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StumbleBoulder City burned by failed solar field
When project investors couldn’t be lined up, city was forced to debate whose jobs were worth keeping
Boulder City public information officer Rose Ann Miele was working the cameras at a city council meeting Oct. 12 when a vote was taken to eliminate her position. Her last day is Dec. 1.
Monday, Oct. 25, 2010 | 2 a.m.
Sun Coverage
- Boulder City sends SolBio letter of default for missed $3 million payment (10-13-2010)
- Boulder City eliminates public information office, makes other cuts (10-13-2010)
- Public information office could be victim of Boulder City budget woes (10-9-2010)
- $3 million budget hole means Boulder City layoffs likely (10-5-10)
- Solar plant in Boulder City gets $2.9 million grant (2-18-2010)
- Boulder City finalizes deal for third solar power plant (6-12-2009)
- Sempra to expand solar power plant near Boulder City (4-15-2009)
- Gibbons dedicates solar plant near Boulder City (1-22-2009)
- Another solar power plant in the works for Boulder City (1-19-2009)
- Trash-to-power plans tabled (1-16-2009)
- Boulder City residents to pay more for electricity (1-6-2009)
- Solar power plant opens in Boulder City (1-5-2009)
- Solar firms seek land (12-24-2008)
Boulder City, born in the Great Depression as an encampment for dam construction workers, seemed to have made a seamless and logical transition to a new and very promising economy, leasing large swaths of city-owned land to solar energy investors.
It seemed a fitting destiny: A town founded on the construction of a dam to harness hydropower now maturing as a small city sustained by fields of photoelectric panels collecting the sun’s rays.
Clean-energy revenue would help the city make its payroll and help pay for the municipal pool, the animal shelter, the youth center, even the city’s public TV station.
In his State of the City address this year, Mayor Roger Tobler declared that solar energy plants had the potential “to help pull our city out of debt and provide for our future.”
The Sol Bio solar plant would be the fifth and largest of the solar energy facilities coming to Boulder City, being erected on a dry lake bed in Eldorado Valley on the fringe of town. And it would contribute $2.4 million to the city coffers — covering almost 10 percent of the city’s operating budget.
But today the city is red-faced with anger and frustration. Plans for the Sol Bio facility have collapsed for want of financing, leaving Boulder City the victim of a cruel betrayal.
And the toll is measured not just in the reduction or loss of services, but the layoffs of city employees who were nothing short of family, warm souls in a city that prided itself on its intimacy and connection with the townspeople.
“My frustration is we’re dealing with individuals’ livelihoods,” Councilman Cam Walker said.
Rose Ann Miele, the city’s public information officer, was beside herself with anxiety while waiting for the City Council to decide who would need to be laid off. “I can’t take it anymore,” she said this month. “I have to be here, and I have to do all my jobs, not knowing if I’ll have a job next week or not.”
The shoe dropped Oct. 12. Miele was working the cameras at a city council meeting when it voted to eliminate her job. Rather than take a severe pay cut, she chose to retire. She leaves Dec. 1.
The other two city employees facing termination — Debbie Barth, who runs the youth center, and Robin Kariam, who has run the arts center for 13 years — are safe for now.
The anxiety was palpable for Kariam. “It’s like an empty pit in my stomach,” she said. “You feel like you’ve never been appreciated.”
This is how budget cuts are emotionally processed — as changing the lives of real people, not just refiguring numbers on a computer spread sheet.
The numbers are simple: For the city’s 2011 general-fund budget, revenue from four solar project leases, along with projected income from the Sol Bio facility, accounted for 14 percent, $3.8 million, of the $26.6 million spending plan.
Solar was providing the promise of future revenue when traditional sources have been decimated. For instance:
• The city expects to make $30,000 in hotel room taxes in 2011 — a mere fraction of the $462,000 those taxes generated in 2006, because of plummeting tourism.
• The city expects to make less than $30,000 on building and zoning fees, compared with $220,000 in 2006, because of the drop in development.
So solar revenue — which is making more money for the city than property taxes and fees for various city services — is coming just in time.
Of the $3.8 million projected revenue in solar leases, $2.4 million was to come from Sol Bio, which planned to build a $2 billion solar panel power plant on 2,200 acres. The city and the company signed a 40-year lease on Dec. 8 with payments starting in fiscal year 2011, which began in June.
