At the start of our recall, shortly after Philip Rodriguez was fired by Ken Kreutzer, the City of Brighton’s Communication office began distributing a flier that they also shared across social media, to attempt to explain away the public outcry on the nearly $70,000,000 surplus sitting in the water department.
This flier was unsuccessful in calming the concerns of the city residents, long tired of being overcharged for their water and of a city staff arrogantly telling them to “go check for leaks”.
The flier made its first appearance only two days after the start of our Recall Campaign.
The original flier distributed by the city on July 18 is here:
The slightly amended flier now in circulation is shown here (click for a clear image).
And it references this CAFR Audited Financial Statement for the Brighton Water Department from December 31, 2018, shown here (click for a larger image).
The circular is full of inaccuracies, political spin, and intentional misinformation, as our Committee has repeatedly spelled out for the residents of Brighton.
They call it a “Fact Sheet”, but very little of it is factual.
(This is your government, Brighton.)
The simplest way to deconstruct this flier is to walk through it item-by-item, which is what we will do below:
“Where is the $70,000,000?”
The city alleges that the fund is actually $61,3651,399 using the 2018 CAFR report as its source.
What they fail to mention is that this is the total amount of money in the UNRESTRICTED account (meaning, no projects attached to the money).
(See the CAFR, at the bottom.)
This is a separate line item and is basically a “holding account” of money not needed for current or actually planned (out for bid) projects.
There is actually nearly $200,000,000 in total funds in our water department, as you can see on the last two account lines of the CAFR report. The city only mentions the $70,000,000 in the unrestricted (any use / no use) fund.
Also, it’s important to note that water usage surges in the summers, but the figure being used by the city is from December 31, 2018 – the dead of winter. The city takes in between $15million and $18million in new fee revenue every year, and most of that is in the summer months. At the time of this circular, the unrestricted fund was very likely more than $70,000,000.
The city also makes the laughable claim – with certainty – that “there is no money missing”. While the Recall movement doesn’t allege theft, we do allege that this statement is nonsense. The fund has never been properly accounted for since it began to swell in 2011. There is no way to know, without a forensic audit, if money is missing or not.
“What projects will this money be used for?”
This portion is a deliberate deception by the City. The projects listed are already part of the larger “Net Investment for Capital Assets” line item on the CAFR report and are NOT being paid for – in any way – by the $70,000,000 unrestricted account.
In order for city funds to be allocated to a project, the project must be out for bid and the city council must have voted on it. The projects listed here are already part of the larger fund. As of August 15, 2019, there have been no votes of the city council to use any of this unrestricted account.
This part of the circular is an outright lie on the part of the city. Unless they are admitting that they violated the law and used these funds without a vote of the city council and a bid process, they lied to us.
“Are we paying too much?”
The city says here they are examining the question with outside experts, but it’s a process that was started by new (and now terminated) City Manager Philip Rodriguez as part of his 75-Day Work Plan to fix the water department problems back in December 2018.
The city also wants to tout that rates stopped climbing in 2017, but that was the direct result of Rodriguez putting a stop to rate hikes (after eight straight years of them), in one of the first decisions as new city manager.
“Will I get a refund?”
We could make a lot of fun at this non-answer, but suffice it to say, read for yourself.
“When will the forensic audit review be complete?”
The city is correct in the fact that the selection of an auditor is underway.
At the behest of councilman Matt Johnston, the city should now be looking at 2008-2018, so it may take months for this to be completed.
The City of Brighton has been overcharging you for water and sewer for years.
Finally, thanks to the work of Councilmember Matt Johnston, former city manager Philip Rodriguez and the energy and forcefulness of this Recall Movement, we can finally do something about it.
Please watch the following video. The supporting documentation and detailed narrative is below.
The city of Brighton began a series of water and sewer rate increases over eight consecutive years (2010 – 2017), despite the utilities department never showing a budget shortage.
