Message from the Town Accountant
From: accountant@templeton1.org (accountant@templeton1.org) You moved this message to its current location.
Sent: Fri 8/08/14 4:07 PM
To: kcrobinson7@gmail.com (kcrobinson7@gmail.com); J Driscoll (jdriscoll@templetonlight.com); 'Diane Haley Brooks' (dianehaleybrooksselectwoman@gmail.com) (dianehaleybrooksselectwoman@gmail.com); jfcolumbus@gmail.com (jfcolumbus@gmail.com); Julie Farrell (j_farrell@hotmail.com) (j_farrell@hotmail.com); treasurer@templeton1.org (treasurer@templeton1.org); Holly Young (hyoung@templeton1.org) (hyoung@templeton1.org); townadministrator@templeton1.org (townadministrator@templeton1.org); Doug Morrison (dem270@comcast.net) (dem270@comcast.net)
Cc: kwebster kwebster (kwebster@templetonlight.com); Dana Blais (snowfighter4@verizon.net) (snowfighter4@verizon.net); 'Gregg Edwards' (gmefromces@aol.com); stewy5@comcast.net (stewy5@comcast.net); jbelliveau jbelliveau (jbelliveau@templetonlight.com); Thomas Berry (tberry@templetonlight.com)
John,
I am restating my May 12th offer. I will work with the Light Department to help it obtain a bond rating separate from the Town. I know the industry contacts to get this done. If you want to do it yourself, please contact Mary Carney at First Southwest at (508) 797-3035, who is cc'ed here. Mary is the person who can get it done for you.
I want to straighten out some information you have below. The Town's bond rating was removed only because it could not provide FY 2013 audited financial statements within Moody's evaluation window. The rating removal is not a reflection of the "Town's handling of all matters financial," but rather a reflection of how difficult it is for the Town to obtaining an audit firm and schedule the audit. To prove that the Town's handling of its financial matters is improving, please remember that the Town floated your department's cashflow needs last month. With this help, your department did not need to obtain a revenue anticipation note, nor did we charge your department interest for this service.
Bob and I have been here only for a few months. Let's stop tying the past to current administration so that we can work together on obtaining a separate bond rating for your department.
Thanks,
Matt
On August 6, 2014 at 10:20 AM J Driscoll wrote:
All,
Last e-mail, no meeting here this morning. The amount of paperwork necessary to be generated for me to sign for MMWEC to handle this situation keeps growing and nobody from MMWEC can make it out here today.
John M. Driscoll
General Manager
Templeton Municipal Light & Water Plant
86 Bridge Street, P.O. Box 20
Baldwinville, MA 01436
Phone (978) 939-5323
Fax (978) 939-4309
From: J Driscoll
Sent: Wednesday, August 06, 2014 9:18 AM
To: townadministrator@templeton1.org; accountant@templeton1.org; treasurer@templeton1.org; kcrobinson7@gmail.com; Doug Morrison (dem270@comcast.net); Julie Farrell (j_farrell@hotmail.com); 'Diane Haley Brooks' (dianehaleybrooksselectwoman@gmail.com); jfcolumbus@gmail.com; Holly Young (hyoung@templeton1.org)
Cc: Dana Blais (snowfighter4@verizon.net); 'Gregg Edwards'; stewy5@comcast.net; kwebster kwebster; jbelliveau jbelliveau (jbelliveau@templetonlight.com); 'Tom Berry'
Subject: Town of Templeton's Bond Rating Withdrawal
All,
As of July 29, 2014 the Town of Templeton no longer has a rating with which to bond.
Yesterday afternoon Templeton Light was informed by MMWEC, our joint action agency, that ISO New England’s Market & Credit Risk Department has been made aware of this. Since Templeton Light has been and continues to be a participant in the ISO New England market, the absence of the Town’s bond rating represents a material adverse change to ISO New England. In other words, thanks to this town’s handling of all matters financial over the last year or so, the light department has now been, through no fault of our own, re-classified as a credit risk to the wholesale energy market. As a consequence, Templeton Light will have to immediately post collateral, as if it were a private company, in the amount of $200,000.00 to be held as an escrow fund at ISO New England. This money will have to come from one of the light department’s trust accounts held at MMWEC and this is not what these types of trust accounts were established for. But the trusts were established initially with electric ratepayers funds over the years, which means that should the $200,000.00 be tied up for a period of months or years until this town gets its act together, Templeton Light’s electric ratepayers shall be denied access to these funds while simultaneously being charged monthly to build the funds back up ($16,666.67 per month per 3,525 electric customers) to a responsible level.
