ISSUE # 72: From My vANTage Point

INEPTOCRACY (in-ep-toc'-ra-cy): A system of government where the least capable to lead are elected by the least capable of achieving, and where the members of society least likely to succeed or even to sustain themselves are abundantly rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

 CARBON MONOXIDE IS POISON

I've had the Aspen Volunteer Fire Department (A.V.F.D.) on my mind a lot over the past few days. Yes, I do enjoy a regular coffee at Peach's, next door to the fire station, but it's more than just checking out the awesome fire equipment. It's Thanksgiving season, and this one marks 3 years since the carbon monoxide poisoning deaths of my dear friends the Lofgren family, who died tragically at a rental house in Aspen that they acquired at a school auction. This sad anniversary was exacerbated this year by the Thanksgiving Day suicide of local restaurateur Scott DeGraff, a married father of 2, who chose carbon monoxide as his means of escape from life's troubles. Many of the same firemen who were first-responders to the Lofgren tragedy also went out on the DeGraff call.

Our fire department is comprised of community volunteers. That's why it's called the Aspen VOLUNTEER Fire Department.

PLEASE be sure that you have carbon monoxide detectors in your home. No more senseless and preventable carbon monoxide-related tragedies for our fire department or our community, please.

Lofgren update: The criminal cases in the Lofgren matter were recently dismissed. Yep, thrown out. The judge (Judge Boyd) ruled that the statute of limitations on the charges had expired. A former city of Aspen building inspector and the owner of a Glenwood Springs-based plumbing and heating company walked, just weeks before they were scheduled for jury trials on four counts each of criminally negligent homicide. The city/county argument? Implementation of a building code is voluntary and shields the inspector from any civil or criminal liability. Swell, then why have an inspector?? A civil case remains. And don't forget, as a community, we paid the $250K+ in defense bills for the former building inspector with public funds.

As a result, there are still so many unanswered questions related to the Lofgren tragedy:

• Why was this home so lethal?
• Why was there no carbon monoxide detector as required by law?
• Why did this home have a certificate of occupancy?
• Who is responsible for their deaths?

And most notably, with no criminal trials, there will be no insight obtained as to what actually happened. The friends and family of Caroline, Parker, Owen and Sophie will never hear the evidence that the grand jury heard; evidence that compelled them to issue indictments. There were countless failures that led to this tragedy. By dismissing the cases, the judge, and we, as a community, have again failed the Lofgrens. Carbon monoxide detectors save lives. Get yours today. And give one to a friend.

(Side note: Judge Boyd is the same judge who dismissed Marilyn Marks' lawsuit against the city for refusing to disclose the anonymous voted ballots from the 2009 municipal election. His dismissal was recently slapped down when the Appellate court overturned his decision unanimously, 3-0.) 

HYDRO PLANT: THE ECONOMIC BASICS

I recently got so fed up with the ineptitude of those on city council who regularly continue to blindly grant more and more funding (today we're up to $9.5M on the $6.3M project, and FAR from finished) for the ill-conceived Hydro Plant and Castle Creek Energy Center that I did a top-line economic analysis of the project. When both papers refused to run my essay as a Guest Opinion (lest they give me any credibility), it was likely because the piece blew several enormous holes in the B.S. the city has been peddling in defense of this misguided endeavor. So, The Red Ant purchased a full-page ad in the paper and ran it anyway over Thanksgiving weekend. HERE it is: 

ASPEN'S WATER-GATE: THE HYDRO PLANT DEMONSTRATES HUBRIS WITHOUT PARALLEL

Aspen's exclusively political program of environmental hubris, funded by the bottomless pit of its underrepresented tax base and fueled by the misleading 2007 ballot measure promising clean energy at a construction cost of $6.3 million, is finally facing its Waterloo. If built, the Castle Creek Energy Center will for decades be defined as Aspen's "environmental loss leader," costing millions more to build and operate than it can recover in energy revenue over the next half century. Here are three important numbers:

• 2.83 cents: The 2010 actual direct cost per kilowatt hour (kwh) to generate 16.8 million kwh of hydropower from the City's two existing hydro facilities at Reudi Reservoir and Maroon Creek.
• 9.47 cents: The estimated direct cost per kwh to generate 5.6 million kwh (8% of the City's 2010 total energy load of 69 million kwh) of hydropower annually from Castle Creek. That's more than three times the 2010 actual cost.
• $1.9 million: The resulting - very, very conservatively estimated - loss in current year dollars of operating Castle Creek over the coming half century.

The City currently pays just 4.6 cents (plus a small charge for transmission services) per kwh for wind energy purchased from its primary energy provider, the Municipal Energy Agency of Nebraska (MEAN). That's less than half of Castle Creek's projected cost. Why does the City insist on passing such costs along to its customers when far less costly yet still "renewable energy" options exist?