However, the company went into default on those payments as soon as the first due date arrived in March because it had not secured financial backing for the project.
Throughout the spring and summer, David Irwin, Sol Bio president and CEO, reassured City Manager Vicki Mayes and the council via e-mail that he was working tirelessly to find investors.
Irwin, who did not respond to Sun requests for an interview, told the city Oct. 5 that he has hope for two potential investors, only to inform the city since then the deals had faltered.
Mayes, Tobler and Walker said they knew in December that Sol Bio’s plan might fall through. With solar projects, nothing is certain until the ground has been broken, Mayes said. Still, in these tough times, they found themselves counting on Sol Bio to perform.
Sol Bio is a Delaware-registered limited liability company, and the Boulder City project would have been its first. Irwin also owns Green Tech Solar, a company registered in British Columbia, although neither has completed a solar power plant of this magnitude, Mayes said.
Despite Irwin’s assurances, officials began to suspect he would not succeed. As the city scrambled to make up the difference, the missing payments became a gaping hole.
In August, Mayes outlined three phases of cuts to fill it. The first step froze capital spending and hiring beginning Sept. 1 to save about $315,000.
At its Oct. 12 meeting, the council considered a slew of cuts to save $350,000 or more in the second phase. Some possibilities included closing the swimming pool, suspending activities at the youth center and art center — causing Kariam and Barth to lose their jobs — and shutting down the city’s TV station, laying off Miele in the process.
In its final vote, the council eliminated Miele’s position, cut hours of operation at the swimming pool and reduced maintenance at the city’s two golf courses. For now, the art center and the youth center will stay.
A third phase of cuts is slated for November, and Mayes has said that more layoffs might be necessary. She wouldn’t be specific.
Kariam, who makes $32,000 annually for working 32 hours a week, said recent months have been very stressful. The center has been forced to increase fees for classes and turn people away who have regularly attended because they couldn’t afford it.
Moreover, she said she’s in no position to lose her job. With mortgage payments, Kariam described the fear of being laid off as “devastating.”
Barth and Miele have similar stories. Barth, who has run the cottage that serves as the youth center in ABC Park for eight years, said after the center began charging $20 a year for after-school programs, attendance dropped from about 60 children a day to 15.
“You kind of take it personally,” said Barth, who is paid $37,000 a year for 32 hours a week. “I don’t go home and just forget about it.”
Boulder City public information officer Rose Ann Miele talks on the phone inside her office in Boulder City Thursday, October 21, 2010. December 1 will be Miele's last day on the job.
Miele, who makes $75,000 a year, agreed. She has been the city spokeswoman for 10 years, and said it was surreal to listen to the council and the public debate whether it was “worth it” to keep her job. “It’s unnerving,” she said.
Before it started cutting jobs, the city had taken some easier routes for budget reductions. The police department declined its annual cost-of-living increase twice to help the city; positions have been held open, and miscellaneous expenditures have been cut.
Possibly making matters worse, funding from the state to local governments is anticipated to drop drastically as the Legislature tries to fix its $3 billion deficit.
Boulder City sent Sol Bio a letter of default in October, but it’s unlikely that the city will take legal action, City Attorney Dave Olsen said. Instead, Mayes will seek a lease with another company.
Officials are confident that solar power still holds promise for mending the city’s budget holes. So the search for the next project continues.
“I just move forward,” Mayes said.
Discussion: 14 comments so far…
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in other words the city of boulder SPENT money it never received. why did they do that?
Boulder City was one of the 3 extremely successful socialist experiment planned cities in the US. All were converted to capitalism to erase their success from US history.
Boulder city was the last to be sold off in 1962
Maybe Boulder City would be better off going back to the good old days.
Boulder City made the mistake of counting their chickens before they hatched. Poor budget management in the city led to these issues. If the solar company had never signed on, what would Boulder City have budgeted?
...and yet you continue to vote for Harry Reid and Obama rhetoric? Facinating.
When you hold up Spain to be the model of Solar power this is what happens.
Betrayed again by Obama, Reid, green energy...Boulder City - not big enough - too small to succeed.
Got to give you anti Obama people credit ...you are tireless.
An extreme example of counting one's chickens before they have hatched. The inexperience or negligence (or just naive hope) of the City Council is surprising.
Only a right wing tea bagger could possibly tie President Obama and Harry Reid to this story. Get a grip on reality Comanche.
