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Councilman confident home foreclosure will be headed off | Lubbock Online | Lubbock Avalanche-Journal.

Ever the victim, Councilman Hernandez hopes to stay in his 4,100 square foot $326,500 home. Most people sell their home and move into a smaller one when they can’t pay for it. But Councilman Hernandez isn’t most people.

City Council Punts on LP&L

imageNEWS & COMMENTARY: “The world would wonder if it knew with how little wit government conducts its affairs.” I can’t remember who said that so I’ll attribute it to The Whirlwind. It’s his kind of humor. And that’s our impression of the Lubbock City Council meeting Tuesday evening. It was little more than a three hour news conference with not much accomplished but posturing.

The Lubbock City Council, eager for political capital, couldn’t wait 48 hours for the EUB to meet and make recommendations. It had to speak first even if it said nothing at all.

Tuesday’s Lubbock City Council meeting began with Council members interrogating random Lubbock Power & Light employees while Electric Utility Board members sat in forced silence like shamed children whose comrades were being called to testify as to the truthfulness of their actions. It fell to the LP&L employee who was brave (or naive) enough to stand first and answer questions. The crowd was modest and consisted mostly of the usual suspects. Most Lubbock citizens understand that fuel costs have risen and electricity costs will rise correspondingly.

What is suspicious is that LP&L CEO Gary Zheng was not the first LP&L representative to speak, nor second, third, four or fifth. In fact, Zheng never spoke at all. Instead Zheng allowed employees and a consultant to take the bullets intended for him. He dealt employees like cards throwing them under the Council bus one by one while he stayed glued to his seat except to whisper in the ears of his sacrificial lambs. His performance by quiescence was ignominious. His absence at the podium served to highlight his failure to lead.
Council’s berating of employees and consultant instead of CEO Zheng was embarrassing, to say the least. Ever understated in our opinion, we’ll not describe the lack of courage it suggested or the C-word that comes to mind.

And while we’re noting absentee performances, let’s give dishonorable mention to LP&L EUB Chairman Gail Kring who said not a word while watching four employees and one consultant pummeled by Council. Wouldn’t you love to work for him? We’ll not characterize his behavior as cowardly, oops there goes the C-word, since he refused to speak. Rather we’ll call it completely devoid of leadership and moral fortitude.

LP&L attempted to gain control of the meeting by putting up a consultant who hypnotized the audience with numbers and terms like PPRF’s, FYE’s and kWh’s with models demonstrating how the rate increase worked as intended. Demand charge, energy charge, fuel charge and Council BS at no-charge. We came away convinced this is a complex issue and wondering how much it costs to keep a high-powered consultant in town for three days. More than the Chairman and Vice-Chairman are worth as board members we’d wager.

Probably the most honest statement of the night came from the Reverend Pastor Councilman Jim Gerlt when he said, “I had no clue.” We know that supposedly God is on the Reverend Pastor’s side in a special way, but God was on the side of Balaam’s donkey too yet that didn’t keep Peter from calling it a “dumb ass” (2 Peter 2:16 KJV). Where is Paul Beane when you need him? He was often an ass, but never a clueless one.

Eventually, Mayor Glen Robertson could hold back no longer interrupting the consultant with a well-rehearsed “mad speech”. Robertson has consistently accused staff of deceit. Most likely he just doesn’t understand. “It’s an absolute lie” he said of one statement by Councilman Hernandez. We pause here to observe that in West Texas to call a man a liar is a good way to get your donkey kicked.

Speaking of the Councilman-in-Jeopardy, the most constructive questions and statements came from Councilman Hernandez. We’ve been hard on Victor, but Tuesday night he shone with his intellect and insights. He understands the complex rate and billing issues and, with the skill of an attorney who has a client on the stand, he walked the consultant through the process with questions that enlightened those of us who didn’t yet get it. “Unfortunately this thing didn’t build up overnight. It took four years of rate increases [denied]” said Councilman Hernandez.

“Rate changes should be small, routine and uneventful” was the LP&L consultant’s conclusion which concurs with what the Sandstorm Scholar has opined earlier this week.

That this is not as simple an issue as Council would like us to believe is confirmed by the fact that the Council could not pass any resolution, including one to repeal the rate hike which failed 5-2 with Mayor Robertson and Councilwoman Gibson voting to repeal the hike and further in-debt your utility.

Yes, in the final analysis and after all of the big talk the city council punted. That’s a good thing. Now it’s back in the hands of the Electric Utility Board where it belongs. The EUB ought to immediately demand the resignation of its officers and fire CEO Gary Zheng and start anew. Citizens want political blood. Give it to them and they’ll be satisfied.

