DME salaries brought to light

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City-owned electric utilities in Texas can no longer hide their employees' salaries from the public, according to a new state law.

Under Senate Bill 1613, passed by the Legislature this year, municipally owned utilities can no longer shield employee pay under a 12-year-old law that protects "competitive matters" from release. The bill effectively overturned statutes in Denton and other cities that kept electric department salaries secret, earning praise from advocates of open government. ALSO ONLINE

 Database of all city employee salaries

"We believe that the information belongs to the taxpayers and that taxpayers have a right to the information," said Keith Elkins, executive director of the Freedom of Information Foundation of Texas, who testified in support of the bill. "And some of the arguments that it should be protected for competitive reasons just didn't seem to be supported."

Salaries of other city employees were already subject to release under the Texas Public Information Act.

But the state had allowed cities to withhold electric employee salaries since 1999, when lawmakers voted to deregulate the state's power market.

The 1999 legislation exempted cooperative and city-owned utilities from deregulation, although they could choose to opt in.

It also let city-owned utilities classify certain information as competitive matters exempt from the state's open records law.

Under the old law, information could be withheld if the city's governing body decided "in good faith" that releasing it would give an advantage to competitors.

The new law, filed by Sen. Steve Ogden, R-Bryan, includes categories of information that qualify as competitive matters, meaning cities no longer have discretion in deciding what to withhold. The law lists employee salaries among the categories that don't qualify as competitive matters.

The (Bryan-College Station) Eagle reported that Ogden filed the bill after Bryan's city manager resigned amid a dispute with Bryan Texas Utilities over access to financial records. Ogden's office did not respond to a request for comment.

The bill enjoyed support from the Texas Public Power Association, which represents the 72 Texas cities that own and operate an electric utility.

"There are a number of pieces to the bill," said Mark Zion, the association's executive director. "It protects commercially sensitive public power information that would advantage competitors in the electric industry - competitors that have few obligations of their own to disclose sensitive information. It also adds additional transparency in a number of areas, including salaries."

Phil Williams, general manager of Denton Municipal Electric, said he was pleased the law continued letting city-owned utilities withhold information on wholesale power purchases.

DME doesn't compete for customers in the retail power market in most of Denton because the city opted out of deregulation, but it does compete with investor-owned utilities and co-ops in negotiating wholesale power prices.

Also, DME is a monopoly provider only in places that were part of its service area when the city chose not to deregulate. Some new-growth areas outside Loop 288 are open to competition among DME, CoServ and Oncor, according to limits set by the Public Utility Commission of Texas. That means developers building in those areas get to choose their power providers, said Lisa Lemons, DME community relations manager.

Williams said it's too soon to know whether releasing salary information will hurt DME competitively. He said investor-owned utilities must report the earnings of top managers under federal rules, but co-ops typically don't make their salaries public.

What they make

The city released a database of employee salaries to the Denton Record-Chronicle last week in response to an open records request.

The records show six DME employees earn more than $100,000 a year. At least 14 more workers earn between $75,000 and $100,000, including Lemons, who often serves as the public face of DME.

Williams, a five-year city employee, has the highest DME salary with $162,750 a year, which makes him the fourth-highest-paid city employee. Only City Manager George Campbell, City Attorney Anita Burgess and Assistant City Manager Howard Martin make more.

Martin, a 35-year city employee who oversees all city utilities, earns $162,775 a year.

DME's $144 million budget for the current fiscal year includes the equivalent of 129.5 full-time positions, although Williams said there are five to 10 vacancies. Salaries make up less than 10 percent of DME's total budget, he said.

DME salaries started drawing attention this month after former mayoral candidate Bob Clifton posted them online at www.dentonpowerline.info, a website set up in response to a controversial transmission line reconstruction project in northeast Denton.

Clifton, who unsuccessfully sued the city over access to DME records in 2006, said he believes many of the salaries are out of line.

"You don't want to be a training ground for Oncor or CoServ, so you've got to pay a competitive salary, which is different because they're specializing in electrical work," he said. "On the other hand, why is the head of the department making $25 a year less than the assistant city manager, who is the head of all the utility departments?"

Clifton is awaiting trial on charges of bribery and records tampering stemming from the May 2010 mayor's race. He has denied any wrongdoing.

Williams said DME's salary levels were recommended by T.R. Edgar and Associates, a company that advises all Denton city departments on pay. Williams said he believed the salaries were based on surveys from benchmark cities, but he could not provide details.

City employees are in line for average merit raises of 2 percent under the city's proposed budget for the fiscal year that starts Oct. 1. A public hearing on the budget is scheduled for Sept. 6 at City Hall.

LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com.


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