Electric Cities’ Future at Stake: Soaring costs, Mismanagement in Raleigh threaten eastern NC

Electric Rates are increasing. You may not be surprised.

After all coal, rail, nuclear fuel, like everything else, is increasing in cost. BUT, if you live in one of the 32 cities in eastern NC that belong to the NC Eastern Municipal Power Agency (i.e. your town owns a piece of Progress Energy nuclear and coal plants and that piece has a huge debt like a noose around your town’s neck) web site

you have OTHER cost increases going on behind the scenes. And those costs are on the wholesale rate the power agency passes onto your town. And those costs threaten your town, you, your way of life.

OPERATIONAL costs, or costs of doing business, are out of control at ElectriCities and those costs can be DIRECTLY attributed to JESSE TILTON, the CEO. His contract is up for renewal this summer and every rate payer can participate and ensure new leadership at the helm.
How? Talk to Members of the Board of Directors or ElectriCities, urge your local and state elected officials to talk to the Board who have been reluctant to hold Tilton accountable for a series of serious errors, misstatements and embarrassments that are costing you money and costing your town its reputation. Reputation does cost when it comes to recruiting business, attracting new residents and winning legislative battles. And, many of us who are retired simply refuse to see our money fly out the window due to mismanagement.

The timing is right. It is election time. It is time to call the Attorney General Rpy Cooper and his challenger Bob Crumley. The Treasurer Richard Moore and candidates. The candidates for Governor and Lieutenant Governor. It is budget time in the cities. Time to attend the budget hearings, get a copy of the budget. These two factors – elections and budgets - can change this situation. While we may be a small number of people, businesses and industry affected in eastern NC, we are the lifeblood of the region and the future of the region. And, I personally do not think our fate should hinge on the actions of one individual who simply does not get it – in terms of ethics, truth, fiscal management, personnel management, responsibility, accountability. Do you?
Here are the Low Points driving costs.

ElectriCities is not the entity to which your town owes debt. ElectriCities is the trade association
web site Somewhere buried in the budget of your town, is a line item for membership in ElectriCities. It is not REQUIRED or MANDATED.

It is fluff. Your town could acquire the same services and benefits by working together with other towns, without ElectriCities. And the simple fact of council members and commissioners refusing to pay dues would have a dramatic effect on management, via ElectriCities, and possibly turn the decision-making closer to home where it should be – with the commissioners from each town at the power agency. Question the dues. Some cities pay $50-60,000 a year.

Surely your town could put that money to use somewhere else besides the pocketbook of a Raleigh CEO and his sidekicks.

A few of the issues costing you money via OPERATIONAL COSTS over the past 5-7 years.
Though there are policies for employees and hiring practices afterall ElectriCities is a local government entity on the local government retirement system, but those procedures are routinely ignored. Jobs get filled without postings. People get raises for no reason. The HR manager, Dick Salentine, makes more than $120,000 a year which is excessive for 100 employees. He does not adhere to the organization policies. New positions and open positions are routinely hired “outside the procedures” and people are hired without the proper experience. Would you allow this in your city/town? No. A staff lobbyist gets raises and promotions after urging legislators to call on her behalf, a fact that is well documented and witnessed. The legislators admitted it. How is this fair to the other employees? Should not the ethics committees at the legislature question their own “influencing” lobbyists’ jobs. Ask an employee. They have been complaining and are being ignored.

In March this year, two lobbyists left suddenly. In the lobbying department, new people continue to be hired on contract so we are now paying for ten, even when there are no issues on the horizon. And last year, even with all these people, the towns still lost some battles. And one staffperson who just left got hired on contract, so one can presume this was a “hush” deal to keep the guy from talking. ElectriCities has far more lobbyists on contract than any electric entity in NC – more than Progress, Duke, the co-ops. These consultants rake in $300,000.

Then, with the staff lobbyists there has been 75% turnover over 5 years.

How can we be represented well when people with good credentials keep leaving. Three people who worked for Members of Congress left. All three after a very short period of time. Two others, executives, received settlements due to the bad behavior of the CEO Tilton, presumably to avoid lawsuits. Those settlements were done to avoid court because of the illegal behavior involved on the part of the CEO. We speculate that they total more than $300,000. Is this how you want your dues and power agency money spent? To avoid lawsuits? Because of all the secrecy, who knows how many settlements there have been and how much they cost you. There has been a settlement with Tom Fetzer, a former contract lobbyist. No one knows why. Or how much. Another secret. How many “secrets” are there? And what are they costing us? What entity would retain a CEO with so many settlements using PUBLIC MONEY. And what Board made up of public officials would let someone use public money so freely. Would a town let a city/town manager continue to run up settlement costs on the back of the taxpayers? We don’t think so. Your community would demand a change. Our State's PUBLIC records law should mean more than they do. Legislative twists have led to entities hiding information.

