City Council

this structure and form of government. That’s true, most of them do it, but I think one thing that needs to be considered in that is that there are (approximately) 560 cities in the State of Georgia. Of those 560 cities, 50 of those cities are MEAG cities, which means Municipal Electric Authority of Georgia, which means they have an electric department. Also, on top of those 50 cities you have the City of Dalton. When we look at our budget for the City of Calhoun, we have approximately an $82 million budget, of that budget, the electric department is approximately $42 million dollars of that budget. The other is also in utilities, where you have about $20 million portion of that. I think all of those things need to be considered. And when we look at the structure of all of the other governments, the MEAG cities, approximately 41 of those ( MEAG cities) have either a separate board or a separate authority director. Of those that do not have that structure in place, one of those is a city of 450 (residents), one of those is a city of 800 (residents) and there are several with a population of 2500 or less.

“The other thing I’ve seen is the streamline of organization,” continued Palmer. “When we look at streamlining the organization as the new chart shows, what we’ve got in there is a new person at City Hall to do a lot of the things that Mr. Vickery, or the position, has done in the past. And what we’ve done with utility manager (Larry Vickery) is move somebody with 40 years of experience in utilities to a position of Professional Planner, an area where he has no experience, same salary and same benefits.

“Also, it is said that we owe a lot of money, which we do,” said Palmer. “Which to me, that stresses the need for somebody that is familiar with the management of the utilities, that looks at the revenue bonds, where the money is owed primarily, and to match those rates up with the needs.”

Mayor Palmer also discussed the importance of the position of General Manager of Utilities to the Industrial Development Authority and bringing in industry, and keeping industry, in Calhoun.

“This is a full time job, speaking of the General Manager of Utilities,” said Palmer. “We are a leader in the state in utilities, and I would like to see it remain that way.”

Former City Councilman George Crowley then addressed those in attendance.

“I’d like to share some reasons why I object to the elimination of the position of the Director of Utilities position.”

Crowley shared that the utilities in Calhoun began with the digging of wells to get water for drinking and putting out fires, but over the years has morphed into much more. “Now, utilities has become competitive,” said Crowley. “When you look at who we (City Utilities) go up against when we are trying to get the big loads, and we don’t just get those things. We have to go up against people like Georgia Power, North Georgia Electric, Oglethorpe Power and lots of other folks. There are now even some investor-owned utilities of water that are actually taking over water systems because, it’s not simple to manage a water system anymore. It’s not easy to do what they do. But it’s becoming more and more competitive. Most people think that utilities is a cash cow, and it does return some, but it also uses a lot of money as well. You have to keep up your infrastructure; we’ve been very good in the City of Calhoun to do that and part of that is because we have had a Director of Utilities and that was their job and what they did.”

Crowley then quoted his friend, Tom Bundros, who is CEO of Dalton Utilities, “Utilities are not a simple business and evidence has shown that most city utilities don’t operate well when run as a governmental entity rather than a business.”

“Our utilities are such a large part of our city that this decision you are going to make tonight could possibly affect our economic development efforts, affect our schools. It’s a big issue; our overall quality of life.”

Crowley also gave some facts from studies done across the nation concerning the utilities business. “(It’s) difficult for one manager to control both the general government and utilities,” said Crowley. “It was about four years ago, there was a municipal utility in Texas that was considering how they were going to manage their utilities, and they were very concerned with how to manage their electric utilities when they did it. They studied other municipalities, and one of those they studied concluded that having one city manager for government and utilities did not work because of four things: political interference, lack of consistent policy direction, lack of consistent management and a failure to operate the system on a businesslike basis. They also went to their financial advisors and asked, ‘how should we structure this on a financial standpoint that makes sense?’ The financial advisors told them that separating the two entities (general government and utilities) would be positive for the ratings agencies and the less politics that is subjected into the process the more favorably the utilities are viewed by the ratings agencies.”

“They also held public forums,” continued Crowley, “and asked folks what they thought about this and basically in the public forums it was generally found that city government and a bureaucratic political system was ill-suited to manage a competitive business.

“With all of that said, it’s a pretty simple decision that you have to make here tonight,” said Crowley. “There is nothing good that we can really see that comes from this (elimination of the General Manager of Utilities position) and there’s lots of bad things that can happen. I would ask and hope that you would all be unanimous tonight and vote to turn this down basically because of the elimination of the position.”

Steve Powell, of a Crestmont Drive address, then addressed the Council in opposition of eliminating the position of General Manager of Utilities. “I have been a city resident for 44 years,” said Powell, “I stand in opposition to the elimination of the position of General Manager of Utilities and stand in support of Larry Vickery. We have a good system; we have people in place that do their jobs and I don’t think that we can find anyone that is any better suited for the Manager of Utilities other than Mr. Vickery. No one out there knows any more about rate structure, negotiations and all the other things that go with the Utilities Director than he does. I respectfully ask for the Council to not consider this.”

Trey Pierson, who identified himself as a lifelong resident of Calhoun, then spoke in favor of the organization structure change. “Sorry, I can’t keep my mouth closed,” said Pierson. “All I want to say is change is not bad. We have four people that we have elected up here; five with the Mayor, that I am going to put my faith and trust in; that they know what they’re doing. They have a plan, they see the long term, they see the vision. Mr. Vickery is not going anywhere; we have his expertise until he retires. I’m just going to say that change is not a bad thing.”

Councilman David Hammond then addressed the room. “This decision has not been a quick decision; we have debated this for nine months. We needed to debate it; we are having experienced, qualified managers that are going to leave,” said Hammond. “We are not leaving the utilities out in the cold to be neglected and abused. We have a very distinct difference of opinion, and that’s okay We are going to be going back to a system that we have had in place here in Calhoun when we had the height of our growth in industry. I know there’s a lot of facts and figures I could share but there’s no reason; it won’t do anything for economic development in this community to talk about but I’ll be able to discuss those individually, one-on-one as I have with several of you. But we’re going to be making decisions to move forward with quality management that’s going to grow this community for the next 20 years. Paul Worley will be serving as the Assistant City Manager and his primary responsibility will be working with the Director of Electrical Jeff Defoor who handles the electrical department, and Jerry Crawford, the Director of Water and Sewer.”

“The bad thing about politics and the bad thing about communities and government is usually everybody doesn’t get their way, but it doesn’t mean you’re throwing the baby out with the bathwater,” said Hammond.

The vote was then put on the floor and the organizational change was passed by a 3-1 vote with Councilman Hammond, Councilman Matt Barton and Councilwoman Jackie Palazzolo voting for the change. Councilman Al Edwards voted against the change.

Mayor Palmer then invited everyone to the next City Council Meeting where he will use his veto power on the vote. Councilman Hammond mentioned that there will be a veto override by the Council.

The next meeting of the Calhoun City Council will be at 7 p.m. on Monday, Nov. 28 at the downtown Depot Community Room.