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New utility ordinance leaves hiring of Austin Energy chief with city manager

Monday, April 8, 2013 by Michael Kanin

An ordinance prepared by City of Austin legal staff to be the starting point for a change in governance for Austin Energy leaves the authority to hire and fire the utility General Manager in the hands of City Manager Marc Ott.

 

That news comes as Council members begin a week of deliberations that will likely result in first-reading passage of an ordinance that would separate many aspects of day-to-day management of the utility from Council and city management.

 

However, the subject of who will hire and fire the utility’s general manager – and thus a large portion of control of the utility – could be headed for a delay. Or it could be the subject of a heated conversation between management and some members of the Council.

 

A delay would allow passage of legislation drafted by State Sen. Kirk Watson, D-Austin, that will make clear the city’s authority to create an independent board that has management control over the utility. Though Council Member Bill Spelman believes that the city has legal standing to proceed with both phases of the governing ordinance now, he tells In Fact Daily that he is content to wait until Watson passes his measure.

 

Still, Council members could act this week to remove language in the draft governing ordinance that reserves hiring and firing powers for the City Manager.

 

For his part, Spelman is worried that city management control over utility management has kept a good deal of Austin Energy’s operations from the public eye. “It used to be that the (city’s) Electric Utility Commission knew what was going on,” Spelman said.

 

Top Austin Energy officials – specifically General Manager Larry Weis and Chief Operating Officer Cheryl Mele have stopped attending EUC meetings. Director of the utility’s local government relations division Jeff Vice described that change as a workforce development strategy designed to give other, more mid-level Austin Energy officials a chance to address the commission.

 

Electric Utility Commissioner Michael Webber was clearly frustrated when presented with that set of facts at the March commission meeting. Spelman, who appointed Webber, told In Fact Daily that Webber expressed serious concerns about the commission to him. Spelman said that Webber told him, “right now, the EUC is a powerless, toothless Kabuki dance.”

 

That statement echoes Spelman’s own concerns about a lack of oversight. Spelman and others have argued that an independent governing board could well increase utility transparency.

 

Council Member Chris Riley told In Fact Daily in late March that he too believes that a version of the independent body could feature more Austin Energy transparency. “I don’t foresee the Council stepping away from its responsibility to remain accountable on those big picture issues. What I do see is the Council enlisting the help of a board of experts who are in a position to devote more time, energy, and expertise to more mundane utility issues – the second tier issues that currently don’t get much public scrutiny,” Riley said.

 

“To some extent the utility is treated as another city department and there are mid-level management decisions made all of the time that never draw much public interest but could well benefit from some more scrutiny and exposure. I would expect the new board for Austin Energy to be dealing with important but routine utility matters,” he continued. “What we could end up with is a far-greater degree of transparency at Austin Energy than we ever have before.”  

 

Riley noted that many of the second-tier managerial decisions currently rest in the hands of city management.

 

In Fact Daily interviewed Ott after it ran a story about the development of a change in governance into a two-part process. Ott objected to a section of the piece which referred to “a suggestion that Austin Energy employees, including the General Manager, should stay under the auspices of city management” as “one option proposed by Ott in a…memo.” (See In Fact Daily, March 21)

 

While Ott claimed that In Fact Daily had selected the most potentially controversial portion of his memo, the resulting ordinance contained language that does just that.

 

In the interview, Ott noted that there were other options discussed in that memo, a document that was classified as a status report to Council members about where city staff stood with regard to a utility governance ordinance.

 

“That was intended to try to characterize all of the things that we were working on relative to the first resolution,” he told In Fact Daily. “So, for example, all the employees report to the board requires charter change, separate pension, personnel policies. Another scenario could be the pension program – they aren’t separate. So there are lots of permutations. We weren’t trying to capture them all for purposes of this status report, but we wanted to give Council a sense of, you know, we were addressing it – the (governance) resolution – and all of its component parts.”

 

Ott has been against the idea of separating the utility from city management. No one at Austin Energy is willing to go on record about the governance issue.

 

As part of an earlier discussion about governance, Ott did not allow utility officials to speak directly to Council members at a work session. This clearly upset Leffingwell. (See In Fact Daily March 20, 2013).

 

Later, In Fact Daily asked if delays in the delivery of the ordinance – Council members believed that they might see some version of it in mid-March – was the result of city management dragging its feet. “Dragging my feet. Dragging my feet,” responded Ott. “When was the resolution (that asked management to come up with a governance ordinance)? On Valentine’s Day? And this is what, March 21?” he asked. “You see the order of magnitude of the request?”

 

The reporter also asked Ott whether the idea of independent governance had been discussed for some time. Ott noted that he hadn’t been around for a large portion of those deliberations.

 

“I haven’t been down this road before. I can’t account for all of that history. I’m the City Manager today. Right? And it’s not like all of that other information has been ignored,” he said.

 

The city hired utility consultant Bob Kahn, a former Austin Energy official, to report on various types of utility governance structures. Kahn delivered that report to the city last September. (See In Fact Daily Sept. 14, 2012).

 

“That information informed Mr. Kahn, who provided the report. It has informed us, you know, as the staff works on what we’ve been asked to do now, they’re not ignoring that information. But today, now, given what we’ve been asked to do, we have a responsibility to do it. I can’t simply rely entirely upon some stuff that was done – I don’t know how long ago – some of it years ago. Ignore it? No. Does it help us? Yes.”

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