This division is in shambles. The CEO is accountable for those shambles. The collection of staff who left had worked for US Senators, Chief Justices, Members of Congress. They had good credentials and were highly qualified. The person who remains through all of this worked her way up from a secretary and has no distinguishing credentials except a reputation for “getting what she wanted” from former Rep. Richard Morgan, including an internship for her kid and his phone calls on her behalf so she could get raises. He got expensive dinners from her even after he left office. What is going on? And, we have just been told there is likely a law suit coming related to the antics of this individual. Clearly there is an issue with the lobbying – loss of good ones, turnover, settlements. These issues further damage our reputation. How can we be effective with this debacle called lobbying? The CEO is accountable.

Stories of staff bonuses matching PAC contributions. Staff getting bonuses to be used as contributions to legislative campaigns. And the CEO Jesse Tilton asking for a whopping salary boost to use as political contributions. These issues need to be investigated.

Inexplicable SALARY increases. Multiple increases in one year. Retoractive increases.

We are not talking about increases on top of $50,000, we are talking 16% increases on top of salaries in the $160,000 range. Senior staff retreats in five star hotels out of state and out of town with lots of alcohol, perks. Nothing but the best. Soaring legal bills. Wining and dining and out of state trips to influence board members. Out of state annual meetings.

Senior staff retreats paid for by law and engineering firms? How do they get reimbursed? Bar bills show thousands of dollars for drinks. At one last year, a female left to go home for the night because the men were absolutely wasted and stayed up all night drinking. And these reports come from the hotels not the individuals. Does your council retreat like that? What planning takes place when staff is doing Wine tastings, cooking classes, ballgames and drinking thousands of dollars of boos.

$50,000 is easily spent each year for a select group to go to the national conference for cities like ours across the country - APPA. Half the people never go to a session. The one this year occurs the same week as the BIG RATE COMMITTEE MEETING. So fresh off some fun in New Orleans, this Board will then appear in Rocky Mount to talk about bad debt financing and soaring rates. Remember that on June 27.

A friend of mine owns a Raleigh restaurant and is willing to testify that Jesse Tilton had an expensive “business” dinner meeting so he could pay for his date there. How many more events like that take place? How many times did Jesse Tilton have his staff take him to lunch on your dime?
Building renovations, including adding a shower to the office of Jesse Tilton; artwork; furniture. Does your town do that? Why in the world does this man need this perk?

Clay Norris, a staff person who appeared on the scene suddenly, after the original staff person got the boot after the job was already advertised (procedures?) has been the recipient of 60% salary increases over 5 years. My understanding is that he primarily works for the west. Great. Then they can pay for him. And he has been planning a large transmission purchase. Just what we need. More debt. Brilliant. Estherine Davis got 14% in 2003; and other senior staff got double digit increases. Ken Raber, who admittedly does a good job running the eastern agency, has been the recipient of many increases and retroactive increases. Why? Why so many lately?

Did Jesse Tilton get wined and dined by bond underwriters who are now jacking up rates on the debt refinancing deal? We deserve to know. Is it not bad enough that we have debt to pay but now we have a CEO who does not own up to a bad refinance deal and waits six months to tell us about it. ATTEND the rate meeting in Rocky Mount at the Braswell Library June 27 at 10:00 am. Call Jesse Tilton and get the agenda. The refinancing of THREE BILLION IN DEBT (ok $2,537,640,000) has gone awry and will be a major source of the RATE INCREASES. Jesse Tilton knew and he did not tell the city staff. He has known there was a problem and just told city staff in March even though he has known since October. ACCOUNTABILITY. This mistake will cost us millions of dollars. How will it be explained to the taxpayers? Millions of dollars in interest will drive up costs along with these other issues. Attend this meeting and find out the REAL components of the cost driving your rates to increase. And, suddenly the 30-year CFO is retiring BEFORE the rate meeting. Interesting timing?

