"Trimming" a Budget at ElectriCities, the only place in America adding staff and giving big raises

I find it hard to believe that ElectriCities can say with a straight face that they are assessing all positions for critical needs and trimming their budget when they add staff - lobbyists, communications, temporary secretaries - and still give merit raises and have parties. Unbelievable.

http://www.rockymounttelegram.com/news/power-agency-approves-725m-budget-291119.html#comments

They trimmed the eastern agency $725 million budget. There was an error in the story about how Rocky Mount voted that inflamed a few dozen people before it was corrected.
This is my favorite line,

"'I, as well as the ElectriCities board, will scrutinize the expenditures we make in 2009,' said ElectriCities interim chief operating officer Art Hubert."

We are waiting for some scrutinizing but so far we just see some spending. But this is actually humorous

"Hubert said after revisiting the budget, he and ElectriCities staff eliminated retention money for personnel and VIP events; senior staff merit pay; reduced merit pay for employees from 3.8 percent to 2.2 percent; made reductions in travel expenditures and reduced consultant services by more that $120,000. The overall budget trimming totaled $564,000 out of the $725.8 million budget, Hubert said."

Seriously, BlueNC posters, please explain to me how I should be thrilled over this pathetic reduction of things that should have been eliminated back when there was a 14% rate increase. Poor staff, no VIP events and reduction in consultants of $120,000 on budgets of consultants in the millions. This is a pathetic excuse for a news story, a pathetic budget reduction. Does anyone really expect us to believe this makes a difference one bit in this world?

But let me add that Mr. Stevens, Mr. Noble and according to the Wilson paper, Mr. Craft did make some adjustments to staff merit increases so I do commend them for what they did, however, in the big scheme of things, it is rather small. I am amazed that Rocky Mount, the shrinking city, did not put up a huge fuss at this meeting. Electric rates are killing this city.

Comments

They're counting on you to give up

The overall budget trimming totaled $564,000 out of the $725.8 million budget, Hubert said.

That's less than a thousandth of a freakin' percent!

If these people were competing in real business, they'd be out on their ears. This is obscene. Where's the outrage by customers? Are regular people just swallowing this abuse without complaint?

Budget Cuts

^ELECTRICITIES
Serving Public Power Communities Since 1965

TO: Electricities Board of Directors
and NCEMPA Board of Commissioners
FROM: Arthur L. Hubert, Jr., Interim Chief Executive Office
DATE: December 4,2008 ......
SUBJECT: Response to Document Submitted by Andre Knight
On November 19, the NCEMPA Board of Commissioners received a letter which offered up suggestions for spending cuts that could be made at Electricities.1 Many of the items stated in the letter are misleading and the associated dollars included are incorrect. Additionally, the letter indicated that $6 to $7 million worth of cuts were achievable. This suggestion is not practical when one considers that the total 2009 Budget for Management Services for NCEMPA is $7.25 million.
This memorandum addresses points included in the letter and provides some facts regarding the items listed, as it relates to the 2009 Budget. We have worked with the NCEMPA Board of Commissioners and the Electricities Board of Directors to further reduce the original proposed 2009 NCEMPA Budget for Power Agency Services by 5.3 percent.
Items:
1. Suggestion to cut the $174,000 per year for board member salaries.
• NCEMPA voted to eliminate the salaries for the Board while NCMPA1 did not. For 2009, there is $87,500 in the NCMPA1 Budget and $0 in the NCEMPA Budget.
2. Suggestion to reduce CEO salary to $250,000.
• Effective November 7, 2008, CEO Jesse Tilton resigned his position. Any replacement and salary decisions will be addressed by the Electricities Board of Directors.
3. Suggestion to eliminate out of state annual meeting, and to make this meeting a one day event at a Participant city.
• The Annual Meeting is a self-supporting event, paid for by sponsorships and from the
registration fees paid by attendees. No monies for the Annual Meeting are included in either the NCMPA1 or NCEMPA Budgets.
• All staff travel and expenses for the Annual Meeting are included in the Annual Meeting Budget and is not in either the NCMPA1 or NCEMPA Budgets.
• The 2009 Annual Meeting will be held in state. The location of the Annual Meeting has been contracted through 2012. In the past, the Annual Meeting was held in Participant cities, but unfortunately, the attendance declined significantly.

