Friday, March 1, 2013

More angst over Drake's future

Posted By on Fri, Mar 1, 2013 at 5:08 PM

Neumann Systems Group Colorado Springs Utilities
  • Neumann: Worried about his company.

Yesterday, we got an explosive e-mail from David Neumann, a physicist who invented a pollution control device that's being installed on Martin Drake Power Plant downtown. His NeuStream invention removes sulfur dioxide and is being tested on removing carbon dioxide. The former must be removed to certain levels within a few years under new EPA regulations, while there is no regulation for CO2 as of yet.

Our follow-up has led to an admission by Mayor Steve Bach that he has NO authority over Utilities, which conflicts with an earlier legal opinion from City Attorney Chris Melcher that Bach must sign all Utilities contracts.

As you probably already know, a battle over the NeuStream installation has been raging — at least on the part of City Councilor Tim Leigh, who continually calls it "unproven" and a venture-capital deal in which the city shouldn't be participating. Neumann has since filed an ethics complaint against Leigh.

Last summer, City Council, sitting as the Utilities Board, voted to install the technology. But delays have put his company at risk, he says, and he's lost several key employees due to the brouhaha. Now, whether the technology will, in fact, ever be completely installed appears to rest on the outcome of the April 2 election in which voters will elect six of nine councilors.

Neumann is nervous, because he says Mayor Steve Bach won't give him the time of day.

Here is the message we got from Neumann yesterday:

There will be no new product announcements for us in the near future because of the situation that currently exists with the Mayor, the City Attorney and Councilmember Leigh. Note that we have tried to set a meeting of our new CEO Todd Tiahrt with Mayor Bach to discuss our situation. He would not meet Mr. Tiahrt in his office. The best we were offered was a clandestine meeting at a private residence at 6:30AM with the Mayor and his planned new President of the Council, Merv Bennett. After we declined this style of meeting, we were told through these same surrogates of Mayor Bach that he will control the new Council and the first act of that new Council will be to kill our contract with CSU. In addition we were told (paraphrasing) “Don’t get emotional, deal with it and salvage as much as you can. It will go better for you if you go quietly. No scorched earth.”

We have no choice but to be prepared for the worst in April based on these threats. We currently do not know how a small, high tech business like ours can survive the toxic Colorado Springs business environment being created by the Mayor, the City Attorney and Councilmember Leigh with their lies, threats, violations of the City Charter and Code of Ethics and behind closed door deals with Xcel and the Sierra Club. The appearance to the nation of an unstable, unfriendly and autocratic City government with its unprovoked attacks against the strongest and one of the best performing public institutions in the nation—Colorado Springs Utilities, is doing tremendous damage. Furthermore, we are appalled that a very small group of very rich developers and wealthy individuals think that they can own the Council (as they now own the Mayor) and can get the Council to act in a way that hurts our people but feeds their greedy self-interests. As always we at NSG are proud of our proven and independently validated technology and the potential it offers for cleaning our air and over time bringing thousands of jobs to the Springs.

Neumann also alleges in a phone chat with us that Bach is working on a deal with Xcel. "The only thing we can do at this point is try and let a little sunlight shine on these things as best we can," he says.

Drake Power Plant

Utilities CEO Jerry Forte has declined to comment about the whole situation, pending the outcomes of several studies about Drake and a potential sale of Utilities. He does say, however, that the Neumann technology has been vetted and revetted, and that it works. It's also the cheapest alternative and requires the smallest footprint. In addition, it uses less power than other types of scrubbers, he says.

We asked Bach's communications director to see if the mayor had anything to say in response to Neumann's missive, and here's what we got:

1. Mr. Neumann's allegations are false. Neither his firm, his new CEO or he has attempted to make an appointment with me. I would be glad to meet with them, but do not see the relevance given that Mr. Neumann's company is a vendor for CSU which is controlled by City Council acting as the Utility Board.

2. Mr. Neumann's suggestion that I am somehow impeding his company's success is also false. Again, City Council acting as the Utility Board has statutory authority over CSU. I have none. Mr. Neumann should take up his concerns with Scott Hente, Chairman of the Utility Board and Council President, who leads the Utility Board/Council.

Even though we didn't ask him for comment, Melcher weighed in, and had the communications department send us this late yesterday. (Melcher has said dumping the Neumann deal would free up money for stormwater drainage.)

The City recommends Mr. Neumann contact City Council and CSU management with regard to any questions about the status of the Neumann Systems contract, since Council and CSU management have full authority over Neumann Systems. It is unfortunate that Neumann Systems is having trouble generating sufficient customers or revenue to sustain their business model and expenses. The City certainly wishes Neumann Systems well as they seek to be a viable and independent company in the future. The City categorically denies Mr. Neumann’s allegations about the Mayor, the City Attorney, Councilmembers Bennett or Leigh, and the “unnamed surrogates” who are unknown. It is unfortunate that Mr. Neumann has chosen to make desperate and baseless criticisms, rather than focusing on what appear to be serious difficulties with the company’s operations and business model.

Councilor Merv Bennett dismissed Neumann's allegations involving him, saying via e-mail that it was "news to me" that he'd been identified as the next Council president. "As far as the NeuStream system," he adds, "my opinion has not changed. I am still supportive of completing the project as designed and approved."

We also asked Council President Pro Tem Jan Martin for her thoughts on Neumann's technology, and she responded like this:

I hope Dave will hold off making any decisions until after the election. The Utilities Board has voted to move forward with the Neumann system and any decisions prior to the election would be premature. I have always had faith in the city’s electorate to make good decisions. If Dave’s statement regarding trying to setup a meeting with the Mayor is accurate, I’m disappointed that after the many public comments made by the Mayor and Executive Branch regarding NSG, he wouldn’t meet with Nuemann [sic] Systems and openly discuss the issue.

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