Keeping The Pressure On

KEEPING THE PRESSURE ON

The little distraction about CSU’s wasted funds on water tours is laughable compared to the real waste CSU can be credited with. By now the infamous Neumann puzzle is even more confusing to someone who has just been invited to hear about “Dave Neumann's new Education Foundation.” Really?

Perhaps not everyone is puzzled by the timing of such a presentation; perhaps it makes sense to those of us who pay utility bills every month. It makes almost as much sense as the “Sponsorship Program” of CSU.

The first paragraph is right on the mark, and serves as a disclaimer of sorts: “The most critical contribution we make to the community is to provide safe, reliable competitively priced energy and water services. To help achieve the lowest rates for our customers, we have a very limited sponsorship program.”

What “very limited” as opposed to none at all? Think about it for a moment: whose money is being dispersed as “sponsorship”? It’s us, the citizens and consumers of Colorado Springs, who have paid for supposedly the “lowest rates”. But wait, these rates include enough “fat” so that sponsorship is possible. This makes no sense.

Let us pay less, and with the extra money we save, we will sponsor whatever programs we want. Instead, CSU collects extra fees to be able to disburse them as it wishes and buy “goodwill” not on our behalf, but on its own behalf—oh, that lovely CSU generously sponsored my kids’ event. Really?

As CSU’s website boasts: “Our sponsorship program supports local community projects and nonprofit events. Projects or events that are eligible for corporate sponsorship are finite in nature, located and serve citizens within our service territory or locations significantly impacted by our operations. Because of budget constraints, only events or organizations that have a strong alignment with Springs Utilities business priorities will be considered for financial sponsorship…”

It’s almost as if CSU claimed to help local dealerships because it’s buying new cars for its managers every year or new expensive trucks every six months. Let us waste your money in order to improve the local economy. Incidentally, CSU repeatedly refuses to provide a list of vehicles it owns, year, model, and assignment. It’s possible to legally force the issue, but it, too, would be wasteful.

Looking over the 2011 budget report, one cannot find how much “sponsorship” costs CSU, that is, us. It could be millions, for all we know. But CEO Forte has fortified his castle so that no information is available; even his board remains in the dark most of the time, or simple votes yes.

We may want to go back a year and recall the Memorial saga, one we all suffered through with raised eyebrows at some point, and raised voices at others. Should we go through the same ordeal again? Have we learned nothing from that experience?

Certain city officials were so supportive of CEO McEvoy that they deemed all critics as unpatriotic if not outright dumb. Certain claims by the CEO were discovered later to be unfounded, perhaps deliberately so. Will this scenario repeat itself with CSU and its CEO?

What’s upsetting some people right now is that Steve Schuck has convened a fact-finding group to ask some simple, if fundamental questions. Why not thank him? Why not have multiple groups convene to ask questions?

Wake up, Colorado Springs! It’s not too late to avert another potential disaster. We should be grateful that citizens in this town are taking the initiative; apparently the Chair of CSU’s board is asleep at the wheel, and the rest of the board is confused and scared. This is the same board that almost fumbled the Memorial deal. Should we trust such leadership?

Politicians cling to their positions out of convenience and pride: they like to be addressed “the honorable,” even when they don’t deserve to be honored at all. They think they “deserve” their seat at the table because they were elected to that seat. But they forget what responsibility they have to the city and its future. Theirs should be the long view, the bird’s view from high above, warning us of dangers to come.

Theirs shouldn’t be the view from within that circles the wagons against critics; nor should it be a defensive posture. At the end of the day, they should welcome criticism and implement changes. They should invite experts and recuse themselves—it takes a lot more than voter support to oversee a $1.2 billion entity.

Once again, let’s invite the CSU board and its CEO to resign; let us secure a better future for the city than any of them can honestly promise.

[This piece was submitted to the Colorado Springs Business Journal on September 24, 2012 as my weekly column. On September 27, 2012 I was informed the column was terminated.] 

 

“Earnings fairness,” The Colorado Springs Business Journal, May 11 – 17, 2012, 19.