Because destiny trumps environmental stewardship, Aspen's leadership seeks not just political credit but political immortality. A permanent edifice to their wisdom, like a marble statue of a Greek tragedy, the Castle Creek Energy Center is their end goal. And when seeking immortality, cost becomes secondary when it's somebody else's money. Their arrogance enables the over-estimation of their own competence, resulting in tragically poor decisions despite overwhelming facts and recommendations to proceed differently; the very definition of hubris.

For those with the stomach for it, here are the underlying details, derived directly from information provided by the City through numerous Colorado Open Records Act requests. The most recently disclosed Castle Creek Energy Center construction budget, which includes a new 1.175 megawatt hydro plant, is $9.5 million. A 50% increase over the original budget, it is sure to increase, but $9.5 million provides a conservative starting point for this analysis.

Cost of Capital

Capital always comes at a price. Assigning a conservative 3% cost of capital and a 50-year life expectancy to this $9.5 million "investment," the resulting 6.64 cents per kwh cost of capital alone is over twice the total cost of power generation from the debt-free Reudi and Maroon Creek hydro facilities.

Operations

Let's conservatively assume the cost per kwh to operate Castle Creek will be the same as Reudi and Maroon Creek. The combined cost of capital and operations (6.64 + 2.83) brings the estimated direct cost for Castle Creek to 9.47 cents per kwh.

Loss Leader

At 9.47 cents per kwh, power from the Castle Creek hydro plant is so expensive it would cost more to generate than the City could charge under its 2010 rate structure. Specifically, Castle Creek power will be 43% and 12.7% more expensive than the City's 2010 residential and commercial base energy rates of 6.6 and 8.4 cents, respectively. This translates to an estimated loss of $38,000 per year, or $1.9 million in red ink over 50 years. And those are just the conservatively estimated direct costs of a facility designed to provide only 8% of the City's power load. This analysis does not reflect the very real additional costs of overhead and administration.

The financial shock from this new cost center has already resulted in rate increases for local residents and businesses. Earlier this year, city council increased electric rates an average of 16% over the next four years (for a residential customer using 1,350 kwh per month). The first phase of this increase became effective November 1, and future annual increases through 2015 have already been approved. Without this pricier new rate structure, the annual losses for the hydro plant would be an order of magnitude greater. Even with these rate increases, however, the hydro plant will still operate at a loss for its entire lifetime.

Not only will the Castle Creek Energy Center be a loss-leader for the City, it will be the most expensive source of power in the City's energy portfolio. Combining Castle Creek's cost with that of Reudi and Maroon Creek, and conservatively assuming the new hydro plant will run at full capacity, the "blended" cost for all City of Aspen hydro power generation will increase 58%, from 2.83 to 4.48 cents per kwh. In reality, however, this 4.48 cents per kwh rate will likely be much higher because Castle Creek will not initially and may never run at full capacity to produce the promised 8% of total power generation.

In Aspen's council chambers, political hubris reigns. City leaders seek the credit while we pay the ever-increasing costs and on-going subsidies. With cheaper and more environmentally friendly options at their fingertips, City leaders aspire to an expensive and ill-conceived "clean green" destiny despite the fundamental flaws in their plans. Why? Political credit outweighs public benefit. Ambition trumps principles. Immortality overshadows environmentalism. And political destiny, no matter how misguided, is worth more than any amount of other people's money necessary for its attainment.

STOP THE HYDRO PLANT TODAY! NO MORE SPENDING UNTIL THE LEGAL CHALLENGES ARE RESOLVED AND THE ENVIRONMENTAL IMPACTS ARE KNOWN!

Immediately after this ad ran, council quickly postponed its impending meeting on rezoning a city-owned parcel of land along Castle Creek upon which the city intends to build the Castle Creek Energy Center from "residential" to "industrial use."  Council will now have a work session on December 12 to discuss "economics" and "water quality" issues pertaining to the Hydro Plant and Energy Center and will follow up on the rezoning issue in January. Of note, it appears that the city is now attempting to seperate one project (Hydro) from the other (Energy Center). I see this as positive indication that the city is fearful that its $9.5M investment in the Hydro Plant infrastructure (built prior to having a permit and with a current lawsuit challenging the water rights to even build one) is in serious jeopardy. But, while the Hydro Plant may get tied up, the rezoning of this specific parcel (amidst a residential neighborhood) for an undisclosed "industrial use" stands to proceed. If I had to speculate on what's going on, I'd guess this t.b.d. "industrial use" could at some point in the future be so intrusive to the neighborhood that the neighbors might regret not allowing a hydro plant there. How's that for vengeance? These guys are bad. Really bad.

