The Saga of the Chisholm Creek Utility Authority

The Saga of the Chisholm Creek Utility Authority:
Then (2005) and Now (2009)

Then:

• Operations of the Chisholm Creek Utility Authority a mystery
• Conflict of interest - Bel Aire city attorney also represented CCUA
• Recordkeeping and billing done by Bel Aire City employees
• CCUA, City of Bel Aire, and Bel Aire LLC records, funds comingled
• Auditors stated bookkeeping done incorrectly for at least 1 1/2 years
• $60,000 spent for audit, unauthorized expenditure
• Vote to purchase trash company compromised with one board member intimidated due to fact he reported to another member in his employment
• No purchasing policy in place
• No operations contract with plant manager, OEI.
• OEI convinced that construction contract entitled them to design/build every CCUA project in perpetuity
• Maintenance at plant scanty at best, despite Randall Harris’ efforts
• Randall Harris left for other employment, replaced by inexperienced manager
• Then, almost no maintenance, problems with KDHE over dumping sludge on ground, integral parts removed from equipment and not replaced
• OEI sued individual CCUA board members for “conspiracy” to make operations and finances transparent
• CCUA sued OEI to obtain declaratory judgment on legality of contract
  
  Now:
• New CCUA attorney is independent of either city
• Recordkeeping and bill payment done by independent bookkeeper
• Monthly revenue/expense statement part of minutes
• Minutes are detailed, taken by independent secretary
• New auditors are helping to make and keep books correctly
• Board expanded to six members, with a minimum of two elected officials from each city
• No member may be employed in a position reporting to another member
• No contract with outside operator, CCUA is independent
• Randall Harris hired by CCUA, maintenance and employee training now current
• Purchasing policy in place
• No lawsuits
• Attendees at meetings can tell what their utility is doing.
  
  All of this cost about $200,000 in legal fees and settlement costs. The option was to let OEI design and build every project forever, regardless of the board’s wishes, and let the plant fall apart due to mismanagement. The first boards had never operated a utility company and, of course, neither had the current board. However, the current board is now composed of qualified business people who know how things should be done.

The process of cleaning up the CCUA has been long and arduous - four years of hard work by a dedicated board consisting of former business owners/managers, a former purchasing agent, a former banker, a physician, a PhD. We believe it's finally a transparent publicly owned utility.

2005 Broadside

Remember seeing this four years ago?

DO YOU KNOW WHAT’S BEEN GOING ON
AT CITY HALL THE PAST FEW YEARS?

I put out a flyer the weekend before the 2005 election detailing what I considered to be the worst problems of the Bergquist administration. In this blog, I will republish the flyer exactly, word for word, and take another look at those issues with four years perspective.

The first bullet:

Park City has spent $50,000 in attorney fees in the last six months – and another $6,000 to pay our prosecutor! The mayor kept a City Attorney who was doing almost NOTHING for Park City, missing over a third of the Council meetings in 2003 and half in 2004. The City Attorney was placed under supervised probation by the Kansas Supreme court in March, 2002 for neglecting his clients. The mayor reappointed him as our City Attorney in May, 2002 and again in May, 2003. In 2003 he pretty much stopped coming to court and missed nine City Council meetings. The City Council urged the mayor to find other counsel, but the mayor refused to appoint another attorney. So in May, 2004, no no one was appointed and the old attorney continued on. In October of 2004 the City Attorney was put on “leave of absence” by Park City. Park City was forced to pay other attorneys $50,000 to do his work after he was found in contempt of court for not showing up at a hearing. He was also paid $10,000 to do a codification for Park City which was never done. Why did the mayor give away $60,000 of our tax money without receiving contracted services from this attorney?

Perspective: I knew when I wrote this that the results of retaining such incompetent counsel was far greater than 50 or 60 thousand dollars, but tried to be conservative in my accusations. After taking office, I asked several Council members what they thought was the actual cost and one even said over $200,000! Lawsuits, appeals, grievances all contributed to this amount. There is no way to compute the cost of all the ordinances that we have lived by that are not legal, things like repeal of ordinances replaced by new ordinances and the old one was never repealed correctly – leaving us with conflicting laws. Having good legal advice is absolutely essential to good government and I know we have that now.

