It’s natural to assume when a state employee gets a promotion, there’s a raise that goes along with it; greater responsibilities usually correspond with greater rewards. However, when a state employee is demoted or moved to a job with less responsibilities, a statutory rule also allows the worker to keep their previous higher rate of pay. The policy was created in state statute in 1963, and is typically referred to as “Saved Pay.”

An analysis of Saved Pay workers (obtained via the Colorado Open Records Act) by Independence Investigates found over 175 employees who have benefitted from this obscure rule over the last three years. In most cases the Saved Pay “premium” (i.e., the excess between what the individual earns, compared to what they would be earning if the Saved Pay rule weren’t in effect) is usually only a hundred or a few hundred dollars per month. But taking all of the program’s beneficiaries in the aggregate, Saved Pay generated significant pay premiums for the state, roughly $2-million dollars total, over the past three years:

2009-10: $629,266
2010-11: $762,974
2011-12: $666,241

Sometimes the benefit from Saved Pay can be as little as $40 per month. However, in fiscal year 2011-12, 47 state employees took home a saved pay premium of at least an extra $5,000 per year. Of those 47, 17 made a Saved Pay premium of over $10,000 per year.

This spreadsheet identifies all Saved Pay recipients over the last three years. Consider employee #21 (names have been removed because this report is focused on the rule, not the employee). This individual is currently in an (unidentified) position that according to state guidelines should only pay a maximum of $6,828 per month. However, because of Saved Pay, the individual is instead taking home the maximum pay scale for a “General Professional IV” which pays $8,467 per month. On an annual basis, this person grosses an additional $19,688 because of the Saved Pay rule.

Saved Pay is not indefinite. Per the rule, it can only benefit a worker for a maximum of three years.

Jeffrey Martin is a former deputy with the Colorado unemployment division, and says the saved pay rule has consequences beyond a single person’s paycheck:

“Nothing was more unbearable than seeing a coworker who –despite having less experience and fewer skills in performing same job duties that you were performing- made more money solely because the previous position they performed had either been eliminated or because of the ineptitude by the individual. ‘Save pay’ in is an unjust system of personal patronage by managers and its allowance within the State Personal Rules causes tremendous harm to morale,” Martin said.

In this year’s legislative session, “modernizing” state employee rules has become one of the higher profile discussions. But the efforts to revise state employee rules is likely to last beyond this year’s General Assembly.  And Saved Pay could become a part of that discussion.

“We are working on a review of all the rules that govern the state’s personnel and hope to have a package of changes to recommend to the Governor by early next year,” said Sabrina D’Agosta, spokeswoman for the Department of Personnel and Administration. “As part of that review, we will analyze the pros and cons of saved pay, how it’s implemented and whether it is the right way for the state to do business.”

However, 911 emergency telephone authorities (ETAs) have never received much scrutiny, especially where financials are concerned. Also, ETA’s work on the assumption that they are not subject to TABOR, although that assumption has never been challenged.

Below, you can read the republishing of a 2009 piece from Independence Investigates, where we took a closer look at the financials of several front range 911 ETAs.

Additionally, we asked Joseph Benkert of 9-1-1Colorado.org to make comments not only on our 2009 piece**, but on the general state of 911 ETA’s in Colorado as well. His remarks are published in full below the republishing of our 2009 story.

Make no mistake, we agree wholeheartedly with Mr. Benkert when he says, “The tragic circumstances involving the Lower North Fork Fire are unrelated to the funds saved and earmarked by 9-1-1 Authorities in anticipation of future expenses.”

However, 911 ETAs are government agencies that don’t typically receive the same kind of media watchdogging that school districts, county governments, or larger municipalities receive. Independence Investigates fully hopes to take a deeper look at some 911 agencies ourselves, but that task is several months off, at best. So in the meantime, other media outlets could serve their readers and viewerships well by auditing some of these governments as well, and examine their pay structure, bonuses, perks, travel, etc.

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WHILE SOME GOVERNMENTS STRUGGLE WITH BUDGETS, 911 TAXING AUTHORITIES ARE FLUSH WITH CASH

Tuesday, June 30th, 2009
by Todd Shepherd

Suppose you choose a monthly cell phone plan that will charge you $59.99 every month. So how in the world does your final bill end up being closer to $70? 911 tariffs account for a portion of that final increase.