4. Suggestion to eliminate staff retreats and out-of-state travel.
• Reductions were made in Staff Development travel for the 2009 Budget.
• There is no staff retreat included in any of the 2009 Budgets.
5. Suggestion to eliminate multiple positions in senior management and manager level management and salary adjustments to eliminate double digit salary increases over the past five years.
• All Electricities positions' salary ranges are evaluated using an outside salary consultant to determine the appropriate ranges for the job responsibilities and those ranges are taken into consideration when any raises are given.
• When vacancies occur, the need to fill the position must be justified to the CEO before the vacancy can be filled. All vacancies are evaluated to determine if adequate resources are available to cover the responsibilities of the position or if a new hire is required. Additionally, all positions are periodically evaluated to ensure that the proper allocation of resources between agencies occurs.
f
6. Suggestion to eliminate contract lobbyists and staff lobbyists.
• The 2009 Budget includes 6 part-time contract lobbyists, 5 for State issues and one for Federal issues. The total amount included in the 2009 Budgets is $230,000, split 50% to NCMPA1 ($115,000) and 50% to NCEMPA ($115,000). In terms of dollars, this is equal to approximately 1 full-time contract lobbyist per Agency.
• Staff includes two lobbyist positions and three grassroots coordinator positions. All of these positions have to register as lobbyists in order to comply with the 2007 state ethics law because of interaction with legislators.
7. Suggestion to restrict the legal budget expenses to $150,000.
• The 2009 Budgets include $1.85 million for legal expenses. These costs cover legal advice
related to contractual, regulatory and legislative issues. Approximately $47,000 is paid for
through Electricities Dues and the remaining $1.8 million is split 64 percent to NCMPA1
and 36 percent to NCEMPA.
• These expenses are considered consultant expenses. Any consultant expense that is expected to exceed $25,000 must be approved by the Electricities Board of Directors prior to spending any dollar.
8. Suggestion to implement a hiring freeze to be effective Aug. 23,2008.
• As noted in item 5, when vacancies occur, the need to fill the position must be justified to the CEO before the vacancy can be filled. All vacancies are evaluated to determine if adequate
-2-
resources are available to cover the responsibilities of the position or if a new hire is
required. Additionally, all positions are periodically evaluated to ensure that the proper
allocation of resources between agencies occurs. - -.,, «
9. Suggestion that salary adjustments be restricted to 2 percent for the next three years and be only available to those employees making less than $50,000. It was also suggested that bonuses be eliminated.
• On November 20, 2008, the Electricities Board of Directors held a special budget workshop to review the 2009 Budget. During that workshop the salary adjustment (merit pool) was reviewed. For 2009, the budget file merit pool was adjusted to eliminate senior management increases and lower the amount available to all other staff. This adjustment resulted in a merit pool of approximately 2.2 percent for NCEMPA and to 2.4 percent for NCMPA1. This amount will be included in the NCEMPA 2009 Proposed Budget.
10. Streamline functions within Electricities to achieve elimination of positions.
• As noted in item 5, when vacancies occur, the need to fill the position must be justified to the
CEO before a vacancy can be filled. All vacancies are evaluated to determine if adequate
resources are available to cover the responsibilities of the position or if a new hire is
required. Additionally, all positions are periodically evaluated to ensure that the proper
allocation of resources between agencies occurs. i,,(.
11. Suggestion to eliminate the October employee appreciation day.
• The 2009 budget includes a split between the agencies for an employee appreciation day. This is done to thank the Electricities employees for their efforts throughout the year and includes a lunch and small tokens of appreciations for each employee, typically a $40 or $50 gift card. Employees are also recognized for their dedication and longevity.
12. Suggestion to eliminate the purchase of logo items.
• The 2009 Budgets include approximately $20,000 split between NCMPA1 and NCEMPA for promotional marketing items.
• These items are used to promote and market
- Energy services and Energy Solutions Partner (ESP) to Commercial and Industrial >. Key Accounts,
City services to key trade allies such as home builders, HVAC contractors, and electric contractors,
- Public Power to residents during exhibits and fairs. ,;
13. Suggestion to eliminate out-of-state travel for trade shows.
• The 2009 Budget includes travel to the following trade shows:
- International Council of Shopping Centers (ICSC)
-3-
- Biotech 2009 (Pharma / Biotech) ;- ^s, - -il# *.,
- FABTECH (Metal working) •••.•.-. , ,"*
- SEMA / PRI (Automotive) ^it
- NPE (National Plastics - show held every 3 years) ''
