Are you aware that a group of volunteer citizens govern a County enterprise that generates more than $60 million in annual revenues, responsible for assets that cost more than $280 million to acquire and would probably cost $400-500 million to replace? That’s the role of the Los Alamos Board of Public Utilities as defined in County Charter Article V that has been in place since 1968.
We’re fortunate to have some very capable and dedicated people on the Board today. Their responsibilities are significant and require time and commitment in return for nothing more than the pleasure of serving the community. Stepping back and looking at the organizational structure of the enterprise as defined in Charter Article V, one realizes that the Board exercises broad authority with very little accountability to the County Council or the voters. With respect and gratitude for today’s board members, the Los Alamos citizens need to consider whether this organizational structure best serves the community going forward.
Under Article V of the Los Alamos County Charter, Board of Public Utilities members who are appointed cannot be removed by the County Council for poor performance. So, if a board member were to make decisions that result in financial penalties to the County, losses to the utility enterprise, or were to engage in unprofessional and unacceptable behavior such as sexual harassment, there would be no mechanism for removal. This has not been an issue in the past for this Board but anyone who listens to national news knows that these things do happen and could potentially happen even in Los Alamos.
Other than the County Attorney who reports to the County Council, the Department of Public Utilities is the only County enterprise that does not report to the County Administrator. The Board and its appointed manager are rarely obligated by the Charter to communicate with Council except for an annual budget submission and on other limited occasions. In practice, and especially in recent months, there has been considerable communication between Council and the Board. But that is because the people involved have voluntarily chosen to increase communication, not because they are required to do so by the Charter. And if County Council were to object to a Board proposal, the Charter is silent on how disputes would be resolved.
In essence, Charter Article V as written results in a group of appointed board members overseeing an extremely valuable County asset tied to an essential County service, with minimum involvement of the County’s elected officials or citizens. If that idea makes you uncomfortable, you’re not alone.
Over the past several years the County Council has formed two separate committees to evaluate this situation, presumably because some Councilors have realized that although Charter Article V does not give the Council the authority to direct the County’s utility business, New Mexico law mandates that the County and its taxpayers are technically liable for mistakes or missteps made by the Board and the DPU. So under the status quo the Board of Public Utilities has the authority to act and the County has the responsibility for those actions.
Although periodically discussed, this arrangement has been in place for 45 years. Some who were involved in 1968 when this system was put in place explain that citizens were afraid elected officials with short term reelection objectives could not be trusted to make politically charged rate and investment decisions. They believed that a County service as essential as utilities should not be subjected to the short term whims and vagaries of politics; and the Board of Public Utilities was formed with substantial independence from Council. Over time, people have also argued that Councilors have too much on their plates to do justice to the large responsibility of operating the utilities business.
Over the past few years two citizen’s committees have been tasked with evaluating this issue and both committees saw some merit in the 1968 thinking. In fact, neither committee recommended disbanding the Utilities Board or moving the DPU under the County Administrator, even though many public utilities are structured that way. As the chair of the most recent DPU Charter Review Committee, I can report that we saw the benefit of having a dedicated team focused on this complex business, providing a deeper, more focused knowledge base on this critical County service.
But there are problems with the current structure. We need to resolve the question of who is ultimately in charge; about who makes the final decision if the Council and the Board can’t agree; about who approves a disputed budget, strategic plan, or key personnel decision. And, there should be provisions for removal of unproductive board members. Both citizen committees that reviewed the matter concluded that the ultimate responsibility lies with the elected County Council.
The Board of Public Utilities recently voted to accept two elements of the DPU Charter Review Committee’s recommendations but rejected most of the proposed changes in favor of the current structure. Some claim that the current approach has worked for the past 45 years and that it will continue to work in the future. They argue that the acknowledged ambiguities can be managed if a problem ever develops that is serious enough to warrant hard resolution.
The Board of Public Utilities, by majority vote, rejected what seemed to many of us as very benign recommendations aimed at increasing communication between the Council, the Board, County Administrators Office, and the Department of Utilities. The Board opposed mechanisms to promote dialogue like a requirement for quarterly updates on significant Utilities issues, a living strategic plan, and a formal review of the operations of the Department every five years. The Board majority argued that these things aren’t appropriate for the Charter, but have offered to consider these ideas for their own internal procedural action. By contrast, the DPU Charter Review Committee believes that having these simple requirements in the Charter creates transparency and accountability that has been lacking for decades.
The provisions of the County Charter don’t exist to serve the Board of Public Utilities or the management of the Department. They exist to serve the citizens of Los Alamos County and to promote open, responsive local government.
While respecting the contributions of Board of Public Utilities members, two successive citizens committees have concluded that the Charter should create a structure that promotes good government, rather than relying on personalities and good will to address the acknowledged systemic flaws that exist today.
On December 3, the County Council will discuss the recommendations proposed by the DPU Charter Review Committee. You can find these recommendations on the County website. If you have an opinion about this situation, contact the Councilors with your views and come to the Dec. 3 meeting to make a public comment.