"Oops, I did it again." --- Britney Spears
MOVING $$ AROUND: A FINANCIAL SHELL GAME AT CITY HALL
How do you go $1M (and counting) over budget on a project you don't even have permission to build? Well, you can count on the city of Aspen to find a way! In 2007, misled voters approved a bond measure that provided $5.5M for constructing and equipping a new hydroelectric facility on Castle Creek. Fooled by the "green" promise of our local bureaucrats (yes, our boy Mick), voters ignored or didn't even ask about the costs vs benefits of the project, the fact that the plant will only operate a couple of months a year, and the property tax increases if (more like when) the electric utility revenues generated are insufficient to service the debt, not to mention the heinous environmental damage that could be caused to the stream's health and riparian habitat by significant reductions in water levels. (Since they don't yet have a federal permit to build a hydro plant, they are burning though money on a drain line, the purchase of a custom turbine and a new "Energy Center" which will do nothing more than to serve as an edifice to city council's misguided aspiration of environmental immortality.)
Now it seems the "budget" has been increased to at least $8.3M because they've gone $1M over. But wait. Was what the $5.5M for? And how'd it get to $7.3M? Why do they need another $1M? Who is the mathematician here? Must be incompetent and lazy city manager Steve Barwick! These numbers are an insult to taxpaying citizens of Aspen. First of all, the $8.3M has already been allocated! And the water department insists that these figures aren't even close to being final, there are more expenses to come! So that's not a budget! JUST WHAT IS THE BUDGET? Does this sound like another Burlingame? It sure does to me! At press time, despite NUMEROUS requests of both the water department and the finance office, no comprehensive BUDGET has been made available. My guess is that's because there isn't one. They continue to move money from this fund to that, muddying the waters in order to prevent citizens from ever discovering the true costs of this latest boondoggle!
WHAT IS THE MUNICIPAL WATER FUND AND HOW MUCH IS IN IT?
In a May 3, 2011, email, the city finance director told The Red Ant that nearly $1M "was transferred from the water fund" to pay for some of the excess expenses from the fraudulent and unnecessary "emergency drainage line" the city built from Thomas Reservoir in an attempt to trick the feds into issuing a "conduit exemption" that would enable the city to bypass environmental studies and sneak by without federal oversight. Interestingly, the water department officially asked city council for this extra $1M on May 31, exactly 4 weeks AFTER the money had already been transferred! Barwick! What kind of organization is this fool running?
Still claiming that the fraudulent conduit line was constructed for "emergency" purposes, city officials feel that the Water Fund (and therefore the residents who pay into it) should pay for this alleged "necessity" above and beyond the revenues provided by the bonds (and inevitable property tax increases)! And the budget hawks on council think it's just a-ok to fund some of the ongoing overages with money from OUR water fund. Really?
In a written response on June 23, 2011, city utilities director Dave Hornbacher, who declined to meet with The Red Ant, had his predecessor Phil Overeynder write of the municipal water fund:
"The Water Fund was established by the finance department, I assume, to properly account for revenues generated by and expenses of the City's water department. Again, I assume that the Fund was established to segregate such revenues and expenses from the City's General Fund and other operating funds. Since the 'operation and control' of the City's water system and Water Department fall under the direction of the City Manager, it is his call as to what type of expenses are 'legal uses' of water funds."
Sources of funding of the Water Fund include: applications for utility service, utility investment charges, utility hook-up charges, monthly fees for metered/unmetered water service, late payment charges, investment and hook-up charges for snowmaking services, violations and sancitions, etc.
As of May 31, 2011, the municipal Water Fund had a cash balance of $9.4M. (Cash balance or cash cow? You decide.)