Bullet two:
Over 10% of last year’s general fund budget was left over at year’s end because it wasn’t spent. Why weren’t those drainage ditches paved as promised? There wasn’t enough money?

Perspective: The governing body in office from 2005 to 2007 took care of three of the worst problem ditches almost immediately. They are an ongoing problem that will never go away – we just have to keep allocating funds for that item and deal with them as they get critical. The $400,000 carryover from the 2004 budget was ridiculous!

Bullet three:
Sunnydale Addition was annexed by Kechi when it should logically have become a part of Park City. The mayor did not try to fight this or work with the residents of that area to convince them that we could provide services much more efficiently than Kechi or Valley Center could. He actually opposed our annexation. What was his hidden agenda? This is not the only time we’ve missed out on annexation opportunities. As the Wichita media asked, “Where was Park City when all this was going on?”

Perspective:
No change. Our bungled relations with the residents of Sunnydale have damaged Park City forever. The Kechi annexation cut us off from moving up
I-135 to the north for commercial development. The governing body was warned not to speak to those folks, but why on earth didn’t they approach active Park City residents to lobby them to come to an agreement with us? After numerous attempts to sue Kechi, our only avenue was to appeal – a very expensive avenue! I got a referral to an attorney with annexation experience. He told me that if we had annexed over Kechi instead of suing, we probably would have been better off. As it was, the court declared that we had no “standing” and an appeal would be just another waste of taxpayer dollars.

Bullet four:
Complaints from city employees against a fellow employee who had been treating them badly were ignored. One grievance was even given back to the employee by the mayor’s instruction and told that it had to be given to her immediate supervisor – with whom she had the problem. That supervisor turned out to be an accused serial killer. There are many personnel issues that need to be addressed by a new mayor.

Perspective:
Once again, Park City was left to defend itself. I guess the best thing I can say about this issue now is that our personnel manual was rewritten, the grievance procedure defined, and we have a human resource specialist on staff. The personnel issues also included a real mess in the police department that culminated in firings and lawsuits. The day after I took office, I had a meeting with members of the department and found out how bad it really was. The first meeting I presided over was disrupted by a police officer demanding an executive session with the mayor and council. After contacting the sheriffs of two counties, the head of the KBI and several attorneys, Richard LaMunyon agreed to tackle our problems.



Bullet five:
The mayor signed a Memorandum of Understanding with the Iowa Tribe of Kansas and Nebraska to study building a casino in Park City after the City Council voted 7 to 1 to pursue the issue. Since then he has publicly opposed the building of the casino. If we back out of this commitment, Park City will most likely be sued for (Here we go again!) breaking a treaty with the Indians.

Perspective:
The former mayor has made opposing casinos the hallmark of his political career. I don’t know what his stance is now that Park City has expressed its support of expanded gaming twice – in the election of 2005 and in the referendum held the summer of 2007. My position on expanded gaming has always been that I support any legal enterprise that will bring in revenue to the City, enabling us to improve the lives of our residents.

On Dec. 10, 2002, the mayor voted with the Chisholm Creek Utility Authority to buy out the Chisholm Trail Sanitation Company. Why did he vote for this ill-advised purchase without City Council approval? Did the mayor vote with Bel Aire at the expense of the citizens of Park City?

Perspective:
With the perspective of four years on the CCUA Board of Directors, the last year and a half as its chair, I know that the former mayor could not confer with the council concerning the purchase of the sanitation company. That still does not make it the correct move. The company was then sold to Stutzman Refuse Disposal, financed by the CCUA. As a partner, Park City would be 50% responsible for repayment of the financing if anything should happen to Stutzman. This is exposure that served no purpose except to get the former operator of the plants out of a bad investment.
If I had known how bad the situation at the CCUA was, I would have at least given a great deal more thought to the decision to run for mayor. My next blog will detail the problems that were left by the previous boards, including the former mayor.

The mayor’s friends in “Voices of the Heartland” arranged a “forum” sponsored by the Fraternal Order of Police to be held on March 26. The web site for “Voices of the Heartland” listed no board of directors or affiliation with any other groups until last week. Who are these people? Is this some kind of secret society? The officers of the FOP say they know nothing abut this “forum” and did not agree to sponsor it.



