burlington is a monopoly. There will be no market pressure or accountability to provide that service efficiently or reliably.

The best case scenario here is that service rates would only go up as much as we would be taxed to pay for the BT debacle ourselves.

[Tim]

JCARTER: " BED is $84 million in debt"
You know they just hired that guy who ran South Burlington into insolvency so who really knows what they're worth? Assuming they don't want to be sold, I'm sure they can cook the books to make themselves look like beggars.

I'm voting communist, to the barricades Comrades!

[Captain Obvious]

Well, Burlington’s finances are sure screwed up. They won’t be resolved anytime soon. I like the point Dale Tillotson makes. Bob Kiss is the biggest mistake in recent Burlington history and should resign. Even if Mr. Wright was elected mayor and a proposed sale of BED was made, it would still have to be approved by the voters of the city. That would be a tough proposition to make, given BED’s solidity in comparison. I personally dislike the idea of selling it off completely, but I would be open to a minority share being sold off to bring in more cash. Just because the screw-ups of the last decade have brought financial wreck to city coffers doesn’t mean one should get rid of a competently-run city-owned utility for a one-time cash infusion. If the city were to sell off a minority share, I would put language into the sale to ensure the city would have the option to buy back the minority share at a fair market price. For the moment, all of this is just hypothetical.

Changing topics, I have noticed that the comments section on this blog is getting a bit nasty. Perhaps the Seven Days editors should think about maybe changing the comments section policy. People like Dale Tillotson have strong opinions for example, but they state their names and have a good, meaty argument to bring to the table, but others just make nasty remarks to people who disagree with them. Some blogs have dealt with this by either getting rid of comments entirely (think Andrew Sullivan at the Daily Beast), where reader comments only get posted when screened thoroughly and bring something thoughtful to the table, or ending the option to comment anonymously. In the latter case, require people to login using their Facebook account, etc. (sites like Mother Jones, for example) so they can be held accountable for their remarks. Civil discourse can only take place when people are out in the open stating their arguments. It won’t get rid of trolls necessarily, but it will help civilize the debate. Seven Days’ current commenting policy leaves me with little taste to read anything beyond the actual blog posts. If you require names and phone numbers when posting Letters to the Editor for the paper edition, something more than just an anonymous handle and an email should be required to post something on this blog.

[joeconn4]

Lots of criticism of Wright's idea by 4 Democrat candidates and our Progressive mayor, but I don't see any other ideas on the table. If you recognize the city's financial position as a problem, you better figure out a way to address that problem. Leadership addresses it now, not 5-10-15 years from now.

Or do those other 5 people think there is not a problem?

[Charlie Smith]

To Shay's comment that Kurt misstated the amount of debt at BED, check the facts. Kurt tossed the question to me (in the audience) and I stated that the long term debt of BED is $65 million - which is accurate as of 6/30/2010. Current assets and current liabilities essentially wash.

[Jimmy]

"The best case scenario here is that service rates would only go up as much as we would be taxed to pay for the BT debacle ourselves."

Actually the best case scenario is that whomever buys BED has experience running these types of companies, can leverage economies of scale, and lowers rates. But don't let that stop you from throwing out asinine, unsupportable statements like the above.

What's your plan to raise nine figures in a city of under 40K residents, ~? Or would you prefer to wait for this genius to come up with one?
http://www.youtube.com/watch?v=JodUgoLe4aw

[Jcarter]

"People like Dale Tillotson have strong opinions for example, but they state their names and have a good, meaty argument to bring to the table, "

Should I call you Captain or Mr. Obvious?

[Tim]

Politics makes strange BEDfellows.

[dale tillotson]

Ok folks.
After a hotly contested week where we actually had a boldy presented idea to solve the Progressive mess in Burlington,as well as a week where Mayor Kiss attended the wards 4 and 7 NPA meeting, and told me my remarks were out of line,(just because I told him I did not trust his administration handling the pennies for parks funds), of course he now wants to divert them from their actual intent.
I have taken some words from a Neil Young song, slightly changed them and came up with the following tune.
Stubborn Man,
better keep your head
dont forget
what your good book said
stubborn change gonna come at last
now your crosses
are burning fast
stubborn man
I saw BT coming
and i saw
Moran tall ice climbing
and little lies
when will you pay
us all back
stubborn man.
Have a nice weekend all

[The Awesome Captain Obvious]

I do strongly encourage the Seven Days editors to seriously consider altering their commenting policy on the Blurt Blog along the lines I have suggested earlier. Awesome.

