Category Archives: Utilities

Long Beach closes on $513 million in financing on Civic Center

Source: LA Biz, April 22, 2016

The city and Port of Long Beach have closed on financing for the $513 million Long Beach Civic Center Project. The project is a public-private partnership that is working to constructing a combination of public infrastructure and private mixed-use real estate development. The Civic Center project aims to reinvigorate downtown Long Beach and includes:

  • An 11 story 270,000 sq ft City Hall
  • An 11 story 237,000 sq ft Port Headquarters Building
  • A two story 92,000 sq ft Main Library
  • A 73,000 sq ft Civic Plaza
  • New underground parking with 469 spaces
  • Central utility plant
  • A three rooftop solar array system to provide up to 25 percent of the Civic Center energy needs
  • Revitalized City park of 4.9 acres.
  • Plans for future mixed use development with up to 580 residential units, retail space and up to 200 hotel rooms

The financing packaged arranged by lead developer Plenary Group included $239 million in a private placement from Allianz, $213 million construction loan from Sumitomo Mitsui Banking Corp., $21 million equity investment from Plenary and $11.8 million in cash and land valued at nearly $30 million from the city of Long Beach.

Related:

Long Beach Using P3 For New City Hall, Library
Source: Keeley Webster, The Bond Buyer, January 15, 2016

Long Beach, Calif. is pioneering a public-private financing method rarely used in the United States outside transportation in a $533 million project to build a new city hall, port headquarters, library and park. Instead of the city paying upfront to build the facilities and then paying for their operating costs over time, those expenses, along with design and construction costs, are all wrapped into “availability payments” the city and Port of Long Beach will make over a 40-year period. … The only other U.S. social infrastructure project that Ignacio Barandiaran, an Arup principal, said he is aware is the Long Beach courthouse agreement the California state government entered into in 2010. … The plan was for the availability payments to be the same as the existing expense, but the payments are going to be $14.7 million, plus a couple of million dollar service fee that covers the cost of interest on privately placed debt, according to city documents. Plenary-Edgemoor Civic Partners expects to close on a $238 million privately-placed taxable 43-year note in late January to fund the project. It will combine that with a $213 million bank loan from SMBC.

San Juan takes steps toward outsourcing utilities

Source: Fred Swegles, Orange County Register, April 11, 2016

Faced with escalating water rates, debt, lawsuits, a costly groundwater recovery project and a looming need to replace aging water infrastructures, San Juan Capistrano is contemplating transferring its water and wastewater operations to an outside service provider. The City Council last week directed city staff to prepare an application to the Orange County Local Agency Formation Commission, asking for an analysis of the most effective way to provide services. The council set aside $150,000 from the city’s water fund for costs associated with a LAFCO study. … The council’s 3-1 vote, with Sam Allevato dissenting and Derek Reeve absent, came after a year-long study by consultants who concluded that San Juan’s water and sewer systems are functioning well, but the water system faces steep challenges. … Consultants with the firm Brownstein Hyatt Farber Schreck said it could mean sale or transfer of city utilities to another provider, or a contract with a service provider.

Faced With Exorbitant Utility Costs, New York State Residents Fight To Keep The Lights On

Source: Laura Gottesdiener, In These Times, October 26, 2015

Nationally, energy utility companies’ rates have been rising throughout the last decade, and Central Hudson is no exception. On July 1, Central Hudson imposed a dramatic rate hike: a 7 to 9 percent increase for electricity and a 5 percent increase for gas. … From mid-2013 to mid-2014, the company cut off energy from more than 10,000 households, including West’s, for lack of payment. … In fact, a study by the Center for Financial Services Innovation found that utility bills were the number one reason people were forced to take out short-term loans such as payday loans … For nearly 20 years, Central Hudson has operated more or less unchallenged—until Nobody Leaves Mid-Hudson came along. First emerging as an anti-eviction working group of the 2011 Occupy movement, the group spun off into its own organization and soon began supporting homeowners fighting foreclosure with guidance from the longtime housing-rights group City Life/Vida Urbana in Boston and the national umbrella group Right to the City. … Nobody Leaves is demanding the company expand its assistance program, strengthen the protection policy to prohibit any shut-offs of homes with children 12 years old or younger during the winter months, and release data on who is being shut off. Nobody Leaves Mid-Hudson is also exploring possible models of collective bargaining with Central Hudson, as well as ways to move toward the long-term vision: publicly owned, publicly run utilities companies.