BARWICK'S ATTEMPT AT .... (WHO KNOWS WHAT HE'S DOING)
It would be funny if it weren't so pathetic. Steve Barwick, CEO of the city and czar of the Water Fund, has yet to pull the city's draft application for a "conduit exemption" from the feds, despite being directed to do so by council in April. Instead, he wants national organizations and other outside groups to put their support of the City's change of course from a "conduit expemption" to a "small project license" in writing. As if. Just because someone doesn't support the city's original plan (to defraud the feds) doesn't mean they will blindly support the city's next move! Simply preposterous. Make the change Barwick! Council voted and told you to! All this delay does is increase the timeframe needed for the new application, delay the mandated environmental studies, and of course, add to the costs.
THE "8%" NUMBER
Famous for its major capital project "brochure errors" (remember Burlingame?), the city issued a $3000, 4-page propaganda insert in the June 14, 2011, issue of The Aspen Times that stated, "Right now, the City's utilities are already 75% renewable and the hydro plant would boost this number by 8%, resulting in 83% of the City's utilities providing clean energy and reducing the City's reliance on coal as well as reducing emissions." Yes, it's poorly written and confusing, but there's that 8% number. Skeptics question whether the "8%" is consumption by the entire community or just by the city government itself. City communications director Mitzi Rapkin assures The Red Ant it is the entire community's usage that is impacted. I darned well hope so, but when the city states, "The Castle Creek Energy Center can provide back-up power for the City in times of emergency by acting as a sole power source for some municipal buildings that could act as shelters," it certainly makes one wonder.... Here are the two scenarios:
The elephant in the room: Is "8%" the maximum amount of power the hydro plant can generate? Is this projection based on the hydro plant operating full-time or just a couple months of the year? And what if the feds require more water to remain in the stream than what the city likely based the 8% projection on? Sounds to me like 8% is aspirational at best!
ASPEN: DOING IT MICK'S WAY VS. THE RIGHT WAY
In a June 24 phone interview with Matt Rice, director of American Rivers, I learned a great deal about Aspen's hydro plant as it relates to what's going on nationally. In short, there are very few new "conventional" hydro plants (like ours) being built these days, however, there are many municipalities pursuing hydro power on existing dams, etc.
The difference is that inherent to the design of Aspen's new hydro plant, water will be diverted and the streams will be de-watered as a matter of course. You just don't see this being done much these days because the environmental impacts most often far outweigh the power benefits. It's very rare for it to work out otherwise. Notably and ironically, Colorado is a great example of a state that is creating incentives for what's called "conduit hydropower" (not to be confused with Aspen's fraudulent attempt at a "conduit exemption"), which promotes the use of existing diversions and conveyance systems. This form of hydropower has NO ENVIRONMENTAL IMPACT, and American Rivers is seeing a lot of "conduit hydropower" projects here. In fact, the State of Colorado and FERC are actually working together to streamline the process for these installations.
Rice concluded with a reminder that "small" as in "small project license" refers to the amount of power generated, not the size of the environmental impact (which can be just as big as that of a large hydro project).
THE HYDRO FORUM: QUICK RECAP
Here are the links from GrassRoots TV to the first, second and third sections of the June 16 Hydro Forum. For a very brief overview, watch the "second" section (link above) and fast-forward ahead to 10:32, local water attorney Paul Noto's successful de-bunking of mayor Mick's crazy "the front range is gonna steal our water if we don't build a hydro plant" rhetoric. (Click "watch now" and enlarge your screen. To fast-forward, press and hold down the double arrows pointing right.) Noto's intelligent overview of the water rights specifically on Castle Creek is extraordinarily informative, with even the city's water attorney agreeing.
But don't miss the "third" section! Fast forward to 21:00 to see mayor Mick in all his defensive nastiness. On a panel among national experts, our boy behaved like a petulant teenager. Don't take my word for it. See for yourself.
WHY NOT SOLAR, FOR EXAMPLE?
