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

“A tale of two cities,” The Colorado Springs Business Journal, May 4 – 10, 2012, 19.

A TALE OF TWO CITIES

Instead of Charles Dickens’ famous novel about Paris and London during the French Revolution, we are talking about Colorado Springs Utilities and the Pikes Peak Regional Building Department, representing two radically different “cities” or mindsets.

Dickens’ opening paragraph still resonates: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…” Is our city going through “the spring of hope” or “the winter of despair”?

When there is unanimity of public disregard, as is the case with the CEO of CSU (Forte) and its Chairman (Councilman Hente), then no oversight is expected and stonewalling is standard procedure. Perhaps they already concede that CSU will be sold like Memorial, so why bother?

But when there is a difference between the head of RBD (Yankpwski) and its Chair (Brown), when the former responds in person while the latter takes three months to respond by e-mail (after pressure from the other two Commissioners), we can hear quite a bit.

Having taunted RBD’s Commissioners, it’s only fair that a brief summary of their answers should be provided.

Many answers come from the Intergovernmental Agreement that set up RBD in 1966. Once RBD puts it on its website, anyone can read it. It specifies the role of the Commissioners, the composition of their board, and the relationships between the oversight body, the advisory boards, and employment conditions.

Likewise, the organizational charts are in place—they know who does what—but should find their way to the website for public scrutiny.

The budget of $9.5 million (2012) reflects a decrease from $9.8 million (2011) and $11.2 million (2006). Since the budget is entirely composed of fees, and since fees haven’t increased since 2008, staff has been cut from 114 (2008) to 72 (2012).

Other statistical data that may be of interest: in 2011 some 53,000 permits were issued, 63% of them on the website. Around 150,000 inspections were required for these permits with over 80% approved on the first visit; 99% of the inspections are performed the same day they are requested. Pretty impressive!

RBD instituted a call-ahead program where an inspector will call thirty minutes prior to arrival so that the contractor or homeowner can be present. RBD is trying to streamline its operations electronically, from submission to approval, while maintaining a process for appeal with various technical boards. So, why are there still complaints about RBD?

Perhaps the culprits are architects and designers who have been “grand-fathered” when new codes were adopted a few years ago. When developers and owners think they get reliable information about zoning or use-change, they might be mistaken. Better ask RBD officials than rely on some professionals.

It seems that of the three Commissioners, Sharon Brown (Chair), Bernie Herpin (CS Councilman), and Dennis Hisey (County Commissioner), only Hisey takes his oversight job seriously. He recounted in writing his political engagement with state agencies on behalf of RBD.

What is politically at stake here? Why is RBD the “other city” as compared to CSU? While at CSU everyone seems to be asleep, congratulating themselves on lower-than-expected rate hikes for water, for example, RBD is proactive and serious about its mission and responsibilities.

At stake is political leadership that should ensure a climate that is responsive to local needs without shirking public responsibilities, balancing public safety with entrepreneurial efficiency. Developers and remodelers can put pressure on politicians so they perform.

Unlike CSU which raises rates in order to cover an ever-increasing budget—new cars for executives lately?—RBD hasn’t increased fees in four years. Unlike CSU, RBD realizes the impact of the Great Recession and has adjusted its budget.

Unlike CSU, RBD realized that to hustle for new business means spreading its wings outside the region, specializing in school permits and inspections in other counties. Yes, it’s legal; other jurisdictions are puzzled by this competition. This mindset guards against the need to raise fees.

Likewise, some legislation that imposes state electrical and plumbing codes on local jurisdictions ties the hands of RBD’s inspectors. Even when the cases are ridiculous, like requiring a child-proof outlet on the ceiling of garages, the local agency isn’t permitted discretionary application. It has to administer the state code, however bizarre.

Here’s where politics comes into play, and no, it doesn’t require money. Instead, the political leadership of RBD can ask for political help from other local politicians and petition the pro-business Governor who appoints individuals to these state boards so as to allow for greater local maneuvering power.

As long as government agencies hold the power to dictate building codes, the best we can do is direct this power to the local level, where common sense may prevail.

