Questioning Glendale City Council on a $731 Million No Bid Contract!
Dear Glendale City Council Member
I happened to notice Item Number 8 (c) on your Council meeting agenda for October 24, 2017.
8 (c) Resolution terminating the existing 21-year PPA with Skylar for renewable energy; dispensing with competitive bidding and authorizing a replacement 21-
year WSPP PPA for the procurement of renewable and carbon-free energy, for an amount not to exceed $647 million over the 21-year term; authorizing the
novation of the PPA to a credit-worthy counterparty without further City Council action; and finding that this project is exempt from the requirements of the
California Environmental Quality Act http://www.ci.glendale.ca.us/government/council_packets/Reports_102417/CC_8c_102417.pdf
I was curious about the Resolution and did a little research.
Here I share some of my findings and I ask you to tell me in all honesty that nothing I have found should be of any concern. Obviously, by the position you hold, you probably know more about this than I, and I’d like some reassurance that there are no improprities here or maybe even criminal action.
Here is your original September 2014 resolution posted on the City web site:
Starting back in 2014, I don’t understand why a 731 million dollar contract was done as a “No Bid”??
So, I wanted to see what the Skylar Energy, LP, company looked like. A company getting a “No Bid” contract for 731 million dollars must be pretty impressive.
The first thing I noticed was that the Company was located in the Virgin Islands!!
The office location overlooks the Marina and the water.
I couldn’t find Skylar listed as a tenant on the East End Plaza web site.
Red roofed building in which the Skylar Officers are reportedly located.
I don’t begrudge them for being in the Virgin Islands…kind’a like going to work and being on vacation all at the same time. I also imagine being off shore has some tax breaks and maybe extradition is difficult if a criminal indictment were to be filed for some reason.
I found that the company is 10 or less people!
And, the Company incorporated one year prior to getting the Glendale Contract…obviously, wouldn’t it have been difficult to vet?? I guess not, they got the contract without an open competition.
Let’s look at the Company executives:
Vice President of Structured Transactions is Rich Ghazarian.
Why of all the executives is he of special note??
Rich (Varuj) Ghazarian before becoming the Vice President of Skylar was employed as a trader and risk manager by the City of Glendale, Water and Power Utility. Coincidence?? Glendale to the Virgin Islands!! Remember the “No Bid” contract for 731 million dollars??
A quote written by the Utility on the Glendale City web site:
“The firm’s (Skylar’s) deep experience in energy markets allows it to serve clients by providing them with unique, customized structured solutions which are often difficult to find in the marketplace.”
Does being incorporated for one year prior to getting a 731 million dollar contract really constitute “…deep experience…”?? Was that really written to factually describe the Company, or to impress the uninformed tax payer??
And, you may have noticed, Skylar Resources L.P. is a wholly-owned subsidiary of Virgin Islands based Brisa-Max Holdings LLC. It’s an other company in the Virgin Islands with less than 10 employees.
Nothing in the above at this time is sufficient proof that the City Management, or the Companies committed illegal acts or violated any laws. It does, in my opinion, at a minimum reveal some major mismanagement of tax payer funds and opens up all kinds of questions that remain unanswered:
Why would any reasonable person award a contract for 731 million dollars without a bid process??
Why would any reasonable person award a energy contract for 25 years when the energy scene is rapidly changing and could be totally different in the next 10-15 years??
Is it just coincidence that a Glendale City Water and Power employee is now the Vice President of the contracted energy company??
Reading this, one might think it was a fictional script for some suspense movie. But, I assure you the facts as presented are correct and it is real. I wonder how the movie would end??
I close with the question I asked in the beginning: Should I be concerned about any of this??
Better yet, should you be concerned about any of this??