Perspective:
Voices of the Heartland was an organization formed to fight expanded gaming in this area. They, along with Stand Up for Kansas and other anti-gaming groups were successful in preventing Sedgwick County from realizing the increased tourism and resulting revenue from a destination casino. And eliminating 350 jobs at the Kansas Greyhound Park. And we could sure use the 2,500 permanent, full-time jobs promised at the proposed casino now.

“The mayor contributed to all of these problems. Does the mayor have a lack of knowledge about how these things work? Does he not have the skills necessary to competently oversee the workings of the city? The mayor frequently shows up in time to have his picture taken with a project, without having anything to do with the work. He presents pizza to ice storm refugees – but the City pays for it. He expects discounted motel rooms because he’s the mayor. And this is a man who has repeatedly claimed to have been ‘chosen by God’ to be mayor of Park City. What do you think?”

Perspective: Well, what do you think four years later?

WATER, WATER EVERYWHERE - SO WHY DO WE HAVE TO PAY?

I frequently hear complaints that our water and sewer bills are too high. Of course, any water/sewer rate is too high, but here is where we really are.
The area of Park City that is in the Rural Water District #2 has been a concern for many years. I was on the City Council that agreed to the settlement that haunts us to this day. Gary Davis and I were brand new on the Council, and if our attorney advised us to agree to something, we did. David Oldham and Emil Bergquist were also on the Council at that time. Bad attorney, bad advice.
That settlement became a journal entry that lasts forever. City Attorney Doug Mosier and I have met with the Rural Water District people at their board meetings, in mediation, in Emporia with state rural water people. Our lobbyist knows that this is one of the main reasons we retain his services – to work on legislation that would get us out of the agreement. We have even offered to buy the rural water district. They won’t give an inch.
As far as the rest of the City – the last time we raised water rates was in 2002. City rates went up in 1992, from $10.60 to $11.25 for a minimum of 5,000 gallons per month. In 1999, we hired a consultant to tell us how to adjust the rates so our utility fund stayed solvent. He proposed a 90% increase and the Council was poised to institute that rate. I worked all one weekend and came back with a different plan that increased rates by $2.25 a month for the first 5,000 gallons and by $.30 a thousand for over 5,000 gallons per month. That rate was adopted and stood until 2002.
In 2002, the Chisholm Creek Utility Authority water treatment facility went on line and the water rates more than doubled. We went from adding only chlorine and one other chemical to our well water to actually treating the water. We also went, many of us, from buying bottled drinking water and salt for our water softeners, to water from the tap. And it’s some of the best tasting water in our area. But water isn’t cheap, no matter what we think.
That increase was due to the cost of treating the water, but most of all, it was due to the debt obligation incurred in building the plant. We have to make the bond payments whether we sell water or not. And wet years are great for you and me when watering our lawns and gardens, but not so great for money coming in to make those payments when billing is down. And the cost of everything goes up every year, if not every month.
The City of Wichita has debt obligations as well, but is able to spread the costs over several hundreds of thousands of people. Most of the cities in the county buy their water from Wichita but we have our own in conjunction with Bel Aire. I keep an eye on water, sewer, and tax rates around the area. We have no control over state, county, or school taxes, but do have some control over our own tax and utility rates. Here is a table that shows the rates of other small towns in our area – water, sewer, total bill. Some also have a stormwater fee in addition to what you see here. All figures are based on usage of 5,000 gallons per month.


Park City water - $28.05 sewer - $29.50 total $57.55
Kechi water - $34.15 sewer - $19.15 total $53.30
Valley Center water - $26.24 sewer - $28.09 total $56.27
Maize water - $34.73 sewer - $31.00 total $65.73
Haysville water - $11.50 sewer - $30.00 total $41.39
Newton water - $23.70 sewer - $44.80 total $67.56
Bel Aire water - $27.73 sewer - $45.00 total $72.73

