Bill would require municipal utilities to open up on finances
Sen. Somers leading charge for full disclosure; opponents say much already is available
The legislature’s joint Committee on Energy and Technology has backed a bill co-sponsored by state Sen. Heather Somers, R-Groton, that would make municipal utility companies’ books and financial documents subject to disclosure under the Freedom of Information Act.
Somers said she introduced the bill because she wants accountability for ratepayers about how money is spent. The Connecticut Municipal Electric Energy Cooperative refused to disclose its spending reports after hosting trips for dozens of staff, board members, municipal officials and guests to the Kentucky Derby, Somers said.
Groton Utilities also cited trade secrets in declining to release records related to the finances and sale of Thames Valley Communications, a former municipally run cable and internet company in Groton City that left behind $27.5 million in debt.
“What is trade secret or confidential about a deal that went bad that is in the past?” Somers said, referring to the cable company. “It’s over. It’s done. They should be disclosing that. These municipal electric companies are spending money, and nobody knows how they’re spending it.”
“The reason Derbygate came out is because somebody boasted about the Derby on their Facebook, not because of someone’s review of financial records.” KEITH HEDRICK, GROTON CITY DEPUTY MAYOR
Several people testified during a Feb. 21 hearing on the bill, and the legislative committee voted 24-0 on March 21 to issue a favorable recommendation on it. It goes next to an internal screening committee in the Senate and then could be raised on the Senate floor.
A related, separate bill approved by the joint committee last week would add ratepayer representatives to the cooperative’s board of directors and require future board retreats to be held within Connecticut.
Drew Rankin, chief executive officer of the cooperative, told the legislative committee during the hearing that he was sorry for creating the Derby retreats.
“I am professionally responsible and accountable for the adverse consequences of my bad judgment in these business decisions,” he testified. “I am sorry for my actions that are causing such harm, and will work to ensure we restore the full faith and confidence of all stakeholders.” He said the cooperative had changed controls so incidents like the trips would never happen again.
But he called Somers’ bill on disclosure “redundant and unnecessary.” The cooperative’s records already are subject to disclosure under the Freedom of Information Act and the agency complies with requests “including permitted and prudent exemptions,” he said.
Municipal utility companies have the right to protect their financial records from competitors just like private utility companies, Groton City Deputy Mayor Keith Hedrick testified. He called the bill a “government overreach and an emotional reaction” to the Derby trips.
Hedrick said he supports transparency, and believes meeting minutes, agendas and bylaws should be public. But he doesn’t support making municipal utilities release financial information their competitors could use to undermine them, he said.
Disclosing those finances also wouldn’t have made people aware of the Derby trips, Hedrick said.
“The reason Derbygate came out is because somebody boasted about the Derby on their Facebook, not because of someone’s review of financial records,” Hedrick added Friday. Paul Yatcko, general manager and chief executive officer of South Norwalk Electric & Sewer, said the cooperative already posts financial statements on its website and discloses records except those that are exempt. South Norwalk Electric & Sewer is a member of the cooperative.
But others described the situation differently.
Michael Boucher of Groton told the legislative committee he’s still trying to get answers. Boucher had testified that the City of Groton, with no warning, announced in 2012 that it would sell Thames Valley Communications for $150,000 after the company had $20 million in assets listed in the City Annual Financial Report.
“Shock and disbelief descended upon the City of Groton,” Boucher said. “How could such a thing happen? Why are we selling? Citizens pressed for answers, but few details were given. All we were told was Thames Valley Communications lost $2.5 million in the most recent fiscal year.”
Afterward, the utility denied repeated requests for financial information, citing “trade secrets,” he testified.
Taxpayers are tired of public officials who abuse their positions or behave in an autocratic way, resident Dom Gatto said, speaking of the Derby retreats.
“If the (cooperative) leadership feels that they have done an outstanding job on behalf of their ratepayers, then any rewards for such work should be approved by those same ratepayers,” Gatto testified. “Lack of transparency in governmental affairs not only fosters unethical behavior, but reinforces the growing lack of trust among the citizenry in those appointed to serve.”
Those in government should welcome the chance to explain and justify their actions to the public, testified David McGuire, executive director of the American Civil Liberties Union of Connecticut.
“While the government can withhold some information, such as personnel medical records, it cannot cloak an entire agency’s finances in secrecy, particularly when that financial disclosure could reveal inefficiencies or unwise behavior about which the public has a right to know,” he said.