Wednesday, March 25, 2015


By Juan Montoya
Each year, the mayor and the city commissioners of the City of Brownsville go about the business of putting together a budget.
They are not particularly concerned that at the end of the process there will emerge a balanced budget. Between issuances of millions of dollars in Certificates of Obligation (COs) that they don't have to go for voters' approval, they can always lean on their public utility to bail them out of their drunk-sailor spending ways.
For as long as anyone can remember, the city has gone tot the Public Utility Board (PUB) well to "balance" the city budget. (See graphic, click on to enlarge)

In 2013, they dipped into the PUB deep pocket to snare more than $7 million in cash transfers and an additional $4.6 million in free utilities for a total "prestamito" of $11,674,480 million.
The two years before, the city went to the well for additional "economic assistance." In 2010, they tapped in for an additional $3 million. The year after, in 2011, they got an additional $2.5 million.
It is an endless giving machine. Why control your costs and salaries when you can always go to the PUB well and make it happen?
Some say that the city is guilty of double taxation because PUB rate payers are also property taxpayers. By taking their taxes and then grabbing an additional $11 million of their rate payments from PUB, isn't the city in effect imposing a double tax on them?
Old times remember that when the PUB was created in 1960, many felt that by separating the board from the city, politics would be eliminated from hindering its operations.
Boy, were they mistaken!
Those who worked on the very first PUB administration after the board's first meeting on July 15, 1961, inherited a system lacking in some basic requirements of a municipal utilities system. The electorate had just approved the creation of the board by a mere 38 votes (2,741 to 2,703) that would be responsible to the city commission and to the voters of the city.
The membership of that first board reads like a Who's Who of Brownsville history. Former Mayor Ruben Edlestein, Kenneth Faxon, Barry Putegnat, and Gus Peña were the voting members. Mayor Dr. J.C. George represented the city commission on the board and was a nonvoting member barring a tie. George Weir, the manager of the existing electrical plant, was named PUB's first general manager and given the daunting task of bringing PUB up to par to meet the challenges of the mid-20th Century.
First, the board had to deal with $250,000 in uncollected utility bills. At the time the collection rate was hovering near 65 percent, a drag on the entire system. Additionally, rigged meters and tapped electrical lines were in use, resulting in electric losses that reached about 30 percent.
For many years, CPL and others had tried to buy the utility from the City of Brownsville – but the voters of the city had rejected all offers that would take the ownership away from the municipality. Hard-nosed business decisions and changes in policies to help PUB survive in the dog-eat-dog world of the utility market generated controversy and resistance from many quarters. Yet, in a very short time, the utility could report to the city that its finances were on solid ground and that transfers to the city – which continue to this day – could be made to the city's general fund.
And now, instead of rewarding the ratepayers, the city has yet again burdened them with a dubious plan to construct a power generating plant with the private energy firm Tenaska and indebted the ratepayers with $325 million to be paid through higher utility rates. Added to the existing debt, that made it $500 million which forced Fitch to issue a "negative" rating citing ratepayer fatigue.
Look at the graphic below. That is how the project will be paid (though higher rates that will keep climbing into 2016) while the city continues to raid the PUB till. Is this any way to run a railroad?


Anonymous said...

Da mayor's mis management of city finances is quite evident. He needs to be voted out of office .

Anonymous said...

Kick the Bum out .