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

“On style and substance,” The Colorado Springs Business Journal, April 6 -12, 2012, 21.

ON STYLE AND SUBSTANCE

When logic was formalized in ancient Greece, it separated arguments from those who made them. Arguments should be tested as valid or not on their own merit, rather than on the credibility of those making them. At times, we forget this simple principle.

The legal system doesn’t help, either. In case after case, lawyers and juries assess the guilt or innocence of defendants not only in terms of the facts, but also on their moral character or that of witnesses. What does good moral character have to do with the fact that someone committed a crime? Does it matter how the defendant dresses to court?

Businesses interview job applicants looking at how they dress, how they handle themselves, as much as they care about their resumes. Should it matter that an employee is unpleasant, even deficient when it comes to hygiene, when assessing job performance?

Perhaps the best way of thinking about this is the famous phrase “all sizzle no steak” as a way to enforce in the marketing world that style always trumps substance: we are drawn by the ad and are disappointed by the product.

It’s with this in mind that we keep on hearing complaints about the style of Mayor Bach which offends some Councilmembers. Are they listening to what he says? Or are they more concerned with how he says it? Would they rather have a friendly, smooth-talking snake-oil salesman than an executive who gets things done?

Not only is the focus on style misplaced, it gives at times cover for substance not to be examined at all. Local church leaders, from the mega-churches in the north of town to small, local ones in the south, are preachers and social workers, ministering to their congregants in finely styled soliloquies. But what are they doing in the public square?

Churches receive numerous local and federal tax benefits, because there is a deep sense of respect for their religious role in the social contract. Would it be style or substance if we ask each of the churches in town to adopt a park in town and take care of it because of shortfalls in city budgets? Is it style or substance when some of them speak out in the public square about poverty and hunger, child abuse and indigent health care? Catholic charities run Marion House downtown—style or substance?

The religious style, just like that of public officials, may be important in retaining civility, ensuring we interact peacefully in the public square. But focusing on style alone may miss the opportunity to have candid and heart-wrenching dialogues about the things that matter most to the good life in our city.

I hear colleagues and acquaintances insist that “he is a good guy” or “she is really nice.” These statements might be true, but they still tell me nothing about their competence and substance: Are we paying them to be nice or to get a job done? I’d readily give up bed-side manners for the competence of a surgeon anytime.

There are businesses, especially hospitality, where style seems more important than substance. Waiters are supposed to be nice and friendly, smile and remain cheerful no matter how rude the customer. But wouldn’t you rather have a waitperson bring you the right dish or drink without a smile than a smiling waitperson screw it up?

Is it a matter of style when the charming, grandfatherly Chuck Murphy, the chairman of the downtown taskforce, and the likeable Steve Cox, the new economic tsar, promote the idea of downtown surveillance camera? Is the substance the police statistics about reducing crime?

Or is the substance different: what is the root of the problem? Is it three Tejon Street clubs where fighting is rampant? So, why not deal with them, rather than suggest turning downtown into a prison-yard with surveillance cameras? Are cameras now stylish?

Is it style or substance when Scott Hente, the Council President, shirks his oversight responsibilities as chairman of CSU or board member of URA?

Is it style or substance when his second in command, Councilwoman Jan Martin, works behind closed doors to appoint her loyalists to task forces?

Is it style or substance when Councilman Bernie Herpin refuses to deal with RBD publicly as its commissioner?

Is it style of substance when Councilman Tim Leigh doesn’t filter his public statements?

The more you think about it, the more you’d agree that we want the steak and care less about the sizzle, that we want to respect our public officials rather than like them as  people. As Easter is upon us, taking stock of the deeper lesson of renewal may resonate with our political leaders: resurrect the core of what should be done without losing your civility with each other.

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

“Utilities gamble might be community’s loss,” The Colorado Springs Business Journal, March 23 - 29, 2012, 21.

CSU’S GAMBLE MAY BE OUR LOSS

If you can’t take the heat, get out of the kitchen! Chefs know that. Perhaps politicians and public officials should learn from them.