Make a phone call, Harry..............
All that has happened is the city officials privatized the profits while socializing the expenses.
Prime example of government going into business with the private sector.
Boulder city should do the project themselves seeing they own the land, sell bonds for the project.
Now I don't like anyone to lose there jobs but $37,000 a year for 32 hours a week comes out to be $22.00 an hour part time.
And $75,000 a year as a spokes person is $36.00 an hour to be the go between from the governing body and the public.
And how is it that it's ok to take action on these peoples lively hood and not take action for the default that in it self tells who's interest is being looked out after (any Business)over it's own people.
Lay off some of the bloated police force. It is way over the top in terms of numbers. You don't need three cruisers for a simple traffic stop.
News flash to citizens of Boulder...more cuts are coming. These solar grids take a lot of money to get set-up and Boulder doesn't have a monopoly on worthless dirt. Someone in the city didn't due their homework on Sol-Bio or at this might've been their only game. Sol-Bio is a small time company and clearly bit off too much. Just look at their website.
As I have stated in several past posts private investors, aka the free market, will not put their money into "green energy" projects (or any project for that matter) until they are reasonably certain it will work and be profitable.
Why government agencies cannot understand this simple rule of economics is beyond me.
Is Harry touting this failure? This article clearly points out that Senators don't create jobs, they only ride the gravy train.
Harry, get on board the Searchlight express.
What has Boulder City done to regain control of the land?
The Boulder City Council took two in the bush, and did not wait for the bird in the hand. The funding should have been secured for the solar project before the city council approved the lease and spent money they did not have. The residents of Boulder City should question the judgement of the elected officials and the city attorney to sign contacts that are not fully funded.
Mr. Goodman,
By finding Sol Bio in default of its contract, Boulder City re-claimed the leased land. Unless the company challenges the city in court, that will be the end of the matter.
Gee, according to our politicians wind and solar was supposed to be the great economic salvation of the southwest. Oops
Judy:
I think the point that Comanche was trying to make before you descended into the immature depths of name calling was that Harry Reid did a press conference at the Boulder City Solar Site espousing the benefits of green jobs.
Obama did the same but his was at Nellis where the private sector is not paying for it.
This illustrates the point that the country is not yet ready to make green jobs a focal point where it can be counted as an economic benefit. The economics of the balance sheet says that limited economies cannot afford to make green jobs a loss leader & be expected to financially thrive in the current environment.
Solar Power doesn't amount to a hill of beans compared to fossil fuel and atomic power.
For this, read Clean Energy: The Nuclear Solution, at http://www.thenewamerican.com/index.php/....
I am sick of seeing snarky, political whining in every story comment section. People like COMANCHE & getalife only want to stir S#*! and on the internet, that is known as being a flaming troll. These comments do not address the article in question. They only serve to provoke. The Sun should remove these comments from trolls.
As for the actual story, I feel for these folks who have suffered from the economy. I hope they can overcome these very difficult circumstances.
The company is in default. Should this be considered as a reason for dismissing three persons who are near retirement age on the assumption that the replacement of three can be done by newer employees? I don't understand the connection with a company being in default and the dismissing of employees by a city council. If your plumbing needed fixing would you use a vet.
Danno,
True, name calling does not have a spot in this extremely kind, gentle, and spotless election season,, name calling other than between canidates is a tasteless, pointless affair,, its sad watching pigs wrestle in the desert.
However, isn't this the second one that barfed. Boulder was/is stuck with a building that another group of green-rollers, went backwards on. two for two and isn't that the area that Harry walked to high school, uphill both ways, in the snow, rain, etc. before political fertilizer consumed him.
Jt2ou, I am sorry if you feel offering a free opinion relegates someone to troll status. Open your mind and put away the cool-aid. Harry is touting all of his "succeses" on renewable energy so i thought i would give him a shout-out and I didn't realize I should have checked with you before exercising my rights.
Condemn me all you want since you have succinctly proven that Nevada has enough sheep.
This project worth 2 billion has been included in Rory Reid and Harry Reid commercials. I don't see Harry coming to the rescue of Bouloder City to get financing for SolBio. I guess this GREEN project isn't worth it.
Solar power is what keeps those satellites in orbit online and working for our defence, Weather service, Internet access globally, Space station power, Media news and Entertainment, Cellular phones, Digital age.
