BY KATE CROWLEY ROSENBERG
As if it weren’t bad enough that Truman utility bills have gone through the roof this summer, residents are now learning that the recently increased utility rates aren’t being used to repair infrastructure as intended and promised, but instead have been used to increase the wages of Truman Public Utility employees—a move authorized by the Public Utilities Commission (PUC).
“Essentially, the city council feels they were lied to by the PUC,” said City Manager Bethanie Ekstrom on the issue that led to a special meeting of the Truman City Council on Monday, August 27, 2018.
“In 2016, we were presented this power point presentation, and it showed pictures and cost figures of repairs that needed to be done. And at that point, the council agreed to a rate increase under the condition that these repairs were going to be done,” said Ekstrom.
“In all reality, in 2016-2017, the wages were increased by $82,000, more than half of [the money brought in from] this rate increase that was supposed to be used for capital improvement that is now being used for these wages," Ekstrom said. "Now the PUC is in a position where these repairs need to be done—the essential ones being the water tower needs to be repainted and re-coated and the safety repairs done, as well as the filter — well, now they don’t have any money to do that. So, now they’re coming to the council because they can’t get funding and they want the city to pay for it. Well, to be frank, we are putting on the brakes.”
The Truman City Council was authorized to create a Utilities Commission (PUC) and appoint its three members under Minnesota Statute 412.321.
By statute, those members are in charge of the operations, personnel, rates, and relations and finances with the city of Truman.
Minnesota Statute 412.321 Subdivision 4 allows for the dissolution of the utilities by the City Council.
In January 2016, Gary Greenwald of GMA Powerlineman Consulting, LLC, pitched his consulting services to the PUC. He had recently retired from the Minnesota Municipal Utilities Association and offered his services to train Brandon Winch and Aaron Pavelko in lineman duties since a journeyman lineman had not been hired to replace Justin Anderson, who left to work elsewhere.
Greenwald later explained that obtaining state grants to make the repairs would not be possible. “...Until we get out water and sewer into the black, we aren’t eligible for any of these grants.”
While grants from the state are available to small towns, they are not available to ones operating in the red, such as those who are insolvent or not providing evidence of fiscal responsibility.
In the Dec. 2016, meeting the PUC also voted to approve the following hourly rates effective January 1, 2017:
Taylor Varpness, $30/hr; Brandon Winch, $30/hr; Aaron Pavelko, $23/hr; Josh Shoutz, $26/hr; and Judi Davis, $30/hr.
Both of those motions were made by TPU Commissioners Kathy Hendricksen and seconded by Alex Voyles.
At the December 19, 2017 PUC meeting, Voyles and Brad Nickerson (who had been on the commission since 1992, Wayne Wiederhoeft replaced him as a voting member) resigned, and wage increases of 2% were approved, resulting in the following hourly rates:
Taylor Varpness, $35.19 (which included a $1.50/hr increase for having completed a 10-week probation, the remaining $3.69 unaccounted); Brandon Winch, $30.60; Aaron Pavelko, $23.46; Josh Shoutz, $30.60; and Judi Davis, $30.60.
According to figures provided by the Truman City Council, the wage changes from 2015 to 2017 were:
Varpness, was not employed in 2015, but in 2016 earned $40,152.54 (increased 67% in 2017 to $60,268.50.)
B Winch, $31,307.63 (increased 125% to $70,455.)
A Pavelko, $9,622.33 (increased 419% in two years to $49,993.38.)
J Shoutz was not employed in 2015. In 2016, he earned $35,216.24 (increased 71% to $60,268.50)
J Davis, $48,908.84 (increased 27% in two years to $62,400.)
D Brummond, $567.38 (114% increase to $1,217.64.)
Brad Nickerson doesn't feel the TPU employees are overpaid.
"No, because it will cost more to train and replace them."
Nickerson spent more than two decades on the PUC board.
"Personnel was the biggest problem we had at the time. What are we going to do if they all quit?" The TPU electricians are now trained journeymen-linemen.
Nickerson said the cost of training has paid off in getting numerous projects taken care of, and through the ability to have immediate help, rather than needing to wait for mutual aid assistance from another city, when a transformer blows and a part of the city is without power.
Necessary or not, the TPUC failed to include projected pay increases in the rate increase as presented to the Truman City Council.
How did it Happen?
At the Special City Council meeting held on Aug. 27, 2018 Councilor Brandon Mosloski questioned the TPU accounting practices and asked if the new monies generated by the rate increase are being put into a separate capital fund, which would make them unavailable to be spent on anything else, such as wages. Davis stated that TPU currently does not have itemized accounting, therefore all monies go into a general operating fund.
At the Sept. 4, 2018 City Council meeting, Davis defended the accounting practice stating that to have put it in a separate account would have required a Special Ordinance from the City of Truman.
According to Councilor Jake Ebert, “In the first year of the 10-year-plan (presented by Greenwald and approved by the Council), $82,777.52 of repair monies have been used for wages, and repairs are not being done due to lack of funding.”
Hendricksen, who is also on the Truman City Council, has had a view from both sides—as pointed out by Ebert at the Aug. 27 meeting, and “Should have been aware of what was happening,” according to those minutes.
Pay equity has been a frequent topic at the PUC meetings. In November 2014, J Davis' wages were adjusted to include a $1/hr increase to meet the State Equity requirements retroactive to Oct. 1st of that year. In addition, a $.60/hr increase was approved for J Davis for the 2015 pay period. In addition, Marlene Breitbarth received a $1/hr increase, and Darlene Brummond received a $.75/hr increase.
The Truman PUC employees are members of the International Brotherhood of Electrical Workers (IBEW) AFL-CIO Local Union 160 out of St. Anthony Minnesota.
Mosloski stated that TPU cannot keep operating the way it has been and asked if eliminating the union or decreasing wages were options.
Dissolving the union is not a decision that can be made by anyone other than the PUC employees.
According to the 2016 US Census Bureau of Statistics, a survey of Truman resulted in a median income of $46,944.
What Does the PUC Really Need to Fix?
Current cost estimates for the available options from Nero Engineering are:
Urgent repairs are the exterior and interior coating of the water tower, safety improvements and filter repair or replacement at the water treatment plant; $500,000.
Replace the existing iron filter: $1,877,400 (which does not address the chloride issue.)
Centralized water softening: $2,945,900.
Connecting to Red Rock Water: $3,070,960 (which still may not meet chloride limits.)
Connect to City of Fairmont Water: $2,885,300 (which will address the chloride issue but is likely to have high user rates.)
Fixing the Accounting Problems
Greenwald retired in September of 2017. Since then, Taylor Varpness, Outside Operations Foreman is making the decisions, according to Davis.
Davis, who acts as office manager, said, "I do the accounting and we do have an auditor—Burkhardt and Burkhardt, Ltd. (same as the city)," Davis said.
"They go through our books. They're making sure we're in compliance."
But the auditors do not help make judgments on how the money should be spent.
"No," Davis agreed, "because they review it after it's spent."
Davis has a two-year degree in accounting from South Central Technical College.
As for setting up a separate account for capital expenditures, Davis said, "That would probably be something I could talk over with the auditor and see what the steps are for that. I've never done it personally."
Resolutions at this point are undecided, but discussions are ongoing, and there are likely to be more revelations.
“It was made clear by the council at Monday (special session on August 27) night’s meeting that another raise in utility rates is not an option," Ekstrom said. “In order to obtain funding, the PUC needs the city to apply for funding. Which in return could affect the city's bond rating.”
Nickerson said, "Maybe some repairs will have to wait until certain bonds are paid off."
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