But some 911 taxing authorities in Colorado appear to be consistently collecting anywhere from 20 to 50 percent or more in excess revenues annually, and these excess revenues are never returned to the public, and the tariffs are rarely lowered.

Take for example the Jefferson County Emergency Telephone Service Authority (JCETSA), which provides 911 emergency telephone services for both Jefferson and Broomfield counties. For the year ending 2007 (2008 audit results are not yet available*), the authority brought in just over $4.5 million through 911 “tariffs.” In the same year, the authority only had roughly $2.5 million in expenses. That means 40% of the taxes collected were over and above the operating expenses for the year.

Finally, the JCETSA’s 2007 audit shows the authority had “cash and cash equivalents,” of $11 million, meaning the JCETSA has turned a significant “profit” over the years with some consistency.

Penn Pfiffner, Director of the Independence Institute’s Fiscal Policy Center, said, “This is bizarre. Why are these governments consistently overtaxing just to build up huge reserves?”

Officials with several of the 911 agencies say the large amounts of cash reserves are necessary for future technological upgrades. They also say that having some cash reserves on-hand to deal with unforeseen expenses or budget spikes is also fiscally prudent, though none of the 911 agencies we spoke with provided a defined amount of what those reserves should be.

The income and assets dollar-figures are very similar for the Douglas County Emergency Telephone Service Authority. In 2007, the DCETSA over-collected to the tune of 46%. The DCETSA ended 2007 with just over $11 million in net assets. Even after setting aside $2 million for future capital expenditures, the DCETSA audit shows more than $7 million in “unrestricted” dollars…essentially a stockpile of cash from years of collecting tax revenues in excess of the actual year-end spending.

It appears that only recently has the issue of over collection become a problem for any of the emergency telephone authorities. The JCETSA’s Jeff Irvin tells the Independence Institute, “The fund balance has been a topic of discussion for the board at several meetings this last year,” noting that the authority is “grappling” with the topic of “sufficient reserves.” Arapahoe County Emergency Communication Service Authority Treasurer Todd Weaver says they anticipate establishing a cash reserve policy this July.

Arapahoe County lists roughly $7.5 million in net assets for the calendar year ending 2007. “[S]ome of the fund balance is simply held as sound financial practice in the event of some issue with revenue collection or for unforeseen expenditures for maintenance or equipment purchases that could not be projected during the development of the annual budget,” said Weaver. Weaver also says that Arapahoe County has already expended $400,000 thousand in upgrades that were not reflected on their 2007 balance sheet. Arapahoe County’s 911 service has spent $2 million on upgrades including a new call center in Littleton. The county also anticipates that NexGen upgrades could cost $2-4 million, and that monthly service charges incurred by 911 agencies from communications providers are expected to increase with the installation of NexGen.

NexGen upgrades will allow 911 agencies to create a broad umbrella network that will closely link all 911 call centers, and will facilitate inter-agency communication.

Boulder Police Chief Mark Beckner with the Boulder Regional Emergency Telephone Service Authority says that BRETSA has never considered a reduction in their 911 tariff. He says net collections from 911 taxes and tariffs will decline in future years. Chief Beckner believes cell phones have hit a saturation level with the public, and also anticipates fewer land lines in the future, especially as more consumers choose VOIP communications. Beckner also argues that changing the tax can be difficult because each 911 agency represents multiple jurisdictions. “We must propose a change and get it approved by each legislative body in our service area – never an easy process,” Chief Beckner said.

Most, if not all, of the 911 agencies are dealing with emerging technologies, and how to incorporate them into public safety communications systems. For example, making inbound and outbound text messaging a part of the repertoire of 911 call systems is among the upgrades being debated by most 911 agencies.

“It would appear that most of these 911 agencies have already bankrolled the capital they need for the changes and upgrades that they have on the horizon,” said Jon Caldara, President of the Independence Institute. “And given their track-record of over-collecting, it would seem that these taxes could still be lowered, without hampering their future projects or without threatening their reserves needed to deal with contingencies.

*While 2008 figures are not yet available through audits as of this publication date, the Arapahoe County ECSA has informed the Institute that in 2008, its budget was in excess of revenues collected by approximately $300,000.

