The financial scandals embroiling Montpelier and Burlington have some striking similarities. No, it’s not just that the administrations of both cities are liberal — if not downright progressive.
Rather, key administrators opted to keep their money troubles — and the strategy to get out of those fiscal pickles — a secret from citizens.
In Montpelier, Mayor Mary Hooper and City Manager William Fraser, in collusion with city councilors, kept hidden from the public an overpayment to a contractor that will cost taxpayers $400,000 to remedy. It may have already caused water rates to rise. They kept the information to themselves for three years.
During that time frame, Hooper ran for reelection unopposed. She’s up again in March. Want to bet she’ll see a challenger this time?
In Burlington, a top aide to Mayor Bob Kiss is on the hot seat after it was revealed that he authorized a $17 million loan from the city’s checkbook to keep fledgling Burlington Telecom afloat.
Chief Administrative Officer Jonathan Leopold told “Fair Game” that it was he, and he alone, who decided to extend the money to BT in early 2008. He loaned it in anticipation of receiving a new round of financing from outside investors. The deal never materialized because of the global financial meltdown, and the city’s checkbook became the bank.
“It was me, and I’m not ashamed of it,” said Leopold. “I still believe it was the right thing to do. In hindsight, you can always find things you could have done differently, but this was prudent and the taxpayers are not at risk.”
Leopold said refinancing BT’s current debt could cost about $1.1 million in fees, and he hoped to refinance the old debt and the cost of the remaining build out all at once. That process has taken longer than anticipated.
Leopold said he did brief city and state officials about BT’s finances, and the use of the loan, as far back as December 2007 and again last fall. Still, there is no explicit OK on record from the board of finance or the city council to loan the money, which is what irks many councilors and the public.
I never knew the phrase “checks and balances” means the guy in charge can request the loan and write the check.
Leopold’s actions also protected Mayor Kiss during a spirited four-way race for mayor this March. Wonder if voters would have been as likely to back Kiss for a second, three-year term if they had known the full details of the $17 million loan?
It also helps fuel ongoing speculation that Kiss is clueless and Leopold is really running the city.
Burlington and Montpelier aren’t alone in their secret shenanigans. As I noted recently in “Fair Game,” the Winooski School Board ran afoul of the state’s open-meeting law when it decided in an email exchange to “protect” the children from Pres. Barack Obama’s speech to schoolkids.
Recently, too, the weekly Waterbury Record took its town select board to task for holding subcommittee meetings without telling the public, or even keeping minutes of the meetings. Sheesh.
In the Winooski and Waterbury cases, Secretary of State Deb Markowitz said that, while there was a violation of law, they were honest mistakes. An intentional violation of Vermont’s open-meeting law is punishable with a $500 fine.
It isn’t the first time the Record has caught the Waterbury select board running afoul of the law, notes editor and publisher Maria Archangelo.
As with all these cases, perhaps there’s more intent than meets the eye?
Burlington Mayor Bob Kiss said he supports a full, independent audit of Burlington Telecom’s finances, among other steps, to reinstate confidence in the venture.
Kiss outlined these fixes to the city council before a special meeting Tuesday night. [Click here for Shay Totten's report from that session on Blurt: The Seven Days staff blog].
The audit request comes on the heels of an extensive war of words between the Kiss administration and David O’Brien, the state’s public service commissioner.
The public flap erupted after “Fair Game” first reported that BT borrowed $17 million from the city after years of promises that it wouldn’t rely on taxpayer money to be viable. O’Brien said it was “the most irresponsible utility behavior” he’s seen in his seven years as commissioner.
CAO Leopold, who OK’d the city loans to BT without explicit approval from the board of finance or the city council, will recommend several refinancing options to councilors by their November 16 meeting, Kiss said. The financing plan could include an immediate repayment of the $17 million.
In a letter to city officials on Friday, O’Brien’s department urged BT to repay the city loan immediately and stop taking more cash from taxpayers.
City officials say O’Brien either doesn’t talk to his own staff or, worse, he wants to deliberately sabotage BT.
