City Attorney Chris Melcher

David Neumann, who invented the scrubber technology that is being installed at the Martin Drake Power Plant downtown, is accusing City Attorney Chris Melcher of “extreme prejudice” toward his company and Colorado Springs Utilities.

In a strongly worded email sent Sunday night to Melcher and some City Council members, Neumann also says Melcher may be trying to stonewall an ethics complaint that Neumann filed against City Councilman Tim Leigh.

The Gazette received a copy of Neumann’s email late Sunday. About 9 p.m., the newspaper sent an email to Melcher seeking comment. Chief Communications Officer Cindy Aubrey was cc’d in the email.

This blog post will be updated as soon as Melcher responds.

A private meeting in Mayor Steve Bach’s office Friday apparently prompted Neumann’s email to Melcher.

But the meeting wasn’t about Neumann’s scrubbers.

The meeting was about the work of the Stormwater Task Force.

Jason Hann, a task force member who was not in the meeting but heard about what happened afterward from someone who was there, described the meeting like this:

“Melcher stated that NO regional cooperation would take place and if there were collaborative efforts for projects the City would be at the helm. Bach commanded that he knew there were several agendas at the table and that he was going to tell us what our agenda is. Bach stated there will be NO tax recommendation and that while his administration existed, CSU was going to be responsible for paying for stormwater. That CSU needed to “scrub” their budget again (despite the City not being able to execute a zero-based budget themselves). That the Neumann cleaner technology should be removed and that would provide millions right away and for years to come,” Hann said Sunday morning on Facebook.

Robin Roberts, who was in the room, corroborated Hann’s account.

“I was on this committee and in this meeting on Friday,” Roberts said on a Facebook thread. “The way Jason is reporting it is accurate, although I do remember that the suggestion of Utilities taking over the storm water function was just a suggestion, an option thrown out there.”

Roberts said she will never volunteer for the city.

“It will be a cold day in hell before I volunteer my time on a committee for this city again,” she said.

Here is the full text of the email that Neumann sent to Melcher:

Mr. Melcher:

You are being quoted by a number of sources as expressing extreme prejudice toward our company and CSU as part of a Storm Water meeting last Friday which was presided over by the Mayor and held in the Mayor’s office.

Additionally, we are in receipt of a letter from you to two council members which instead of providing them with legal guidance on how to determine conflict of interest you single out the employees of our company and employees of CSU as being the definition of a conflict of interest.

Further evidence of your extreme bias toward our company and CSU is shown in your negotiating a deal with the Sierra Club that involved damaging our company and a CSU project approved and budgeted for by the CSU Board. You attempted to cut a deal with a radical environmental group that could have resulted in a $400 million loss in ratepayer assets and a 30-50% increase in electric rates and may have prevented the Drake plant from receiving required emissions controls.

Additionally, we expect that any meeting discussing the merits of our contract or our company’s past, present or future relationship with CSU will be discussed openly with an opportunity for public comment.  Furthermore, we demand that you release to the public the records of past private meetings dealing with our contract with CSU so that the public may determine whether your conduct is appropriate to your position.

Finally, based on information from two separate Council Members, your alignment with Councilmember Leigh has become clear and it appears that you are attempting to stonewall or deflect the Ethics investigation of Councilmember Leigh.

We can only wonder why you have not taken action directly against Councilmember Leigh when you have explicit examples of his providing false information to the public and the Board. It is obvious that you have examined our contract with CSU in detail. Therefore, when Councilmember Leigh says the contract title says it is for “Experimental” equipment you know that is false. When he says the CEO did not sign it you know that is false.  When he says there are no specs, you know there are over ten pages of specifications. We are prepared to present over twenty separate counts of ethical and legal violations by Councilmember Leigh should we be given the chance.

Request that you explain to the public how your actions above and other related actions you have done as required by the Mayor are consistent with the appropriate conduct of the City Attorney. Perhaps you can also explain the responsibilities any lawyer has to avoid conflicts of interest. How is it possible for you to do the will of your boss the Mayor under threat of termination, while simultaneously representing the best interests of the City, the Council and Colorado Springs Utilities when their interests are in conflict?

David K. Neumann

Monday’s informal agenda included a closed executive session for “legal advice and consultation” with City Attorney Chris Melcher regarding the status of a complaint filed against the city by the ACLU, which says the zone violates the First Amendment.

After the closed session, the council is scheduled to reconvene in open session and have a “general discussion” about the status of the case, according to the agenda.

