Response to Judge Ellerbe’s Final Order and Judgment

RESPONSE TO JUDGE ELLERBE’S FINAL ORDER AND JUDGMENT

BY

Earnestine D. Pittman, Former East Point City Mayor

All pages referenced in this Response are in an attachment entitled Response to Judge Ellerbe.

Every resident in the City of East Point has been grievously wrong by the City’s Finance Department; East Point Power (Electric Utility Department); Electric Cities of Georgia (ECG); and especially Fulton County Superior Judge Kelly Lee Ellerbe.  East Point Power electric residential and commercial customers have been victimized by both the City and the Court.

After reading through Judge Ellerbe’s Final Order and Judgement, I sought the legal advice of a respected Attorney who confirmed what I thought I had read. I was appalled by some of the totally false information provided by the entities above and the unfounded assumptions and conclusions by Judge Ellerbe.

Judge Kelly Lee Ellerbe’s FINAL ORDER AND JUDGMENT

(All numbered statements in bold print are direct quotes from the Court document.)

c. January 2013 Ordinances (Page 30)

1. “The City concedes “[t]he January 2013 Ordinance was not specifically voted on by the City Council before it was enacted.
2. “The Court finds the substance of January 2013 Ordinance V.1 (version 1) was discussed at two public hearings and adopted by City Council in January 2013. The Court finds the City substantially complied with the law in adopting January 2013 Ordinance V.1.
3. “The Court finds January 2013 Ordinance V. 1 is not illegal, ultra vires, null and void. The Court further finds January 2013 Ordinance V. 2 (version 2) was not enacted and is null and void.”

The City Clerk is the official records keeper of all City Minutes, Agendas, Contracts, Agreements, Memorandum of Understandings, copies of draft legislation, power point presentations and any other legal City documents.  The City Clerk office records of Council Minutes and Agendas do not show any evidence of any January 2013 Ordinances; version 1 or version 2; nor do the records show any public hearings.  A power point presentation is not a public hearing.  Public hearings are listed on the Council Agenda for zoning and assessing Ordinances per the City Charter. My open records requests have failed to provide the information stated above.

At the January 7, 2013  Council Meeting and recorded in the adopted Council Minutes provided by the City: “ “Council Member Cook motion to approve proposal #2 to adopt a Power Cost Adjustment of 0.0102 kwh and ECCR of 0.0062 kwh and an EMR discount at .0111 effective until June 2013 with Council Member Reed providing the second. The motion carried with Council Member Rhodes and Hubbard voting “no”.  It is clearly stated what the “content” of Proposal 2 was limited to and how long the “content” was to last.  Why wasn’t this vote” considered to be “substantial”.  Why wasn’t this vote by Mayor and Council not addressed by the Judge?

Judge Ellerbe’s statement: “The Court finds the City substantially complied with the law in adopting January 2013 Ordinance V.1” has the effect of destroying the City Charter as our governing authority.  In East Point, the City Charter is our law and per the City Charter “ Sec. 1-103 Powers (b) General powers. In addition to all powers specifically enumerated and granted in this charter, the city shall be vested with any and all powers which municipal corporations are or may hereafter be authorized to exercise under the constitution and laws of the State of Georgia as fully and completely as though such powers were specifically in this charter.  The city shall have all powers of self-government not otherwise prohibited by this charter or by general law.”  What “law” is Judge Ellerbe referring to?

Nowhere in East Point City Charter, Ordinance, Resolution or Policy will you find the words “substantially complied with”.  She did not reference the source of this phrase in the constitution or laws of the State of Georgia. What would happen if a resident were to go to Customer Care and tell the teller, I am going to pay 75 percent of my utility bill which is more than half the bill and is a substantial amount?  The teller would say, that is not the City’s policy.  What would happen if you tried to pay 75 percent of your property taxes; state income taxes; federal income taxes or court fines using the “substantially complied with” version of some unknown law?

If Judge Ellerbe’s ruling is not overturned on Appeal, imagine the nightmare that the City is going to have trying to enforce code enforcement complaints; housing codes, zoning codes, building codes, etc.   How would “substantially complied with” be defined in an Ordinance?