End of Report

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The following are the remarks sent to Independence Investigates from Joseph Benkert. Mr. Benkert is the CEO and creator of 9-1-1Colorado.org, a nonprofit foundation providing public education regarding 9-1-1, and which raises funds and make grants to help fill the gaps in 9-1-1 funding. Mr. Benkert is also a telecommunications and new technologies attorney who represents 9-1-1 Authorities.

The Lower North Fork fire in Jefferson County was a tragic situation, and the investigation is ongoing.

Public safety authorities have found that people are now relying on Emergency Notification Systems (ENS) calls to tell them when to evacuate, rather than managing their own emergency and taking action in response to their own observations. ENS should not be relied upon in this manner. ENS calls have been delayed or prevented due to fires burning phone lines, congested telephone switches from residents calling out as well as the volume of ENS calls, recent changes in phone service, residents not manually registering their wireless or Internet phones for the ENS service, and exclusion of unlisted numbers with some ENS systems. (The ENS sign-up page for each county can be accessed through the 911Colorado.Org website.)

The tragic circumstances involving the Lower North Fork Fire are unrelated to the funds saved and earmarked by 9-1-1 Authorities in anticipation of future expenses.

9-1-1 Surcharges in Colorado range in amount from less than $0.50 to $1.50, depending upon the County. Because 9-1-1 Authorities are prohibited by law from incurring debt, and the surcharges are so small, the Authorities have to plan and save over time to meet significant expenses, such as deployment costs for Next Generation 9-1-1 (NG9-1-1).

The transition to NG9-1-1 is the most significant expense 9-1-1 Authorities will face in the near future. NG9-1-1 will allow 9-1-1 Operators and First Responders to receive text messages, video and photos, crash data from services such as OnStar, medical records and other data, in addition to the voice calls they can now receive. 9-1-1 Operators will be better able to exchange data and coordinate emergency response among multiple jurisdictions. However NG9-1-1 will require expensive fiber optic-based IP networks state-wide, and data processing systems in the network and in the 9-1-1 Call Centers.

9-1-1 deployment and service costs have traditionally been spread among all Colorado telephone service subscribers. This assures that the service is available throughout the state, including rural areas which are more expensive to serve. It also means that Front Range Authorities bear a large share of the costs of the service. There is also legislation pending before the Colorado legislature that could limit or end Public Utility Commission oversight of 9-1-1 and service costs, potentially resulting in dramatic increases in the cost of the service.

The 9-1-1 Authorities in Colorado have been prudently saving the small monthly surcharges they receive from telephone subscribers against equipment replacement costs, significant service upgrades, and other expenses and contingencies for more effective emergency response. There would be greater cause for concern if they were not planning to meet future costs for continued and improved 9-1-1 service.

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** Mr. Benkert was regrettably not available for comment when we published the original story in 2009 because of scheduling issues.

Unlike previous Colorado governors, John Hickenlooper hasn’t offered any legislation or policy theme (think Ritter and green energy) as being the signature effort or achievement of his administration. Even his “signature” policy effort thus far is called, somewhat ironically, “To Be Determined.” There’s seemingly little that he has put his full political weight behind.

At least publicly.

But if calendar documents give us any hint as to what’s important to the Governor, then we can rightly say that behind closed doors, John Hickenlooper has gone “all in” on privatizing Pinnacol.

Looking at the Governor’s calendar from November through the end of March, Hickenlooper had 14 calendar entries regarding the state’s unemployment insurance provider of last-resort.

Fourteen may not sound like much over the course of 5 months, but really, no other single policy item comes even close to occupying so much of the Governor’s attention and effort.

So I’ll offer a point of conjecture here, namely, behind the scenes, when it comes to privatizing Pinnacol, Hickenlooper is all-in.

Hick’s spokesman Eric Brown told Independence Investigates, “The governor is committed to exploring what the Pinnacol restructuring proposal could mean for increased college scholarships, more economic development funds and support for injured workers. That’s why you’ll see many meetings related to Pinnacol on his calendar.”

I don’t doubt a word Mr. Brown has said above. However, look at the documents yourself, and you’ll probably get the feeling I have: Outside of any budget deals, this focus on Pinnacol is the signature policy work of Governor Hickenlooper during the 2012 session, if not all of 2012 itself. Not to mention the fact that such tasks as exploring scholarships through Pinnacol all could be delegated downhill. Clearly, Hickenlooper has taken an executive interest in this endeavor.