- IBEX (Marine) -••>. ' NC Hospital Association ':-, - , •••'' ..r.:;.-,-. • ;,,
• Electricities members benefit from these events because they provide opportunities for retail, commercial and industrial recruitment. These events allow us to walk the floor talking with companies to generate leads in targeted sectors such as biotech, automotive, marine, plastics, food processing, metal working, and aviation / aerospace. The International Council of Shopping Centers show is strictly for the retail/commercial market and provides Electricities members with access to 80-90% of the developers we need to talk to. This also allows us the opportunity to learn about new projects/developments in our member cities and to talk to the~ developers about our member cities. The NC Hospital Association show has been beneficial for marketing ESP services to hospitals, which is a customer class that a majority of our members serve.
14. Suggestion to reduce magazine, newspaper and web subscriptions. •-,
• The 2009 Budget includes a line item for dues and subscriptions split 50% to NCMPA1 and 50% to NCEMPA. These are not typically magazine subscriptions but are for subscriptions to databases and industry publications that are needed to perform functions in treasury, surplus sales, accounting, economic development and other areas of Electricities. Also included in this category are the dues paid for professional licenses for PEs, CPAs and CFAs on Electricities' staff.
15. Suggestion to eliminate hotel meeting space, food catering and beverage expenses for meetings.
• The majority of meetings held on behalf of Electricities are held at the Electricities office
when they occur in Raleigh. The Board of Commissioners meetings are held in Charlotte for
NCMPA1 or in Wilson for NCEMPA. In Charlotte, a hotel facility is required, hi Wilson,
we are able to use the Operations Center as a meeting place. Electricities does typically
provide lunch for attendees. -
• Beverages for meetings in the Raleigh office are included in the 2009 Budgets at $12,500
split between the agencies.
16. Suggestion to eliminate hotel costs for Board of Directors that come to Raleigh the night before a Board meeting.
• Electricities does reimburse Board members for hotel costs when they come to Raleigh the night before a Board meeting. Board of Directors meetings begin at 9:00am. Many Participants cities are 2l/2 to 3 hours away and Board members may not wish to drive that distance twice in one day.
-4-
17. Suggestion to eliminate lawyer/lobbying assistance costs.
• The 2009 Budget include $120,000 split 50/50 to NCMPA1 and NCEMPA for legal assistance with legislative items. Electricities uses this money for legal interpretation of legislative issues to determine any potential impacts on NCMPA1 and/or NCEMPA of the various bills that are introduced into state or federal legislation. This information helps us develop alternatives and strategies to minimize any negative outcomes of introduced bills.
18. Suggestion to cut printing costs for Annual Reports, Financials Statements and Fact Sheets.
• The 2009 Budget includes $20,000 for printing the annual reports of all three entities:
Electricities, NCMPA1 and NCEMPA. Financial Statements are printed in-house for Board of Directors mail outs and also uploaded onto the Electricities website. Fact sheets are also produced in-house.
19. Suggestion to cut advertising costs.
• On November 20, 2008, the Electricities Board of Directors held a special budget workshop to review the 2009 Budget. During that workshop advertising dollars were cut by $60,000, split 50/50 between the two agencies. The cut was to eliminate the 2 VIP events held annually in each agency.
19. Suggestion to eliminate Energy Solution Partners (ESP)
• Program Purpose
o The Energy Solutions Partners (ESP) program is designed to provide Electricities members the tools necessary to help retain existing key accounts as well as attract new business.
o ESP is a partnership of Electricities and vendors with expertise in the areas of on-site generation, lighting, HVAC, power quality and energy management. Through these unique relationships, Electricities, its members and its key accounts have realized cost savings, improved reliability and increased productivity.
• Financial Benefits
o The ESP program is a revenue generating program. Through an agreement with its Energy Solutions Partners, Electricities receives a small management fee on a per project basis which is split between Electricities and the two Power Agencies. Since the program began in 1999, Electricities has received more than $1,300,000 in fees with minimal costs (less than $10,000 a year for contract review and informational website work). In 2005 alone, Electricities earned nearly $200,000 in management fees.
-5-
o The major economic benefit for the cities is the reduction in KW demand that these projects provide. The 20 MW of on-site generation installed in 2005, represents a potential annual savings for the cities of $3,000,000.
o From 1999 to 2005, nearly 100 MW of customer generation has been installed
through the ESP program, representing a potential annual savings of nearly $30
million. ;
20. Suggestion to cut sponsorships to:
