Great Falls Tribune

April 25, 2009

Officials say Lawton's compensation was ethical

By RICHARD ECKE
Tribune Staff Writer

It was not improper for a Billings-based electric cooperative to credit former Great Falls City Manager John Lawton with $11,500 for serving on the co-op's board for two years, various officials said this week.

Forms filed by Billings-based Southern Montana Electric Generation & Transmission Cooperative listed Lawton as receiving $5,500 in 2005 and $6,000 in 2006 for sitting on SME's board of directors.

All of that money went into city coffers and not into Lawton's pockets, the former city manager said this week.

"I never took a penny," Lawton said. "For me to double dip would be clearly unethical."

Great Falls-area Internet bloggers raised the issue of pay to Lawton recently, after they thumbed through forms filed with the federal Internal Revenue Service by SME.

Tim Gregori, general manager of SME, said it is common practice for the co-op to compensate members of its board of directors. The co-op's members are five electric cooperatives and the city of Great Falls.

Gregori said Lawton asked him to credit the amount due to Great Falls as a member of the board to the city's electric utility operation. Great Falls' utility arm, Electric City Power, buys power from SME and sells it to other government agencies, nonprofit groups and businesses, mostly in the Great Falls area.

Great Falls Fiscal Officer Coleen Balzarini said Thursday that the money for being on SME's board was given to the city of Great Falls.

"Southern Montana has never issued a check to John Lawton, to Greg Doyon or to Coleen Balzarini," said Balzarini, who sits on the SME board as a trustee. She said she does not receive any payments personally for holding that post.

"It's a net credit against Electric City Power's net energy bill," Balzarini said.

If anyone were paid money personally, "there would have to be a 1099 (tax-filing document) issued," Balzarini added.

She said it is upsetting that area bloggers would post the information online without more explanation, saying they should "get the facts."

"All they had to do is call and ask," she said.

In reply, Gregg Smith, who runs Electric City Weblog, criticized the city and Balzarini for not being more forthcoming in turning over documents in the past.

"I don't even know if she'd take my calls anymore," Smith said.

He conceded making an inaccurate statement on his site that Lawton "was receiving compensation for acting as an SME trustee." Smith's site also included a few anonymous comments that were harshly critical of Lawton and the city over the payments.

In one comment, Smith said it was his "guess" that Lawton did not turn over the payments to the city. Smith said he believed his site's postings on the subject were "generally accurate."

"It's not like I made it up," Smith said, adding the 990 tax forms filed with the IRS appear to show Lawton received compensation.

Smith said Friday that he views his Internet role as "probably more commentary" than anything else. He added he could not find any time the City Commission ever voted to accept trustee payments from SME.

Randy Boysun, a Great Falls accountant who has filed Form 990 documents for SME with the Internal Revenue Service, said Thursday that the SME trustee payments "went directly to the city's power bill. At no time did it ever go to him (Lawton)."

Boysun said the payments were authorized by the electric cooperative board. He said it is not uncommon for co-op board members to be paid.

"It's standard practice, actually," Boysun said.

On SME's 990 forms, Lawton was listed as receiving compensation in 2005 and 2006, but not in 2007, where his compensation was listed as "0." Boysun said that the zero listed for Lawton's compensation for 2007 better reflects that Lawton did not personally receive the money. The city of Great Falls continues to receive trustee payments.

A Form 990 filed for SME for calendar year 2007 showed the most compensation for an SME trustee went to Joe Dirkson, who received $19,250 for spending 12 hours per week doing that job. Gregori, SME's general manager, received a salary of $147,167 for 2007, the document states.

In 2007, the cooperative reported $31,330,091 in total revenue and $29,623,518 in total expenses, according to the filing.