“The tone of urgency of the letter is ironic since the DPS has known about the city’s use of pooled cash since November 2008,” the usually quiet Kiss fired back in a prepared statement. “This is a public relations ploy consistent with Mr. O’Brien’s inaccurate and unwarranted statements about BT’s finances. His remarks undermine public confidence in BT and increasingly appear to be a strategy to close BT down.”
Oh, come on. The only folks who might like to see BT shut down would be Comcast. And I don’t recall seeing the giant telecom company on O’Brien’s holiday party guest list last year — you know, the one “Fair Game” wrote about? In his Stowe condo, O’Brien rubbed elbows with Jay Thayer, the head honcho from Entergy Vermont Yankee.
Queen City taxpayers are being invited to a special council-sponsored city hall forum about BT on Thursday night. There, voters will finally have a chance to give city councilors a piece of their minds.
Imagine that, letting the public weigh in.
Cover that Cough
The flu season is upon us, and it is underscoring the impact of nearly two years of state staffing cuts.
In 2007, the state had 87 public health nurse positions, according to state personnel records. Today, that number has dwindled to 65. Every one of the state’s 12 district health offices has been impacted by the job cuts.
The cuts have meant that flu clinics, once largely run by the state’s public health nurses, have been handed over to the private sector.
A national nursing firm, Healthy Achievers, will provide flu shots to state workers. They had a $92,000 contract last year to staff the clinics, while this year they will be paid a maximum of $77,910. Next year, the state has agreed to pay out as much as $103,000.
Meanwhile, regional visiting nurse associations will be paid a total of $2 million to staff flu clinics for the general public.
State nurses are working with local school districts to staff in-school flu shot clinics.
What puzzles some observers is that the health department relies more heavily on federal and special funds than do most other state departments and yet has seen its nursing ranks shrink.
In fact, only 9 percent of the department’s money comes from the state general fund, said Chris Finley, deputy health commissioner. The feds finance about 80 percent of the department’s work.
“That said, we’ve been faced with the same constraints as other departments, and I know we always say this, but we really are doing everything we can to make sure that we don’t impact public health,” said Finley.
Finley said public health nurses provide a wide range of services, from maternal-child services to screening families for the Women, Infants and Children nutrition program.
One way the department is seeking help is through volunteers. Earlier this fall it sent a letter to private nurses asking them to help out at flu clinics.
Dawn Kersula, a registered nurse at Brattleboro Memorial Hospital, was shocked to receive a letter from the state asking her to volunteer her time.
Rather than getting nurses to work for free, she suggests a better public health policy is to keep good nurses on staff.
“We were aghast to receive letters asking us to volunteer to give flu shots, for the good of the populace, the day after the announcement of more layoffs. This is not forward-thinking public health policy,” said Kersula.
Speaking of forward thinking, more cuts are on the horizon. Department heads have been given a reduction target of 8 percent for the FY 2011 budget.
As if swine flu weren’t enough to make a state employee feel queasy.
Despite the cuts, the state has found money to install new granite steps at the health department’s Burlington office on Cherry Street.
Total cost? Roughly $100,000, said State Building Commissioner Gerry Myers.
The granite was locally sourced, which made the project more expensive, he said. They also used a Vermont-based contractor.
The repairs were several years in the making, as the original steps were falling apart and increasingly unsafe, especially in the winter.
Wouldn’t want a laid-off employee to trip on their way out the door, adding injury to insult.
Hats off to Louis Porter at the Vermont Press Bureau for his eyebrow-raising item in Sunday’s “Capitol Beat” column.
Porter reported that Senate President Pro Tem Peter Shumlin (D-Windham) has separated from his wife of 20 years. Shumlin is expected to announce next month that he will seek the Democratic nomination for governor.
“We have been living separately for several months,” Shumlin told “Fair Game.” This isn’t the first time the couple have split up. They also went their separate ways about six or seven years ago, Shumlin noted. Gee, that was right around the last time he ran for higher office. Shumlin ran, and lost, his bid for lite guv in 2002.
The earlier separation lasted about a year, Shumlin said.
Peter and Deb Shumlin have two daughters and live near each other in their shared hometown of Putney.
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