When it comes to vision, ours is a tale of two cities.
One vision sees a municipally owned and operated retail cable and high-speed internet service provided by a city so generous, it makes access to cable and internet as easy as turning on a spigot.
The other vision focuses on the utility’s core mission: providing dependable electric and water service at a reasonable price. It sees the telecommunications operation for the money-draining sinkhole it is.
Bill Gaines, the director of Tacoma Public Utilities who received his involuntary retirement papers last week, was the leading figure in the latter camp.
His departure after 10 years does not bode well for Tacoma’s prospects to attract another straight-talking, cost-conscious utility director. Gaines’ successor, unfortunately, could end up a puppet of the City Council.
By accepting a large severance package, Gaines gave his adversaries the gift of a bloodless coup. But it’s not hard to trace the fingerprints to those who wanted him gone.
The city’s “all-in” visionaries insist a municipal broadband operation would close the digital divide between the haves and the have-nots. They say an upgraded gigabit internet service would keep Tacoma’s identity as “America’s most wired city” intact.
But the vision doesn't come cheap; it’s predicted to lose about $14.7 million in its first two years in the ultra competitive telecom industry. And who’s supposed to pay for this money-losing foray? TPU ratepayers, even those living in University Place and Lakewood outside of Click’s service area.
Instead of “all in,” Gaines pushed to sell or lease Click’s infrastructure. He maintained TPU lacked legal authority to run Click at a loss to utility ratepayers. He wasn’t alone in his objections. Many, including this editorial board, share his views.
A lawsuit, filed in June by a former Tacoma mayor, former city attorney and former TPU director, is welcome relief for those of us who hope the final curtain drops on this dispute.
The suit accuses the city of violating the charter and wants TPU ratepayers reimbursed for the estimated $21 million they’ve already spent subsidizing Click. Their argument was fortified by a memo sent to the City Council in 2015 by Elizabeth Pauli, who was then Tacoma’s city attorney and is now the city manager.
Her words bear repeating: “Electric utility revenues may not be used to pay for costs directly associated with providing commercial telecommunications services (such as cable television and internet service) to the public . . . ”
All this makes one hanker for the good ol’ days when TPU and the City Council respected a separation of powers. For the better part of six decades it was a structure that worked, a model based on best practices of the American Public Power Association.
The utility director maintained independence and focused on managing a complex technical enterprise while holding rates down; he answered only to an appointed advisory board, not elected politicians.
In that era, the politicians knew better than to ask utility customers to underwrite social-engineering experiments.
But then, in 2014, along came Charter Amendment 6. Voters approved giving council members authority not only to confirm the TPU director when first hired by the utility board, but to reconfirm every two years. It’s now in their purview to hire, evaluate and fire any utility director they don’t like.
Facing the council wasn’t Gaines’ only political friction point. The ideological divisions on display over the last year among the five TPU board members — including the slim 3-to-2 reconfirmation vote in June — put Gaines in danger of quickly becoming persona non grata. A majority of the board favors using ratepayer revenues to fund Click.
Board member Karen Larkin said Gaines lacks respect for the city charter. In our view, if anyone’s disrespecting the charter, it’s Larkin and others who ride roughshod over its boundaries in pursuit of the myopic “all-in” vision.
Gaines will do just fine for himself. It’s hard to feel sorry for a man walking away with a $387,650 severance package. In the end, his greatest asset — a strong sense of what the charter requires — became a liability: He lacked sufficient political dexterity for a role that had become deliberately politicized.
The losers here are utility customers. They lost an administrator who stood firm on cost-saving principles and who did other good things for TPU, such as overseeing construction of a $200 million water filtration plant.
In a competitive arena where quality public utility managers are in high demand, the vacancy left by Gaines won’t look too attractive.
The City Council will be eyeing job candidates willing to buy into their vision. But local utility ratepayers need an advocate who won’t lose sight of the greater long-term public interest.