However, show them a lackluster performance like we saw Tuesday night and it’s your blood people will be clamoring for.


What’s Next For LP&L: Run It Like A Business (Part 2 of 2)

LubbockPowerandLightLubbock Power and Light, the city’s municipally owned utility, isn’t broken but it is badly in need of a resetting of roles. The first thing it needs is better leadership. Council loves to play hockey and LP&L is the puck. The mayor controls the puck and is racing for the net hoping for an easy goal. We really can’t blame the mayor, it may be his only chance of scoring between now and the election. If he can’t lead his Council perhaps he can be the first to score on LP&L.

But the rhetoric is all sideshow and it doesn’t contribute to solutions. With stronger leadership in place the next thing LP&L requires is to be run like a business whose ratepayers (customers) stand in place of stockholders. Virtually every problem with LP&L in the last decade can be traced to City Council mismanagement. Poor appointments to the Electric Utility Board, robbing LP&L coffers for pet projects and failure to act to prevent lowering of its credit rating are all directly attributable to Council irresponsibility.

Because LP&L only services about 85% of Lubbock’s electrical users it should not subsidize city projects nor should taxpayers underwrite LP&L rates. They are two different subsets of our city.

There are fees paid by LP&L to the city of Lubbock that are justifiable. As with any other utility (AT&T, Suddenlink, South Plains Electric Coop, Xcel, Atmos Energy, et al) LP&L pays a franchise fee to the city. It also makes a payment in lieu of the property taxes which other businesses pay called a PILOT. Those two items keep things strictly business. Every utility competes on a level playing field.

But recent Councils have also required that LP&L provide electricity, maintenance and operation costs for street lights. There’s no rhyme or reason for that; it’s merely a backdoor way to grab money from the utility. This ought to stop permanently. AT&T stockholders aren’t asked to provide free phone service. Atmos doesn’t provide natural gas subsidized by its ratepayers. LP&L customers ought not subsidize street lights with higher rates. It’s not equitable. Step one in running the utility like a business is to stop underwriting city of Lubbock street lighting.

Here is the impact of the street lighting expense: 85% (the ratepayers of LP&L) of citizens underwrite street lighting costs estimated at $3 million for 100% of Lubbock. This factors out (round numbers here) to about $30 per customer per year extra to pay for city of Lubbock street lights. Council ought to balance its own budget up front and transparently, not on the backs of LP&L ratepayers.

Moody’s has placed LP&L on a negative outlook. That’s bond rating jargon for their credit score is going down. This downgraded bond rating is more Council’s fault than management and the EUB. The City Council has denied four rate hikes choosing instead to force LP&L sell power for less than it costs. Putting off needed rate hikes to offset fuel costs are the number one reason for the July billing shock.

What’s the difference between running LP&L like a business and using it as a hockey puck? In 2011, when he was a businessman on the LP&L Electric Utility Board Glen Robertson said LP&L rates needed to go up. He was right. Less than a year later, as a politician on the City Council, he became resistant to the idea and LP&L began losing money and the subsequent rate hike caused this political firestorm. Poor planning on the part of the Council. Council needs to step-up and approve rate hikes as they are needed rather than postponing consumer pain for Council political gain.

Lubbockites who have been under-billed in June are being offered the best possible solution. Making up less than one month’s payment over several is a bargain. And remember, no one is paying for LP&L’s mistake. They are paying their electric bill. This is a no whining zone. Electric bills are up for everyone across the state. If yours is higher than some areas in the state it is because Council waited too long to make needed changes. But taxpayer subsidy should be out of the question.

LP&L problems aren’t terminal. The public cannot allow these issues to be Council’s chance to divert our attention from its own inability to function. These problems are directly attributable to the Lubbock City Council. Council needs to appoint strong EUB members, stop the back door robbing of LP&L, approve rate hikes when justified and then get out of the way. If you can’t relocate a library after a year of pontificating you have no business trying to micromanage the electric utility.

What’s Next For LP&L: Better Leadership (Part 1 of 2)

Lubbock’s city owned utility has hit some rough spots. It’s not broken, but it’s much like LP&L’s infamous Massengale cooling tower: still standing but flawed and at risk of structural failure. The question becomes whether we tear it down or reinforce it with better management.