+++

The next aggregation of entries that caught my eye had to do with Colorado’s third-rail, the Public Employee Retirement Association, or PERA as it’s commonly called.

The Governor’s calendar shows the following entries dedicated to PERA:

Dec 08 – briefing w Henry, Alan, RD, Christine
Dec 15- briefing, Rox, Alan, Henry, Jack
Jan 18th, meet with Rep Kerr, re PERA
March 5 – PERA meeting w/ Henry

Note that three of the four meetings include Henry, as in Henry Sobanet, the Governor’s budget director.

Here’s what I find interesting about these meetings.

I assume the Governor, broadly speaking, must dedicate his time with an “if it ain’t broke, don’t fix it” philosophy. Another way of saying this is, some things run smoothly and need very little, if any, tinkering. Let’s say the Department of Veterans Affairs, or the Colorado Lottery. These things aren’t “broke,” and that’s why you won’t find any calendar entries on these items.

Is PERA broken? Depends on whom you ask, and apparently, the Governor keeps asking Henry Sobanet.

Is reform on the agenda? Again, we turn to the Governor’s spokesman Eric Brown who told me, “Just because an issue or topic is not on the calendar doesn’t mean it hasn’t been discussed. As for PERA, the governor said in his most recent State of the State speech: ‘And while we are not immediately seeking legislative changes to the state’s retirement program, we are mindful of the obligation we have to Colorado’s taxpayers and state retirees, to ensure that PERA is both stable and sustainable.’ The governor continues to gather information about PERA. No reform plan is currently on the table.”

Previous reports said the DOE and Abound were declining to release the documents because of “proprietary reasons.”  However, many redactions have still been made to the documents in conjunction with their release, and again, the principal reason for those redactions is FOIA exemption b(4) – “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.”

Abound Solar was originally touted by President Obama as a “green” jobs creator, but in February, the company laid off more than 200 workers. The company says they are currently retooling their manufacturing plants to create a newer, more competitive solar module. However, the company has drawn criticism because, like the recently-failed Solyndra, the DOE loan to Abound appears to have been made without regard to various credit ratings. The company has also received criticism over the political connections between Abound and the White House, primarily from Colorado Democrat donor Pat Stryker.

If you have tips on Abound Solar, the DOE loan, or any other story, please email investigative reporter Todd Shepherd at shepherd-(at)-i2i.org

Common Agreement – Final – Redacted

Exhibits to Final Agreement – Final – Redacted

The Abound Solar “Term Sheet” – Redacted

photo credit: twodolla on flickr

A covert audit of a third-party commercial driver’s license (CDL) testing facility found so many faults, 126 truck drivers had to be retested in order to keep their CDL driving privileges. The testing facility, located in Kit Carson County, has been forced to close.

An email between officials in the state Department of Revenue (DOR) and the Colorado Department of Transportation (CDOT) noted that the third-party testing facility in question had received numerous warnings in 2005 and 2010, and that repeated violations could have put federal highway funds in jeopardy.

Mark Couch, spokesman for the DOR, stressed to Independence Investigates that the situation could have been more serious than it seemed on the surface, because the reduction in federal highway funds would have been permanent. Couch went on to say that federal transportation officials were made aware of the situation, and the highway funds are no longer at risk.

“The Department notified affected drivers by certified mail last fall and has been in contact with them throughout the process,” Couch told Independence Investigates. “All affected drivers were offered an opportunity to retest at no charge. Those retests occurred in late October and early November 2011. The Department was in contact at that time with the Colorado Motor Carriers Association, which supported the steps taken to retest drivers, to ensure compliance with federal law, to protect the motoring public and to provide qualified drivers to the industry.”

Jon Caldara, president of the free-market think tank, the Independence Institute, said the biggest lesson to take from this situation is that audits work. “Great job that this has been taken care of by the Department of Revenue. Private entities that work with government need to be carefully scrutinized so that they follow the letter of the law and the letter of their contracts with the government. Good auditing always makes for good government.”

The audit was performed in August of last year.