[Tyler Machado]

Captain Tenille: Nothing's set in the stone, but it's in the works. Expect some changes when our new site comes along in a few months. Having said that, Facebook is not a perfect panacea -- people are very capable of being crass, hurtful, and downright stupid even when using their real names. But things will change all the same. Thanks for the feedback.

[finn]

"The common refrain from the right is that private businesses operate more efficiently than government, but electric service to Burlington is a monopoly. There will be no market pressure or accountability to provide that service efficiently or reliably."

Then where's the accoutability now? It's a monopoly whether it's publicly or privately owned.

Fact is, BED is regulated by the Public Service Board, like every other utility, whether it's publicly or privately owned. A private buyer of BED would not be able to just jack up rates at will, anymore than it can now.

[Jcarter]

Captain Oblivious,

Your suggestions don't solve the problem. It's not like there aren't fake facebook or twitter accounts out there. For example I could go and create one today under a fake name and then use that. Still anonymous.

Secondly, there are some whack jobs out there. Some who threaten physical violence. Now, how smart would it be to go ahead and give those nutjobs information such that some random night they show up at your house and wake your kids up because you called diagree with them. Or you are out having lunch on church st with your wife only to get sucker punched. You may think I am overstating things, but I'm not. When Freyneland was around there was several occassions where these scenario's were very plausible. One issue is this is not "public" discourse persay. It's not like there are 30 people in a room where if something were to get out of hand people would step in. Instead it is there anytime, allowing for retribution at anytime.

[Doug Hoffer]

"Finally, since there seems to be some confusion on this point: BED's rates are higher than GMP's."

Rates are important but our bills reflect rates times usage. According to the DPS, BED's average residential bills are much lower than those at GMP (or CVPS). There are a number of reasons for this but one is BED's long history of aggressive energy efficiency.

And this from BED's last performance report: "BED's recent rate increases were driven largely by expiring power contracts at old prices and the need to replace them with contracts at higher market rates. Fortunately, the majority of impacts from the deregulated markets are already built into our rates. CVPS and GMP have not yet absorbed as much of the new market prices because of their existing Hydro Quebec and Vermont Yankee contracts. When the contracts expire in 2012, those utilities will have to replace them, probably at higher cost. At that point, their rates (and the statewide average) will very likely catch up with BED’s increases."

One more thing: GMP's overall average rates are artificially low because of the significant portion of their output that is sold to IBM at steeply reduced rates.

Finally, the Free Press article on Kurt Wright's suggestion that the City sell BED said, "He added that a privately held electric utility would become a taxpayer — unlike BED."

This is an astonishing statement from a sitting city councilor. In fact, BED and the Joint Owners of the McNeil Plant make a payment in lieu of taxes every year. In the last five years, the total PILOT was over $7 million.

I'm certain Kurt knows this so I'm a little surprised he would make the misleading statement attributed to him.

[Jimmy]

"Rates are important but our bills reflect rates times usage."

You're talking about the behavior of a customer base. Switching to GMP would not make BED's customers wastrels. Their bills would be lower, because at the same usage they'd be paying lower residential rates.

"GMP's overall average rates are artificially low"

GMP's residential rates are lower, not just their average.

My statement was that people believe that BED's rates are lower, and they're not, they're higher. "They might eventually be the same or lower" in no way refutes that statement, so I'm not sure what your point was.

[Doug Hoffer]

It's not just behavior; it's investments by the utility in efficiency.

Rates change over time and people's perceptions may lag (BED has had lower rates than GMP in past years). But it is true that BED customers spend less. And that was the point because your reference to rates was only half the story.