Last Friday (July 26) LP&L Electric Utility Board Chairman Gail Kring and Vice-Chairman Emilio Abeyta held what has been described as a “hastily …called news conference” to announce they have no answers to recent problems but they’re sorry. This is the utility’s second news conference in a week. Coming at the heels of LP&L CEO Gary Zheng’s dismal apologetic performance the previous Friday we can only assume that this second one was to convince us that they’re not just sorry but now they are really sorry.

That’s a relief. Two successive pressers in which we learn almost nothing we didn’t already know. But not quite nothing. The Chairman and Vice-Chairman, acting Friday unilaterally and independent of their Electric Utility Board (EUB), have shown us the two other players in LP&L’s terrible triumvirate. Like Zheng, neither gave an accounting of when they knew of the billing glitch. They are part of the weak management dilemma and, like Zheng, they ought to go.

Zheng should go because he has proven he hasn’t the ability to communicate with and lead a team successfully. The executive committee of the EUB should resign because they still haven’t answered key questions about events that happened six weeks ago. Kring’s statements were sprinkled with inaccuracies and “we don’t know for sure” type statements. It’s not personal, it’s just business. This is step one in better leadership: Say good-bye to the ruling trio.

The City Council has a responsibility here. Better leadership demands quality appointees. This is step two. As a city we must excise our fear of strong business people on the EUB. The last obnoxious rich appointee who couldn’t be elected dog catcher rescued LP&L from the brink of disaster and oversaw a financial turnaround from a $35 million deficit to a $100 million surplus. This isn’t the place for class favorites, political tokens or corporate bureaucrats. This is a job for people who have successfully risked their own capital and who understand how to manage large budgets.

And finally, let’s put to rest once and for all the delusion that LP&L management ought to be brought under City Council control. Friday’s hastily called news conference was apparently held in concert with Councilman Victor Hernandez who released his own 1,000+ word recap and remedy. This City Council has proven it can’t operate a dog pound or relocate a library. How are we to think it is capable of ignoring populist pressures necessary to efficiently and profitably manage an electric utility? If you think it can you ought to move to Colorado where at least that stuff you’ve been smoking is legal.

Strong business leaders who are invested in Lubbock will help make a better LP&L. But that’s not enough. Next we will look at how to run it like a business.

House Vote 412: NSA Surveillance Program

randy_neugebauerCongressman Randy Neugebauer joined Republican Speaker John Boehner and Democratic leader Nancy Pelosi with a Yea vote for continuing NSA surveillance of U.S. citizens. The program survived on a vote of 217-205. An unusual combination of 94 liberty-minded Republicans and 111 liberal Democrats joined forces to oppose the program.

Neugebauer assured KFYO listeners:

I think one of the things that has been frustrating about this issue is the amount of misinformation that’s kind of floating around out there…I’ve had unclassified briefings and I’ve also had classified briefings and I have not heard anything at this point in time, but I’m certainly watching this issue, that leads me to believe that the individual liberties and freedoms of American citizens are being violated by this particular program.

There’s no need to fear. Randy is ever vigilant in guarding your civil liberties.

What Did They Know & When Did They Know It?

lpl_logoThese are treacherous times for Lubbock Power and Light, our city owned electric company. Treacherous because we do stupid things when we’re angry and drunk on the liquor of our own righteous indignation. And we have a right to be angry. 44,000 of us were under-billed in June. LP&L says the loss is approximately $3.2 million. But, to correct something that we reported earlier, no recapture, i.e., no reconciled billing of those customers who were under-billed, was made in July so the loss stands.

LP&L made a software change and several rate changes at once and in the process 10 of 22 June billing cycles had mistakes. So far so good. It proves that fallible people work at LP&L. Staff discovered the glitch by June 15 and corrected it for the remaining twelve June billing cycles. Stuff happens. If that were all we’d say, get over it Lubbock. But that’s not all.

A footnote here to emphasize the importance of timeline. We were trained by the best: a woman who held command over Presidents. She instilled in her political progeny the principles of good government and she was impossible to ignore. “It’s not the mistakes you make that will ruin you,” she’d tell us, “It’s always the cover-up that will bring you down.” And that’s where LP&L management made the error that demands changes.

The timeline matters. What did they know and when did they know it?

Friday’s mea culpa by LP&L management was about a month too late. Even if we allow that after staff corrected the mistake on June 15 it took a week, possibly two, to calculate the impact, by July 1 a decision was made to not recapture the loss and it wasn’t made by a software programmer nor the LP&L Board of Directors. It was the decision made by top management to mail July bills hoping that no one would notice the difference and question June’s $3 million gaffe. No apologies or explanations, just a brazen attempt to conceal the snafu by ignoring it. This was a deliberate deceit and it was wrong.

