Review of Austin Energy’s Spending

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Public Utility Spending on Employee Outings and Travel Scrutinized Amid Ongoing Rate-Hike Debate

by Rebecca LaFlure

A private movie screening at Alamo Drafthouse, an end-of-the-year celebration at Dave and Busters, and an outing at Main Event Entertainment to bowl and eat barbecue are among the publicly funded events held to recognize Austin Energy employees over the past two and a half years.

As City Council members grapple with a proposed electric rate increase for Austin Energy customers, The Austin Bulldog paid $281 to obtain hundreds of documents through open records requests submitted in March outlining how the city-owned electric utility company manages spending for employee parties, business dinners, and travel.

The records indicate that Austin Energy spent at least $123,065 related to holiday, retirement and employee appreciation events from October 1, 2009 to February 29, 2012.

The public utility spent $41,579 on the events in fiscal year 2010; $50,329 in fiscal year 2011; and $31,157 through the end of February of the current fiscal year that ends September 30.

Included in these numbers is an annual holiday party Austin Energy hosts for employees’ children called YuleFest, which Austin Energy spokesman Ed Clark said cost $7,500 over the past three years. Austin Energy did not include the event in response to The Austin Bulldog’s open records requests.

On May 16, KXAN reported that Austin Energy spent $612,000 since late 2009 on expenditures labeled “food/ice” and “awards,” including $52,400 on gift cards for employees.

Clark told The Austin Bulldog that most of the food costs were for “day-to-day kind of stuff,” such as meals for support staff working to restore power after storms and refreshments for community outreach meetings.

Austin Energy has presented a proposal to increase customers’ electricity rates that has yet to pass the Austin City Council. Three council members recently unveiled an alternative plan for a smaller increase.

Austin Energy generated $1.26 billion in revenue last fiscal year, and transferred $103 million to the city’s general fund in fiscal year 2011 to help pay for services that otherwise would require higher property taxes. The utility also transferred $9.7 million to the city’s economic development programs.

Austin Energy has 1,706 employees and provides electric service for about 415,000 customers, Clark said.

The employee appreciation event expenses came from the city’s Star Awards program that budgets a certain amount of money to all city departments every year for employee appreciation meals, outings or gifts.

Clark said Austin Energy is budgeted $108,000 a year for the program. The utility typically does not spend all of the money budgeted, and tries to limit employee appreciation costs to $60 an employee, he said.

“It’s designed for once a year to say thank you to employees for a job well done,” Clark said. “When employees see appreciation, it comes back to customers in better service.”

Although the utility’s employee event expenses are small compared with its overall budget, Bill Oakey, a former member of the council-appointed Electric Utility Commission and a longtime Austin consumer advocate, said he thinks paying for these outings were an inappropriate use of public money.

“It’s just appalling to me and shows a cavalier attitude on the part of Austin Energy that they can go out on the work day to all kinds of restaurants and run up these tabs and say, ‘Oh it’ll build morale, and we’ll just ask the ratepayers to pay for it.’” Oakley said. “I worked for three state agencies over 36 years, and we were never allowed to spend taxpayers’ money ever on events like that.”

Employee appreciation, retirement and holiday events

According to city documents, Austin Energy rented a private room at Dave and Busters on September 24, 2010, for an end-of-the-year celebration. About 70 employees in the Energy Efficiency Services Division ate fajitas; drank coffee, tea and soda; and played arcade games. The event cost $2,479, according to city documents.

Just three days earlier, 101 employees in the Finance and Corporate Services Department visited the Bob Bullock Texas State History Museum to look at exhibits and watch Hubble 3D at the IMAX. The appreciation event cost $1,864.

The city paid Pappas Catering $2,018 to serve 60 guests at an Austin Energy employee recognition luncheon on September 21, 2011. The menu featured jumbo cold-boiled shrimp, Louisiana shrimp gumbo, grilled mahi-mahi and 16-ounce rib-eye steaks. For dessert, guests ate New York style cheesecake and bourbon chocolate pecan bars.