The email from DOR says, “The auditors found many deficiencies and improperly administered tests,” and later implied that even basic testing requirements may have been improperly administered or ignored.

Third party drivers license testing, whether for normal driving privileges or for CDL purposes, came under greater scrutiny last year. In July of 2011, the DOR shut down ‘Ola’s Driving School’ and forced more than 11-hundred people who received licenses from that location to re-test.

The Department of Revenue is one of a handful of state agencies that has its own in-house auditor.

Read the email between DOR and CDOT below:

Michael Corey Donahue has gained some measure of notoriety, primarily because his work at ‘Occupy’ has netted him three arrests already. But his criminal record begins in 2002, and in 2004, was accused twice of DUI and once of DWAI within a span of 6 months. Along with a couple of “failure to appear” notices, the other notable from Donahue’s record is that his original arrest at ‘Occupy’ includes a misdemeanor of “Sex Offense Unlawful Contact,” which the Denver Post reports was for groping a photographer.

26 year old Ambrose Cruz was charged with felony “menacing with a deadly weapon” by Denver Police in 2007. Cruz also has two entries on his rap sheet as “fugitive from another jurisdiction,” which most often means the individual failed to appear for a court date somewhere else.

In 2000, Scott Allen Greene was charged by Aurora Police with assault and battery, simple assault, and reckless endangerment. Further back in 1997, Greene received a mix of charges related to a domestic incident. Throughout his history, Mr. Greene has numerous “failure to appear” charges along with “fugitive from another jurisdiction.”

Charles Landon Smith has the longest record of the group, although most of the charges aren’t as serious as the three previously noted. Charges that stand out for Mr. Smith include panhandling, a handful of charges for “fare evasion” on public transportation, criminal mischief of defacing/damaging property, several marijuana related charges, and again, a host of “failure to appears” and “fugitive from another jurisdiction” charges.

The remaining group of those with background items unrelated to ‘Occupy Denver’: Ronald Sanchez, Joshua Morgan, Nicholas Baracz, Patrick Lif, and Kathleen Emma Dias.

Candidate Leslie Dahlkemper said her funding came from a variety of sources, and gave no other specifics other than to mention her daughter made a $6 contribution. However, according to the October 11 candidate filing on the Secretary of State’s website, Dahlkemper’s largest donor at that time was John Sands, the brother of Jefferson County Superintendent Dr. Cindy Stevenson. By the time of the candidate forum, Sands had donated $2,000, twice as much as any other donor. (Sands wrote 2 separate $1,000 checks).

The question posed to the candidates was: “Several people want to know who your largest supporters are, where the money has come from for your campaign, and are you supported by a political party?”

Dahlkemper began her response saying, “I am very proud to say I’ve had more than 300 contributors to my campaign, and those contributions have raised, um, ranged from $6, all the way to $1,000. And I think, and it means the world to me, that I have supporters. They are members of our community, they are parents who deeply care about this upcoming school board election. They are grandparents, they’re taxpayers, they’re homeowners, they’re Jefferson County, they’re Republicans and they’re Democrats. Um, I have to tell you that the best contribution that I got was that six-dollar contribution. It’s actually hanging on my wall because it was from my daughter Grace.”

LISTEN TO THE AUDIO HERE. Dahlkemper’s response begins at 3:51

The TRACER filing system only has records of two political donations from Sands, both of them to Dahlkemper for this specific race.

Jefferson County Superintendent Dr. Cindy Stevenson said all of her brothers and sisters are products of Jefferson County Schools, so for her brother to take an interest in a board election shouldn’t come as a surprise. Additionally, Mr. Sands has children in the Jefferson County school district. Stevenson added that her brother’s political actions and donations belong only to him.

Dahlkemper’s opposition on the ballot is Jim Powers. For the same filing period, according to TRACER, Powers’ biggest donor was Andy Hoover of Littleton, giving $1,000. Hoover has also given $1,000 to Jefferson County Board candidate Preston J. Branaugh, and has a short history of giving to local GOP candidates.

For the October 11 filing, Dahlkemper raised over $42,000, and ended the period with over $22,000 on hand. Powers raised over $8,000, and ended the period with roughly $7,500 on hand.

Emails obtained by “Independence Investigates” show that the Colorado Department of Transportation (CDOT) is conducting significant research on raising department revenues through at least two new potential transit taxes.

