The author of this op-ed, Josh Portney, is a member of State College Borough Council.
At the Sept. 9 State College Borough Council meeting, in a rather unprecedented and unsettling move, my friend and colleague Mayor Ezra Nanes essentially asked me to apologize for my questions and comments surrounding the Solar Power Purchase Agreement (SPPA).
As an elected official tasked with the stewardship of millions of dollars of taxpayer money, it is my duty to throw the red flag when I suspect that those dollars are not being handled correctly.
I raised legitimate concerns regarding the appropriation of taxpayer funds to pay the legal fees for the development of the SPPA. Here’s why.
The working group of the SPPA selected, without a formal vote and without prior notification to the individual members of each entity, a law firm that would work to draft the contracts binding the entities together for the initiative. The working group and the entities initially approved a maximum, not-to-exceed budget of $165,000 for the law firm to do its work.
But, even before the law firm exceeded the budget, there seems to have been issues with the agreement to spend funds. Centre County Controller Jason Moser, as part of his investigation into the SPPA legal fees affair, found only one signed agreement between the working group and the law firm. That agreement authorized only $35,000 in legal fees.
No clarity has been provided on this variance, which raises significant oversight concerns. How does $35,000 balloon into more than $310,000? What were the parameters in the original agreement?
At that Sept. 9 meeting, Centre Regional Planning Agency sustainability planner Pam Adams reported that the law firm’s hourly billing rate was between $780-$1,000 per hour. I can’t seem to find comparative evidence of any other considered law firm options.
Ms. Adams reported that the selected law firm came as a recommendation from GreenSky (the energy consultant), but the working group held no formal RFP process to solicit and review other law firms specializing in this area of law. Why?
At the point when the working group realized that the legal team was going over budget, it appears that no one thought to report that information back to the entities. In response to my question regarding the breakdown of communication regarding the working group’s granting of permission to the legal team to continue working above the approved budget, Ms. Adams stated: “Maybe we should have, I can see that now.”
The legal fees have mounted to a grand total exceeding $310,000, but the law firm is allegedly prepared to forgo collection of $70,000 of that sum. It has been more than a month since the meeting and no one has produced a written agreement to that effect, despite my and other councilmembers’ requests.
While Ms. Adams explained that, “[the solicitor’s] general means is talking on the phone and he does little in writing,” the failure to obtain the firm’s written offer to forgo $70,000 of its fees is concerning. Moreover, given the numerous entities involved in the SPPA, the solicitor should be providing regular written reports on the progress of the firm’s work on the matter.
A total bill of over $310,000 with the stated billable hourly rate equates to upwards of 350 working hours. I have asked to see the timesheets detailing the law firm’s work, but again, a month has gone by and nothing has been produced. How can we verify the substance of work performed if there is no public accountability? And truly — how does it take that long?
Per Ms. Adams: “We didn’t expect this, but here we are today.” How? Were there full and frank conversations with the legal team before they began work to get an estimate of what it would actually end up costing? Recall that the original agreement was only for $35,000, but that clearly could not have been the only amount expected. Where was the breakdown?
It was also reported that Centre County Government’s Director of Administration John Franek put the additional legal fee cost in the check run without notifying the Board of Commissioners beforehand. This, according to Moser, occurred at least twice. The undisclosed “slips” were submitted to pay for the exceeded legal fees. Mr. Franek only admitted his “mistake” just one day after Mr. Moser publicly announced his discovery of it. I know that I am not alone in feeling concerned by that development.
Despite several outstanding questions and concerns surrounding the legal fees that were left unanswered by Ms. Adams that night, Mayor Nanes stated: “I think the communication question around finances has been addressed.”
The mayor, who – per our charter – has no official role in the financial affairs of the borough, seems to want to move past this, diminish the value of any further questions and sweep it under the rug.
Never in recent memory has a State College mayor publicly “dressed down” one of its council members, and certainly not on an issue for which he has no vote.
The record will reflect that nearly four years ago I managed Mr. Nanes’ campaign for mayor. But today, I am extremely disappointed in this behavior and his overall approach to this issue.
“The ends justify the means” argument has been raised repeatedly in the last few months, as more public scrutiny attaches to the financial quandaries of the SPPA. That argument is flawed in many ways, but it also doesn’t hold much water.
As stated in working group documents, the SPPA aims to avoid 16,000 metric tons of CO2 yearly. However, the net impact may likely be lower, due to the environmental impact of the array’s construction (on farmland), manufacturing and other variables.
Either way, this represents less than 2% of the total CO2 emitted annually in just the Centre Region.
Alternatively, there are other solar electric options that offer rates similar to the SPPA’s proposed rates. At the time of writing, Brighten Energy offers a fixed rate of 10.89 cents per kWH for 24 months, while IGS offers a fixed rate of 12.99 cents per kWH for 36 months.
Both of these options achieve the global CO2 reduction that the SPPA aims to create (both provide energy from 100% green energy sources). However, the SPPA requires continuing management and development fees, while both providers noted above do not.
Both alternative options also do not require the acquisition of 100 acres of Centre County farmland that could either be preserved or used to tackle our housing crisis and facilitate growth.
Additionally, the “means” to get to this point have been lackluster at best.
In voting for this project, my colleagues are endorsing a five-year process marred with miscommunication, budget overruns and “accidental” overspending of taxpayer money slipped into the check run. They are endorsing a precedent that allows contractors who exceed the not-to-exceed budget to nonetheless get paid. They are endorsing an unconventional method of “at-risk” billing, which has rarely, if ever, been used in public sector projects.
I want to be clear: residential solar energy and commercial-grade renewable energy is the future and I support it wholeheartedly. But the SPPA’s ends will never justify its means, if those means include bad governmental practices. Our neighbors, our taxpayers, our voters are watching.