Board members and staff “scout” out of state resorts to check out the rooms, go to meetings for extended periods, all costing hundreds of thousands of dollars. One staff reported that rarely do the board members attend the sessions at the conferences but when it is time to eat and drink, they arrive. And, the bond underwriters who sold the bad REFINANCING also pay for many a dinner. Do you want your taxpayers to pay for a select few people from cities to fly across the country and stay at five-star hotels eating filet mignon?

Salaries. The largest cities in the country pay city managers $200-350,000. They manage employees numbering more than 10,000. Jesse Tilton is making $500,000 and manages 100 employees. Will taxpayers believe his job is so complex to command this salary? This job is so complex that he makes more than the President of the United States? Givemeabreak. The largest cities in NC do not pay anywhere near this amount. Jesse Tilton makes more than the President of the UNC system, the President of the United States. How can we possibly explain this salary to your taxpayers? Could you explain that he gets this salary but works very limited hours? And to hide that he ordered calendars “shut down.” Mr. Tilton, have you read the paper and the email scandal in the Governor’s Office? Could you explain his car allowance for his Lexus? Could you explain his “lunch out” regularly with staff on your tab, his “dates” that get treated on ElectriCities’ tab? His propensity to order multiple expensive desserts at the taxpayer expense, an antic well-know in Raleigh. His propensity to travel first class and stay in top-line suites is also well-known. And, then there are the tantrums. Annual Meeting rants, travel rants about his rooms. My goodness. The annual meeting rant was captured on video. We have a real prima donna on our hands and picking our pockets.

When town employees get raises, do they get multiple raises in one year, retroactive raises, reprimands and continued raises? Do they acquire staff to manage, screw up and have them moved and still get raises? Secretaries make $45,000-$50,000 at ElectriCities. Elaine Williamson “forgot” to send in the rooms to Myrtle Beach in 2006 and lost the room block at the primary hotel for the ElectriCities Annual Meeting. Many people gave up their rooms, but she still commands $50,000, more than some cities can pay planning directors, finance directors. New secretaries come in and make $45,000, more than your important police officers make. At least one secretary NEVER comes to work and makes $46,000.

Still other staff re hired, after being “let go” from Progress Energy, paid salaries higher than 20-year staffers. Some staff were passed over in favor of “layed off” Progress Energy people. Do we let our city/town operate like this?

There is an entire group of former Progress Energy employees who roam around the country monitoring regulatory entities. Are the cities regulated? No, not last time I checked. But it seems ElectriCities wants the cities to be regulated given the sudden, growing and expensive emphasis on regulatory activity. The legislature keeps inching closer to regulation for the cities on electric and ElectriCities appears to be sending signals that it wants it. Do you? I, for one, am an advocate because then the Utilities Commission could plow through these costs and tell us if they are legitimate. So the staff is all over regulatory activities and then we hire 10 lobbyists to fight regulation at the legislation? Yes, this makes sense on another planet.

I do realize we can add these categories up and get mere millions of savings (and perhaps better manage the interest rate and financing of the BILLIONS of debt) each year but think what your city/town and taxpayers could do with a share of those savings. How many times has your town struggled to help a business expand, run a water or sewer line, get a grant for Main Street. Sure these amounts may be small on first pass, but when added up on an annual basis would definitely pay for needed improvements in cities.

Let me close by focusing on some spin:

Wilson Times wrote, Dec. 2 , 2007 in an Opinion, "News that the N.C. Eastern Municipal Power Agency does not plan a wholesale electric rate increase in 2008 gives some reassurance to electricity customers in Wilson. But that reassurance is limited to just the next budget year and, even then, could be altered by changes in fuel costs. NCEMPA provides electricity to the city of Wilson. Some of the power is generated by power plants partially owned by NCEMPA, and some of it is sold to NCEMPA by Progress Energy."

And, Nov. 29, 2007, Rochelle Small with the Wilson Times wrote, "Wilson Energy customers stand a good chance of not experiencing a rate increase this winter. The N.C. Eastern Municipal Power Agency Board of Commissioners, which met at the Wilson Operations Center Wednesday, approved its 2008 budget plan. The budget does not include any increase in the wholesale rate for electricity sold to Wilson or its other 31 member cities."