[Frank Frank]

Doug, your arguments might have more supporters if you weren't seen as someone whose analysis was always through the prism of the Progressive party and liberalism. Credibility is harder than polarization.

[Jcarter]

"In fact, BED and the Joint Owners of the McNeil Plant make a payment in lieu of taxes every year. In the last five years, the total PILOT was over $7 million"

Um so? Without actually saying what the Taxes are the statement is as useless as the Salmon DUI video.

I propose Doug start using the screen name Spinster.

[Jcarter]

Either way, agree or not with Wright's proposal at least he is opening a discussion on dealing with the huge debt load that is bankrupting the city. The libs just seem to ignore it. Everything is an asset, whether it is 84 million in the hole or only 50 million in debt.

[Doug Hoffer]

jcarter

not sure what you don't get; they are not "taxes" because a municipal entity is tax exempt; that's why they're referred to as payments "in lieu" of taxes

in the last five years, the amounts have grown from $1.2 million in 2006 to $1.5 million in 2010

what do you think is being spun? these are facts

Kurt Wright said BED doesn't pay taxes; a PILOT is the same thing and he knows it

[Jimmy]

"it's investments by the utility in efficiency."

GMP also has efficiency programs. The fact that BED's customers use less power (I'm taking your word for it) likely has little to do with BED's particular energy efficiency efforts. Did a Burlington resident buy an energy star bulb because they're generally more conscious of environmental concerns, or because BED offered a $1.50 rebate? My bet's on the former.

If BED were purchased by another entity, their customers would not suddenly start using more power.

"It's not just behavior"

The bill is consumption (behavior) times rate - plus fees, which added ~15% to my last BED bill. I'm a longtime BED customer, and I can't recall a single instance in which they've even attempted to influence my behavior wrt consumption. So yeah, guess what - for any given customer, they're more expensive.

[Doug Hoffer]

"GMP also has efficiency programs"

Sorry. It was the failure of GMP & CVPS to take efficiency seriously that led to the creation of efficiency Vermont.

For its part, BED (after voter approval of an $11.3 million bond 20 years ago) started early and did a good job. Early on it switched almost 2,000 customers from electric heat to natural gas. It invested millions in small and large businesses to reduce demand (lighting, HVAC, etc.). And if you don't think customers respond to financial incentives you're just not thinking straight. BED has 20 years of experience that says otherwise.

Just because you never took advantage of the many opportunities over the years doesn't mean they weren't there for you.

BTW - The only fee on a BED bill that's not on every bill in the state is the city franchise fee. But guess what, it's a net win for you. The fee is paid by all customers including entities like UVM and Fletcher Allen, which don't pay property taxes (they pay PILOTs but waaay less than what they would pay in property taxes).

"If not for BED’s PILOT and the franchise fee, the combined property and school tax rate would be almost $0.09 higher than it is today. That means a family with a $200,000 home saves about $170 per year in property taxes, while paying only $27 in franchise fees, a savings of $143 per year."

BED Performance Report, p.10
https://www.burlingtonelectric.com/ELBO/assets/About%20BED/PMR.pdf

[Finn]

Hoffer's disputations on whether BED's rates are actually lower or higher than GMP's (or anyone else's) when you take into consideration factors X, Y, and Z, does not address the point that public ownership vs. private ownership will have nothing to do with rates. Those will be approved or disapproved by the PSB regardless of who owns BED.

The only argument for public ownership is the philosophical one that the Progs and untraliberals just won't let go of.

[Jcarter]

"jcarter

not sure what you don't get; they are not "taxes" because a municipal entity is tax exempt; that's why they're referred to as payments "in lieu" of taxes"

Jezuz Christ Doug. You aren't that thick. You can't tell that what I was referring to was the difference between payments in lieu of taxes by BED and WHAT A PRIVATE CORPORATION WOULD PAY IF THEY WERE TAXED ON THE HUGE TRACTS OF LAND THAT BED AND MCNEIL ARE?

I'm dumbfounded.

[The Really Awesome Captain Obvious!]