The city council used an atypical and questionable process called a “re-budget amendment” to justify the rate increasesafter every time they raised water rates. This allowed them to vote for the water and sewer rate increases and have discussions away from the usual annual city budget process.
Because of these rate increases and a very poor project completion rate, the city’s surplus water, sewer and drainage funds grew to an average of nearly $70,000,000 in 2018.
New (now terminated) city manager Philip Rodriguez discovered this “slush fund” during his first budget creation process in September 2018.
Rodriguez informed Mayor Ken first, then within days met with all but two members of city council about his knowledge of the overcharges in mid-September, 2018. On September 17, 2018, Rodriguez met with Mayor Ken and discussed for many hours the unknown funds with him in depth. He then met with Mayor Ken again on September 18 and September 19 because it was such a significant issue to the public. Mayor Ken has since falsified in public statements stating that he was not made aware of the funds until October. Then, as we all now know, on October 2, 2018, Mayor Ken held an illegal executive session about Rodriguez to force him to resign or be terminated. Fortunately, it caught enough of the city council off guard, that Mayor Ken didn’t have the votes he thought he did to make that happen – that time.
Councilmember Matt Johnston informed the public of both the overcharges and the threat to Rodriguez’s job in October 2018.
Rodriguez’s “75-Day Work Plan” to correct our water issues included hiring outside experts to conduct a third party rate study of all utility rates over a period of approximately six months. Presumably, the city is still meeting with these outside experts, but that remains to be seen to us as of August 15, 2019.
In December 2018, Councilmember Johnston presented evidence of excessive rate hikes to city council and the public.
In late spring of this year, growing increasingly concerned about financial irregularities in the Brighton city government, as a private citizen, Philip Rodriguez officially notified the Colorado Attorney General and the US Department of Justice as a whistleblower.
In June, 2019, the outside rate experts confirmed to Rodriguez that the city had been seriously overcharging residents and creating an unallocated surplus in both water and sewer. Rodriguez drafted several emails to the city council preparing them for a soon-coming rate reduction to cure the excessively growing water fund. Rodriguez, in several conversations with members of council, indicated that the average decrease in both the water and sewer rates would be 30%.
On July 2, 2019, Philip Rodriguez presented to the public and the city council his grave concerns about the water and sewer fund and the overcharges happening to residents. He then calls publicly for a forensic audit of all utilities funds. Under public pressure, the council agrees to the audit, with Councilmember Blackhurst absent and not voting.
On July 8, 2019, Mayor Ken called a special city council meeting for the next day. The only item on the agenda was to suspend Philip Rodriguez and place a vote on the agenda for the next meeting to terminate him. No cause is given.
On July 9, 2019, Philip Rodriguez is suspended despite public outcry by an illegal walking quorum led by Mayor Ken in a 5-3 vote. Councilman Mills was absent but made many statements that he supported city manager Rodriguez.
One of the most public reasons this Committee sought the recall of Ken Kreuzter as mayor was his handling of the public disclosure of the overcharges in the city’s utilities funds.
It’s common knowledge now that the city has in its possession approximately $70,000,000 in excess funds collected from its customers, that has no declared or intended purpose according to the city’s budget. These funds were collected during the years of 2010 to now, as the city of Brighton began a series of annual rate increases in a highly unusual process called a “re-budget amendment” from at least 2010 to 2017.
We allege, and the city government has since begrudgingly acknowledged, these funds were the direct result of overcharges to the residents of Brighton over a period of years, most of which were purposefully implemented while Ken Kreutzer served on the city council.
What’s with the city’s water and sewer?
There are three main water and sewer related issues that we will address over the course of this recall election:
Irregular billing cycles push residents into higher rate tiers during peak usage months like July and August.
Eight consecutive years of rate increases, done outside the standard budget approval process, starting in at least 2010, that resulted in a nearly a 162% increase in fixed water charges to even have the luxury of having water at all, even if you don’t use a drop, and another 42% increase in usage charges for the water that you actually use. These massive rate increases came at a time when the average inflation here in Brighton averaged approximately 2.6%.