The lawsuit over the no-panhandling zone isn’t the only item scheduled to be discussed in closed legal session.

The council also is scheduled to receive “legal advice and consultation … regarding the processes and procedures for ethics allegations against councilmembers.”

That item may be tied to an ethics complaint filed against City Councilman Tim Leigh by David Neumann, who claims Leigh “has committed numerous wrongful acts potentially in violation of his  fiduciary and other duties as a member of the Board of Directors of Utilities.”

Neumann has a $73.5 million contract with Colorado Springs Utilities for scrubbers at the Martin Drake Power Plant downtown. The contract and the scrubbers themselves are the subject of intense debate among city officials.

Secretary of State Scott Gessler was named in the report

Whew.

Nobody in the city of Colorado Springs made it on Colorado Ethics Watch’s 5th annual report on the top ethical scandals of 2012.

The report focuses on “the five most public and egregious lapses in judgment and ethics by public and elected officials,” according to Ethics Watch, a Denver-based legal watchdog group.

“The report highlights the lack of structure of Colorado’s government to prevent and respond to corruption, and the need for ethics enforcement to match the laws that are currently in place to keep state government clean,” the group said in a news release.

Colorado Springs was on the list of ethical failures last year because of its embarrassing confusion about campaign finance laws.

“The five scandals detailed in this year’s Ethics Roundup are the clearest examples of where our enforcement system is working, and where it is lacking,” Director Luis Toro said in a statement.

“When a city council is its own ethics panel, or where a public official who has been convicted of crime related to his office and awaits trial for more such crimes is still in office, we know we have a problem.  The sooner local governments and our state legislature recognize the shortcomings in our enforcement systems, the sooner we’ll have government that we can all trust,” he said.

In a telephone interview, Toro said Ethics Watch is “keeping an eye” on a recently filed request for an ethics investigation of City Councilman Tim Leigh.

“At this point, we just don’t know enough to say this is really a big deal,” he said. “It may turn out that next year this blows up. I know there’s so much money involved with the Drake power plant that if it’s big, it’s going to be really big.”

Toro said his organization is also keeping a close eye on “all these issues” with Mayor Steve Bach around open-records requests.

“That’s been kind of a hot and cold thing. It sounds like there hasn’t been as much problem lately,” he said. “We were certainly aware that there’s been a lot of questions about his transparency.”

Among those listed in the group’s Top 5 ethical scandals of 2012 is Colorado Secretary of State Scott Gessler, who is the subject of a criminal investigation that grew out of a complaint from Ethics Watch.

Gessler’s communications director, Rich Coolidge, called Ethics Watch is a liberal group that targets only Republicans.

“They’re trying to get Gessler attached to corruption,” he said. “They’re writing this to fudge it and make it look sensationalized.”

David Neumann

The secret agreement between the city of Colorado Springs and the Sierra Club may put a controversial emissions control technology being installed at the downtown power plant in jeopardy.

“My understanding is that recent secret negotiations with the Sierra Club conducted by the City Attorney have resulted in an agreement which partially or wholly suspends our contract,” businessman David Neumann, who invented the sulfur dioxide scrubbers, said in an email to the Colorado Springs Utilities Board.

” I appeal to you to have a full and open discussion with the community before you proceed to endorse the dealings of the City Attorney.  These dealings by the City Attorney may appear to many of the Colorado Springs Utilities’ citizen-owners and ratepayers as truly egregious acts,” he wrote.

Here is the full text of Neumann’s email:

Dear Colorado Springs Utilities Boardmember:

As you know NSG with its 55 employees has a contract to provide emissions control capability for the Martin Drake powerplant in compliance with EPA requirements. Already $60 million of rate payer money has been committed or spent.  NSG stands ready to continue performance of that contract and provide the City with one of the cleanest coal plants in the country.

My understanding is that recent secret negotiations with the Sierra Club conducted by the City Attorney have resulted in an agreement which partially or wholly suspends our contract.   I appeal to you to have a full and open discussion with the community before you proceed to endorse the dealings of the City Attorney.  These dealings by the City Attorney may appear to many of the Colorado Springs Utilities’ citizen-owners and ratepayers as truly egregious acts.

While it is clearly not my place to judge the City Attorney’s actions, I do believe that NSG, as a vendor of Colorado Springs Utilities, has a right to expect full and open discussions, with substantial Community input, before actions are taken that may adversely affect assets of Colorado Springs Utilities, the Community and NSG.

