Comment Up
Originally our Bond for our Utility was for $66,000,000, half of which was for our RO and the other half for the Utility electric upgrade. (2008 Series Utility System Refunding and Improvement Bonds-- 2004 Series Bonds). The bonds were refinanced in 2008 in order to get a fixed interest rate payment of 4.25%. These bonds are due and payable in yearly installments through May 1, 2028.
Today Becky Mattey said that we had $16.6 million left for the utility upgrade and needed $7 million more to complete her 10 year plan that was going to cost $22,587,778. That adds up to $16 mil spent, $16.6 mil left plus an additional $7. No one was clear whether or not some of the things suggested in her back-up and not discussed today are included in the $22.59 million. No one is sure of her statement that one-half of the bond money has already been expended. No one is even sure if $7 million is really all that she needs. There was no accounting of the funds presented and Commissioner Scott Maxwell has asked for this as well as the time-lines for items to be finished/completed. Mattey said that we were "under Bank requirements and no longer under the requirements of the Bond Covenants."
Mattey says she does not want to call it a "Conversion" but rather a "solid, well designed" long range electric utility plan that will take 10 years from start to finish. It is a conversion if her department has now decided to go with a 13.2kv distribution system as the "most economical approach by de-converting the 26.4kv and converting the 4.kv to 13.2kv. What else would it be?
Going with the 13.2kv is the way to go.
One thing we did learn today, we are now short $7,000,000 to complete her Plan. We learned but already knew, possibly $5 to 6 million was wasted on labor and materials in ripping a part a system and now we will be paying millions more in labor to straighten out the mess. Director Mattey said it "wasn't lost money."
Bad decisions and not listening to expert advice always result in lost money and in the City of Lake Worth's case, it is always millions, not hay.
It does appear that Becky is attempting a bait and switch with the 138 kV dollars. This is probably not intentional, but will become mandatory as they spend $$$$ on their Rolls Royce proposal.
ReplyDelete2) Clay misspoke when he indicated that some portions of the conversion will be Overhead to Underground. The cost differential between the two would be at least 10X with a reduction in reliability as the URD conductor is weathered in the coastal salt water. (I will provide more information as I search my database.)
3) The utility is attempting to do twice (possibly three times) the work with one-half of the original bond money. This ain't going to happen. They have mislead the commission into thinking that they can provide a Cadillac system for the dollars remaining.
In the Know
I sincerely wish that Becky and Clay had presented the commission with an achievable plan for the dollars available. This pie-in-the-sky, wishful thinking, plan that was presented will ultimately result in a lot of hard feelings and disappointment when they have to continuously have to go back to successive commissions to ask for more money.
ReplyDeleteThis is certainly not a plan that I would have presented, although if one wants utopia, I suppose you have to go for it.
Should we be selling this turkey?
ReplyDeleteA plan was submitted to the utility in 2008 which would permit the conversion on a shoe string budget. The author of the Plan says, "Granted, it is not the Cadillac system as envisioned, but is adequate for the next ten to twenty years and will provide a strong foundation to gradually gravitate into a much more complex system without any changes. This plan envisioned using a small amount of $$$ up front to purchase the initial three substation transformers, and would then use the current utility revenue to complete the project. This was a ten year plan that did not include converting the existing 26 kV. But, by utilizing the existing utility revenue stream, the remainder of the system could be converted without much additional cost. This is because most of the pole replacements and insulator replacements would be accomplished utilizing 'maintenance' dollars as these problems existed prior to the upgrade."
ReplyDeleteDid they say how we're going to pay for it?
ReplyDeleteWell if the commission eventually passes this, it will probably go on the non-advalorem part of your tax bill if the Mayor has anything to do with it. He has already said that he wants to shift as much as possible to your tax bill. We all have to pay one way or the other. Granny will be forced out of her home. :(
ReplyDelete