Douglas Athas, Mayor-Elect

City Manager Bill Dollar addresses the Council on a proposed contract with retiring GP&L director Ray Schwertner

The news story that I mentioned in my previous post made the false claim of paying for sirens or funding a consultant's contract. The point of the newscast had nothing to actually do with emergency sirens but rather what is a reasonable rate to pay for the continuing services of a retiring employee.

One Council member in the public discussion at our last work session made reference to her fiduciary responsibilities. What are our fudiciary responsibilities? In this case, our fiduciary responsibilities are far beyond whether the contract is one year or three, or any other concerns raised.   The Council's duty is to the continued health and competitiveness of GP&L; our fiduciary responsibility is exclusively to the customers of Garland Power & Light and to the regular citizens that benefit from the transfers from GP&L to the city's General Fund. It is a business decision, not a political one. There isn't room for politics; too much is at stake.

First, to my knowledge, the city has not even offered a contract to Ray Schwertner, the retiring director of GP&L, but there have been discussions. The fact that there is no agreement to even discuss exemplifies how ridiculous this situation and public debate really are. The initial contract that was being discussed has since been modified by several Council members and I presume it has not been finalized or presented to Mr Schwertner. I hope not.

Second, there has probably been a violation of the Open Meetings Act by this point, either factually or at least against the spirit of the Act. We have gone from polling the council outside a posted meeting to the media collecting input to announce a "vote."  

Quick background: Garland Power & Light, in just five years, has literally jumped from the stone age of electric generation to become one of the most diverse and respected electric utilities in the state and the country. Five years ago, we were simply spinning generators and delivering power to homes, and paying a lot to do it. Since then we have entered the statewide nodal market, we have setup our own power trading department, we have sued the Public Utilities Commission and won, we have acquired an interest in the multi-billion dollar CREZ line from West Texas, we have agreed to built a transmission line from Texas to Arkansas that will make money for GP&L and enable power transfers to and from Texas, we have settled law suits between the TMPA cities that had been ongoing for twelve years, and, more importantly to GP&L users, avoided any of the rate increases that were projected five years ago (we have actually lowered rates). We had to enter the nodal market since it was a state requirement but we would not have accomplished any of the other successes without the leadership and experience of Mr Schwertner. Period.  

Much to his credit, City Manager Bill Dollar sought the best person he could find to assume the CEO position at GP&L when the position came open. Mr Schwertner gave his commitment when he was hired to remain five years. Nearing that five years, he announced his need to retire and to move to Austin for family reasons. As related in the article, Mr Dollar suggested that Mr Schwertner continue to provide the same services to GP&L as an exclusive consultant with an office in Austin, which is where Mr Schwertner has to spend much of his time anyway. It was an excellent idea, one that could keep GP&L on track and provide a slow, steady transition as others learned the new sides of the electric industry.  

In future revenues, Mr Schwertner has brought well over $400 million of business to GP&L that we would otherwise never had. Under his leadership, GP&L has been able to repeatedly cut millions of dollars in expenses over the last five years. At this moment, millions in unexpected costs from TMPA, the power agency 47% owned by Garland and 53% by three other cities, combined, are being addressed, which could still be passed to ratepayers if new management, new policies, and new solutions are not found. Mr Schwertner has been on the forefront identifying the problems and finding solutions. Five years ago those costs would have been passed directly to ratepayers by a blind and industry-ignorant Council.  

It has been suggested and questioned if Mr Schwertner is irreplaceable. He is. He has truly worked miracles; he has done more than anyone knew to ask, suggest, or dream. And right now he is being debated and berated in public and in the media by those that know nothing of the industry and have no appreciation for the challenges we have faced and will continue to face.

I asked the reporter in the linked article when he called recently if he had even spoken to Mr Schwertner. No. He asked if I supported the contract. I told him it would be an Open Meetings violation to announce the expected votes in the media. I also told him that no agreement had been presented to the Council so how could I answer, even if there were no legal ramifications.  

On individual occasions, Mr Dollar mentioned to Council members his intent to retain Mr Schwertner's services after he retired. I presume he received no significant objections from any Council member. I was supportive in principal and thought it actually essential. What should have happened at that point was for Mr Dollar to negotiate a contract with Mr Schwertner. Because it would have been over $100,000, he would need to receive formal Council approval, as is common on almost every regular meeting agenda for other expenses. He would have received a thumbs up or down vote. If not approved, he could forget about it or seek a contract he thought he could get approved. However, none of that happened.  