Funds like this are to be used for rate stabilization to counter unforeseen fluctuations in wholesale energy costs in the market, to which Templeton Light is about 20% exposed. They are not supposed to be held hostage by the region’s RTO for an undefined period of time during which they will gain little to no interest income, especially when it is all due to circumstances that are completely out of Templeton Light’s control. The only way to assure the timely release of the $200,000.00 back to Templeton Light’s electric ratepayers is to obtain our own bond rating through an agency (other than Moody’s), which we are in the process of doing right now. But until we are truly separate from the Town in the credit worthiness category our light customers will suffer this unnecessary shortage of available rate stabilization funds.
There is to be a meeting this morning at the light & water for 10:00 a.m. office with Matthew Ide from MMWEC, our accountant and myself so that he can lay out the light department’s options to get through this mess, none of which are desirable. A municipal light department established in 1906 should not need to obtain a letter of credit in 2014 through its joint action agency’s bank to stay afloat, nor should it have to establish some temporary escrow account at its RTO, all because its host town cannot provide adequate financial information to ratings agencies like Moody’s.
I am advising anyone on this e-mail list who can attend to do so, this way the level of severity of what has happened will be clear to all.
John M. Driscoll
General Manager
Templeton Municipal Light & Water Plant
86 Bridge Street, P.O. Box 20
Baldwinville, MA 01436
Phone (978) 939-5323
Fax (978) 939-4309
Sent: Fri 8/08/14 4:07 PM
To: kcrobinson7@gmail.com (kcrobinson7@gmail.com); J Driscoll (jdriscoll@templetonlight.com); 'Diane Haley Brooks' (dianehaleybrooksselectwoman@gmail.com) (dianehaleybrooksselectwoman@gmail.com); jfcolumbus@gmail.com (jfcolumbus@gmail.com); Julie Farrell (j_farrell@hotmail.com) (j_farrell@hotmail.com); treasurer@templeton1.org (treasurer@templeton1.org); Holly Young (hyoung@templeton1.org) (hyoung@templeton1.org); townadministrator@templeton1.org (townadministrator@templeton1.org); Doug Morrison (dem270@comcast.net) (dem270@comcast.net)
Cc: kwebster kwebster (kwebster@templetonlight.com); Dana Blais (snowfighter4@verizon.net) (snowfighter4@verizon.net); 'Gregg Edwards' (gmefromces@aol.com); stewy5@comcast.net (stewy5@comcast.net); jbelliveau jbelliveau (jbelliveau@templetonlight.com); Thomas Berry (tberry@templetonlight.com)
John,
I am restating my May 12th offer. I will work with the Light Department to help it obtain a bond rating separate from the Town. I know the industry contacts to get this done. If you want to do it yourself, please contact Mary Carney at First Southwest at (508) 797-3035, who is cc'ed here. Mary is the person who can get it done for you.
I want to straighten out some information you have below. The Town's bond rating was removed only because it could not provide FY 2013 audited financial statements within Moody's evaluation window. The rating removal is not a reflection of the "Town's handling of all matters financial," but rather a reflection of how difficult it is for the Town to obtaining an audit firm and schedule the audit. To prove that the Town's handling of its financial matters is improving, please remember that the Town floated your department's cashflow needs last month. With this help, your department did not need to obtain a revenue anticipation note, nor did we charge your department interest for this service.
Bob and I have been here only for a few months. Let's stop tying the past to current administration so that we can work together on obtaining a separate bond rating for your department.