FAIRNESS

The latest twist in the checkered career of Dr. McEvoy, the CEO of Memorial Hospital System, is upsetting citizens and in different cities could cost Council President Scott Hente his job. Are we upset about 18 month severance, totaling around $1.15 million? Or, are we upset at the lack of oversight by the appropriate governing boards?

The fact that Dr. McEvoy, whom I lampooned months ago for his scare tactics while the hospital was profitable, overplayed his hand and lost badly, agreeing to a “separation” so that he’s neither resigning nor being fired, is perhaps what justice should look like.

He wanted the hospital to himself, setting it up as a non-profit with a board he’d appoint, a cushy relationship indeed. Along the way he got a pay raise amidst negotiations for the sale of MHS to UCH. What warranted his raise, excellent performance? And Council President Hente, consulting with his right-hand woman, Pro Term Jan Martin, thought nothing of it.

They also didn’t challenge the severance pay until Mayor Bach forced the issue in an open letter to Hente. Convening Council, they agreed to dismiss MHS’ board and appoint their own. Does the Mayor have to wake up Hente and Martin from their political slumber? Are they really that out of touch with public sentiments?

What upsets citizens at the end of the day isn’t how much money anyone makes, but rather morality. We want to know that someone in position of power monitors abuses and ensures fairness in the system.

The New York Times reported that according to Greenlining Institute, Apple—the brainchild of Saint Jobs—paid just $3.3 billion in 2011 on profits of $34.2 billion, making it an effective rate of 9.8%. Forbes’ contributor, Tim Worstall, explains that taxes paid in 2011 are for profits made in 2010 which were only $18 billion, making it an effective rate of 18%.

Worstall is probably correct, and The Washington Post was delighted to correct its northern rival. The issue remains: is it fair for Apple to use its off-shore subsidiaries in order to avoid paying taxes in the US? Isn’t its headquarters in California? Isn’t it enjoying the infrastructure provided here? When copyright issues arise, isn’t Apple happy to appeal to American rule of law?

Isn’t the brain-power that propels companies like Apple nourished on our campuses, courtesy of taxpayers who guarantee student loans and provide needed research and development grants from the National Science Foundation and the National Institute of Health?

The same fairness questions have been raised before by the legendary Warren Buffet who paid taxes totaling 17% percent of his $40 million in taxable income. Romney’s tax rate for 2010 was 14%, while Obama, comparably the poorest, paid 20% on his $789,674 taxable income. Do any of these relate to the 99% of American taxpayers?

The fact that Dr. McEvoy earns much more than the US President’s $400,000 only proves how much more valuable his services must be. If he were in private practice, no one would care. But he works for us, after all.

Perhaps the comparison should be closer to home. On MHS’ website, this Note was posted: “On June 29, Memorial Health System will begin relying on Bonfils Blood Center, a Colorado organization, to collect blood and provide products for our patients. This change means memorial will no longer operate its own blood donor services.”

Richard Titmuss’ The Gift Relationship (1971) suggested that countries where blood is donated rather than bought and sold had no shortages, and the blood in their banks was less contaminated. What does this switch in policy, under the leadership of McEvoy mean? Has he read the book? 

Or is the financial cut implemented to ensure his salary raise and severance pay? Has he cut anything else at MHS to guarantee that he stays within the budget, and thereby doesn’t need his board to get Council approval?

It won’t be a week too early for MHS to be sold to UCH. Get this mess off our hands, because our own watchdogs, City Council, obviously lack the kind of leadership that can handle its fiduciary responsibilities.

How are they doing with CSU? The less you hear about council leadership and CSU, the more you should worry. At least with MHS there are leaks that get to the press and then to the public. CSU, by contrast, is so close-mouthed that no one knows what’s going on, including Council

This is an open plea for Council to probe the depths of CSU and devise a plan for selling it to the highest bidder. CEO Forte won’t care as much, now that he knows he can ask for a raise and get a hefty severance pay—it’s a win-win, no?

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“Shouldn’t public servants face questioning?,” The Colorado Springs Business Journal, February 3 - 9, 2012, 21.

