Power company bargain?

[Chuckie]

Just saw the report saying the city council wants to buy Aquila. The asking price is 140 million. They stated the annual profit margin is 4 million. Using those figures it would take 35 years before the city started making a profit. Is this really a good deal? It would be better to put that 140 million in the bank and just take simple interest.

Is there a special course at school called math for polititians? Must have missed that one.

[Zen Curmudgeon]

Howdy -

Looked up the Aquila financials today, and was I surprised to learn that the company has managed to lose money, $0.65/share last 12 months with an estimated $0.33/share in FY 2005.

http://www.forbes.com/finance/mktguideapps/compinfo/CompanyTearsheet.jhtml?tkr=ILA

I suppose it's fair to say Aquila doesn't suck quite as much now as it did a year ago, but let's ask the question: do we really trust Sova, Shilling, et al, to make an intelligent decision here?
Exactly whose interests are really being served here?

Take Care -

ZC

[large]

As was said, can one imagine the clowns we have on Council running a $200 million Operation?

And they're saying (Ochiatto, actually said this) "We could save the Pueblo Citizens some utility money!"

This is coming from the same people who put a tax on our dogs and cats!

Kinda like using a tire iron to get in our shorts!

[Zombiewire]

Thats funny! heeh haha

Kinda like using a tire iron to get in our shorts![/QUOTE]

[Zen Curmudgeon]

Recent Chieftain articles make it seem that Our Leaders have already embraced the idea of becoming literal Power Brokers. But before they ask permission to spend $100 to $200 million dollars, maybe we should demand a demonstration of the Council's management skills.

Howsa bout this - they can't buy Aquila until they have a new building for the Health Department. I mean, if they can't manage to scape together a couple of million for an agency that actually delivers services to Pueblo County citizens, why should anyone believe the Silly Seven can reliably run an electric utility?

Take Care -

ZC

[large]

Well, bringing up the Health Dept., I think we've been B.S.'d about that too . . the Health Dept folks would have you to believe that IF we build them a new building, we won't have to deal with the Asbestos abatement that would be required if we remodel the building they're in . . Wrong . . Abatement will actually cost more if we decide to demolish the Building! Fact of life . . !

Dr. Woods isn't exactly my idea of a "George Washington" either . . she has spoken with a forked tongue on more than one occasion . . and in a couple instances she has cost the community both money and credence . . .

[Zen Curmudgeon]

There sure are a lot of vague assurances here.

...City Manager Dave Galli and Councilman Mike Occhiato described the proposed deal...

1. Buy the whole thing

...chopping up the Colorado network may give Aquila grounds to ask for more money for fragmenting it

2. It won't cost anything

...city would pay for the system with revenue bonds, which are loans made against the money the utility generates.

The city would not use its general fund money, [Occhiato] said...

If the revenue is less than the bond payment I guess the lenders just waive that month's payment, huh?

3. It's better than a button hook

...the utility buys most of its electricity from other sources, instead of generating it.

"It's mostly a distribution system," Galli said.

But didn't that pricey consultant report say the "distribution system" is only in "fairly good" shape?

4. It's cheap to buy energy, y'know, like gasoline

...asked how the city could buy electricity cheaply when it is much smaller than Aquila.

Occhiato said Pueblo could join an existing group of city utilities and buy electricity for less.

5. The city would have more employees, and a new pension to manage

...He [Galli] didn't know yet how they [Aquila's 200 employees] would become city workers.

6. But there's an up side

..."I do not see City Council having any hands-on management" of the utility, the councilman [Occhiato] said.

I'm still waiting for some real details, maybe even some real journalism.

Take Care -

ZC

[large]

My thoughts in a nutshell:

With the City council's track record to date . . "The Indians will be screwing us in the Dark!"

[Chuckie]

It turns out that Aquila doesn't want to sell. They (Aquila) figure that the price Pueblo is offering is roughly half of what it's worth because of how much they sold their other assets for. If we offer Aquila what they feel the company is worth then it will take 70 years to turn a profit rather than "only" 35.

The city council still wants the purchase on the November ballot. What for? If Aquila isn't selling why should we consider buying something that isn't for sale? It doesn't make sense.

[large]

Dunno . . is it the Pueblo Voter . . or local politics . . ?

We can't seem to elect any "Functional" leaders . . . seems we have a City Council who can't quite understand simple math . . a County Commission that has the combined IQ of a flock of Sparrows and a School Board that completely defies description . . .

"Dysfunctional" comes to mind in each case, but barely meets the definition . . . . . .

[Zen Curmudgeon]

. . a County Commission that has the combined IQ of a flock of Sparrowsis there any reason to insult sparrows? :)

Take Care -

ZC

[large]

Well, we see how it is . . or do we?

Now what's the Clown Council to do? The Parent Company pulled the rug out from under the Council by pulling Aquila off the market. Now the council doesn't know whether to buy or not to buy, to condemn or not to condemn, to argue on not to argue . . the new Clown Council candidates gave us little insight as to their feelings or intent the other night, sooo, what to do, what to do?

