Sullivan: ML&P sale may be good for city, but process causes concern

By Dan Sullivan:

On April 3, Anchorage voters will be asked to approve Ballot Proposition 10, which authorizes the city to sell the Municipal Light and Power electric utility to Chugach Electric Association. 

These two utilities provide the majority of electric service to Anchorage residents, with Matanuska Electric Association serving the Chugiak Eagle River area.

While this sale may ultimately be a good deal for the municipality and the consumer, I have real concerns about the process involved with this proposal.

 In 1975, the city of Anchorage and the Greater Anchorage Area Borough merged into the Municipality of Anchorage. Subsequently, the municipal dharter was written and enacted as the guiding document for the governance of the new entity.

Section 16.02 of the charter defines how the sale of any municipal utility should be conducted.

It reads:

“The municipality may sell, lease, or otherwise dispose of a municipal utility only pursuant to an ordinance or initiative proposition approved by three-fifths of the qualified voters voting on the question. If the disposal of the utility is by ordinance, the municipality may dispose of a municipal utility only to the highest responsive bid received by the municipality from a responsible bidder to a competitive procurement. The assembly shall provide for such competitive bidding by ordinance, and shall provide a description of the factors that will be considered in evaluation of the bids, including the relative weight of price and other evaluation factors.”

Unfortunately, neither of the charter requirements for selling ML&P has been followed in the proposed sale to Chugach. There was no Assembly ordinance authorizing a sale and triggering a competitive bid and the requirement for a 60 percent vote has been disingenuously altered in the proposition.

The opening sentence of Proposition 10 reads: “If approved by a majority of qualified voters voting on the question, this proposition would amend the Anchorage Municipal Charter and authorize (but not require) the Municipality to sell………the assets and business of ML&P to Chugach Electric.”

Nowhere in the proposition does it state that the normal requirement for selling a utility is 60 percent and that this charter requirement is being specifically amended. I seriously doubt if 99 percent of the voters know the 60 percent charter requirement. Not many walk around with a copy of the municipal charter in their pocket. With shenanigans like this, maybe more should.

When I first heard about the reduction in the vote requirement, I thought – this is something Mark Begich would come up with, just like he did for increasing the bed tax to fund the Denaina Center. Imagine my surprise when I found out that sure enough, he is under contract to Chugach to facilitate this deal, and has worked with the Assembly and the mayor to craft the sneaky change to the vote requirement.

This deal was negotiated behind closed doors with minimal public involvement and without the advice and consent of the ML&P Advisory Commission, who learned of the deal the day before it was delivered to the Assembly. Judy Brady, one of Anchorage’s finest civic leaders, resigned as chair of the commission in disgust over how this backroom deal was handled. That should tell voters all they need to know as they contemplate Prop. 10.

I have also heard from reliable sources that there has been interest in the sale from parties who are prepared to make a substantially higher offer than Chugach, with all the proceeds paid up front. That would mean our Municipal Trust Fund would see a significant and immediate cash influx, rather than waiting decades for Chugach’s schedule of payments. We have an obligation to maximize the return from the sale of a valuable asset such as ML&P.

This proposition should be rejected by the voters who should demand a more transparent process. I would then advise the Assembly to go back to the drawing board, pass an ordinance approving the sale, and let the process of a true competitive bid begin.

Dan Sullivan served as the mayor of Anchorage from 2009 to 2015 and on the Anchorage Assembly from 1999 to 2008.

One Response to Sullivan: ML&P sale may be good for city, but process causes concern

  1. Margaret Hansen March 12, 2018 at 6:50 pm

    You are right on Dan . Mark Begich will do it all with a smile on his face like a Cheshire Cat. I will vote NO


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