Thanks for considering this,

David K. Neumann, CEO

Neumann Systems Group, Inc.

According to the agenda, the issues to be discussed include:

– legal advice and negotiation consultation with City Attorney Chris Melcher regarding an intergovernmental agreement and contract negotiations

– legal consultation with Melcher regarding an enforcement matter

–  legal advice and consultation with Melcher regarding a pending litigation matter.

The agenda doesn’t provide any more specifics.

The council is discussing three legal items in the open, including a discussion of Amendment 64, the voter-approved ballot question that legalized small amounts of marijuana in Colorado.

The work session will be from 10:30 a.m. to noon in the Pikes Peak Conference Room at City Hall, 107 N. Nevada Ave.

The public is allowed to comment on the proposed changes, which are the result of confusion and other problems that surfaced during the last municipal election.

Click here to see the proposed changes.

Here’s the agenda for Tuesday’s work session:

Introductions

Key Issues

Timeframe for hearing/penalties

– What are appropriate penalty limits?
– How long should process take?

Disclosure requirements

– What information is required and what is filing process?
– Reporting of Independent Expenditures.
– Disclaimers on electioneering communications.
– Conflict between definition of Issue Committee and disclosure requirement.

Termination of committee

– How to affirmatively close?
– Carry-over funds and disposal of unexpended funds.

Enforcement issues

– Ability of Clerk and/or hearing officer for discovery of information and to compel testimony.
– Ability to “follow the money.”

Candidate training

– Manual and training program: who creates, who instructs?

Other Issues

Public Comment

Summary of Council Direction to City Attorney

“When approached prior to the meeting by the reporter, she had no writing materials and no visible recording device,” Schuck said about the reporter, who DOES NOT work for The Gazette, in an email to Hente.

“She never indicated that our discussion was an interview and that its content would be shared with the public.  Shame on me for trusting her and not properly protecting myself by limiting my comments to only those which were guarded and well thought out.  This ain’t my first rodeo.  It will be interesting, however, to hear her explanation of how she actually validates my so called quotes,” he wrote.

Regardless, Schuck said he was sorry for his “poor choice of words” and any offense they may have caused.

“No one better understands all you do or has more respect and appreciation for the commitment and sacrifices you and other members of Council make in order to serve our community.  Unlike most other elected officials, many of whom are handsomely compensated, you are true servants whose primary reward has to come from within,” he wrote.

Here is the full, unedited text of Schuck’s email to Hente:

scott

It is very unfortunate that others, one of whom may have questionable motivations, or worse, have functioned as intermediaries between us.  My choice is to communicate directly with you.

Let me start by apologizing for my poor choice of words and for any offense they caused. No one better understands all you do or has more respect and appreciation for the commitment and sacrifices you and other members of Council make in order to serve our community.  Unlike most other elected officials, many of whom are handsomely compensated, you are true servants whose primary reward has to come from within.

You may not be too surprised to learn that the quote attributed to me was both incomplete and seriously out of context.

When approached prior to the meeting by the reporter, she had no writing materials and no visible recording device.  She never indicated that our discussion was an interview and that its content would be shared with the public.  Shame on me for trusting her and not properly protecting myself by limiting my comments to only those which were guarded and well thought out.  This ain’t my first rodeo.  It will be interesting, however, to hear her explanation of how she actually validates my so called quotes.

Having apologized for the comments, let me change course and stand behind the message.  It has been my position for a long time that any decision about the future of CSU must first take into consideration the costs and benefits that every responsible alternative might generate.  You and a few other members of Council have already advocated an outcome, one that may or may not prove to ultimately be the best, without having the information that allows you to compare it to the others, assessing them all in an objective fashion with all available facts.  The objective of Thursday’s meeting was to start a process, one that would ultimately result in your receiving expert input about alternatives and the tradeoffs associated with each.  Why would you not want, or even demand, that information?   When challenged about ‘why are YOU doing this,” my response was that no one else was, so why not me? When challenged about “why now” and why not wait a year as was recommended by Council, my response was “why NOT now?”  Obviously you and the rest of Council came to the same conclusion on Wednesday.

As to your comments about me personally, they do not merit a response. My record and history speak for themselves.