In Saturday’s Lubbock Avalanche-Journal LP&L CEO Gary Zheng is quoted as saying, “it is unlikely customers who were undercharged in the billing error will be asked to pay the difference any time this summer.” To our knowledge Zheng hasn’t the authority to say this on his own accord. The SANDSTORM SCHOLAR has learned that as long as two to three weeks ago more than one customer was told by LP&L customer service that the amounts they were under-billed would not be collected from them.

We have to wonder if that was an arbitrary (therefore unauthorized and illegitimate) decision on Zheng’s part or if he was given permission for that stratagem. If so, then by whom? It couldn’t have been the LP&L Board of Directors because they won’t meet until Monday (tomorrow) to discuss the matter.

Again, the question is the oldest in public scandal: what did they know and when did they know it?

If board members knew about the $3 million snafu and failed to call a meeting to address it then they are parties to a cover-up. When did LP&L Chairman and Vice-Chairman learn about this? Why didn’t they call a utility board meeting to address it? And if they knew, what City Council members, who appoint the utility board, also knew and how long did they hide the truth?

It’s the coverup that brings you down. Undoubtedly the CEO of LP&L must take the fall for this one. It’s not personal, but Gary Zheng must go. The whitewash is inexcusable. But Zheng is not alone. Every board member who was complicit and who did not call for an immediate meeting of the electric utility board ought also to resign their office because they have betrayed the public trust. We cannot tolerate the attempt to conceal a $3 million blunder.

We’ve no doubt that any number of buzzards are circling hoping that reckless statements and LP&L management’s bumbling can devalue it enough for cheap sale and a new privately owned monopoly of our power services. But so long as there is only one power company serving Lubbock citizens it is in our best interests that it be in control of the public, and public control demands that the citizens have answers, not cover-up.

How to Find a City Manager

As the City Council prepares to find a new city manager we have some advice for it: no high powered-headhunters.

Why is that? Budgetary considerations are one factor. The City Council has blown $50,000 in a purported investigation of the city manager and Councilman Victor Hernandez. “Purported,” because we suspect that no investigation of Councilman Hernandez was conducted. Councils don’t willingly investigate their own bad behavior. We’ll know for certain if it releases the report from outside counsel. The Sandstorm Scholar will request a copy.

In addition to that, the City Council has a $250,000+ liability in the form of a contractual severance agreement with the former city manager. It doesn’t matter what you think of severance agreements, that contract is a promise made by the City of Lubbock that it must keep. We expect that it will.

Most important, we have in our community outstanding human resources. Not to be mistaken with Human Resources departments, the City of Lubbock has at its disposal enough qualified business people and former Council members to form a search committee and to make a recommendation to the City Council as to a satisfactory city manager.

Let the City Council appoint a search committee and give it the resources to look for and find a suitable city manager. Let it be someone who can work with a sharply divided Council, someone who wants to live in Lubbock and someone who is a person of excellence with a proven track record. We want no one with question marks hanging over their head from their last job.

Who better to help choose the next city manager than Lubbock citizens with experience in business and government? No New York search firm will produce a better candidate than our own.

At the Sandstorm Scholar we trust Lubbock.


Straining a Gnat

lubbock_city_limitsAttending Council meetings sends me back to my religious roots. “Straining out a gnat and swallowing a camel” is the scripture that comes to mind. To listen to the City Council you would think that annexation of newly developed residential property is a difficult decision.

How difficult is it to decide to annex new developments that provide more in property taxes than they consume? These are subdivisions whose hard services (sewer/septic, water and stre…ets) are paid by the developer. They are people who, because they shop, work and drive in Lubbock indirectly consume considerable city resources today. And they’ve asked to be annexed; it’s voluntary.

If you don’t grow your city you can’t grow its revenues. Lubbock needs approximately 1000 new homes each year. The estimated impact of building just one hundred single family homes in a typical new subdivision is $21.1 million in local income. and $2.2 million in taxes and other revenue for local governments.

Small minds, private agendas and weakened leadership threaten Lubbock’s future. We are dangerously close, some would say we’re already there, to having an anti-growth City Council. One Council member makes it clear that if it isn’t a development in his district he’s against it. Another thinks planned development means that she plans it. A third, who ordinarily never saw a dollar he didn’t want to spend, is suddenly concerned with the cost but is apparently incapable of doing the math. It is absurd for people who have never met a payroll or developed a piece of property to presume to arbitrarily dictate the direction of city growth. To try to stymie that growth verges on malfeasance.