I like the advancements that solar power has brought and I think you might too other wise you would send your comments in with a stamp on it.
Its sad whenever someone loses their livlihood- private money will not be spent or invested until this administration stops freaking everyone out ie new taxes etc- Harry " no one can do more" Reid should call some banks and get it funded- or maybe he didnt really save Citicenter- Duh
Why does Boulder City need a public information officer in the first place?
Harry may not be to blame, but he certainly ain't helping now is he? Rushed in to help casinos though. then he preaches about him and obummer being so great for jobs and green energy....LMAO. until the citizens of this country realize what liars these long time politicians are we will never recover. and I will add, I hate that these folks will lose thier jobs, but all three are not needed for the safety and security of boulder city. THAT is the only thng the govt should be doing anyway.
solar power is a joke. it is water intensive and the ROI is way to huge to make it feasible. It sounds real good to the kiddies though and makes everyone feel warm and fuzzy.
Does anyone know if we will get a renewed tax break on our sales taxes on our Federal returns because we don't have an income tax? The break expired in 2009.
If Harry Reid wasted all his time on health care, and didn't get this break renewed for our state, he's worthless, and not worth re-electing. And I'm a Democrat.
jt2ou,
That was a good post. The "trolls" you cite plague these Sun forums with their witless, endless, oh-so-predictable regurgitation of what right-wing talk radio and Fox Noise tell them to think. Alas, the trolls are the excess baggage we responsible citizens must carry and endure in our society.
On to my main point: America is only now waking up to the reality that we must seriously develop solar, geothermal, and wind power technology. This article is a clear illustration of the shortcomings of entirely depending on the capital markets to lead the way. When they work -- great. But they flop a lot, too. Thank goodness for far-sighted public leaders like Nevada's senior senator, who is bringing several projects to Southern and Northern Nevada. The Silver State WILL become a leader in alternative energy. Reid is out in front, on this. Sure, this particular project has temporarily grinded to a halt. But just one stumble and some of you are ready to declare failure and throw in the towel. BALONEY! American's perservere; the phonies around here who hope and cheer for policy failure are on the wrong side of history and, to repeat, are simply the excess baggage that the rest of us must carry and endure.
"The ROI is way to huge to make it feasible."
Don't play with terminology you don't understand, son. If the "ROI" is "huge," it would be more than "feasible," it would be a rip-roaring success. Just show me an investor who doesn't want a "huge" return on investment.
America is the country that delivered the Moon Shot, undertook and delivered the interstate highway system, and has the best public universities in the history of mankind. Of course, there were naysayers who were there who said we can't do it, or "it's a joke" back in those days, too. Those smug naysayers are long forgotten and buried deep under the ashes of America's glorious, "CAN DO!" history.
Noindex, look up SPIR a US solar company. It's a good one to put your money into.
i hope the voters in the next boulder election remember this day. they cant blame the cops or fire fighters for this one! in fact, i would suspect an audit is in line here; did any of the town officials get some money under the table for this deal?
like useing your credit card,knowing you dont have the funds to cover your 1st payment.
Public TV's time has passed. Unless it can self support, Pull the plug. Same with public radio (which even will fire a liberal commentator if they don't tow the line). Government needs to make deep cuts in unnecessary programs that the taxpayers are tired of supporting. I'm all for taking care of senior citizens who really need the help, (no freebies for those who can afford to pay) or some kind of child care for single moms who are trying to work (low pay jobs) to support thenmselves instead of welfare, etc. But there is a lot of excess to be cut. Times have changed, difficult choices need to be made. High paid city officials should all take a 20% cut to start.
"Pull the plug."
Where's the next "Wayne's World" going to come from then?
About a decade ago, a community TV channel run by local government in Japan needed to find a way to generate revenues in order to stay on the air. One day -- without warning -- the community access channel started broadcasting porn. I kid you NOT! Don't ask me what the revenue plan was, but I remember hearing that local residents were naturally outraged. (Well, the ones who complained, at least. Maybe some others enjoyed it...)
Wind and solar are nothing but a big joke anyways...
There are already two large solar plants operating in Boulder City, and plenty of room for more, with easy tie-in to regional electric transmission lines in the Eldorado Valley.
The issues here were only with SolBio (and accounting decisions by the City), not with renewable energy, or with Harry Reid.