We have readily demonstrated to the residents of Brighton, with your own testimony on Facebook and NextDoor, the serious problem with irregular billing cycles. The city of Brighton responded to the public outcry, brought in large part by this Recall Movement and the public efforts of Mr. Johnston and Mr. Rodriguez over the course of the past 11 months, by offering a refund for a single bill (June-July 2019) to any resident affected by the long billing month. The city estimated that the average refund would be only $3.25 and would only benefit approximately 900 families. In doing so, the city has acknowledged that the billing cycles did result in overcharges.
A single month of analysis does not go nearly far enough, and the city knows that. This practice has been going on for many years, resulting in much more money being improperly taken from its residents. We await the city’s decision on whether to make right a long history of using long billing cycles to push residents into higher rate tiers.
The second issue remains open and is being thoroughly investigated, though we have proven anecdotally so far that simply having Philip Rodriguez addressing the issue by the summer of 2018 caused a number of residents’ usages to fall by 50% or more with no change to the household size or water usage itself.
The third issue is perhaps the most damning for the city, and the hardest to explain away.
Brighton residents have long wondered aloud why their water bills kept climbing, even as they continued to conserve and cut back on their usage.
The answer is as simple as it is frustrating: because the city kept raising your rates in a very quiet fashion.
In 2010, the city’s base water fixed charge was $6.11 per month. By 2017, the city had increased it nearly 162%, to $16.00 per month. In the same manner, the actual water usage rates increased by approximately 42% (varied by tiers and consumption). These 162% and 42% rate increases happened at a time when the average inflation here in Brighton was approximately 2.6%.
The reason given for the rate increases each year from 2010 to 2017 was that the utilities department had a budgetary shortfall and could not perform the projects on its slate without increasing its revenue intake substantially. This was the same excuse given each year, and they used the same off-budget processes to get it approved through the city council each year.
The problem wasn’t necessarily that the city needed more money to cover projects. That happens.
The problem was the city never even started most of the projects they claimed to need the money for. And in many cases, they never intended to do the projects at all.
In a speech given in December 2018 to city council, Councilmember Matt Johnston presented his research at a public meeting that packed City Hall prior to a council meeting. He clearly spelled out the seriousness of the situation:
2012-2013 Council raised rates yet again to pay for “more capital projects”. Utilities department was supposed to spend $7.7 Million. They only spent $1.4 million. (2012 Fee Resolution | 2012 Ordinance )
2013-2014 Council raised rates another time. Once again the city is told that they are behind and need more money for capital projects. In 2014 the council gave Utilities $8.3 million. They only spent $2.7 million. (2013 Fee Resolution | 2013 Ordinance)
2014-2015 Council again raised rates. The Utilities department was directed to spend a significant $32.4 Million to fix infrastructure utilities projects. They only spent $3.1 Million. (2014 Fee Resolution | 2014 Ordinance)
2016-17 Before the new Council was elected, and before the new City manager Philip Rodriguez was hired, they raised the rates one more time. (2016 Fee Resolution | 2016 Ordinance) This put $65.8 million more in the hands of our utilities department. They only spent $11.9 Million.
It was in September 2018, that the new city manager Philip Rodriguez, discovered this fund the city claimed it didn’t know was even there. It was Rodriguez who terminated the Utilities Director in light of this overcharge and the poor project completion rate, among other issues.
It was Rodriguez who alerted the council and helped inform the public. It was Rodriguez who refused to allow any further rate increases until the surplus and the other major issues with the utilities department were resolved.
It was Rodriguez who implemented the 75-Day Work Plan to fix the issues, including the new Smart Meter system, mandating no longer than 31-day billing cycles, and asking for an audit of the fund itself, since it had never been properly accounted for going back to at least 2011.
It was Rodriguez who insisted on hiring outside rate experts to study the city’s history of water rate hikes and help assess whether or not the fees were excessive.
It was Rodriguez who pushed the city to lower the fees for late payment and reconnect, and extend grace periods and warnings before shut-off.
