5/21/2021 1:53:00 PM Water and Light Commission chairman cites manipulation, no respect for process, fraud for his resignation
by DENISE MARTIN
The Chair of the North Branch Water and Light Commission submitted his resignation during the utility commission meeting Wednesday this week. There are four commissioners remaining and Vice-chair Nathan Keech accepted the Chair.
Past Chair Terry Smith explains that the machinations behind the scenes and the flagrant violations of Open Meeting Law wore him down. City “meddling” in commission operations and a Facebook public group called North Branch News members posting a fake Water and Light meeting agenda— left him no option.
When Smith was appointed to serve as a Water and Light commissioner by the mayor he recalls the Mayor advising that if Water and Light stays out of city business and the city stays out of the Water and Light, things will be fine.
This has been far from reality, Smith said. The city and utility relationship is not mutually cooperative.
In the wake of a May 7 utility “Finance Director’ resignation Smith filled in at the utility offices for hours at a time, answering phones and helping where he could. He installed a mailbox he bought at a home goods store, so people who pay at the office, would have a supply of envelopes by the front door.
The employee who resigned has since signed back on to now perform her utility fiscal tasks as a City contractor— at $75 an hour. There is a contingent who argue that the city will provide utility services cheaper than what people are paying now for Water and Light operations, not a clear cut conclusion to draw. City Administrator Renae Fry explains in her e mail the Press obtained dated May 14, that “My team remains willing to assist but I need the commission to be very clear about the costs of doing so.”
Interestingly the city administrator told Smith— before this former employee was even approached to negotiate a way of getting urgent tasks done— that this employee would work for the city. City Administrator Fry told Smith Monday May 10 (emergency meeting date) which he stresses was well before anybody was directed by the utility commission to contact Brenda Jepsen, that Jepsen won’t work for the utility anymore, but she’ll work for (the city.)
Now, there is confusion over exactly what the “emergency services” are that the City Hall has agreed to provide. Answering phones etc. do not appear to be acceptable. Fry stated in her e mail she is “struggling with project creep.” Filling gaps in utility front office operations will result in the commission “seeing some pretty high bills,” Fry cautioned.
Negotiations are still underway on what the city can or will provide and if a temp agency will be required or not.
Fry saw the need very differently, describing having the city acting as a financial consultant...”with flexibility in how and when services are provided.”
Why should citizens care? Members of North Branch Water and Light Commission — have skirted Open Meeting Law conspiring in private, and have spent taxpayer and utility customer money minus consensus and off-the-record.
There is a process laid out in statute to follow if concerns need to be addressed regarding a public utility.
Instead of having public discussions with everybody looking at the same verified information— this utility commission and city officials have not been doing the public’s business in public.
Smith, as chair, should be setting agendas. He had to contact administrative staff twice to delete items that were added to meeting business that nobody took responsibility for. He said, the purpose for the emergency commission meeting (May 10) was not to create a transition team, that should be on a future agenda for discussion, he adds. The fact that a faked agenda went out with unauthorized agenda items, “...was a rush job by someone trying to get something done” outside the legal process for how the commission needs to handle the public utility.
In the last 10 months, Former Chair Smith points out, the newly expanded five member commission (it used to be three) has successfully smoothed over various bumps in the road. Two members on the last commission illegally kicked out the former general manager and office manager; having met in violation of Open Meeting Law and not notifying staff involved, so the utility employees unionized to secure some sort of due process.
There are still allegations floating around and being repeated without any evidence of fiscal irregularities under the last utility management. A new audit firm was hired for 2020— and nothing to cause alarm was reported. Just like any small office— the utility has separation of duty concerns to monitor, but the City of North Branch had more issues of note in its 2020 audit than Water and Light experienced.
GM Scott Hautala agreed to run the utility after the old commission experienced months of unsuccessful recruiting. But, for every step forward he is facing two steps of pushback. Hautala commented at the commission meeting immediately after City Administrator Fry berated him for personnel problems — that every little thing (financial and personnel wise with the city) becomes a “mountain.”
Hautala had scheduled elective surgery which everybody was aware of— eight weeks in advance of when the Finance Director chose to quit, abruptly, just before that surgery.
When Chairman Smith resigned May 19 Utility Commissioner James Baxter turned to GM Hautala and uttered, “This is your out” apparently anticipating Hautala would resign on the spot. Baxter then floated a motion to NOT continue the process of filling a front office staff vacancy (Hautala was on the verge of scheduling interviews with finalists.) He also declared in this meeting he wouldn’t want to see Hautala “set up to fail.”
Communications in advance Documents provided to this newspaper show a handful of city and commission officials pursuing avenues or being informed of progress never directed to be pursued in any public vote.
A “pre-bill” for legal work researching how to abolish the commission, and/or get the utility’s water division under city control was obtained by the Press. The bill lists utility commissioners Schaps and Baxter, making earlier contact for advice from the utility’s attorney.
Water and Light Chair Smith felt the paper trail clearly sets out a framework of colluding behind the scenes.
When the resignation from Jepsen was e mailed to Smith, Smith says he originally tried to play ball because Jepsen’s “severance clause” negotiated by a previous commission was massive in his opinion. If the commission caused problems, the contract called for six months’ buyout. Who negotiates six months of pay for severance for a mid-level position, he questioned?
The Chisago County Press has a copy of a Baxter-drafted and uploaded “resolution” (complete with typos) dated Sunday May 9. It covers the city taking over operations immediately—and this is the day before May 10, when the utility commissioners met to address Finance Director Jepsen’s resignation (tendered Friday morning May 7.)
At least four utility commissioners are copied in the loop on this electronic communication train with Commissioner Thomas Hals the exception. The General Manager meanwhile, informed the commission that he had been in touch with accounting services providers for temporary assistance as this manufactured crisis unfolds.
He had spoken with the audit firm who came in second in audit services bidding and had left contact requests for others. His level of involvement apparently did not matter. In fact his tenure for the near future is grey. He returned to a commission regular meeting two days after the surgery probably aware that City Administrator Fry, however, is advocating in e mails to the commission that Hautala move to another utility building or suggests he work “remotely.”