And Let There Be Lights

And Let There Be Lights
By: Charles Chandler
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Many City of White Cloud residents are rejoicing today because their residential streetlights will be back in about a week and the City will get a significant refund with interest from Consumers Energy.  

Really?  Yep, the lights are coming on and the refund is on the way!  What the heck happened?  Well, it’s complicated.  On Monday, June 13 the White Cloud City Council was called into a special session with City Manager Lora Kalkofen and Consumers Energy’s Business Account Manager Erik Lathers and Area Manager Richard Houtteman.  The managers presented the Council with a comprehensive memorandum containing the facts and figures along with a verbal explanation of how this turn of events had transpired.    
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For those who were not here when the streetlights went out, a bit of the back-story may help explain why...

...they were turned off in the first place. In the summer of 2010 the City staff and Council members had to initiate an austerity program to address some considerable budget shortfalls.  City revenue was declining, State revenue sharing was a distant memory, and the voters had recently turned down the proposed City Income Tax.

 Operating expenses were reduced, employees were laid off and hours cut to reduce payroll but basic services had to be covered so with few options to reduce expenses, the City Council made the difficult decision to have Consumers Energy turn off the streetlights.  The rumor mills and social media sites began humming and the reaction from residents ranged from embarrassment to outrage. Albeit an unpopular decision, the initial savings was about $22,000 a year. Residents were not placated by this savings and were further infuriated because even though their streetlights were out they still had to pay Consumers Energy for having the lighting system in place. The City Council was taken to the dog house.  

For the last five years, having the streetlights off and getting them back on has been a consistent and emotional topic of conversation in White Cloud.  For the City staff and Council the heat never abated and for then City Clerk Lora Kalkofen, now City Manager, it was a bitter pill because the streetlights had gone out on her watch and she and past City Manager Robert Sullivan along with Council never stopped trying to find ways to get them back on.  She had endless meetings with Consumers Energy staff, exploring LED lighting and solar-powered options, eliminating light poles to reduce cost, grants and on and on.  After analyzing each option none would help White Cloud.  Lora met with about a dozen different representatives from consumers in an effort to get accurate billing information and some workable solution. Then after five years her persistence paid off and the City got a lucky break when consumers assigned the White Cloud accounts to new manager Tami Opalek.


On May 23, City Manager Kalkofen and NCEDO Director Mark Guzniczak met with that new Business Account Manager Erik Lathers and learned that back in 2010 when Consumers Energy turned the streetlights off and recalculated the monthly billing, they had made an error and had been overcharging the City for the last five years.  

In the June 13 special session, Kalkofen and Lathers presented a brief refresher to Council as to why the streetlights were turned off and then a comprehensive Memorandum outlining the actions taken, financial details and where the accounting train went off the tracks.   So why didn’t someone catch the error? Well for one thing it was the scale of the error-- there were no big red flags or warning bells going off.  

​While the City and Consumers were going through the process of turning the streetlights off, it was discovered that the City had also been overcharged for 42 more streetlights than they had in place.  A credit was put into the mix and the White Cloud’s Downtown Development Authority (DDA) contributed $6,000 to keep the downtown streetlights on, further complicating the calculation.  By turning the streetlights off it was estimated that the City would save about 60% on their Consumers Energy bill year over year.  After they were turned off the revised bill came within about $50.00 of that estimated 60% saving after the DDA contribution.  However now we know that there was a mathematical error in the revised bill that was carried forward year after year until perseverance from a new manager on each side taking a fresh look at the City’s account discovered the billing error.
 
Manager Kalkofen successfully negotiated with Consumers for additional considerations in order to convert about 33 of our current streets lights to more energy efficient LED lights.  The net of the overcharge refund and other valuable considerations from Consumers is about $71,000. Never underestimate the value of a professional Clerk especially one with Dutch heritage. According to Manager Kalkofen, it is “Trust but verify.” and “Never again on my watch.” In the special meeting on Monday afternoon, the City Council accepted Consumers Energy’s sincere apology for an honest mistake and quickly and unanimously voted to accept the findings in the detailed Memorandum, the sizable refund for the overcharges, convert 33 existing lights to LED lights, authorized up to $8,000 to be taken from general fund to cover the annual difference in billing, and directed Consumers to turn the streetlights on as quickly as possible.

And there were lights…

Maybe now White Cloud City residents can put this incident behind them and let the Council out of the dog house… maybe?
 

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