Nutter presses case for selling PGW

Mayor Nutter just wants to be heard.

If he is, the mayor believes, the public will rally to his plan to sell the Philadelphia Gas Works for $1.86 billion in a deal that would both get Philadelphia out of the energy business and bolster its struggling pension fund.

Stymied by City Council's refusal to even consider the proposal, Nutter and other sale proponents have been scrambling to resuscitate the deal's chances. In Code Blue mode, the administration has engaged labor and civic leaders to put pressure on Council. Nutter himself has been lobbying individual members. He has gone so far as to suggest he is open to other uses for proceeds from the sale.

Key members of his staff, including City Solicitor Shelley R. Smith and Finance Director Rob Dubow, have been engaged in a fact-gathering mission to push back against what the administration sees as either misperceptions or deliberate untruths perpetuated by Council President Darrell L. Clarke and other Council members.

Chief among those: that Council was left out of the sale process and would be given no say in how a final deal is structured. Both those positions are patently wrong, the administration argues. And by perpetuating them, the deal's opponents have prevented the public from hearing what the Council's own consultant has concluded - that the deal was the best on the table, and was reached through a fair and aboveboard process.

"There are a lot of good elements in here for the customers, the workers, the city," Nutter told The Inquirer in an interview Thursday. "I think that deciding you are against something when you don't have all the facts and information starts to be a disservice to the citizens of this city."

On Friday, Councilwoman Marian Tasco, speaking on WHYY-FM radio, lashed out at Nutter and continued to cite as fact positions the administration contends are falsehoods.

"Council does not have a voice in this sale," she said. "Why would we have a hearing on a sale we don't agree with and cannot amend? This was a take-it-or-leave-it process, no matter what the mayor says. He is full of malarkey, as he usually is."

Nutter's plan calls for selling PGW to UIL Holdings Corp. of New Haven, Conn. The sale is expected to net more than $400 million that would be used to reduce the city's unfunded pension liabilities.

The administration devoted two years to searching for a buyer. PGW spent more than $2 million to organize an auction that attracted more than 30 potential buyers. UIL spent about $20 million in its pursuit of PGW.

Council, led by Clarke, spent $522,000 on a consultant's report on the deal before announcing Oct. 27 there was no support in its own ranks for the sale, so there would be no hearings on it. That outright dismissal of such a major mayoral initiative is without apparent precedent.

Instead, Council plans to hold hearings Thursday and Friday on the broader question of what should be done with PGW.

That has not stopped the Nutter administration from continuing to press - "harass" in Tasco's words - Council members to sponsor the sale bill and force Clarke's hand to hold hearings.

"This is still a great deal for the city," Nutter said. "And at the end of the day, it deserves a full public hearing. It is too big not to be heard."

Based on the administration's response, Nutter has been particularly stung by Council accusations that it was left out of the process leading up to the sale and still would have no say in the matter.

In rebuttal, the administration has produced a timeline of meetings and briefings extending back to October 2011 that included Council members or their staff.

"Myth: Council was not involved in the process. Truth: Not true," is included in a six-page list the administration compiled of what it labels "Myths/Truths" about the proposed UIL deal. "The administration offered to involve Council at every step of the process."

Which still might not have been enough. Clarke and Tasco have said the administration went astray by simply considering a sale without consulting Council first.

Asked about the "myths/truths" list, Clarke spokeswoman Jane Roh said in an e-mail: "The documents you reference contain no information that is actually new. City Council remains unconvinced by the Nutter administration's take-it-or-leave-it privatization option for the only gas utility operating in the City, which presents far too many risks to consumers and not enough long-term benefits to balance it out."

Roh also said lively response to Council's plan for hearings on PGW's future was "evidence" the administration hadn't weighed enough options.

Tasco, too, took the you-should-have-consulted-us stance. "If we were going to consider the sale of a major city asset like PGW, we should have had broad discussions about what that would entail," she said Friday on WHYY-FM.

The seemingly unbridgeable divide over the sale was on exhibit in the same interview, when Tasco cited language in the sale agreement that she read as barring Council from having any say in its final form.

The sale agreement, noting that Council must approve an ordinance covering the deal, says the city as seller "may amend, revise, or add to the ordinance so long as such amendments, revisions, or additions do not adversely affect the buyer."

Once again, there are two sides to the story: the administration's chief lawyer, Smith, says that language was added to ensure Council could address concerns it might have with the sale provisions - with the understanding that UIL would have to sign off on any changes.

"We contemplated that Council might want some additional commitments," she said. "The process was flexible enough to allow that to happen."

Nutter said such give and take is standard when Council is asked to OK a major contract negotiated by the Mayor's Office. He recalled, for instance, that the deal to build stadiums for the Eagles and Phillies evolved once it was before Council to include $1 million annual contributions from both teams toward a children's fund.

As for sweetening the pot in this deal, Nutter was noncommittal, but he suggested he might consider using some of the sale proceeds for something other than the red-ink-ridden pension funds for city employees and retirees.

"The overwhelming bulk of the proceeds have to go into the pension funds," he said. "That is the biggest challenge in front of us, but it is not the only challenge in front of us. I would have to hear what the next compelling thing is."

City Council plans to hold hearings Thursday and Friday on the broader question of what should be done with PGW.

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