One item being researched: raising the state gas tax starting in 2014.

The next item examines how to wring more revenue from electric and alternative fuel vehicles since those higher-mileage vehicles pay less taxes at the gas pump, or sometimes no taxes at all if the car runs only on electricity.

A July 28 email from CDOT’s Deputy Executive Director Herman Stockinger asks a CDOT staffer for various revenue estimations by raising the state gas tax (with some varying assumptions), starting in 2014.

CDOT provided the following PDF that shows the projections to the research questions posed by Stockinger. According to CDOT’s assumptions, a one-cent increase in the state’s gas tax, beginning in fiscal year 2013 and running continuously for 10 straight years would produce just shy of $300 million.

CDOT public relations director Stacey Stegman says the research was not created at the direction of the Hickenlooper administration.

“CDOT is asked regularly about what an increase in the gas tax would generate,” Stegman said. “This question comes from our planning partners, local governments, the state Transportation Commission, etc. The last time we updated the ‘what does one cent generate’ information was for Governor Ritter’s Transportation Finance and Implementation Panel so most of the data we have been using was about four years old.  Internally at CDOT, we regularly put information together on the state’s transportation needs and recognize that there is a need for increased funding if we’re going to meet these needs so we try to maintain this data and keep it up to date.”

In a separate email, legislative liaison, Melissa Nelson-Osse, says CDOT is strongly considering running an alternative fuel vehicle tax in the 2012 General Assembly session. According to the email, the proposal was to be delivered to Governor Hickenlooper by CDOT Director Don Hunt on August 3, but CDOT again says they were not directed to undertake the research by the Hickenlooper administration.

As for the details of the electric vehicle tax, the email indicates that the language and structure of any bill would likely lean heavily on similar proposed legislation from Oregon in 2011 that essentially uses odometer metering to assess the vehicle use tax. That legislation in Oregon, however, was killed late in last year’s session. Odometer metering taxation is also sometimes called “pay-per-mile” taxation.

Stegman says thus far, the real concern isn’t hybrid vehicles, which obviously do pay gas taxes, but the research is more focused on electric vehicles. “More and more electric vehicles are hitting the market, and so it was time for us to take a look at how we are funded and how we can ensure that all vehicles pay their fair share to drive the state’s highways given that they all still cause wear and tear,” Stegman said.

Electric vehicles have indeed been hitting the market at a faster pace, thanks in part to state and federal subsidies to the buyer. Colorado gained national attention in 2009 as a Boulder seller of the Tesla Roadster sports car advertised that the $109,000 electric vehicle could be purchased with approximately $42,000 in tax credits, essentially creating a 39 percent retail discount on a high-end luxury sports car.

In Oregon, opponents to the pay-per-mile tax argued the state should be encouraging the use of “non-polluting” vehicles, and that a pay-per-mile tax would create disincentives for alternative-fueled vehicles.

By law, CDOT must also create an “annual deficit report” to submit to the Colorado General Assembly.

The state Department of Human Services (DHS) was quick to point out,
however, that while some sex offenders may have been living at CCCAP
locations, no children were under the care of any of the 12 ousted CCCAP
providers when the investigation was ongoing.

CCCAP is a state-administered program that aims to help keep low-income
adults in the workforce by subsidizing a portion of their childcare expenses.
A parent who meets income and other requirements can take her child to an
approved childcare provider. The provider charges a lower out-of-pocket rate to
the parent, but then receives a subsidy on the back end from a mix of state and
federal dollars. Most of the approved providers operate out of their homes, as
opposed to brick-and-mortar retail locations.

In February, Independence Investigates published the results of a year-long
investigation. Investigates took the full list of available childcare providers
under the CCCAP program, and cross-referenced all of the addresses against
the full list of registered sex offenders on the database maintained by the
Colorado Bureau of Investigation. Upon finding several exact address matches,
Investigates immediately turned over its findings to DHS to allow the agency
to act as quickly as possible to remove any children from harm, should those
circumstances exist.

Beyond just removing the 12 providers, DHS says they have made systematic
changes to multiple programs. According to spokeswoman Liz McDonough,
both the CCCAP program and Child Care Licensing have implemented a standard that now checks all childcare providers against the Colorado Sex Offender Registry.