Austin Energy paid $995 to rent a theatre at Alamo Drafthouse on July 8, 2010, for 26 employees in its power supply and market operations department. At the recognition event, guests treated themselves to pizza, salads, drinks, cookies, brownies, and 12 large buckets of popcorn.

Other expenses outlined in the open records include:

• $9,358 toward food for three holiday appreciation lunches in 2009, 2010 and 2011 for St. Elmo Service Center employees. Documents for the 2010 event indicated that 250 employees were expected to attend.

• $3,826 in food catering and gifts for 145 finance employees at a December 7, 2011 appreciation luncheon.

• $1,229 to Shoal Creek Saloon for catfish and chicken finger plates feeding 85 people at a September 14, 2011 appreciation luncheon for information technology staff.

• $700 in gift cards to Randalls and Amazon.com for certain information technology employees.

• Earlier that month, Austin Energy paid Counter Culture Frozen Yogurt $250 to cater a frozen yogurt party for 55 information technology employees.

• $1,492 for 31 employees to bowl, play games and eat barbecue June 30, 2010, at Main Event Entertainment.

Executive leadership team expenses

According to Austin Energy records, the 11 members of the agency’s executive leadership team spent $9,918 in city money from October 2009 to March 2012 on business meals.

The documents did not reveal any business dinners as lavish as San Antonio’s public utility CPS Energy, which garnered publicity earlier this year when local television station WOAI reported that executives spent thousands on alcohol and pricey meals. For example, CPS Energy President and CEO Doyle Beneby charged the utility for a $720 dinner with consultants that included $160 in wine.

Austin Energy General Manager Larry Weis, who earns $290,701 a year, took some business dinners on the city’s dime, such as a $119 meal at Truluck’s Seafood Steak and Crab House in November 2010. He met with Trey Salinas of 3 Point Partners, a registered city lobbyist who represents the Coalition for Clean Affordable Reliable Energy, to discuss an affordability matrix for Austin Energy’s Climate Protection Plan.

They ordered a $42 New York strip steak, $23 stone crab, $21 grilled trout and some side items. However, they paid for alcoholic beverages out of their own pockets. The utility paid for dinner for both Weis and Salinas.

Clark said Austin Energy doesn’t set a limit on business meals, but each meal must be “reasonable and justified,” and signed off by fiscal staff.

Austin Energy’s largest business meal expense was $2,670 to Aramark for catering an executive development summit for 140 city employees on October 27–28, 2011, at the Palmer Events Center. The city, as a whole, paid $8,011 to cater the two-day event, according to public documents.

According to public documents, the 11 members of Austin Energy’s executive leadership team spent nearly $90,000 on travel expenses in FY 2010, 2011 and the current fiscal year up to the end of February.

Executives spent nearly $15,000 in city money traveling to speak at various conferences and universities across the nation over the past two and a half years, according to the records obtained. However, Clark pointed out that some event organizers will reimburse Austin Energy for travel costs after the fact. Whether the utility pays for its executives to speak at events is decided on a case-by-case basis, he said.

Austin Energy spent $13,580 for David Wood—vice president of Electric Services Delivery who has served in various roles at Austin Energy since 1992 and earns $177,757 a year—to take a Utility Executive Course from June 5 to June 24, 2011 at the University of Idaho. Registration cost more than $12,000.

Wood was out of town and not available to discuss how Austin Energy and ratepayers benefited from the course, but Clark described the course as “thorough” and “sophisticated” training for utility executives across the country. He said Austin Energy pays for one or two executives every year to attend and learn about how various utilities handle industry changes.

The course “talks about utility finance and management,” he said. “It’s a pretty significant training effort. It wasn’t just a trip.”

This report was made possible by contributions to The Austin Bulldog, which operates as a 501(c)(3) nonprofit to provide investigative reporting in the public interest. You can help to sustain The Austin Bulldog’s reporting by making atax-deductible contribution.