In its News Release of 10/4/2011, Scott Hente, CSU’s Chairman, said “This is great news for our community. NeuStream will save money for Colorado Springs Utilities’ ratepayers because it will be installed at lower cost than traditional scrubbing technology and will require less operating and maintenance expenditures.” Coming from a non-expert who is embroiled in legal disputes, as the Gazette has reported, can we trust this judgment?

This is the same guy whose judgment about the default on the Urban Renewal Authority’s N. Nevada project, according to the Gazette was: “’The deal was good. The deal still is good,’ said Scott Hente, president of the Colorado Springs City Council and an authority board member.” You may dislike Mayor Bach, but at least he has initiated on 2/15/12 an inspection of the URA because of financial concerns. Should Hente resign and take care of his personal affairs? After all, we don’t pay him enough to divest himself from his real estate deals, unlike the salary we give the mayor to focus on city affairs.

This is what we should fear: politicians sanctioning the work of others without warrant. Relying exclusively on reports generated by URA or CSU is like never asking for a second opinion before a major surgery.

Has Hente or the CSU’s CEO fully disclosed that the technology trade-marketed to Neumann Systems is experimental? Does it matter that CSU is a “pilot project” with a $7.2 million award from the DOE? Has anyone been alarmed that about $17 million was spent as of 9/3/10 on this project, and that an estimated $180 million will be spent overall?

CSU’s answer is that without Neumann’s experimental technology $360 million will be spent “to control SOX, NOX and other particulates.” So, it sounds reasonable, even responsible to spend half of that amount on an alternative.

But the question remains: is Neumann’s solution the best alternative? Though promising in many ways, is there no other alternative worthy of $180 million to replace coal-generated energy? 

It’s not that local engineers shouldn’t be consulted. Neither should we eschew local expertise just because it’s local. It is one thing to solicit local advice and quite another to commit large sums of money as a gamble on what might be the greatest success or the worst failure.

Have we heard about the entire process that led CSU to prefer a brilliant local solution over all those available in the world of energy operation?

Xcel, for example, has not chosen Neumann, but is considering a multiple-pronged approach to dealing with EPA requirements, from retiring some plants, retrofitting others, and using different sources of energy. Has CSU’s leadership spoken to Xcel’s executives and solicited their advice?

CSU’s Grossman responded to my inquiries:

“The EPA and the state of Colorado require Colorado Springs Utilities to comply with new stricter emissions control equipment at our power plants by 2016. Using conventional scrubber equipment, the cost to comply would be an estimated $300 million or more. Installing Neumann Systems Group's air purification device instead of conventional scrubbers is projected to save at least $100 million. So far, approximately $40 million has been spent on testing, designing and implementation. Installation is expected to begin in September 2012.”

Though these numbers differ from the CSU’s News Release and CSBJ’s articles quoted above, CSU remains on message: this is a good technology, even if not fully tested. Don’t question us. All we need from Council is a yes vote anytime they convene as our Board.

Lest I be accused again of not accurately reporting the facts, let me reassure everyone that mine are wild speculations whose veracity is open to challenge. Unfortunately, neither Forte nor Hente are forthcoming, so I must stay at the speculative level.

It’s difficult to report facts when CSU stonewalls the public. For example, when asking about cost-savings at CSU in the area of the motor pool, all I could get is a chart dated 11/28/11 about the percentage of vehicle categories, and a report from 1/7/08 by Mercury.

In 2007 CSU had 1,754 “units” whose replacement cost was $74 million. With an average “replacement spending (since 2000)” of $5.3 million annually, who is overseeing this process? One wonders if anyone digs deep down this rabbit-hole to make sure that a 10% saving on this “average” may be achieved. Perhaps it’s done, but how would we know?

Last time we trusted officials in large institutions without political or regulatory oversight, we got the mortgage bubble. Let’s pray we don’t face locally an energy-rate bubble.

Raphael Sassower is professor of philosophy at UCCS and is still waiting to meet with CSU’s CEO Forte or Chairman Hente. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com