Bel Aire raises its water and sewer usage charges 3% per year in January.
Valley Center raises its water and sewer base and meter charges 1.5% each year.
Kechi’s rates just went up in September, and the sewer rates may do so again.
Haysville’s sewer charge includes $15.00 for building a new plant.
Maize sewer includes $12.27 for debt service (bond payments); the water rate increases by $.25 per thousand gallons each year.
I know our water/sewer rates seem high – you know, Darrell and I pay the same rate as everyone else, and water our garden as well. Bel Aire, Valley Center, Maize and Newton will now raise their rates just a little each year, and I think that probably hurts less. Governing body members seem to think that raising the rates to keep the utility funds solvent will cost them elections. That certainly didn’t happen in 2002, and I think it probably wouldn’t now. We clearly have the smartest residents in the county – they live here, don’t they? – and when the price of milk, gasoline, cable, and everything else goes up, they know the expenses of the utilities go up, too. Our cable bill has increased 15% over the last seven years with no additional channels while Park City has managed to hold the line on utility bills for that same period. If we set aside the $1.5 million from the MTBE settlement needed for the sewer headworks that KDHE says we have to build, we should be able to hold the rates for a little longer.
No one, no one, no one wants to increase your taxes or your utility rates, but state law mandates keeping the utility funds healthy and independent of the tax funds. They must stay self-supporting.

The Six Million Dollar Meeting

I guess if you live in Park City, you know about the $6,100,000 settlement the City received in the MTBE class action lawsuit. MTBE was added to gasoline to reduce emissions. It reduced emissions, all right, but when it leaked out of underground tanks, it polluted the water. That happened to some of Park City’s wells a long time ago. When the pollution was discovered, EPA/KDHE (I know pollution guys from both organizations, but tend to forget which is which) put in remediation facilities at the wells. Our water is now safe and good to drink – even tastes great. MTBE is not detectible when it comes out of our plant.
When we received notification that the award was coming, I said that if we thought the Council could fight over no money, just wait until we had money! Making a decision on what to do with the money was always going to be difficult, but with the disastrous economy we currently face, the difficulty multiplied exponentially.
Wednesday night (the 7th), the Council and members of the public provided many suggestions. You know, cities never have enough money, even when it’s six million dollars. We only have priorities. And, the priorities are bound to be all over the place when you have eight deciders. So we listed them all, Jack and I tried to get them down to about 20 different ones to which we could assign a dollar cost and listed them on a priority worksheet. The Council and some of the volunteer boards have used this tool for prickly decisions and it’s pretty cumbersome, but it does work.
There were many suggestions about sewer, water, streets. I agree that the primary responsibility of a city is to keep its citizens safe and provide utility service, and we do that well. Park City has many ongoing projects, budgeted every year, to address aging utilities and replace or upgrade them when necessary. We have programs to replace water meters, fire hydrants, streets, etc.
This year, we must expand the headworks at the sewer plant. You probably don’t know what that is, but KDHE (Kansas Department of Health and Environment) has told us that it is not an option if we want to keep the plant running. We estimate that it will cost about $3 million and that our share would be about half. 53% to be exact. So we must take that $1,500,000 out of the six million or borrow the money and raise sewer rates. And I absolutely don’t want to raise sewer rates!
As for the other utilities – several Council members spoke as if our city were falling apart. As far as I can tell, our streets are better than those in surrounding cities. Our water rates are competitive except for Wichita’s, and there is no way we could get to the volume that allows their rates. Putting all of the money into utilities just doesn’t seem right to me.
The Library Board has asked for a million dollars to be used to provide the matching share required by most foundations. A new library would cost around three million dollars and they have applied for about 1.5 million in grants, receiving $50,000 to date, using money they have saved as a match. If the City would fund the matches, they could double that $1,000,000 with grants from outside sources. If we can double the money’s effect, what better return could we have? It’s currently invested in a certificate of deposit for – are you ready for this? – 1.17%! That’s the most we could get under the state guidelines. 100% is certainly a better return on your investment than 1.17%.
We have a bridge across Broadway that very badly needs to be replaced. We can get a grant to pay for most of it, but our share would still be $600,000. The FEMA flood plain designation for this whole area could depend on our repairing/replacing that bridge, so we should probably take the money out of the award.
In my last blog, I mentioned the appearance of 61st St. At the Wednesday meeting, Scott Francis from Lytton’s Furniture and Larry Cook, who built both western corners of 61st and Hydraulic, asked that money be used to spruce up the city. Councilman John Lehnherr has worked with a landscape architect to come up with ideas for signing the exit intersections – 53rd, 61st, 77th, and 85th.
There is absolutely no way for people getting off of I-135 to know they are in Park City, except maybe to look at the Cracker Barrel sign.
John asked for $355,000 for this project, but I looked at landscaping around the statues, welcome banners, planters, flowers, etc. to make our city look more welcoming. Scott Francis made a good point. He said you don’t invite someone into your home if doesn’t look its best, and Park City is more than it appears from the entrances. I put $385,000 as a suggestion for sprucing up the city.
We need a new city hall. Anyone who has walked through can see that we are cramped (except for me – and I’ve tried to share my office – they just all think they should have a heat and air conditioned work environment!). I would not suggest taking the money to build it out, but the architectural fees to get the plans for it would run about $175,000. If we have those plans, and the new administration funds municipal building projects, they will be looking for “shovel ready” projects for grants. We would be ready, and if there is no grant money available, we still have to build it some time. The money would not be wasted.
And I would put the rest of the award money, approximately $2,440,000, in the water fund. It can be saved there and transferred out to other funds as needed. That would give us a cushion to protect against the hard times everyone knows are coming.
On a side note, if we think we are having it tough, I recently read “The Worst Hard Time”, about the Dust Bowl. Now, they really had it tough.