And, then Rochelle wrote, Nov. 28, 2007, "The amount of money Wilson pays to buy electricity at a wholesale rate from ElectriCities will stay the same in 2008. The N.C. Eastern Municipal Power Agency Board of Commissioners, meeting at the Wilson Operations Center Wednesday, approved its 2008 budget plan that holds the line on electricity costs for its 32 member cities."

But now we find out costs are increasing, rates are going up, that there were more positions in the budget than was reported in November. And the CEO knew all of this. The true professional travesty is that the CEO knew there were issues with the refinancing deals and he knew he was hiring another lobbyist position but failed to reveal it when he gave these lines. He likes to say “we have the same number of lobbyists” but it just is not true. He keeps adding on the people and they keep leaving. He just recently announced a new lobbyist hire, Karen Johnson, as someone with extensive experience but quick phone calls reveal one year of lobbying experience and no one really knows her. Perhaps Mr. Tilton was up late the night before and got the story wrong like Hillary Clinton on sniper fire. He simply, what, remembered it a different way and translated her year of lobbying experience as “being a veteran”? Do you want the CEO of ElectriCities to be less than forthcoming when billions of dollars are at stake? Do you want “spin” or truth? Do you want accountability or excuses? And do you want management or parties?

The missing puzzle piece is why the 14 members of the ElectriCities board are not addressing these issues – Sam Noble, Tarboro Manager, chairs the group. Fred Turnage, former Rocky Mount Mayor; Bruce Rose, Wilson Mayor; Mark Williams, Wake Forest Manager; Wilson Lacy, Fayetteville Utilities Commission (this is a misnomer because Fayetteville does not have debt and is not part of the power agency and pays minimal dues yet your power agency pays him, like the other board members, $1000 a month. Figure this one out); Ron Elks, Greenville Utilities Manager; John Craft, La Grange Manager. Then, from the West, Richard Thomas, Mayor of Lexington; Stribling Boynton, High Point Manager; Jennie Stultz, Gastonia Mayor; Linda Story, Granite Falls Manager; Bill Seamone, Concord Utilities (see same comment as Wilson Lacy); Jerry Cox, retired; Bob Smith, Monroe Council.

Are some colluding with the CEO and others just plain don’t get it/understand it? Some probably do not want to go through the stress of hiring a new CEO. And, it is hard to do the right thing when someone is buying you fancy dinners and taking you on trips all the time. Because these officials get paid $1000 a month for being on the board for a three-year term, something I, and others, vehemently disagree with because it leads to what we have now – collusion and self-protection – some are bought and paid for and do not want anything to threaten this supplement to their salary. But the fact remains. Public entity. Public officials. Public accountability. The public needs to contact them.

Soaring costs, few legitimate. The Mismanagement at ElectriCities threatens the future of eastern NC. Time to stand up and say NO. Say no in your local Budget. Vote for the candidates willing to look into ElectriCities. Now is the time for all ratepayers to act. ElectriCities will not speak to these issues because they are true. Councils, Commissions – Now is the time for accountability and time to stand up and do the right thing for the future of eastern NC. We deserve it.

Al Manning, native of eastern NC, retiree with plenty of time to investigate

Comments

Any chance that a lawsuit could shake this loose?

I'm not a lawyer, but I'd like to be one ... because I'd like to know how and when to use a lawsuit to get action going on a constipated case like this.

Lawsuit

We have a great lawyer willing to take it on pro bono. We have about 35 people onboard but others are emailing their interest so we get additional people every day. We have a letter going out to all elected officials in the cities with details. So, we are hoping we will acquire 50-60 additional folks, more folks at the Rate Committee Meeting in Rocky Mount June 27 when the CEO unveils his "mistake" for which we all have to pay. And we do think our timing is right now with elections and city budgets so for the next few months an all out effort to get more people on board. So, our timing is almost ripe for a bigtime lawsuit. Many things are "passed on" from employees and city staff so we would definitely like to verify further.

Thanks for the support and if you could put this where more folks see it, we would be grateful. Folks are emailing me here and I have a few new ones as a result of your site.

Al Manning, retiree, native of eastern NC and proud of it, plenty of time to read, research and get annoyed about the lack of accountability in elected leaders these days. Married to a real southern lady and we live with two labs and two airedales who run

Action Needed

Action is needed on these issues. I hope the local elected officials read this closely and contemplate it. While it is complicated, it is on track. And these are serious issues.