WHO DO PUBLIC SERVANTS SERVE?

The former chief of police didn’t want to talk to me some months ago, asking that Steve Cox, at the time the mayor’s chief of staff, would be present. I thought this would waste taxpayers’ money, and wrote about the police department’s budget without his input. His e-mails were friendly.

I asked to meet with the chief financial officer of the Fire Department, and when I met Leslie Hickey, Richard Brown (then interim and now Chief) was present, answering any and all questions. Even though the union president, Jeremy Kroto, wasn’t happy with my piece, suggesting that the numbers I got from Hickey and Brown were wrong, he was pleased that there was focus on the CSFD.

The CEO of Colorado Springs Utilities is “not available for an interview” according to David Grossman (1/10/12), one of the corporate communication staff. I asked why he was “unavailable” and about his compensation package and qualification, and received these numbers:

“Mr. Forte's annual salary of $276,750.03 has not changed since 2007. His 2010 short-term incentive was $31,411.13 and his long-term retirement incentive was $39,852.00. His 2011 short-term incentive was $34,455.38 and his long-term retirement incentive was $41,927.63. $50,000 has been budgeted for CEO incentive for 2012.”

I guess someone with a pre-assigned “incentive” doesn’t need to talk to the press or provide a resume. Given his latest shameless stand-off with the mayor about CSU’s line of credit, he is probably ready to retire (and he can definitely afford it).

By the time I contacted the Regional Building Department, the friendly but suspicious chairwoman of the Board of Commissioners, Sharon Brown (Fountain councilwoman) asked for written questions. When I sent her ten questions on 1/12/12, she called back a couple of days later worried about the “purpose” of my inquiry. As we go to print, I’m still waiting for answers to simple questions such as the organizational chart of RBD and its budget. Councilman Herpin who serves on the board has yet to respond to my e-mail of 1/10/12.

Maybe I’m completely off-base for asking public servants to explain how they are fulfilling their mandate. If this line of questioning warrants an apology, please accept mine right here from these pages.

On the other hand, if the CSBJ is to serve the business community, if its charge is to inform the public of anything that relates to business matters, and if the questioning focuses on monopolies (we can’t get electricity elsewhere), then how public officials operate is of paramount interest: who is in charge of licensing and permits; who is enforcing codes and fining businesses; who can we appeal to when bureaucrats play power games?

The fallacy of the digital age is that “it’s all there in the website”, as Councilwoman Jan Martin admonished me when I asked about her maneuvering the Memorial process (which didn’t work out once the public was more involved). If it is, it’s not easily found; if it’s not, as in the case of the RBD, then simply directing an inquirer to the website is Kafkaesque (senseless, disorienting, with menacing complexity).

The danger of the digital age is that in the name of accessibility, the promise of liberalizing or democratizing the community is actually being undermined. It may even serve to control information more tightly, since there are no other modes of communication.

Besides, as every businessperson knows from experience, numbers alone don’t tell much. They need to be contextualized and interpreted. If I have been guilty over the past few months of presenting numbers out of context it’s because their context was not readily explained on websites and power-point presentations, and when officers refuse to explain (either because it’s beneath them or because they don’t know, rather than because they have something to hide), then one must resort to printing numbers and waiting for a response.

We all deserve to know because this is what our Social Contract dictates: agencies levy taxes and fees on us so as to fund regulatory activities (RBD, City administration) or services (fire, police, and utilities). As citizens we implicitly agree to enter a Social Contract with other citizens and use agencies to execute our individual wills (majority rule) in a legitimate way: we self-legislate. This way of thinking goes back to ancient Athens and has been analyzed for two thousand years by political philosophers.

When our agents—civil servants—forget their complicity in the Social Contract perhaps journalists or gadflies, as Socrates liked to describe himself, need to remind them of their role. If they don’t like this, they can resign; it’s that simple.

I realize that writing this column will prevent me from ever doing another project here. It’s a fair price to pay.

Raphael Sassower is professor of philosophy at UCCS who completed a few downtown renovation projects. He can be reached at rsassower@gmail.com Previous articles can be found at sassower.blogspot.com