Thanks Tyler for giving us that update. Facebook indeed isn't a panacea (nothing is, and still fake profiles can be created) but as long as soom positive changes come along to deal with the negative comments on this blog, that will be an improvement. I'm not saying it should be Facebook, but if people have nothing good to say while posting anonymously, they shouldn't be bothering at all. Hence, regrettably, the need for a change in commenting policy. I'm looking forward to the changes (whatever they may be) when the new site rolls out.

[Jcarter]

Tyler, can we have the option to insert emoticons? That would be awesome !!

[Doug Hoffer]

jcarter

dumbfounded?!
OK

what makes you think the PILOT is less than the amount due from a private owner? you assume a lot based on no information

[Jcarter]

Doug, can you not read either?

"Um so? Without actually saying what the Taxes are the statement is as useless as the Salmon DUI video. "

I never said they were more or less. I said your statement was useless without providing the flip side.

[Doug Hoffer]

Finn said, "The only argument for public ownership is the philosophical one that the Progs and untraliberals just won't let go of."

Not exactly.
1. The people (through the city council, electric commission, and local ballot items) decided to build the McNeil Plant.
2. The people decided to raise their own rates to pay for an $11 million bond for efficiency investments.
3. The people decided not to participate in the first Hydro Quebec contract.
4. The people decided to get out of the contract with Vermont Yankee.
5. The people decided to adopt a franchise fee that reduces property taxes.
6. The people get to decide their own energy future.
7. BED is not required to pay dividends to shareholders which helps keep rates down.

You may or may not like these decisions but if you were a customer of a privately owned utility you would have no input whatsoever about these matters. The people of Burlington understand the value of public power.

[Jimmy]

What's hilarious about Hoffer's argument is that if he were on the other side, he'd be tearing himself apart. Where's the proof, Doug? Oh, people PROBABLY buy energy efficient appliances because of rebates? What an insult to the intelligence of BED customers, whose purchasing decisions are most certainly driven by long term energy savings and concern for the environment, not a ten dollar rebate.

The bottom line is that if someone were to switch from BED to GMP today, their bill would be lower, period.

On this thread, Verplanck implied, and Kranichfeld and Luhrs outrighted stated, that BED's rates are lower than other providers'. They're not. You can contort yourself all you want, but that's a fact.

I understand that you're in love with the idea of publicly owned utilities, as evidenced by your insistence that BT would be "fine" when it was pretty clear that it wouldn't. Kind of like Tim Ashe:

http://www.youtube.com/watch?v=JodUgoLe4aw

As it turns out, you were both wrong, and unless you've got a better idea to raise the eight figures required to rectify that failure, you might just have to reconcile yourself to the Progs having punted two such utilities in one shot.

[Doug Hoffer]

I can't help it if you refuse to accept decades of evidence (not just at BED). Why would any business offer cash incentives if they didn't work? And you first said $1.50 but you're now up to $10. Are you not aware of the incentives offered periodically by Efficiency Vermont for appliances (and VT Gas too)? They're a lot more than $10 ($50 - $100). Besides, do you really think the PSB would let them keep doing that if it wasn't cost-effective? Why not ask the appliance dealers if the incentives have increased sales? I have and they love it.

"What an insult to the intelligence of BED customers, whose purchasing decisions are most certainly driven by long term energy savings and concern for the environment, not a ten dollar rebate."

Actually, you are most certainly wrong. Lots of folks don't have the extra cash to buy the more efficient appliance, regardless of the long-term savings. And of course there are lots of landlords who don't buy the most efficient units because they don't have to pay the bills.

The insulting thing is that you think you know more about this subject than BED management and staff who have been doing the work for years.

BTW - There's no contortion needed. I'm not the one who said the rates are lower; but my bills are. You can try to deny the role played by public power but we know better.

[finn]

1. The people (through the city council, electric commission, and local ballot items) decided to build the McNeil Plant.

You mean the most polluting plant in Vermont?

2. The people decided to raise their own rates to pay for an $11 million bond for efficiency investments.

Congratulations. But any GMP or CVPS customer or group of customers could have petitioned the PSB to order this.

