A Baltimore City Council committee created to examine Mayor Brandon Scott’s new conduit deal with Baltimore Gas and Electric slammed the proposal at their fiery first hearing Thursday night, where City Council President Nick Mosby questioned the administration’s rush to proceed with the agreement.
The Democrat’s criticism boils down to a lack of details about how the administration settled on a new contract that would change how maintenance is administered on the city-owned conduit, a 741-mile underground network of wires that power street lights, traffic signals and phone and internet services.
“The concern of this body has just been about transparency in general,” Mosby said as he opened the multi-hour hearing.
The committee voted unanimously to issue subpoenas for several documents they say the administration did not share with them, including an accounting of maintenance fees and revenue produced by the conduit.
The mayor published the contract in a news release on Tuesday. It calls for nixing BGE’s current fees — $2.20 per foot, amounting to about $28 million a year — in exchange for the private company paying for $134 million in improvements to the conduit over the next four years, plus $1.5 million in fees to the city each year. The proposal is slated to go before the Board of Estimates next week, which is stacked in favor of the mayor.
BGE representatives did not attend the hearing.
Acting solicitor Ebony Thompson addressed what she described as a “strong misconception” that the deal would lessen the city’s control over the conduit. Other Scott administration officials walked a similar line.
BGE “is not going to be able to just decide the location of their projects and do the work without approvals,” said Department of Transportation interim director Corren Johnson.
“I just don’t see that in the details,” Mosby replied. “I see vague language throughout the contract, language like ‘good faith.’ This provides them a Pandora’s box to open up and do whatever they really want in the name of capital improvement.”
Thompson noted that BGE’s current conduit contract expired in June 2022 and that negotiations stalled several times after the city and company repeatedly hit an impasse on fees.
Nonpoliticians questioned the timing and specifics of the deal. A group of other entities that lease conduit space — including Comcast — delivered a letter to the mayor shortly before the hearing that spelled out concerns about the agreement being reached without their involvement.
“We thus have not had an opportunity to discuss and better understand this agreement and its effect on them or Baltimore City residents that depend on telecommunications, Internet access and other services that they provide,” the letter reads.
The council members agreed to issue a subpoena for 17 questions posed by the signatories in the letter, including what impact the agreement will have on non-BGE conduit users.
The president of the company currently contracted by the city to maintain the conduit contested the administration’s assertion that the city loses $7 million annually on the system after maintenance costs are compared to the network’s revenue.
“We’ve spent the last six years literally in the trenches, figuring out the best way to get this work done, how to stand up a conduit division that we would say is second to none,” said Ron Adolph, president of Commercial Utilities.
Johnson, of DOT, said that no city workers would be laid off as a result of the contract.
Mosby also questioned the administration’s decision to seek a contract with FMI Capital Investors, a consulting firm that advises on conduit and telecom evaluations, weeks before a ballot measure that asked if the city should ban the sale or privatization of the conduit was set to go before voters.
The contract stipulated payment as an upfront flat fee of $50,000 and a “contingent one-time transaction fee equal to a portion of any profit from a future deal, should it be able to identify a profit-making venture that the City accepts,” an arrangement that Mosby, Comptroller Bill Henry and former Mayor Jack Young took issue with.
Young, who created the ballot measure, took the dramatic step of criticizing the contract at a city spending board meeting, arguing the terms incentivized FMI to recommend selling the network. Mosby deferred a vote on the contract until after the election; city voters overwhelmingly approved the measure with 77% support.
A representative from FMI noted that the consulting firm had been working with the administration since the summer. Mosby asked if the company was rushed to issue the report before Election Day.
“We sought to move quickly to provide the city the best options prior to the charter amendment,” Dan Shumate, FMI’s managing director, replied. The unfinished FMI report played no role in the proposed contract with BGE.
After more than two hours of questioning from different council members, it was Council Vice President Sharon Green Middleton’s turn. The Democrat threw her hands up.
“How can we trust what you say?” she asked administration officials. For two years — Scott’s tenure thus far — the council has been disrespected, she said. “But this is the limit.”
“I’m tired of getting stuff at the last minute,” she said. “To me, it shows that you’re hiding something.”
Councilwoman Odette Ramos questioned why the contract does not prevent BGE from passing along the cost of maintaining the conduit to city residents.
Dan Goldberg, the finance department’s director of corporate and revenue compliance, replied that BGE would pass any potential rate hikes incurred from the contract along to the entire Maryland customer base, not just Baltimore.
“That doesn’t make me feel better,” Ramos said.
The committee will meet again on Feb. 23.