Philp: Calling out local governments is crucial to setting the right example

Author: Alan Philp - February 21, 2017 - Updated: February 20, 2017

Alan Philp
Alan Philp

There is no question America is witnessing unprecedented dysfunction in government. Whether it’s the hyper partisanship in Washington that has led to record-low Congressional approvals or the growing frustrations coming from a divided government in the Colorado state Capitol, citizens are losing trust in their leaders.

As these frustrations mount, we often look to our lawmakers at the local level to set a better example in governing and serving their constituents. Mayors, city council members and county commissioners are closer to the people they serve, and thus have always held a unique understanding of their constituents’ needs and generally served as good stewards of taxpayer dollars.

But when they fail, they must be held accountable.

That’s why this week Citizens for a Sound Government called upon the municipality of Lamar, Colorado, to drop its destined-to-defeat lawsuit against the Arkansas River Power Authority (ARPA) over the Lamar Repowering Project (LRP) that has cost its residents millions of dollars in frivolous litigation costs.

Some background: ARPA is a collective of six small cities in Southeast Colorado that is organized for the purpose of generating and distributing electricity to its members. In 2004, the six cities decided to convert ARPA’s Lamar-based gas-fired plant into a coal power plant in response to the rising costs of gas at the time. To pay for the project, ARPA would issue bonds and the cities would pay back the debt over time through a surcharge on their electricity rates.

Unfortunately, the LRP was a disaster from the start. The plant was plagued with cost overruns that forced the member towns to take out additional borrowing, totaling over $155 million in debt. Despite years of work and plenty of money, the plant’s boiler did not meet emissions standards and the plant was ultimately shut down following an environmental group’s lawsuit.

The cities were understandably unhappy with the prospect of paying debt service for a failed power plant. But ARPA acted with the full support of all six of its members, which voted in favor of each round of new debt financing. Lamar was even more involved than its peers, as it was the operating agent for the project, in charge of day-to-day supervision of the LRP.

Realizing their obligations, five of the six member cities settled lawsuits with ARPA to cover their bond payments for the plant. But Lamar has refused to take responsibility, opting instead to sue its way out of paying its debts.

According to Lamar’s 2016 budget, the town spent $1.6 million on legal fees and has earmarked an additional $1 million for ARPA litigation in 2017. That is nearly 13 percent of its general fund budget.

Even as other member towns received settlements of $600,000 to stabilize electricity rates, Lamar has refused to settle. Rather, the city opted to grow government spending by 23 percent in order to bankroll a frivolous lawsuit destined to fail.

The lack of accountability among Lamar town leaders is remarkable. They voted to issue additional debt four times in an attempt to save the LRP and oversaw the day-to-day operations of the plant; now, they refuse to accept responsibility to pay for their failed project.

Activists are never shy to point out the out-of-control debt Washington, D.C. has accumulated over the last 15 years. We should hold our local leaders to an even higher standard.

In general, municipal governments have been rare beacons of responsible budgeting and governance in recent years. But Lamar, sadly, has gone Washington, shirking its responsibilities to its debtors, fellow ARPA members and rate-payers.

Alan Philp

Alan Philp is president of Citizens for a Sound Government, a 501(c)(4) nonprofit organization whose mission is to promote the ideals of free enterprise, economic opportunity and limited government through public educational efforts.

One comment

  • Miller Hudson

    February 21, 2017 at 7:25 am

    Sounds like an initial bad decision bolstered with more bad decisions. There is a reason for recall provisions.

Comments are closed.