AE spent $612,000 on food, good times

AUSTIN (KXAN) - On Feb. 8, Austin Energy processed payment to a vendor named Accent Food Services for $17,634.40 to cover the cost of coffee, creamer and sweetener for the city-owned utility's office on Barton Springs Road near Lady Bird Lake.

The next day day at City Hall, Austin Utility held one of more than a dozen public hearings and City Council work sessions on why it needs to increase electricity rates to raise the additional $126 million a year it says it needs to cover basic operating costs and maintain adequate reserves.

For some nine months, the utility and City Council have struggled to come up with a rate structure agreeable to residential and commercial customers while raising the money needed to ensure reliable electric service.

• Rate decision expected June 7
• AE unveils new rate proposal

“We need additional revenue,” said Austin Energy general manager Larry Weis said last August. “We’ve cut the budget as much as we can. We're operating as efficiently as we can. And we just need additional revenue.”

But a KXAN investigation shows that since late 2009, Austin Energy has spent more than $612,000 under such headings as "Food/Ice" and "Awards." In fact, the $17,000-plus spent on coffee in February was just a drop in the mug.

A review of AE records show that the utility has paid nearly $86,500 to Accent Food Services, which supplies coffee and condiments during the past few years.

KXAN's investigation also discovered more than $52,400 spent on gift cards for employees. Tens of thousands was spent on catered events, both at AE offices and off site. The records show the money was for employee lunches, end-of-year luncheons and holiday celebrations.

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Examples of expenditures

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$2,385 -- County Line Barbecue -- employee appreciation lunch

$1,322 -- Pappa's restaurant -- Holiday luncheon

$283 -- Saltgrass -- Awards luncheon

The full table of expenses

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Thousands of dollars were spent at Carraba's, Cannoli Joe’s, Bill Miller BBQ, Artz Rib House, Saltgrass Steak House, Z-Tejas, County Line, Hula Hut and several others, the records show.

Those records show thousands more spent on team outings during work hours at Dave & Busters, Main Event and bowling alleys. There was a $4,300 bill for the Broken Spoke. And a bill for $1,864 at the Bob Bullock Museum’s IMAX theater where more than 100 employees took in a matinee.

There were even farewell luncheons for Austin Energy interns -- one included just nine interns and 29 executives, supervisors and staff members.

The numbers leave a bitter taste in the mouths of some ratepayers.

“We have a hard time out here understanding,” said Charlie Remmert , 73, a retired state employee who has paid his electric bill to the city of Austin for 48 years.

First rate hike since 1994

In asking the City Council to sign off on a plan to raise more revenue, Austin Energy has pointed out that it has not had a rate increase since 1994, even though the city's population has mushroomed since then. And to serve the 120,000 additional customers, it has seen its workforce grow by some 1,700 workers in the last 18 years.

Weis declined to be interviewed for this report, as did several City Council members and City Manager Marc Ott. But Austin Energy deputy general manager Cheryl Mele said the utility is "very conscientious of every dollar that we spend."

And the expenses uncovered in KXAN's investigation, she said, are not out of line.

“There's a direct correlation between customer satisfaction and employee satisfaction,” Mele told KXAN. “And when you have engaged employees they will go the extra mile to serve the customer.”

Mele said some of this money is for community outreach and events. Some was used for team-building and employee morale. She points out the total budget for Austin Energy is $1.2 billion, and that $612,138 over 2 1/2 years is less than 1 percent of the total budget.  

High marks for customer service

Mele said more than 1,700 people work at Austin Energy, and customer service reviews are high.

“Recognition of that type of service is delivered,”  Mele said. “It’s important that we have ways for managers and supervisors to recognize their employees.”

Paul Robbin, a local consumer advocate, said he believes morale building is important. And does believe some of that employee spending is justified, especially for the lower-wage workers.

“Every single line item needs to be looked at closely,” said Robbins, who understands the perception this type of spending gives to the public.  

“They have 130 employees that make over $100,000 a year," he said. "If that isn't morale building, I don't know what is."

Interview requests denied

KXAN contacted some of the most vocal City Council members in the rate increase debate. Councilwoman Kathy Tovo's office asked for highlights from the records used in this report so she could prepare for an interview. The records were sent, but no interview was granted.

Aides did not make Councilman Mike Martinez available. Mayor Pro Tem Sheryl Cole's office said she was too busy to be interviewed.

The city's media manager, Reyne Telles, said the request to speak with City Manager Ott was denied. 

Remmert, the retired state employee, said he's been an Austin Energy customer in the same home for 48 years.  His wife recently went back to work to help pay the bills.

“I've seen a lot of changes in Austin, Texas," Remmert said. "The biggest change I've seen is the wasteful spending of money down at City Hall.”