I was impressed though, by the CEO and the 5 VPs of Aquila, they sold off some other holdings and gave themselves a great big fat Million Dollar Bonus . . but did they pay the bills that they owed first? Probably not, just hid th' numbers somewhere else . . .

And I'd bet, that by the first of the year, they'll be knocking on PUC's door, with hat in hand looking for a raise in rates . . to pay the bills they should've paid instead of getting those bonuses . . .

[Chuckie]

Looks like they are considering the condemning idea. Why else would they want it on the ballot? If they do that they still have to give "fair market value". If the sales that Aquila just did are any indication of what that would be we are talking more like $215 million rather than "just" $140 million. With the $4 million dollar profit margin that was published it would take us a minimum of 53 years to finally break even on the investment. These guys are buffoons pure and simple.

I'm wondering about the legality of this type of takeover. It's already being argued in court about the constitutionality of taking private land to give to a business for the tax dollars. To forcibly take a private business and have it run by the government itself screams unconstitutional to me. A company as big as Aquila will have the funds to fight it in court big time. Even if the clown council wins in court they will still have amassed a huge legal bill. (paid by us, of course) Add that to the $215 million and we are probably looking at 70 years to pay for this fiasco.

The november elections can't get here soon enough to rid us of this bunch.

[Zen Curmudgeon]

Looks like they are considering the condemning idea...

...I'm wondering about the legality of this type of takeover. It's already being argued in court about the constitutionality of taking private land to give to a business for the tax dollars. To forcibly take a private business and have it run by the government itself screams unconstitutional to me.

Not to repeat myself, but...

Posted on Thu, Jun. 23, 2005

Governments can seize private land, high court rules

By Stephen Henderson

Knight Ridder Newspapers

"WASHINGTON - The Supreme Court on Thursday said the Constitution doesn't prohibit local governments from seizing private property for other private uses, so long as it's developed for the public benefit.

The 5-4 ruling clears the way for New London, Conn., to condemn some private homes for a new office and retail complex. It gives other cities and towns more leeway to buy and raze homes, churches and other properties that yield little tax revenue to make way for shopping malls or office buildings, even if they aren't in blighted areas."

Take Care -

ZC

[large]

Could be wrong here, but I think the city would lose all the way to th' Supremes and then some . . Condemnation of private property for the "greater good" can't be "stretched" to the "Greater Profit or Savings" . . That would be "Breaking New Ground" I think . . .

Urban Renewal and the good of the majority is what "Kelo" was about . . . and was just a clarification of an older Right of Eminent Domain decision that Urban Renewal Agencies relied upon.

However, maybe a case like those actions (of the Pueblo Clown Council) could, possibly, bring the whole argument back to the Supreme Court for review . . and possibly some modification of decision.

One of the things I have noticed about Kelo, though, as I read more about the plaintiffs, and the properties involved, is that the majority of the 15 "Co-Plaintiffs" involved were, "Landlords" and in several cases did not have residence in the impacted area. as a matter of fact, 2 of them were not even residents of New London . . so the case did not involve "A Man's home is his castle" neccessarily . . only to a degree . . and in certain circles, that was the straw that broke the camel's back . . It is, in those same circles, supposed that if all fifteen residences had been domestic residences, owned and lived in by their owners, the lower court's decision to have been affirmative to Kelo . . they weren't, it wasn't and that's how it is . . . .

Here's an ironic thought . . As Aquila is a "Public Utility", they also have the "Right of Eminent Domain" so what if they decided they needed a new Transmission Line right through City Hall and sought "condemnation" of the building? Heh, heh . . .

[Zen Curmudgeon]

Could be wrong here, but I think the city would lose all the way to th' Supremes and then some . . Condemnation of private property for the "greater good" can't be "stretched" to the "Greater Profit or Savings" . . That would be "Breaking New Ground" I think . . . A case like that is already developing in New Jersey, where a township board is using E. D. to seize land belonging to a retiree and build a 90 unit development. The current owner also wants to build out the property, but he wants to use a national contractor and the locals want to use a local (and generous campaign contributor) for the project. Here's the link:

http://www.nj.com/search/index.ssf?/base/news-1/1128229442104780.xml?starledger?nnj&coll=1

Stay tuned.

Take Care -

ZC

[large]

Well, it's been rumored that the only place there's more money stolen through politics than Chicago and New Orleans is the Entire State of New Jersey . .

I suppose if I were arguing that logic . . I could say; "I rest my case!"

[Rushboy]

Why.........why........why......is the city of Pueblo getting into the power business? They can barely run a city by themselves! They run off businesses (Wal Mart distribution center). The city of Pueblo has absolutely NO business getting into the power business!!!!!!

[Zen Curmudgeon]

They run off businesses (Wal Mart distribution center). The city of Pueblo has absolutely NO business getting into the power business!!!!!!Just to clarify, the distribution center was proposed for Pueblo West, a metro district under the jurisdiction of the County Commission, not the City Council.

Take Care -

ZC

[large]

But then, the Clown Council just stood by and watched a trio of Idiots mug Wal Mart and the community . . with absolutely no input until the cornerstone was laid in Wyoming . . .

kinda like 7 guys watching a mugging in a parking lot . . and doing nothing . then commenting on the mugger's style . . .