In every recorded reference of the motion made at the January 7, 2013 Council Meeting to adopt Proposal 2, there is an end date of June 2013 for all rate charges and fees.  Despite substantial references made by ECG Director of Analytical Services Chau Nguyen, Judge Ellerbe decided in her ruling that the purported January 2013 Ordinance did not end in June 2013.      

d. June 2013 Ordinance (Page 30)

1. “The City admits the June 2013 Ordinance was not voted on and was not adopted at the May 20, 2013 meeting.
2. The Court finds the City deliberated and adopted the substance of the June 2013 Ordinance, which adopted a summer/winter rate instead of just the summer rate contained in the January 2013 Ordinance. The Court finds the City substantially complied with the law in adopting the June 2013 Ordinance.”  
3. The Court further finds the June 2013 Ordinance is not illegal, ultra vires, null and void.”

Judge Ellerbe has ruled that the electric residential customers must pay higher Winter electric rates and PCA fees and ECCR fees based on the substance of Mayor and Council’s deliberations discussed in the public forum-Council Meeting on May 20, 2013.  Mayor and Council are supposed to deliberate the substance of every issue then make an informed decision.  Mayor and Council were privy to information at the May 20, 2013 Council Meeting that was not discussed in the Council Meeting.

In late May 2013, while preparing the FY 2014 Budget, the Budget Committee learned that the purported expected $3,285,885 deficit in the Electric Utility Wholesale Cost by June 2013 was not true.  The Budget Analyst made a mistake by transferring $3,285,885 to the General Fund Operational Account instead of the Camp Creek TAD escrow account.  Instead of owning up to the mistake, the Finance Department used the Electric Utility to recoup the $3,285,885 by creating a false deficit.  Coupling this information with the 2012 MEAG Power end-of-year settlement of $2,046,721, Mayor and Council were not making any changes to the November 5, 2012 Electric Utility Ordinance.

Since Judge Ellerbe did not have this knowledge and the Mayor and some Council Members did, Mayor and Council made the best-informed decision and did not amend, repeal or adopt any Electric Utility Rate Ordinance anytime in 2013.  Mayor and Council did what they were elected to do.  It is not the Court’s job to weaken the powers of Mayor and Council and to shut out residents from participating and voicing their opinions in public hearings that the City Charter requires on all zoning and assessing Ordinances.

June 2013 Ordinance (Page 20)

1. “The City’s records further reflect that the June 2013 Ordinance was approved by the City Attorney on July 11, 2013, approved by the City Manager on July 12, 2013, received by the Mayor’s Office on July 22, 2013, and received by the City Clerk for distribution on July 26, 2013.
2. However, the City admits the June Ordinance was not voted on and was not adopted at the May 20, 2013 meeting.”

At the bottom of (Page 18) there is a footnote that states: “Former Mayor Pittman admits that both versions appear to bear her signature, but she claims that she did not sign them.” I did not know of the existence of versions 1 or version 2 of the purported 2013 Ordinance until the Plaintiffs lawsuit was filed and I was asked about them at my two depositions.  I signed two notarized affidavits stating that I did not sign them; because I did not sign them!

The process described in 1. above is only for the City’s Contract Tracking Form.  Neither the City Attorney nor the City Manager has the authority to approve any Ordinance.  Under the City’s form of government, the City Charter forbids the City Manager from interfering with proposed legislation to be voted on by Mayor and Council.  According to the City Charter, all Ordinances take effect immediately upon adoption by Mayor and Council unless a future date is stated in the Ordinance or the Mayor writes a veto of the Ordinance and sends the written veto to the City Clerk within seventy-two hours of the adoption.  The City Charter is very precise in which elected official can sign an Ordinance.

e. Proposal 2 Charges (Pages 31 and 32)