Provincially owned telecom firm sold at loss of almost $61 million

Source: Richard J. Brennan, Toronto Star, September 29, 2015

The Liberal government is under fire for selling off a provincially owned telecommunications company at a $61 million loss. … Ontera, which provides local and long distance telephone, data and Internet service throughout northeastern Ontario, was sold to Bell Aliant for $6.3 million — less than the $6.5 million the province paid consultants, lawyers and others advising the government on the sale. Newly released documents from a Public Accounts report states “a loss on disposal of shares of Ontera” of almost $61 million and that the “the government provided a one-time contribution of $52,092,000 to support the sale” of the Crown corporation. … Fedeli said given how the government “bungled” the sale of a smaller asset like Ontera, then “how are they are going to be trusted to sell Hydro One, a much bigger company,” referring to the Liberal government’s plan to sell off 60 per cent of the transmission utility. In struggling to explain the deal, Gravelle said the decision was made to cut the province’s losses. Details of the money-losing deal were outlined in public accounts documents released Monday. Ontera was the communications division of Ontario Northland Transportation Commission (ONTC), which, among other things, used to run a heavily subsidized passenger train service until the Liberals shut it down. It currently provides bus service, rail freight and refurbishment and land development.

LCEC, Cape Coral battle over transmission line project

Source: News-Press.com, September 15, 2015

The electric cooperative, which is involved in tense negotiations with the city over a new utility contract that also involves Cape taking over the utility, has filed an appeal with the city over “unreasonable conditions placed upon project permits, according to a news release LCEC emailed today. LCEC, according to the release, wants to move forward with a transmission line rebuild project, which is the single source of power helps provide power to about 18,000 customers on Pine Island, Sanibel, Captiva, North Captiva, and Useppa Islands, and Cabbage Key. The city approved LCEC’s standard right-of-way permit for a transmission line rebuild project spanning Matlacha Pass. Now, according to LCEC, the city has applied new conditions to the permit tied to Cape’s interest in becoming its own electric utility. Now, Cape officials are requiring LCEC agree “that the value of the project will not be included in the price the city would pay to take over utility service,” according to the electric company. …

City to consolidate departments, Robinson out

Source: Bill Smith, Evanston Now, August 21, 2015

City Manager Wally Bobkiewicz this morning announced plans to consolidate Evanston’s public works and utilities departments into a new Public Works Agency. … The consolidation of the two departments follows a review Bobkiewicz announced of the programs last May, which was headed by Assistant City Manager Marty Lyons. Bobkiewicz says the new agency will have four bureaus and that Lyons will meet with Public Works and Utilities employees over the next week to detail the proposed new structure. … Bobiewicz says the reorganization “will not change positions that directly deliver services to the community.” and that no layoffs of employees represented by AFSCME are planned.

What Our Towns Pay: How many employees does a town need?

Source: Liam Migdail-Smith, Reading Eagle, August 17, 2015

… Towns don’t want to create in-house departments that aren’t needed, Janssen said. But he’s also seen governments rely too heavily on consultants and end up paying far more in fees than they would by adding a salary and benefits. As development swelled in Spring Township in 2007, the township hired its longtime engineering consultant, Jim Moll. The in-house codes enforcement operation was also ramped up. Moll’s $118,000 engineer’s salary topped the Spring Township payroll in 2014. But township officials said they save far more than that by bringing most engineering work in house, along with other tasks such as writing zoning ordinances…

