GM Drama at the District

Reading the papers again.  I saw this one about the District, “Attempt to oust GM falls short“.  In a nutshell Key Largo Wastewater Treatment District Commissioner, Andy Tobin, called for the termination of General Manager, Paul Christian.  Comm. Tobin’s concern is a lack of transparency.

A little background – transparency has always been a big deal at the District.  The commissioners have always expected to be kept in the loop.  And rightly so.  They cannot effectively do the job they were elected to do without knowing the facts.  The first General Manager, Chuck Fishburn, and the second General Manager, yours truly, didn’t need much encouragement on this front.  The Board’s main responsibility is to hire a qualified General Manager and make sure that he or she is properly doing the job.  This position typically requires a bachelor’s degree (at least), several years of experience in the industry (design, construction, operation), and often (but not always) a professional engineering license.

Now to the most interesting parts of the article – the ones about me!

Christian pointed out he gave Saus a 5 percent raise within the past year, while former General Manager Margaret Blank had only rewarded Saus with a 2 percent bump.

This is a weird, off-topic comparison.  I guess if you’re suddenly confronted with possibly losing your job at a public meeting you’ll start grasping at straws.  The issue is about the transparency of recent compensation decisions.  The Board was always reflexively tight when it came to compensation.  It was a battle to get anybody anything.  If they’re starting to compare salaries to market level instead of being reflexively cheap (sorry guys!) then that is a welcome change.  Salary should be pegged to qualifications, experience and performance.  The District’s current Operations Manager is very, very well qualified and his performance has always been outstanding.  Having the right person in that position is key.  We only need to look at Marathon to see that things can go very wrong very quickly.  The District has to set itself up for success by hiring and retaining people with the appropriate qualifications.  This appears to be Comm. Tobin’s underlying concern.  You don’t want to risk losing well-qualified people because of what appear to be arbitrary and baseless compensation decisions.  In general, the Board needs to have some way to evaluate the General Manager’s decision-making ability.  How do they do that if he refuses to answer their questions?  Or provides dismissive non-answers?

Here’s another point I need to address:

Tobin, in an effort to garner board support, tried to downplay the district’s recent approval of an interlocal agreement with the county. It was an issue Christian, who previously called it a big step in the right direction for the district and its ratepayers, spearheaded.

“I don’t see that as a major accomplishment,” Tobin said.

Of course, negotiating an agreement is an accomplishment but the agreement with the county is one small step in a very long process that began years ago and will extend years into the future.  The District made major concessions in order to secure the agreement, including interest-free payments.  Those concessions could substantially reduce the benefit to District ratepayers.  As far as I know, the actual benefit of the agreement has never been quantified.  The agreement might turn out to be a good thing.  It might turn out to be a bad thing.  Nobody knows.  It depends on what the state does and it depends on what the county does.  I’ve written about the agreement extensively here, here, herehere and here.

The agreement is a monetary exchange with the county the district hopes will more quickly minimize its $56 million debt, thus reducing monthly charges for ratepayers.

Blank, as Commissioner Norm Higgins pointed out at the meeting, had no debt reduction plan in place during her general manager stint.

I totally reject the notion that I had no debt reduction plan in place.  Sorry Norm!  During my tenure, the District reduced its debt by over $8 million because of the agreement I negotiated with Islamorada.  By the way, that agreement would not have been possible without the efforts of my predecessors, the District’s legal team and the folks in Islamorada.  The District also secured $18 million in state money because of the Mayfield agreement I negotiated in cooperation with Marathon and Islamorada.  I was also tasked with preparing the one-pager we handed out in Tallahassee and with preparing the joint funding application, both of which required input from every entity in the Keys.  The “debt reduction plan” Comm. Higgins refers to is only possible because of those combined efforts.  These things build on each other.  It’s a years-long team effort.

I actually had multiple “debt reduction plans” and I had done quite a bit of analysis on each.  A lot of this has been presented to the Board over the past few years.  It’s been a while so it’s understandable that they might forget.  My favorite was for the state to simply allow Mayfield money to pay for costs incurred to date as was originally intended.  That was the simplest, fairest and most logical option but it was not to be.  The next favorite, in theory, was the swap agreement with the county.  I say “in theory” because I considered this option to be a huge gamble.  It would require the District to give up lump sum state money in exchange for payments from the county over time.  I didn’t view the county as reliable enough to trust with the District’s state money.  I still don’t.  After all, they have not been responsible toward Key Largo taxpayers as discussed here and here.  There was also a very alarming quote in the paper from Roman “Gases” Gastesi.

The loss of funding could have serious ramifications for the Key Largo Wastewater District, which is line to receive $17 million in sewer funding this year to pay down debt.  The county was looking at a money swap with the Key Largo district, because Gov. Rick Scott said he will not allocate money to pay down debts, only for new projects.

The county commission had agreed to take the state money for the Cudjoe Regional and other new projects and then give Key Largo county infrastructure sales tax money in exchange. But with no state funding coming this year, the county will have to reconsider the funding agreement, Gastesi said.

“The timing is going to be tight,” Gastesi said.

Looks to me like Gases is frantically searching for any excuse to worm out of the agreement.  The $17 million was approved by the state legislature the prior fiscal year.  According to Rep. Raschein, it should become available this fall.  Given the long lead time, Gases had plenty of time to get the county’s ducks in a row.  How could the timing possibly be “tight”?  If the legislature had approved another $50 million this year, the District would have received $12.5 million in addition to the $17 million already approved.  The general time line and the potential amounts of money were known when the agreement was negotiated.  It sounds like Gases is…well…emitting noxious fumes in the hopes of creating a murky fog.  Typical.  Bottom line – the District needs to be cautious.  It remains to be seen if the county was actually negotiating in good faith.  I’ll set the odds at around 50/50.

A solid alternative to the swap agreement, another “debt reduction plan” if you will, was using state money to build a reuse system.  The revenue generated by the reuse system could then be used to pay down debt.  This was an attractive option to me because (1) it complies with the state’s requirement that the Mayfield money be used for “new projects” (2) it generates revenue indefinitely (3) it’s a major benefit to the environment.  On the down side, folks in Key Largo and the Keys in general are suffering from construction fatigue and this would have been a substantial construction project – nothing compared to the wastewater project – but substantial nonetheless.

So there it is – the real poop on various issues.  Best of luck, Keys friends.

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