1. “Plaintiffs argue the Proposal 2 Charges are illegal, ultra vires, and void “because these charges have never been enacted into law by ordinance, as required by Charter Section 5-206.
2. For the reasons previously found in Sec IIIA (ii)(a)-(d), the Court finds the Proposal 2 Charges were adopted by Ordinance.
3. Additionally, Plaintiffs argued the Proposal 2 Charges are illegal, ultra vires, and arbitrary and capricious because “there was not actually a ‘deficit’ in [the City’s] FY2013 electric power budget”.”
4. Additionally, the City passed its FY2014 Adopted Budget by ordinance on November 25, 2013. The 2014 Budget Ordinance states it adopts “all revenues” included in the Adopted Budget and therefore adopted the existing Electric Charges, which included the Proposal 2 Charges.  Further, the 2014 Budget Ordinance contains only one “subject matter”- the adoption of operating budgets for the City’s enterprise funds.  Because the 2014 Budget Ordinance adopted “all revenues,” and has the “force and effect of law (see Charter Section 2-207 (a)), the Court concludes that the 2014 Budget Ordinance adopted the Electric Charges.
5. For these reasons, the Court finds the Proposal 2 Charges are not illegal, ultra vires, and arbitrary and capricious.”

Number 3 statement is correct.  There was no deficit in the FY2013 electric power budget or the electric utility enterprise fund accounts as previously stated concerning actions of the Budget Analyst in mistakenly transferring funds to the wrong account.  Hence, at the May 20, 2013 Council Meeting, when “Council Member Martin motion to approve the electric rate adjustment but died for a lack of a second” that killed any further discussion with ECG to continue with the adopted Resolution to create any new Electric Rate Schedule.

Number 4 statement: “Additionally, the City passed its FY2014 Adopted Budget by ordinance on November 25, 2013.  The 2014 Budget Ordinance states it adopts “all revenues” included in the Adopted Budget and therefore adopted the existing Electric Charges, which included the Proposal 2 Charges”.  The phrase, “and therefore adopted the existing Electric Charges” is absurd, dangerous and totally false. Any and “all revenues” adopted in the Budget is completely based on the assumption that the “revenues” will be collected from either the City, State, Federal or Private entities period. How the “revenues” are generated; collected; or awarded are determined by the laws and policies of the local, state and federal entities that provide “Revenues” to the City.  The City Charter is very clear on how “revenues” should be collected and generated. The City of East Point has never claimed to adopt the sources of any “revenues” that are generated outside the laws and policies of the City of East Point.  In fact, the City Charter legally permits Mayor and Council to decline financial grants, donations or property that they find questionable or a nuisance.

    ELECTRIC CITIES OF GEORGIA (ECG) and the Deficit (Page 15)

Likewise, ECG knew there was no pending “deficit” facing the wholesale Cost by June 2013. The Judge’s report states:

1. “In or round November, 2012, the City requested that ECG propose options for raising revenue sufficient to cover another expected deficit in the electric utility for fiscal year 2013. The City provided ECG Director of Analytical Services Chau Nguyen with information necessary to make the requested calculations and prepare the requested proposals. Based on the information provided, Nguyen concluded that: (a) Over the previous two fiscal years, the City’s electric utility faced declining revenue and increased costs of power; and (b) the City’s wholesale electric cost budget faced a $3,285,885 deficit in operating revenues.
2. When calculating the $3,285,885 deficit, Nguyen did not take into account the approximately $4,355,592 paid in the Voluntary Deposits via the MCT Monetization Process. Nguyen testified that if the power cost figure was reduced by $4,355,592, there would not have been a deficit.”

ECG should be fired as the City’s Electric Utility consultants for two major reasons:

1. ECG provided an Electric Rate Study that resulted in the 2011 Electric Utility Rate Schedule. This Electric Rate Schedule had not been placed on any Council Agenda for any Public Hearings nor any vote for adoption by Mayor and Council until it was placed inside of the FY 2012 Budget Binder on June 20, 2011 when the FY2012 Budget Ordinance was adopted. I vetoed the FY2012 Budget Ordinance because of City Charter violations. I knew that the City Charter did not allow an assessing Rate Schedule or Ordinance to be adopted as part of an appropriation Ordinance under one title. Whereas, Mayor and Council had followed State policy and City Charter procedures for adopting the FY2012 Budget Ordinance as an Appropriation Ordinance; there was never any mention of any unauthorized assessing Rate Schedules/Ordinances included within the Budget ever made. Residents were denied the two public hearings required for an assessing Ordinance. The 2011 Council overrode my veto; but the Council of 2012 codified the 2011 Electric Rate Schedule on November 5, 2012.
2. Rate studies are costly, and no qualified professional consultant would do a rate study that would fail to meet the needs of a client sixteen months later unless a major mishap or a natural disaster occurred. Neither event occurred.
3. ECG had permission from the City in our Agreement with them to consult and obtain any information needed from MEAG Power concerning East Point Power. MEAG Power would have confirmed that the East Point Power was not in a deficit mode with our Wholesale Cost.  Yet, this was overlooked.  ECG should have known that they had a fiduciary responsibility to the City, namely Mayor and Council to notify them of what they had learned from MEAG and not follow blindly with Management saying East Point Power needed to raise $3,285,885, the exact same amount that was mistakenly transferred to the City’s General Fund Operations Budget by the Budget Analyst in the Finance Department.
4.  Mr. Nguyen testified that if the power cost figure was reduced by $4,355,592, there would not have been a deficit.” This statement by Mr. Nguyen clearly meant that the City was “creating” the “deficit”. The City is still creating a deficit on paper in order to generate and collect $6 million each year from monthly combined PCA fees and ECCR fees.  The City’s Finance Department under the direction of the City Manager determines what information is given to ECG when calculating electric rate schedules. ECG was told by a vote of Mayor and Council on January 7, 2013 the amount and the time limit for the fees and adjustments needed to generate and collect the expected $3,285,885 deficit.  

As the Mayor of the City of East Point from January 1, 2010 to December 31, 2013, I worked diligently along with many of the Council Members to adopt legislation that did not conflict with or violate the City Charter. I was a lawmaker not a lawbreaker.  If any legislation was adopted that I believed to have violated the City Charter, I work tireless and consistently to correct it.  I cannot believe that the Nelson and Mullins Law Firm, hired by the City, would not support the City Charter in representing the City.

Judge Ellerbe trashed our City Charter as if it were of no consequence; and disparaged Mayor and Council’s fitness to do perform the job we were elected to do. I am still trying to get a copy of both versions of the purported January 2013 Ordinances and the June 2013 Ordinance since I have been accused of signing them.  East Point is one hundred and thirty-two years old.  Our City Charter was revised on May 18, 2007 and signed off on by the Governor.  We know that we are governed by the City Charter and the Ordinances, Resolutions and Policies emanating from the Powers given solely to Mayor and Council in the City Charter.

It is impossible for me to understand how any Judge can determine that clearly written procedures stating what Mayor and Council shall/may do in adopting legislation for the City of East Point can be reduced to “substantially complied with” instead of the procedures stated in our City Charter that have protected the residents and the City and have never been challenged on constitutional grounds. Judge Ellerbe’s Ruling is being appealed.  Until the Appeal Process has been completed, electric residential customers cannot file any refund claims.  If the Appeal Process is successful, then all electric residential customers will have the right to participate or not participate in the Plaintiff’s Class Action Settlement.

However, there is no need for the electric residential customers to continue to pay the higher Winter rates; PCA fees and ECCR fess.  Mayor and Council can vote at the very next Council Meeting to reinstate the Electric Rate Schedule that was codified on November 5, 2012 to take effect immediately.

 The adopted FY2020 Budget stated that the Electric Utility had a fund balance of $30.1 million. Mayor and Council should use the powers given to them in the City Charter to right the wrong that the court has perpetrated on the City and the residents. The powers in the City Charter; related Federal and State laws empower Mayor and Council to govern East Point. It is time to give the Residents a break and stop the deficit lie.  I am willing to work with residents to get that done NOW!

ELECTRIC REFUND CLAIM WORKSHOPS

If you have read Judge Ellerbe’s entire Final Order and Judgement, you know that the original MEAG Refund Lawsuit became the Plaintiffs Class Action Lawsuit.  Since the 2013 Ordinance was later incorporated into that lawsuit, individual residential electric customers cannot file claims outside of that lawsuit until the Plaintiffs’ Appeal has been successfully resolved.  Therefore, there will be no more Electric Refund Claims workshops.  However, I would suggest that you keep your total electric consumption information.  If the Appeal is successful you may want to opt out of the Plaintiffs Settlement for a larger payout.

 

For the actual Court pages in quoted in Judge Ellerbe’s Court Decision, CLICK HERE : Response to Judge Ellerbe Court doc.