Never mind the economies of scale associated with this low-cost, low-impact means of clean energy. Never mind the scale-ability of solar farms. Never mind that property values just a few miles from Aspen are currently affordable and solar panels there generate a third more energy than Aspen panels because of the better weather west of Snowmass Canyon. Never mind the US Dept of Energy offers consumer tax credits from the American Recovery and Reinvestment Act of 2009 called "Residential Renewable Energy Tax Credits" that enable consumers who install solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, and residential fuel cell and microturbine systems to receive a 30% tax credit (with no upper limit; principal residences AND second homes qualify) for systems placed in service before December 31, 2016. And never mind that entrepeneurs from the Carbondale-based Clean Energy Collective that has solar farms in El Jebel and in Rifle presented a proposal to council in April called "community solar," a concept where multiple homeowners pay into large solar arrays that are professionally maintained and situated in places with maximum sun exposure, thereby enabling large energy consumers to mitigate their energy use through this already-existing local source of clean energy. Shouldn't THESE ideas be what we SHOULD AT LEAST BE considering? But no.
Mayor Mick simply didn't like the "community solar" idea one itty little bit because the energy would not be coming from Aspen itself. He said in an interview with the Aspen Daily News, "It's troubling to send a message that, as an energy-hogging homeowner, you can cut a check and outsource your mitigation requirements to Carbondale." For Mick, it's really not about the environment at all. It's punitive. It's always punitive! Does that really surprise you?? And of course it's all about his resume. He wants home-grown energy. Down Valley energy, regardless of the economics or environmental wisdom or any other potential win-wins, is just not home-grown enough for Mick.
MY HYDRO GOAL
I'm putting it in writing right here, right now. We need to stop this hydro fiasco in its tracks TODAY. The charade is up. Had nobody been looking, the city might have gotten away with it. But instead, the eyes of the Castle Creek neighbors, local environmentalists, national organizations and The Red Ant are all over this mess, and what a mess it is. Costs are approaching $10M today, and at this rate could easily DOUBLE. The city hasn't even started its new course toward a "small project license," and none of this includes the costs of the environmental impact studies that will be required. The $5.5M in bond funds were issued in early 2008. There's nearly $400,000 in debt service every year for this project alone, and that began in 2009. It is next to impossible to get a straight answer from the city on where the money to pay the debt is coming from! They're spending and spending because Mick tells them to. IT MUST STOP.
Now is the time for this community to come together to enact a "stop work" order and/or get a legal injunction in place until a) the environmental impact studies are completed and the results discussed throughout the community, b) an external and independent financial audit is conducted to determine the financial feasibility of this hydro plant and is shared in its entirety with the community, and c) the costs/benefits of the proposed hydro plant are compared and contrasted with several other forms of clean energy. (Another option is, of course, to cut our horrendous losses and walk away. Remember, the city does not yet have permission to build this thing. How much are we willing to spend and potentially waste if the final answer is a big fat NO?)
The city doesn't like citizen feedback. It never has. Mick has never let the facts get in the way of another resume-building endeavor built with public funds. And just because there's no budget is no reason for him to slow down. But this time it's different.
The financial picture will soon become abundantly clear. It's bad, folks. Really bad. Put it this way, power generated from Castle Creek is going to be so expensive it will cost the city far more to generate than they will be able to charge for it. Stay tuned!
"It's the only accounting system they are comfortable with, as it's the only accounting system they know how to use. The ends justify the means. The hydro plant is green and therefore good, and so it doesn't matter what it costs because it's politically correct and therefore priceless.
They have committed to the plant, and they never back down once they've made a commitment. This is a crew that never gives an inch, never admits error, and never waivers from their dogma that green is good and money is evil. And what is money? It's not something they earn. Rather, it's something they take from other people, especially rich people who can't vote here; their voting base lives in deed restricted housing and so is largely protected from taxes.
And so they will keep feeding the plant, if for no other reason than if they don't feed the plant it will die and they've invested so much already in feeding the plant that what's a few more million of other people's money? What's important here isn't the money, it's the plant. And so the plant screams: FEED ME!!!" --- An Angry Red Ant Reader