Lastly, it is important to clarify the position of many of us towards tax increases and Tabor.  We are not Neanderthals, as you imply.  Rather, we are convinced that our City is on a perilous slide towards insolvency and  we can no longer afford to do business as usual.  If, after Mayor Bach has completed his transformation of city hall and squeezed out every possible unnecessary and counterproductive expense and cost, both financial and operational, there is still a need to enhance revenues, you will find me at the front of the line favoring them.   But not until, and unless, we have exhausted all options to reduce both direct and indirect expenses will some of us swallow and prescribe the distasteful pill of draining resources from those who deploy them most efficiently. Our economy remains in crisis, unemployment in the Springs is almost 10 percent and most taxpayers are already struggling. This is no time to even consider raising taxes.

Despite our differences on some matters of policy, Scott, please know of my gratitude and admiration for all you do and for your outstanding service.  should you wish to visit directly at any time, please just let me know.

Best regards

steve

Angela Dougan

The Colorado Springs Utilities Board is expected to make a decision Wednesday about the Martin Drake Power Plant downtown.

But at least one member of the board — City Councilwoman Angela Dougan — didn’t know anything about it.

“I was going to walk in blind tomorrow,” she said.

The Gazette is calling other members of the City Council to find out whether they were kept in the dark, too. The council doubles at the Utilities Board and oversees the $1.1 billion city-owned enterprise.

According to the revised Utilities Board agenda, the board is expected to make a decision regarding the “Drake Retirement Analysis.”

The agenda doesn’t include any supporting documentation.

The board and members of the community, including Mayor Steve Bach and his supporters, have been debating whether or not to conduct a decommissioning study on Drake this year or next.

Dougan said the agenda packet she received Friday didn’t include any decision on Drake. In fact, she said, the last agenda item was scheduled for 3:30 p.m., and according to the revised agenda, the board will consider the Drake decision at 4 p.m.

“Ours goes to 3:30 p.m.,” Dougan said, referring to the agenda she received Friday.

“Nobody has talked to me about it, so I’m very concerned about a decision being made at this point in time,” she said. “How can we make a decision when we don’t even have documentation 24 hours out?”

In other words, emails that are subject to public view can be deleted whenever government officials decide — at least according to the city’s legal department.

Bernie Herpin

The Gazette has obtained one of two email exchanges between City Councilman Bernie Herpin and El Paso County Treasurer Bob Balink that Herpin doesn’t want to provide under an open-records act.

The email exchange pertains to a $25,000 water tour that Herpin, along with 73 other elected officials and community leaders, attended at the expense of Colorado Springs Utilities ratepayers.

Here’s Balink’s initial email, sent Sept. 7:

Bernie, there you (they) go again!

Just when I thought I’d get a reprieve from disagreeing with you for a while- there goes another $25 BIG ONES….

…a bus tour and overnight stay at a luxury hotel in Salida to look at the same reservoirs (Turquoise, etc) that were there the last time you went on the water tour?  Really?

I would have used my own gasoline to drive out there and take a few photos to show you the water levels are down a bit. What else can you learn while spending these hard earned taxpayer dollars?

I am discouraged that 74 dignitaries are  doing this and wondering how many, like you, have taken this trip before. Could you let me know?

Meanwhile, be sure to take your camera- the Aspens are turning earlier this year.

Robert C. Balink

Here’s Herpin’s response to Balink:

This is the first tour that I have been on that includes the Southern Delivery System. As a CSU Board member, I believe it was important for me to be on this tour for a couple of reasons:

(1) we make decisions that impact our ratepayers. A recent Gazette article implied that we were not qualified to serve because we don’t know anything about running utilities. So, I go on this tour to learn more and I did. We had a talk on water law while driving by one one the best water attorneys in the state, for example.

(2) We had many elected officials and community and civic leaders who were interested in learning about where our water comes from and how it gets to our city. I was able to meet and interact with these folks.

BTW, I don’t think the Hampton Inn is exactly a “luxury” hotel!

Also, Dougan often states she doesn’t have enough info to make a decision, but she won’t attend things like this and other CSU training sessions.

Sincerely,

Bernie Herpin

Here’s how Balink responded to Herpin’s response:

Thanks for writing Bernie.

You make some decent points- BUT I’d suggest the same could be accomplished with a presentation at a council or utilities meeting before the public. Then we’d all be enlightened.

I’d also suggest if these community “leaders” we’re really interested they should pay their own way.

Glad you got my attempt at humor about the lodging- but isn’t the Hampton Inn at the high end in Salida?

I’ve also spoken about the unnecessary trips to D.C. that too many E.O.s take.

Have a safe trip.

Bob