How to fix Pepco

It has been about eight years now since the crisis at Pepco came to light, and as far as Montgomery County residents are concerned, nothing has changed.

The 2012 “derecho” storm is the latest disaster, but the problem has been growing for years. In 2011, there were hundreds of thousands of power outages after an ice storm. There were severe outages from storms in 2010, and 2008, and after Hurricane Isabel in 2003.

In Maryland, utility companies are granted a monopoly in exchange for submitting to direct supervision by one agency, the “PSC” (Public Service Commission). The PSC is an independent agency, but the Governor appoints its members and has the power to replace them.

That’s why I started a petition on to Gov. O’Malley and the Maryland legislature, which says:

“The state regulators at the PSC are failing. The chairman of the PSC, Douglas Nazarian, has admitted that they were slow to recognize problems at Pepco. But he is still in charge of the PSC and so are the rest of the slow responders. Why?” 

“The PSC is an independent agency, but the Governor appoints its members and has the power to replace them.” 

As a county government, we have no direct power over Pepco. I can talk until I turn blue about what I think Pepco needs to do better, the fact is that only the PSC can change Pepco, and only the Governor can change the PSC.

Thank you for joining my call to bring accountability to Pepco and Maryland’s utility companies. I welcome your comments below.

Montgomery County Moves Money to Community Banks

Today, the county government announced a new initiative to invest its bank deposits in county businesses. I worked with business leaders in the county to request this initiative and I applaud the County Executive and his expert finance team for launching it.
Montgomery County collects and spends more than $4 billion a year. As part of running the government, the county has to maintain large bank deposits through which it can manage payroll, vendor payments, debt service and other expenses. As of June 30, 2011, the county’s cash and cash equivalents totaled $626 million. Most of this money is deposited with PNC Bank, a regional bank that ably provides the financial services needed by the county, which are very demanding. But while PNC is a sound institution, it is not rooted in our local community. PNC loans our deposits far and wide, and we don’t know how much of that money comes back to the county to generate local economic growth and improve our quality of life.
We have an opportunity to change that by investing a portion of our deposits in community banks, which target their loans to small businesses in local communities. Montgomery County is home to a number of these banks, including Capital Bank, Congressional Bank, EagleBank, Monument Bank, OBA Bank, and more. The county government has announced a new program that would invest up to $10 million in county-headquartered community banks over the next year. In return, those banks would have to loan that money along with $10 million of their own money to county-headquartered small businesses. The banks would have to report on their loan activity and the number of jobs those loans create.
This will be a great test of the value of community banking for governments. If it works, we should expand the amount of money that we invest with the community banks. At the same time, we will be developing a valuable policy framework that we can leverage into our county’s RFP for our overall banking relationship, which comes up for bidding in two years. We may be able to structure the RFP in such a way as to further these goals.
This program shows a lot of promise for leveraging county assets into local job creation. I’m happy that the County Executive is moving forward with it and I will be watching to make sure it works.

Budget Challenges Continue

Our latest six-year fiscal planshows a sobering reality for Montgomery County: our resources will continue to be constrained, and that will necessitate very careful management of our spending.
Since 2010, the county government has issued six-year fiscal plans.  The plans project revenues, mandatory expenditures (such as debt service, retiree health pre-funding and reserves) and the amounts left over for services. 
This practice allows us to see rough estimates over time for how much we will have to spend on schools, parks, police and fire protection and other county services.
Due to the economy’s slow recovery from the Great Recession, the county’s revenues are projected to rise by just 2.3-3.6% per year through 2018.  That is not very different from what inflation will probably be over that period.  At the same time, the state has mandated local spending increases for MCPS matching its growth in enrollment.  Next year, we are projected to increase our local contribution to MCPS by 1.5% as a result of state law.  If we do, according to today’s estimates, we will have to cut most of the rest of the government by 5.2%.
Over the long run, the answer to our budget problems is to increase our rate of economic growth to expand our tax base.  I’m committed to doing that.  But in the short run, we have to continue to manage our spending carefully and show restraint with our resources.  You can count on me to do exactly that.

Daily journal, 10-20-11

On Wednesday I attended Rail~Volution, a national conference about building better communities through transit. I saw a presentation by Peter Calthorpe that I will go ahead and say was the best presentation about planning and the environment that I have ever seen. We can see all around us now the evidence of a change in living patterns as people return to the cities and embrace/build the high quality of life that a great urban area can provide.
Here in Montgomery County we have great suburban neighborhoods and a truly rare agricultural belt, but our urban districts are only starting to blossom. It is in these urban districts, served by public transportation, that we must focus our future job and housing growth. That will be the best way to keep our suburban and rural ways of life intact while fostering the job growth we need to pay for our government services and accommodating the population growth that we know is coming. And I would say most importantly, it is a necessary change if we are going to avert catastrophic climate change. I think we all know that we cannot continue to add cars to the road and vehicle miles traveled at the same rate in the next 50 years as we have in the last 50 years. We have to make a bold change.
These concerns are what animates me in a lot of the daily battles that we have at the County Council. The council has a huge influence on land-use and transportation. Zoning, for example, is the intersection of community building, economic development, neighborhood preservation, environmental stewardship, transportation planning, and so many other key policy areas. It is NOT an eye-glazer!

On a separate note, if you have been reading this blog you know that I have been working diligently to sustain the Fenton Street Market, a great example of grassroots economic development in the Silver Spring area. I am delighted to see this work get results as Hannah McCann and Megan Moriarty have announced they will work to keep the market going. There was a huge gap between the county and the market over use of public space in Silver Spring that we have been working to resolve. We are close now. If this works I hope to see similar efforts take root around the county.

At the World of Montgomery Festival, 10-16-11

The view from where I’m standing about to join County Executive
Leggett and Councilmember Navarro in making remarks to the attendees.
Now off to do some reading for tomorrow’s committee meetings!