Instead a draft contract was circulated to Council members and two executive sessions held. The primary terms were a three-year contract that could be canceled by the city with 30-days notice for non-performance, that would automatically renew unless specifically terminated, and that listed a Scope of Services and reporting obligations. One Council member thought the proposed contract needed changes. She thought it should be renegotiated every year, thought the scope of services should be prioritized, that the retainer should be an hourly rate. Other members thought there should be other changes. At the last executive session on the subject, it was stated that the discussion would continue in two weeks.  

The Council, by our City Charter, sets policy and, as in this case, approves certain contracts and expenses. The Council is not supposed to micromanage and the Council certainly is not supposed to be negotiating. The City Charter provides: "Neither the City Council nor any of its members shall direct or request the appointment of any person to or his removal from office by the City Manager or by any of his subordinates. However, the Council may consult and advise with the City Manager, make inquiry regarding the appointments or removals, and may express their opinion in regard thereto. In regard to administrative and executive duties under the City Manager, the Council and its members shall deal solely through the City Manager and neither the Council nor any member thereof shall give orders to any subordinates of the City Manager, either publicly or privately. Willful violation of the foregoing provisions of this Charter by any member of the Council shall constitute official misconduct and shall authorize the Council, by a vote of a majority of its membership, to expel such offending member from the Council, if found guilty after public hearing, and thereby create a vacancy in the place held by such member." —Art IV, Sec 3.

While the Charter does allow the Council to advise, that does not include writing the contracts for the City Manager and dictating the conditions.   And notice the Charter's reference to "Council may consult and advise," as a body. No single Council member should be given veto over contract terms yet that has been the case here. Any Council member has been free to dictate terms and the City Manager has tried to accommodate the instruction. At no time have changes been presented to the Council as a whole in a proper meeting and contentious items agreed by majority vote. A contract should not be circulated for "input" where nine people are essentially an unofficial committee making changes. Yet all that has happened.  

I started hearing "rumors" about the contract changes, so-and-so insisting on this or that. One Council member wanted to negotiate the contract down and another one up by adding more "incentives." It was requested that "will" be changed to "shall" (or maybe it was vice versa), which has no legal difference and which suggestion would make any lawyer, or even paralegal, burst out laughing.   I became very concerned that too much was being discussed "back channel" that was inappropriate, that was outside our duties under the Charter, and, frankly, that was ridiculous. I stopped at City Hall to confirm with Mr Dollar that the item would be on the following agenda, as the Council had been previously told. This was all after two executive sessions on the matter. Councilman Edwards was also in the building about to meet with Mr Dollar. We were told it would be on the next agenda. Yet the next agenda was posted without the item. Councilman Edwards and I checked at to why it wasn't there. An revised agenda was quickly posted.   Contrary to what I and others then believed, no contract had actually been agreed with Mr Schwertner. Instead of discussing an issue involving a city employee in executive session as is proper, it was posted as an open item. (Video here (Item 2F) and here (Item 9A).) While any contract would need to be public, the meetings with a city employee should have been private. But that didn't happen. The Mayor chose to make it an open meeting item. From the generally gentle discussion on Monday at the work session, the item became prime Kabuki theatre on Tuesday.  

I haven't even read the latest drafts of the contract. They are immaterial because there is no agreement. Even though I have negotiated and executed more contracts than the rest of the Council combined, I have not offered to draft or revise the contract. That is not my role as a Council member. My role is to review any contract and vote "yea" or "nay."  

Changing a three-year contract with a 30-day out to renegotiating each year is not in the citizen's interest. If the terms are good, lock them in as long as possible. One Council member making claims to only having had the contract for twenty minutes, as was done at the Feb 21 meeting, was pure theater. It was shared the day before and only minor, well documented, changes were made in the interim, which Mr Dollar offered to cover in detail at that meeting but no one accepted the offer.  

In spite of the drama that has now been publicly acted, the bottom line is the continued health and performance of GP&L. A contract that essentially pays Mr Schwertner less than he currently makes, expenses and overhead considered, yet keeps GP&L operating in the future on par to the last five years, would be an excellent contract and one that would strongly benefit the customers of GP&L. Of course, I've seen no such contract because no such contract has been agreed. And the meddling, interfering City Council is a prime reason why. (Only a few may be responsible but the whole Council is unable to do what is best for the ratepayers.) My constant worry at the moment is that future fiscal security of GP&L has been compromised, including the associated debt exposure for all Garland citizens, and it will have only been due to the gross incompetence and how this matter has been so badly mismanaged.