Thanks,
Matt
On August 6, 2014 at 10:20 AM J Driscoll
All,
Last e-mail, no meeting here this morning. The amount of paperwork necessary to be generated for me to sign for MMWEC to handle this situation keeps growing and nobody from MMWEC can make it out here today.
John M. Driscoll
General Manager
Templeton Municipal Light & Water Plant
86 Bridge Street, P.O. Box 20
Baldwinville, MA 01436
Phone (978) 939-5323
Fax (978) 939-4309
From: J Driscoll
Sent: Wednesday, August 06, 2014 9:18 AM
To: townadministrator@templeton1.org; accountant@templeton1.org; treasurer@templeton1.org; kcrobinson7@gmail.com; Doug Morrison (dem270@comcast.net); Julie Farrell (j_farrell@hotmail.com); 'Diane Haley Brooks' (dianehaleybrooksselectwoman@gmail.com); jfcolumbus@gmail.com; Holly Young (hyoung@templeton1.org)
Cc: Dana Blais (snowfighter4@verizon.net); 'Gregg Edwards'; stewy5@comcast.net; kwebster kwebster; jbelliveau jbelliveau (jbelliveau@templetonlight.com); 'Tom Berry'
Subject: Town of Templeton's Bond Rating Withdrawal
All,
As of July 29, 2014 the Town of Templeton no longer has a rating with which to bond.
Yesterday afternoon Templeton Light was informed by MMWEC, our joint action agency, that ISO New England’s Market & Credit Risk Department has been made aware of this. Since Templeton Light has been and continues to be a participant in the ISO New England market, the absence of the Town’s bond rating represents a material adverse change to ISO New England. In other words, thanks to this town’s handling of all matters financial over the last year or so, the light department has now been, through no fault of our own, re-classified as a credit risk to the wholesale energy market. As a consequence, Templeton Light will have to immediately post collateral, as if it were a private company, in the amount of $200,000.00 to be held as an escrow fund at ISO New England. This money will have to come from one of the light department’s trust accounts held at MMWEC and this is not what these types of trust accounts were established for. But the trusts were established initially with electric ratepayers funds over the years, which means that should the $200,000.00 be tied up for a period of months or years until this town gets its act together, Templeton Light’s electric ratepayers shall be denied access to these funds while simultaneously being charged monthly to build the funds back up ($16,666.67 per month per 3,525 electric customers) to a responsible level.
Funds like this are to be used for rate stabilization to counter unforeseen fluctuations in wholesale energy costs in the market, to which Templeton Light is about 20% exposed. They are not supposed to be held hostage by the region’s RTO for an undefined period of time during which they will gain little to no interest income, especially when it is all due to circumstances that are completely out of Templeton Light’s control. The only way to assure the timely release of the $200,000.00 back to Templeton Light’s electric ratepayers is to obtain our own bond rating through an agency (other than Moody’s), which we are in the process of doing right now. But until we are truly separate from the Town in the credit worthiness category our light customers will suffer this unnecessary shortage of available rate stabilization funds.
There is to be a meeting this morning at the light & water for 10:00 a.m. office with Matthew Ide from MMWEC, our accountant and myself so that he can lay out the light department’s options to get through this mess, none of which are desirable. A municipal light department established in 1906 should not need to obtain a letter of credit in 2014 through its joint action agency’s bank to stay afloat, nor should it have to establish some temporary escrow account at its RTO, all because its host town cannot provide adequate financial information to ratings agencies like Moody’s.
I am advising anyone on this e-mail list who can attend to do so, this way the level of severity of what has happened will be clear to all.
John M. Driscoll
General Manager
Templeton Municipal Light & Water Plant
86 Bridge Street, P.O. Box 20
Baldwinville, MA 01436
Phone (978) 939-5323
Fax (978) 939-4309
please remember that the Town floated your department's cashflow needs last month. With this help, your department did not need to obtain a revenue anticipation note, nor did we charge your department interest for this service.
ReplyDeleteInteresting fact for the crown jewel of Templeton to have over its head!
What other money has the town put out for the TMLWP and when will they pay it back?
ReplyDeleteWith such high light bills and a rate study just done how did this happen?