This award was a windfall, a gift from heaven almost. Unexpected. It just seems to me that we need to put some of it aside for that rainy time, that we must fund the sewer project and the bridge, but some of it should be used for amenities to make our City more of a community and less of a bedroom.

Move those houses

Well, this is my very first blog! I have thought for years that blogging would be a good way to keep the public informed about what’s happening in Park City from my perspective. It took Len Warren helping me to get this set up to get started. So, first of all, thank you to Len.

A lot of my time right now is being taken up by a program we’re starting that would help move existing housing inventory in Park City. At the end of 2008, we were one new home building permit ahead of last year, but only because there were twelve houses sold in High Ridge in the last 90 days of the year.

It’s important to keep those new homes moving because they all carry special assessment taxes; if they are not sold, the builder is responsible for paying the taxes that make the bond payments for those streets, water and sewer lines. If the builder runs out of money, the bonds have to be paid to protect the City’s credit, so we might actually have to pay some of them ourselves. Not a good thing for the City budget, which is very, very tight. Eventually, we would get our money back, but it could really stretch us in the meantime.

Since I would almost always rather attack problems before they actually become problems, I wrote to all of the active home builders in Park City, asking them to meet with me to seek solutions. I thought focusing on the upcoming Home Show would be a good start. Three builders came to the first meeting, only two of them active now. We talked about lots of ways to sell the “spec” homes and lots, and decided to meet again a week later.

We sent out another letter, letting the builders and developers know that we were working on a program, and that they needed to attend this next meeting to be included. It worked. Seven or eight different builders came that time, and the ideas fairly flew. It’s just amazing what a little cooperation can accomplish. They suggested numerous ways to promote Park City and living here. The ideas ranged from checking on the cost of listing our housing developments on Leeker’s paper grocery bags to a full fledged advertising campaign.

Here are some of the things we’re working on:
Checking on the cost of those bags. John Leeker has no problem if the builders pay for the printing.
Starting a sort of clearing house for mortgage rates and grants/loans that make it easier to buy a new house.
Planning a giveaway for potential home buyers who visit all eight of our developments during a specified period of time.
Really pumping up our presence at the Home Show.

Then, we asked the builders what Park City needs to do to attract more people up here. I was stunned when they said “improve the appearance of the city”. Many, many people have told me that Park City has never looked better, but those guys think our main streets need to look even better. We need to make the entrances to the city more welcoming, adding signs and landscaping. We need to make another effort to clean up residences. If you think it’s not important, talk to realtors, builders, developers. We’re getting a great reputation as a vibrant, exciting place to live, but really need to work on first impressions, they said.

So, last week, I asked John Lehnherr to meet with me and a landscape architect for ideas. John has pushed for improving the appearance of 61st and other entrances to the city for four years, and I knew he would work on this for me.

Darrell Boger, the Director of Code Enforcement, agreed to take another run at cleaning up yards and houses, particularly ones that are most visible to visitors.

Judy Ferguson, our Planning Clerk, is helping with the total project and Vicki Schoonover is keeping track of the mortgage information.

The Council meets on Wednesday, January 7th, to discuss what to do with the six million dollars, and I will ask for a small portion to be set aside for beautifying our community. We’ve come a long way, but still have a ways to go.

I’ll keep you posted (double entendre intentional) about this and other things. Check back often, and do let me know what you think.