Epitaph: Biomass Plant Buyout (They did it anyway and now they "own it").

Special to the Sun: GREC Buyout: “Falling on Deaf Ears”
Robert Mounts

If ever there was the appearance of a carefully orchestrated setup, potentially violating Florida Sunshine Laws, that was how the City Commission’s hearing on the proposed GREC biomass plant “Asset Purchase Agreement (APA)” on August 24 felt. Several Commissioners telegraphed their positions before any member of the public was permitted to speak.  The two newest members, those with the most time left in their terms and not facing reelection anytime soon, and perhaps, with more pressing political debts to pay, led the charge to approve the purchase, with Commissioner David Arreola quickly moving for its approval, and Commissioner Harvey Ward, seconding it, reading a long written statement, clearly prepared in advance.

Then, 18 citizens voiced opposition to the purchase, and only one supported it.  No need for “behind the scenes” backers to appear; the votes were already in and they knew it.  However, if Mayor Lauren Poe signs the APA as he is set to do by September 14, he will “own it”.

For the record, I did not call for a "fraud investigation" as the Sun reported. Although the original GREC Power Purchase Agreement (PPA) reeks with the stench of rumored corruption and the buyout smacks of a cover-up, it is still too soon to presume fraud. What I did call for is an open and fair process to determine how we (the City and GRU) got into this mess, which all now seem to acknowledge was a mistake of epic proportions. 

Reading from an email sent to them with a copy of my Op-Ed piece a week before it was published, I said:

I am not passing judgment on the proposed buyout or any particular office-holder's responsibility, past or present, as I do not at this time have all the facts. I am simply urging you to walk away from this proposed buyout contract and opt fearlessly for a full and open process that will expose the details of this entire matter, not just the most recent contract negotiations, so that the public interest may be protected from further grievous financial harm. Given the huge and continuing financial impact upon the citizens of this community, your duty as a public official requires no less.

The essence of my final argument was provided in the following statement, which I read from the podium:

If you approve this agreement, you will be trading a contractual obligation that the city has an inherent legal right to terminate for its own convenience, for a long-term fiduciary obligation to bond holders that the city cannot escape without grave damage to its credit standing until the debt is fully paid.

[Here I paused for emphasis and said: “Think about that.”]

You will have transformed a mere contractual obligation that still has significant remedies in the case of fraud, misrepresentation, or nonperformance, to one that will be enforceable against the city, no matter what the future holds for the plant.

So, if it turns out three or five years from now that the biomass plant will never be needed or used, you will have still committed the public to pay off that debt. In the meantime, the GREC investors, whomever they may be (and we still don’t know), will have their entire investment and substantial profits “up front”, fully released under the Asset Purchase Agreement from their responsibility to maintain the plant, answer for any defects or misconduct, or to pay claims, and they will simply disappear. They will walk away, scot-free.

I also cited credible legal precedent affirming that governments always have the inherent authority to suspend contracts, even absent a “termination for convenience” clause.  Who knew?

Apparently Darin Cooke, Utility Advisory Board Chair, didn’t know.  His explanation of his “very tepid” vote in favor of the purchase (Sunday, August 27), asserts good reasons why he should have voted the other way, yet he reluctantly supported it, because “restarting arbitration could cause the price of purchase to be even higher” and take “up to a year”, thereby “accumulating another $75 million to GREC’s coffers with no benefit to rate payers”. Yet if the City terminated the PPA, stopped making payments, putting them instead into escrow, this outcome could be avoided.

Jake Fuller got it right in his Sunday, August 27 cartoon in which GREC’s Jim Gordon is pictured saying, “Who says money doesn’t grow on trees?”

It appears none of this matters, the arguments made by the public “fell on deaf ears”.

Fuller Cartoon Re GRU Rates.jpg