**And a big THANK YOU to readers of The Red Ant who generously contributed to this impactful "strategic communication" (advertising) effort. I'd like to run the ad again. If you are interested in helping with the cost, please "reply" to this email.     

BALLOT BROU-HA-HA: THE CONDENSED VERSION

The legal fight continues with the city's recent appeal to the Colorado Supreme Court. It's really simple: the city attorneys argue that public disclosure of voted ballots will cause public harm because (in Aspen) ballots may not be anonymous, therefore they must remain secret, where only election officials and city staff can see them and know how people voted. Now remember, by law, if the city doesn't conduct an election that ensures anonymous untraceable ballots, that election is unconstitutional. Period. And an unconstitutional election can be nullified by the courts, even years after the election.  (Get the picture why city council might be a little worried about exposing the ballots?) Like I said, it's simple. Somehow, the city geniuses (this includes city council) feel that Aspen is special and our ballots SHOULD be traceable to the voter and available only to "insiders," therefore they cannot be made public and must be kept secret. The legal update: Marilyn's original case against the city (to disclose the 2009 ballots) was dismissed in bureaucracy-friendly district court (the case was deemed not worthy of being heard), but when she appealed to the State Appellate Court, surprise, they came down 3-0  strongly and clearly in her favor. The city is ignoring the appellate ruling while it appeals, likely risking hundreds of thousands of taxpayer dollars to keep whatever it was they did to those 2009 ballots in the dark. For now. THE PATTERN OF SECRECY LIVES ON I looked back at an earlier issue (#48) of The Red Ant that focused on "Secrecy at City Hall," the subject of a speech I made at a September 2010 Aspen Business Luncheon. It's frightening how little has changed. The city's legal obsession with "secret" vs "anonymous" ballots fits right in, underneath the big "secret" umbrella. I hate to pull a "Danforth" (the owner of the Aspen Daily News who regularly recycles old columns instead of writing new ones), but I thought the following excerpt from the Business Luncheon speech was worth running again amidst the latest goings-on: "I'm here today to talk for a few minutes about what I see as the "Culture of Secrecy" at Aspen's City Hall. In general, when I use the term "city hall," I am referring to city council, city attorneys John Worcester and Jim True, and city manager Steve Barwick. Now, it's no secret that I was appointed to be an Election Commissioner in 2009, just prior to the now infamous IRV election. In short, here's how it went ---- The public voted in 2007 to use Instant Run-off Voting in our elections. That there were multiple methodologies of the controversial vote-counting scheme was kept secret from the voters. The "rules" for Aspen's vote count were determined mostly in secret meetings of city staff, the city attorneys and the incumbents running for office -- Mick and Jack. Among other problems, as an election commissioner I witnessed messed up pre-election software testing. In one case, the candidate with lowest number of votes came out as the winner, while the candidate with the highest number of votes became the loser. Reminds me of the biblical reference "the first shall be last and the last shall be first."   ---- But I digress..... This precipitated some late-night last-minute software changes in the wee hours before the election. City attorney Jim True tested this software alone, in secret, in his office. And after the election, when the city's election contractor discovered a vote tabulation error, the city kept this secret until the deadline for a recount had passed. But when the election commissioners began to ask questions, we were swiftly "disappeared." Before I left ---- one big secret had been revealed: the city knows how you voted. It's been proven. Your constitutional right to an anonymous ballot has been violated, and this was likely not the first time. Now the city calls that election "the most transparent" in history. WRONG. It's all a big secret. It comes down to this fundamental question: Why won't the city show the same ballot images that they showed on television screens the night of the election? What are they hiding? It will be extremely difficult for the current election commission to make the changes that the city attorneys and city council don't want made. But laws were broken, and we must demand that integrity and honesty be returned to our local elections. That's no secret." Scary, huh? As true today as it was 15 months ago. THE "YOU CAN'T MAKE IT UP" FILE Remember the city's messy and loud $200K geo-thermal drilling experiment (See Issue #67)? A friend of The Red Ant informs me that "not only have they not hit ANY water, hot or cold, the city has asked them to drill down to 1500 feet. We were told that the contract was for 1000 feet. And they are to be finished by December 1. I hate to bitch, but .... Oh yeah, it's our city. Gotta trust them, right? You should know!" .... Like I said, you can't make this stuff up!! AND ONE MORE ADDITION TO THE "FILE" Check out this official agenda from the city clerk's office for the recent Election Commission meeting on November 29. Yes, you are seeing it right. I received an email the morning of November 29 with the following message: "Damn. We missed the meeting. It was at 1am. (City clerk) Kathryn Koch confirmed last night that it was at 1pm. In the dark of night is where city council does its business." Now at least we have the answer to all of the "darkness" that pervades local governance.