… Wyomissing has had success with a different approach. The borough has a very small administration and has been increasingly turning to outside contractors. The most recent shift was staffing summer parks programs through an employment agency. That shifted the liability and related costs away from the borough and cut the staff time that came with hiring and paying seasonal workers. But the changes were all behind the scenes, borough manager Marti Hozey said. Even though the employees are the employment agency’s, the borough keeps the same control over them and the parks programs. “We found that it was actually a better choice for us,” Hozey said. In hiring an outside landscaper to trim grass, Wyomissing was able to free up its maintenance staff to work on other projects that better fit their skill sets, she said. But some services make more sense to bring in house, Hozey said. For example, the borough employs staff arborists to maintain its many park and streetside trees because it found it couldn’t get the same service when contracting out. Kutztown does just about everything in house. It offers standard utilities such as water, sewer and trash collection. But it also crosses into territory uncommon for municipalities: Electricity and cable, phone and Internet service…

Contracting in solar work yields savings for state

Source: Jill Asencio, The Work Force, June 2015

… After receiving an expensive quote of $200,000 from a private contractor for a relatiely small job, it became clear to him that outsourcing the work may not be the answer. CSEA member Sam Mattina and co-worker Vince Iacovitti, electricians at Niagara State Park, were asked their thoughts. They agreed that keeping the project in-house or “contracting in” seemed more logical. How to best handle additional work and its necessary training while still maintaining the park was the challenge but CSEA members got the job done, saving the state an estimated $133,000, plus yet-to-be realized energy costs. …

The Privatization of Public Utilities Has One Major Upside

Source: Laura Bliss, CityLab, July 19, 2015

When local governments turn to private companies to manage vital utilities like water, energy, and public health, the poorest customers often lose. By law, private utilities can set their rates based directly on the cost of their investments, which means they can charge a lot, with little concern for how that impacts low-income consumers. Unlike public utilities, private utilities do not serve constituency—they serve investors. But according to a forthcoming paper in the American Journal of Political Science, the public utility model has some drawbacks, too. Its reliance on public support can compromise its ability to make crucial infrastructure upgrades. As a result of poor funding, public utilities can also fail to meet federal public regulations. And yet regulators are more lenient with them than with private utilities, since harsh punishment only further hurts the public.

Referenced Paper: When Governments Regulate Governments
Source: David Konisky and Manny Teodoro, November 2014

Abstract: What happens when governments regulate other governments? Leading theories of regulation proceed from the assumption that governments regulate profit-maximizing firms: governments set regulations pursuant to policy objectives, to which firms respond rationally in ways that constrain their behavior. But in many significant cases (e.g., pollution control, occupational safety), the entities that governments regulate are other government agencies, not for-profit firms. The typical policy instruments that regulators use to channel firm behavior (e.g., fines and licensure) may be ineffective or counterproductive when governments regulate other governments. Moreover, the regulator and regulated may share basic policy objectives and be ultimately responsible to the same citizens.

This paper advances a theory of regulation that accounts for the choices of regulators and regulated entities when both are governments. We argue that government agencies have greater incentives than profit-maximizing firms to shirk regulation and/or seek regulatory relief through political channels. As a test of this theory, we analyze public and private entities’ compliance with three U.S. pollution control laws: the Clean Air Act, the Safe Drinking Water Act, and the Resource Conservation and Recovery Act. Analysis of data covering the period of 2000-2010 indicates evidence consistent with our argument.

In Pennsylvania city, the poor are paying the price for a bad water deal

Source: Aaron Miguel Cantú, Al Jazeera, July 13, 2015

…. By all practical measures, Coatesville is 2 square miles of ghetto. Yet more than a dozen residents told Al Jazeera that, despite low use, they spend more than $100 each month for water, on par with residents of major cities such as San Francisco. All of their money goes to the private company that owns Coatesville’s water system, Pennsylvania-American Water Co., or PAWC…Nearly 40 percent of the people living in Coatesville are too young or old to work, and unemployment is high among those who can. Almost a quarter of Coatesville’s population live below the poverty line, even though the city is located in the wealthiest county in Pennsylvania, and the rate of violent crime is well above the national average…