Daily Journal (Cost Shift Edition)

The past week has been frantic. We are in the fight of our lives on this proposal to shift costs for teacher pensions from the state to the counties. Yesterday I was in Annapolis for a strategy meeting with stakeholders and I joined a press conference with County Executives from many of the biggest counties in the state. The press event kicks off our campaign to fight the cost shift and was well covered in the media, with stories in the Post, Examiner, Gazette, Patch, and some greatly TV news coverage including the following story from NBC:

Last night I attended a county-wide forum sponsored by the Montgomery County PTA’s about the education. The PTA has come out strongly against the cost shift, noting that it will greatly weaken our ability to fund MCPS. I made the point that the primary reasons the state pension plan faces such a large deficit is that the state adopted a very risky funding policy that resulted in chronic underfunding, then the state increased benefits retroactively, and then the markets tanked.

Now state officials are trying to say that we should “share some responsibility” for the cost of the pensions. But we don’t share any responsibility for the mistakes they made! We don’t control how much they contribute to the fund or how large the benefits are.

During the middle of the PTA forum, I noticed a tweet from Governor O’Malley about comments he made at a convention that evening. He talked about how even in tough times, the state had kept funding for education as a high priority. While it is true that the state increased spending today on education salaries, it is also true that the state knowingly underfunded its pension obligations for education employees.

The Curfew Vote

Dear Supporter,

Today the County Council voted 6-3 for my motion to “table” the County Executive’s proposed youth curfew.

Since the curfew was first proposed in July, Montgomery County has significantly increased its police presence in certain hot spot areas where troubling incidents have occurred.

The result of this increase in police staffing has been remarkable: According to MCPD data, while in previous years we averaged 6 robberies per month, now we are averaging 1.5. In other words, crime has fallen to less than a third of what it was in downtown Silver Spring.

These facts on the ground have changed my view of the need for a proposed curfew at this time. At the same time, I cannot rule out the possible need for a curfew down the road. That is why I proposed to keep it “on the shelf” by tabling it. I think that is the right position for the county now.

I will continue to monitor the facts on the ground closely and do everything I can to make our community safe for our kids and all residents; and I will continue to view a youth curfew as a measure of last resort.

Thank you for weighing in on this important community issue. I will keep looking for practical ways to have a positive impact and I will look to you to help me achieve it. In addition, public safety will be one of the many issues discussed at my Town Hall Solutions Forum on Monday, December 12 at 7pm in Richard Montgomery High School‘s cafeteria.

Daily journal, 12-1-11

Yesterday, I attended a policy forum on workforce training hosted by the Hamilton Project of the Brookings Institution. It was a very informative event and has given me a lot to think about for policy making in Montgomery County. I also attended a legislative dinner hosted by the MCCPTA. I enjoyed the chance to meet many of the activists from around the county, and as a bonus, I got to eat with my friend Juan Johnson, a PTA leader from Germantown whom I’ve known since my earliest jobs in DC in 1995 or so.

Today I was invited to join a meeting of childcare center directors. Needless to say, with a toddler and an infant in my family, I am interested in this topic. I sat with several directors of childcare centers and Uma Ahluwalia, the county’s director of Health and Human Services. I believe wholeheartedly we must do more to support early childhood programs. Particularly in Montgomery County where many of our youngest children are English language learners, the more we can do at an early age the better off we will all be since all of our kids are in the same classrooms.

Today also featured much wrangling on the topic of the curfew. There is a Post story out now describing how I have worked with council president Berliner to put the curfew on a “shelf” so to speak. I have mixed feelings about it as do many people. Regardless, the enhanced police enforcement in Silver Spring and Burtonsville that we budgeted this year is working well — crime is one third (!!) of what it was before the up-staffing — and I think we should wait to see if that progress is sustained before deciding on a sweeping step like a curfew.

Daily journal, 11-09-11

I began the day running late to meet Dan Adcock, the county’s Democratic Party chair. Dan and I have known one another since my second job in DC, back in 1995, when I staffed the Save Our Security Coalition and Dan represented NARFE. He is doing a great job as county party chair, which is probably harder and more thankless than the County Council. 🙂 (Note to self: ask George Leventhal if that is true…)

Next up a groundbreaking in Wheaton for the new 15+ story tower over the Safeway. The county contributed a loan into the financing of that project, which allowed it to go as high as it did. The County Executive deserves recognition for real leadership on this. As I said to the Gazette reporter who attended, this will build the customer base for the Wheaton small business community without displacing any of them. It sets the bar very high for Wheaton and now we need to make sure we meet that bar going forward.

Then a press event with the County Executive and Bob Hoyt at the Department of Environment at the Shady Grove Solid Waste Transfer Station. The topic: you may now call 311 to book a bulk trash pickup. I am a big advocate for 311 because it brings government services to the people in a unique way: you do not need to know any politicians or officials in order to get high quality service. Just call or search 311.