The one motive you can trust and understand is a profit motive. The market will determine where the city should grow. Homebuyers are the best judges of where they want to live and the major factor that drives those decisions is schools, not cities. But if the city does not annex these areas there is no zoning that protects property owners and controls development and there is no revenue benefit to Lubbock which provides indirect services already.

The role of the Council is to facilitate, not manipulate. The decision isn’t whether to offer services. Non-residents proximate to the city limits use Lubbock’s services every time they drive on its streets or play in its parks. The annexation decision is about whether to send them the (property tax) bill.

Annexation is easier if done prior to houses being built. In the past Lubbock City Councils have been aggressive in annexing undeveloped areas and building the basic infrastructure that supports development. This Council is increasingly showing signs of shortsightedness. It threatens our jobs and our tax base.

It does matter who you put on the City Council. A no-growth Council will ensure urban decay and a dying city. Remember this as elections in November and May draw nearer.

Drinking Too Much of His Own Whine

History has a way of auto-romanticizing. It strips itself of the bad smells, obnoxious personality traits and instinctive class distinctions that accompany real life. Today we revere figures like Benjamin Franklin, Patrick Henry, Sam Houston or Winston Churchill, to name but a few, however if we’d lived contemporaneously with them or many of their well-known peers we might have had second thoughts about them. Patrick Henry of “give me liberty or give me death” fame fought ratification of the Constitution because it gave the federal government too much power; Franklin was a womanizer who insisted on bringing up that pesky issue of slavery in the 1790’s when most wanted to leave well enough alone; Houston was a drunk who fought against Texas’ secession and lost the vote 171-6; Winston Churchill, often acceptably inebriated, spent more of his days as a back bencher and reject of the British people than he did its leader. All were highly criticized, themselves critical of others, rejected, fought lost causes, had ugly personality traits and one or most probably were the kind of people many readers would not long countenance in personal association.

Institutions and conventions of today exist only after having been forged by the fires of examination and debate. Great projects often were failures in their inception. The first attempt at the Panama Canal resulted in the era’s largest bankruptcy and its present day usefulness does not argue for the fraud and failure of its initial attempts.

The Lubbock Chamber of Commerce President recently published to the local newspaper a rant that surely must have been written while drinking too much his own whine. We suspect that after he sobered from his self-pitying, back-patting stupor he was sorry he wrote it. It was a drawer-letter if ever we’ve read one. He should have written it, put it in a drawer, and left it there having gratified his need to howl at the moon without the indecency of having committed publicus of equus asinus.

The gist of the Chamber leader’s letter, found below, seems to be resentment that the Chamber’s fantasies are questioned. It seems inconceivable to him that there are good citizens who together imagine Lubbock a place of low taxes that is relatively free from the strings attached to federal funds. At the Sandstorm Scholar we’re impressed with some of the Imagine Lubbock Together plans we’ve been shown, even if we could have written most of the conclusions before they went through the theatrics of an 18 month pep rally. So long as they keep their promises to fund their performing arts center privately and to provide an endowment for its operating expenses, we like the idea. No one has discovered “666” marked on the underside of any smart meter and we had to Google “Delphi Method” to recognize the techniques used in almost every professed consensus building exercise we’ve been involved in.

But neither our impressions nor the tender feelings of the Chamber leader negate the validity of the critics or their right to be heard. A bank doesn’t ask a non-equity employee to sign the promissory note for his employer’s loan. Nor do we ask the guarantee of a hireling that “these folks are looking out for Lubbock’s best interests.” He’s signing notes he hasn’t the credit to back when he presupposes to know what are the best interests of Lubbock or the motives of his employers. Give us the pure capitalism of selfish financial motives any day. Those we can understand and trust. When someone’s business prospers others find opportunity in spinoff commerce and competition.

We’re not suspicious of the Chamber. It’s doing what chambers of commerce and their bureaucrats do. It isn’t necessary to demonize the Chamber to debate its proposals nor should our elected officials be neutered of opinions or banned from participation. But when we become so enamored with the idea that we have ideas, or so attached to our ILTs, that our feelings are hurt when we are challenged then it is probably time to regroup and do an attitude check. Conversely, labeling something as being “Agenda 21” is its own tactic of tainting the opponent rather than arguing the merits. If local government approval or public funding are sought for these imaginary projects then debate outside of the strictures of the Chamber ought to be encouraged.

No whining allowed.