3. The people decided not to participate in the first Hydro Quebec contract.

A foolish decision, but so be it. As you know, through the magic of political expediency and shocking hypocrisy, Vermont has now decided that HQ power is "renewable." But in any event, any GMP or CVPS customer or group of customers could have petitioned company management and the PSB not to allow a contract with HQ. The PSB approves or disapproves Power Purchase Agreements.

4. The people decided to get out of the contract with Vermont Yankee.

Again, a foolish decision, but, likewise, any GMP or CVPS customer or group of customers could have raised this issue with company management and the PSB.

5. The people decided to adopt a franchise fee that reduces property taxes.

They raised their electricity bill to lower their property taxes. BFD.

6. The people get to decide their own energy future.

First, that's an exaggeration, at best. Decisions are made by the BED board, vetted by the DPS, and approved or disapproved by the PSB. Just like any other utility.

Second, do you mean like they got to decide their telecom future? Worked out great! Political leaders who aren't business managers f***** that up and now Burlingtonians (the "people") suddenly owe $50 milllion. "The people's" representative (the mayor) appointed a financial officer who didn't ask "the people's" permission to remove $17 mil from "the people's" treasury, and then decided not to tell "the people" about it. Take a city-wide referendum now on whether BT (Prog Clavelle's idea) was a good idea after all.

7. BED is not required to pay dividends to shareholders which helps keep rates down.

First, are you saying that rates are necessarily lower when you don't have to pay dividends? Hypocrisy alert: you just tried to make that argument already vis-a-vis GMP and you lost. Despite your several attempts at sleight of hand accounting, GMPs rates are lower than BEDs, period. Apparently, you'll say anything. Are you now conceding that BED's rates would be even higher but for public ownership? Prove it. And how high should the rates go to justify your craving for public ownership?

Why don't you just admit that you believe public ownership is better even if it costs more?

[Jcarter]

"The insulting thing is that you think you know more about this subject than BED management and staff "

BAHHAHAHHAAH, Really Doug? You mean the people who have BED $84 Million in debt? Yeah, they know a hell of a lot about running a profitable company. I'm thinking just about as much as the dipshits running BTC.

[Doug Hoffer]

You really don't get it.

1. Being the most polluting plant is true but hardly surprising since VT has so few smokestacks. Would you rather we have some of those natural gas or coal plants in other parts of New England? Right. But you sure don't mind getting power from them.
2. Actually, the PSB required greater efficiency investments but the utilities resisted for years (and then they were allowed to charge higher rates to recover losses from reduced sales; very sad).
3. Re. HQ: It wasn't foolish for the first 10+ years when the power was expensive. And we didn't want to contribute to the destruction of Cree & Inuit land and the resulting pollution. Oh yes, your assertion that GMP or CVPS customers could have petitioned company management is pretty funny. There was a huge statewide debate about HQ and GMP & CVPS knew well that lots of people thought it was wrong. Didn't make a bit of difference. BTW - That contract (like all large long-term purchase power agreements) had to be approved by voters. We kinda like that democracy thing.
4. You might think dumping VY as "foolish" but we didn't (and still don't). The point is, we got to decide; other Vermonters couldn't.
5. Re. franchise fee: Sorry. It is a big deal. It saves a typical homeowner $143 per year.
6. Re. local control: Not an exageration at all. Decisions are made by a citizen board and approved by an elected city council (not a bit like corporate America). And as noted above, large purchase power contracts must go to the voters (along with all bonded debt for system upgrades).
7. Re. rates: I guess you missed the part about BED having already absorbed the costs of replacing older (cheaper) contracts while GMP & CVPS have yet to do so. Rates change all the time. BED was lower, now it's a bit higher. Soon the others will go up. Either way, if you don't think not having to pay shareholders helps the bottom line then there's no hope.

Public ownership does not cost more. Average bills are much lower in Burlington. But the beauty is that we can decide if we want to spend a little more in order to achieve certain shared goals.

Most people prefer to participate in significant decisions about the future. But if you prefer letting large corporations make decisions for, then knock yourself out.