Continuing a whirlwind day, I met with the union for MCPS principals and administrators—their new president Deborah Mugge has just started. The MCPS unions are in their budget discussions for the coming year. What I find so impressive about the MCPS labor – management partnership is they have a table where everyone has input and can find common ground. The MCPS unions were the first to give up their COLAs three years ago when this crisis began. I do not think the MCPS collaborative model is appreciated in this era of anti-union education reform but it does contribute significantly to our success.

Next up a meeting with a business leader to talk about some ideas I am considering on the big box bill and then finally a lengthy meeting with the county executive’s land-use team to talk about a wide variety of issues that I have been tracking, particularly Lyttonsville, Wheaton, Bethesda and Silver Spring projects.

Say, I am looking for volunteers for the Thanksgiving Parade — please email me or Facebook me if you can join! I promise fun, friends, and a memorable day.

Pepco’s Shocking Profits

By Hans Riemer
At-large Member, Montgomery County Council

The first winter storm of 2011 has revealed once again what Montgomery County residents know too well: Pepco is incapable of restoring power outages in a reasonable period of time.

Surprising, then, that Pepco is as profitable as ever. Just last October — despite a year of intense criticism about failing service — Pepco raised its estimated earnings per share for 2010 by up to 38 percent.

The “thundersnow” began on Wednesday afternoon. According to Pepco officials, 127,000 Montgomery residents lost power by the following morning. Forty-eight hours after the storm hit, the Washington Post reported that 64,843 Montgomery residents were still without power – more than the combined total of 42,667 residents without power in all other Washington-area jurisdictions.

As one resident wrote to me bitterly, Montgomery County has become a “laughing stock” in the region. Of course there is nothing amusing about seniors trapped in apartment towers with no lights, heat, or elevator service.

Pepco has offered a variety of excuses for its failure to restore power promptly in the past. The company once blamed its performance on trees, telling regulators that the region has the “fourth most-dense” tree canopy in the nation. But the Washington Post found no support for that claim in a December 15, 2010 article and exposed equipment failures as the real reason for outage problems.

Pepco has also blamed plowing problems for its inability to access neighborhoods. But Montgomery County’s Department of Transportation plowed the vast majority of roads 24 hours after the most recent storm had passed and still more than 100,000 county residents were without power.

The problem is not trees or weather, it is Pepco’s management.

In its December investigative article on Pepco, the Post found that the company’s reliability problems have been steadily growing worse for five years. Its customers have experienced 70% more outages than customers of comparable large utilities and their power has been out more than twice as long. By 2009, Pepco had fallen to the bottom quarter of U.S. utilities in customer satisfaction.

Pepco’s proposed solution to its problems is its six-point “reliability enhancement plan,” in which it intends to spend $51 million annually in Maryland over the next five years, with additional sums for DC.

Where will it get the money? Ratepayers, of course. Pepco wants to increase rates on its customers to pay for its improvements. What the company is not telling the public is that it does not need a rate hike to improve its infrastructure. According to Pepco’s financial disclosure documents filed at the Securities & Exchange Commission (SEC), Pepco’s profits have exceeded $200 million every year since 2004.

In October, 2010, Pepco raised its guidance on full-year earnings from 80-95 cents per share to $1.00 to $1.10 per share, and affirmed 2011 guidance at $1.10-1.30. Pepco’s outage performance has been declining over this same period.

Pepco’s top eight executives, including its retired chairman, collected $12.7 million in compensation in 2009. They have reaped huge gains despite failed service.

Pepco paid out $238 million in dividends last year and could cut that amount to pay for its capital improvement program. But since its board and management collectively own over 750,000 shares of Pepco stock and its executives have been granted over $11 million in stock awards over the last three years, the company would rather stick ratepayers with the tab.

Pepco’s failure to ask for extra crews until Wednesday’s storm was well underway is yet another sign that it is managed badly. It is galling to think that Pepco’s executives rake in the bucks when service declines and will rake in even more when we pay to fix the problems they created.

Pepco must face a financial penalty for providing poor service. The Maryland Public Service Commission (MPSC) should fine Pepco for every kilowatt hour lost by its customers due to outages. This would set an appropriate performance incentive.

The MPSC should also demand service improvements without the ratepayer increase. Let Pepco’s executives and investors pay to get Washington area customers back to an acceptable level of services. After all these years of increasing profits despite declining services, the balance sheet should not be tipped in their favor yet again.

As a Bethesda resident wrote to me, “When I moved to Montgomery County, I never imagined that I would struggle to keep my baby warm.” I couldn’t agree more.

The time for talking about Pepco’s problems is over. The time to act is now.