1. NC Transmission Planning Collaborative (NCTPC),
2. Economic Development conferences,
3. Association of Broadcasters meetings, and
4. Friends of N.C. ,
• The NCTPC is a group spearheaded by Electricities and which includes Duke, Progress
Energy, the Co-ops, and Municipalities (through NCEMPA and NCEMPA) that works
together to develop transmission plans. The group's efforts have resulted in the generation of
the first statewide transmission plan. Also through this joint effort, Electricities provided the
solution to potential transmission constraints that saved over $100 million from the original
plan put forth by Progress Energy. ,.,, ;
o The 2009 budget for NCTPC includes $75,000 for dues and consultant advice for this project. This cost is split between the two agencies 50/50. Duke and Progress Energy each pay $100,000 in dues for this project.
• The 2009 Budget includes $10,000 for client visits and mission trips with the Department of Commerce, member cities and local developers. These trips allow NCMPA1 and NCEMPA participant cities to be represented in discussions with industrial and business clients that are looking at potential sites for new businesses. This cost is split 50/50 between the two agencies.
• The 2009 Budget contains $180 split 50/50 between the two agencies for NC Association of Broadcasters dues.
• The 2009 Budget does not include "Friends of NC" but does include $25,000 for Friends of Commerce dues. This cost is split 50/50 to each agency and provides marketing support to supplement Commerce marketing plan, the advisory board, including contributors, controls dollar spending and selection of events.
21. Suggestion to cut attendance at American Public Power Association (APPA) meetings.
• The 2009 Budget includes $23,165 for board member attendance at the Winter and Annual APPA meetings. During the November 20th budget workshop, this expense was trimmed by over 18%. There is also $47,850 included for staff attendance at various APPA conferences and workshops. These meetings provide staff with valuable information regarding the industry as well as contacts with other Public Power officials to discuss important issues
-6-
affecting the industry and municipalities. This cost is split 52% NCMPA1 and 48% NCEMPA.
22. Suggestion to eliminate lobbying events.
• The 2009 Budget includes $16,300 split 50/50 between the two agencies to cover a reception to discuss legislative issues at the state level. At the beginning of each long session, organizations use receptions as an opportunity to network with legislators on upcoming issues. There will not be a reception at the federal level; however certain board members will travel to the APPA Legislative Rally in 2009 to meet with Congressional delegates that are dealing with issues that could impact Public Power. In 2009 we believe there will be legislation on items such as climate change and renewable energy portfolio standards that will require Public Power to remain engaged in the legislative process.
23. Suggestion to eliminate professional memberships.
• The Electricities staff includes numerous professionals who are licensed in their specific fields. The 2009 Budget includes approximately $11,500 for dues to professional organizations so that staff can maintain their licenses and any continuing education that is required. Electricities has professional engineers (PEs), certified professional accountants CPAs), certified financial analysts (CFAs) and other professionals as part of the organization. This cost is split approximately 50/50 between the two agencies.
24. Suggestion to cut several items
1. VEP events (appreciation events for cities' large customers),
2. gym equipment,
3. bathroom renovations,
4. commissioned art, and
5. big screen TVs in meeting rooms.
• As noted in item 19, at the November 20th budget workshop, the $60,000 advertising budget was cut which eliminates the 2 VIP events held annually in each agency.
• There is no gym equipment included in the 2009 Budget. Past purchases of gym equipment were part of a wellness program implemented at Electricities to help lower overall health costs. Most of the dollars used for gym equipment was provided by a grant.
• There are no bathroom renovations included in the 2009 Budget.
• There is no commissioned art in the 2009 Budget.
• Electricities does not have big screen televisions in any meeting room. The training room has a large screen TV that is over 10 years old. There are large flat-screen monitors in the surplus sales room that are used by NCMPAl's surplus energy traders to monitor the weather and other data needed to extract maximum benefit from selling NCMPAl's surplus energy. These monitors-were purchased several years ago and were fully paid for by NCMPA1.
-7-
25. Suggestion to eliminate the political action committee.
• Contributions to the Electricities PAC are from citizens of the Participants and staff and are not a cost to any cities' ratepayers. The donated money is used to support legislators that can assist Electricities in addressing issues that impact the Power Agencies and/or our municipalities. Donations are voluntary.
o There are no dollars in the 2009 Budget for the Electricities PAC.
-8-