It was Rodriguez who informed the public on July 2 of this year, despite ongoing threats to his job if he spoke up.
And finally, not getting the help of the council to rectify the issues, it was Rodriguez acting as a private citizen, who blew the whistle officially and informed the Colorado Attorney General and the US Department of Justice in the spring of this year.
How is Mayor Ken implicated?
We allege that the mayor, perhaps more than many other long-standing council members who voted on these rate increases, is culpable and should be removed from office for this rate gouging, for the following reasons:
Mayor Ken was Mayor Pro-Tem during many of the years of rate increases and the largest swelling of the “slush fund”. In fact, the mayor claimed publicly he did not know about the price gouging as late as July 2019, despite the fact that he was individually briefed by Philip Rodriguez nearly 11 months earlier and had voted on many of the rate increases himself.
Mayor Ken was Mayor for all of the time period during which the revelation of the overcharges came to light. He also repeatedly resisted attempts to make the matter known publicly.
Mayor Ken was the initiator of both attempts to terminate Philip Rodriguez only days after bringing the water department issues to public scrutiny. In essence and in fact, Mayor Ken initiated and championed the city council’s retaliatory termination of a government whistleblower, costing the city over $150,000 in initial severance pay, and likely hundreds of thousands of dollars still to be determined in litigation and outside investigation costs.
What you can do?
Although it cost Rodriguez his job and councilmember Johnston much political capital, their effort to reveal Brighton’s rate gouging has successfully brought the issue to the public’s attention in a way that the city of Brighton cannot ignore any longer.
In offering a few dollars as credit on your August bill, the city has already attempted, in a ham-handed, wholly insufficient way, to acknowledge the gouging their long billing cycles created. But they did so in a way that can only be seen as a slap in the face of Brighton residents after many years of being overcharged for their basic city utilities. Remember, those 162% and 42% rate increases impacted you and your neighbors, and unless your income increased by at least those percentages during that time, you were seriously and negatively impacted.
The citizens of Brighton need to demand of the city, while the recommendations of the outside rate experts and the pleas of Philip Rodriguez, Matt Johnston and the Recall Movement are still fresh in their ears that rates be lowered NOW.
The outside experts contracted to the city would have recommended an immediate rate decrease in water and sewer of some 30%. We believe that should now be the starting place for our demand.
Think about that for just a moment: what was your last water bill? Would lowering it by 30% have helped you and your family? How much a year would that save you? For many families, that’s hundreds of extra dollars every year that are rightfully yours, that the city took from you for no reason, and will continue to take from you unless they do the right thing and lower the rates now.
The city has already tried to explain away this $70,000,000 surplus with a hastily and ill-conceived “information” circular that they handed out to residents and posted online in late July. That was met with public scorn and the Recall Movement debunked it thoroughly.
They then thought offering a few dollars’ credit on your next bill would quiet you down. Again, they were wrong.
The time is right to force them to stop trying to pacify us, and start making permanent, lasting change.
The city of Brighton is watching social media very carefully these days, in large part due to the very rapid success of the Recall Movement. But larger media outlets, regulators and outside law enforcement are also watching what happens there, we can assure you of that.
So, we would like to ask the residents of Brighton to make your voice heard on social media, and make it loud and clear, and unmistakably precise.
On any city of Brighton Facebook post, we ask you to comment with the following:
We Demand 30! (followed by)
#gouged (and) #BrightonUnited
This will let the city (and the larger media outlets and law enforcement following our campaign) know that we as a city are aware of the rate gouging, and we are demanding action now.
We believe we can force the city to take rapid action on the rates they already know must be lowered, if we can unite and apply the needed public pressure.
As a community united, we can help bring immediate, lasting change for our families and our neighbors by making the city of Brighton admit it’s been knowingly overcharging us, and demanding that they lower our rates. This can happen in just a few days or weeks.
The city has been caught gouging us. They know it. They now know that we know it.
Together, we can force their hand to do the right thing.