I am not sure about anyone else but the excess spending makes my blood boil. There is no reason for this place to be so screwed up, at our expense. In Wilson, electric rates are killing the new business development. Businesses hear residents talk about their $500 electric bill and haul down the road to western Wilson county where they will be on Progress Energy.

I see that these costs may not affect my rate 1 cent on the Kwh but if the money can be used for something in Wilson as opposed to in Raleigh on Jesse Tilton's lavish "lifestyle of the rich" and "not very famous" I am all for it.

Things I dont get

Ok. Someone directed me to read this since I live in Wilson and am fed up with my electric bill (as is everyone). I am all for demonstrations, outrage, public meetings. People are worked up about this.

But here is what I wonder:
1. These things have to be true because no one - and I mean no one as is board, staff, cities, Jesse Tilton, former board members - refutes it. No one has stood up and said not true. So in the face of no information from ElectriCities, these things must be true or close enough to true that he cannot answer. I know a former employee well and a current employee and I have heard many of these things over a period of years. Women have left many an event due to drinking and Jesse Tilton. I was with someone who met him and his actions were disturbing at best. I have heard these things from the board of commission members. So, since this is true, who is helping us - the board is not going to do it which means they should be removed for failing in their official duty. Could that not be a lawsuit? That leaves the legislature, state auditor, state treasurer, state attorney general. This is an eastern region issue and who is standing up for us?

2. Jesse Tilton won a lawsuit with the News and Observer in 2003 about Alice Garland - he said he did not settle with her. But then he told the board of commissioners recently he did. Why did the News and Observer not win this suit? Jesse Tilton's mistruths appear to be catching up with him. I have never heard one soul in this state say anything good about him at all so hello board, are you all crazy or lazy? It does not matter what I think but if half of this stuff is true he needs to move on. Since he hid a settlement as a non-public record but then went and talked about it, is it not now a public record?

3. ElectriCities is not Progress Energy so salaries should be like cities. Nothing complex about this man or his job, at least not in the sub-par way he is doing it.

4. I am very disappointed in some of the board - Fred Turnage, Bruce Rose, Ron Elks, Sam Noble - they have been around and know better. They are beginning to look like puppets of this guy. Do they need back-up or is the west pushing them around. There should be a way to separate from the west if that is the case. Who needs them? Who will advise if there is a way for the Commissioners for the eastern agency to recall a Board Member who is derelect in their duty. Can someone find this out?

5. Jesse Tilton can lock down calendars and hide stuff all he wants. But everything is public information and must be made available. Am I the only one who sees a striking similarity with the Governor's situation? Stupid mistakes. Stupid arrogance.

And one more thought

An employee passed this along,

An email from Dick SAlentine, HR

"Mr. Tilton has asked me to pass along the following announcement:

I am writing to advise you that after 30 years of creditable service to ElectriCities and the North Carolina Municipal Power Agencies, Chief Financial Officer Al Conyers has announced his retirement from ElectriCities effective at the end of the day May 23, 2008.

In anticipation of this decision, a number of steps have been underway to ensure a smooth transition for the management of the complex strategic finances of our three entities. Over his remaining time as CFO at ElectriCities, Al will primarily focus on special financing projects. Also as a part of the transition plan, Tim Tunis, Manager of Accounting and Financial Reporting, will be appointed as Assistant Chief Financial Officer to focus on daily management of the Finance Division while efforts are underway for the selection of an individual to provide financial leadership for the future.

During his career, Al has made many very significant contributions to the success of the Power Agencies and ElectriCities. We all wish him well in his retirement.

Dick"

A CEO who cannot write about thirty year employee right at the time of a bad financing deal. Suspicious to say the least.

I hope someone can answer the questions but at a minimum someone at a higher level should ask and get answers. Retirees, seniors, the working poor are getting creamed.

Thanks for the emails

Thanks for all the emails. You will all get the letter going to the elected officials tomorrow. And, as Kim in Wake Forest said, "Tilton needs to walk the plank like the CEO of Wachovia."
web site No reason he should get off. And any board member who cannot see that needs to leave or be removed.

We could cut half the personnel budget by slashing some salaries and eliminating some worthless people in regulatory (joke), planning (bigger joke), and the economic development team I witnessed is worthless, uncertified and poorly educated.

Al Manning, retiree, native of eastern NC and proud of it, plenty of time to read, research and get annoyed about the lack of accountability in elected leaders these days. Married to a real southern lady and we live with two labs and two airedales who run