ElectriCities Disgusting

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

MORE DIRT AT ELECTRICITIES

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

What a bunch of Blatant Spin

Ricardo - did you evaluate this?

Suggestion to cut the $174,000 per year for board member salaries.
SOMETHING IS FISHY WITH AGENCY ONE. WHY DO THEY KEEP GETTING PAID

The Annual Meeting is a self-supporting event, paid for by sponsorships and from the
registration fees paid by attendees. No monies for the Annual Meeting are included in either the NCMPA1 or NCEMPA Budgets.
NO WAY ANYONE BUYS THIS. THE SPONSORS ARE CONSULTANTS. ANDRE NEEDS TO ASK FOR HOW MANY ARE SPONSORS AND WHAT THEY GET PAID. THE STAFF SPENDS A WEEK THERE "OFF BUDGET" THAT OUT OF A BOARD MEMBER MOUTH.

Suggestion to eliminate staff retreats and out-of-state travel.
STAFF SAYS CLAY NORRIS DID NOTHING BUT TRAVEL OUT OF STATE EVERY WEEK.

Suggestion to eliminate multiple positions in senior management and manager level management and salary adjustments to eliminate double digit salary increases over the past five years.
BULL. SOME OF THESE PEOPLE BLACKMAILED THEIR SALARIES. LOOK AT THE NORRIS 80000 dollar INCREASES

Suggestion to eliminate contract lobbyists and staff lobbyists.
WASTE OF MONEY. GET ONE PERSON, CONTRACT OUT. HOW MUCH HAS ALL THIS TURNOVER COST

Suggestion to restrict the legal budget expenses to $150,000.
• The 2009 Budgets include $1.85 million for legal expenses. These costs cover legal advice
related to contractual, regulatory and legislative issues. Approximately $47,000 is paid for
through Electricities Dues and the remaining $1.8 million is split 64 percent to NCMPA1
and 36 percent to NCEMPA. UNVBELIEVABLE

Suggestion to implement a hiring freeze to be effective Aug. 23,2008.
• As noted in item 5, when vacancies occur, the need to fill the position must be justified to the CEO before the vacancy can be filled. All vacancies are evaluated to determine if adequate
WHAT A DUCK

Suggestion to eliminate the October employee appreciation day.
• The 2009 budget includes a split between the agencies for an employee appreciation day. This is done to thank the Electricities employees for their efforts throughout the year and includes a lunch and small tokens of appreciations for each employee, typically a $40 or $50 gift card. Employees are also recognized for their dedication and longevity.

80,000 DOLLARS IN INCREASES FOR NORRIS AND 60,000 FOR DAVIS. DONT THINK THEY NEED A GIFT CARD

LOGO ITEMS These items are used to promote and market NO NEED TO PROMOTE AND MARKET A MONOPOLY!!!!!!
CUT OUT THAT HYBRID CAR - HOW DARE THEY BUY THAT WHILE RAISING RATES

CITIES SAY ECONOMIC DEVELOPMENT PRODUCES NOTHING FOR THEM., THEY WOULD RATHER HAVE THE MONEY.
SAME FOR COMMUNICATIONS.

Suggestion to cut printing costs for Annual Reports, Financials Statements and Fact Sheets.
EVERY ONE OF THESE ITEMS WAS LATE - AS IN 6 MONTHS LATE. WORTHLESS

CUTS - WELL GOOD
1. NC Transmission Planning Collaborative (NCTPC),
2. Economic Development conferences,
3. Association of Broadcasters meetings, and
4. Friends of N.C. ,
• The NCTPC is a group spearheaded by Electricities and which includes Duke, Progress
Energy, the Co-ops, and Municipalities (through NCEMPA and NCEMPA) that works
together to develop transmission plans. The group's efforts have resulted in the generation of
the first statewide transmission plan. Also through this joint effort, Electricities provided the
solution to potential transmission constraints that saved over $100 million from the original
plan put forth by Progress Energy. ,.,, ;
o The 2009 budget for NCTPC includes $75,000 for dues and consultant advice for this project. This cost is split between the two agencies 50/50. Duke and Progress Energy each pay $100,000 in dues for this project.

WASTE -- LET THE CITIES AND MAYORS GO - The 2009 Budget includes $10,000 for client visits and mission trips with the Department of Commerce, member cities and local developers. These trips allow NCMPA1 and NCEMPA participant cities to be represented in discussions with industrial and business clients that are looking at potential sites for new businesses. This cost is split 50/50 between the two agencies.

•• The 2009 Budget includes $16,300 split 50/50 between the two agencies to cover a reception to discuss legislative issues at the state level. At the beginning of each long session, organizations use receptions as an opportunity to network with legislators on upcoming issues. There will not be a reception at the federal level; however certain board members will travel to the APPA Legislative Rally in 2009 to meet with Congressional delegates that are dealing with issues that could impact Public Power. In 2009 we believe there will be legislation on items such as climate change and renewable energy portfolio standards that will require Public Power to remain engaged in the legislative process.
WASTE OF MONEY

GUESS THEY DO NOT NEED ANY MORE -- THEY ALREADY SPENT THOUSANDS ON IT
gym equipment,bathroom renovations, commissioned art, and big screen TVs in meeting rooms.
TOLD THE BIG SCREENS WERE FOR TILTON TO SEE HIMSELF AT ANNUAL MEETING

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