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SUNDAY, MARCH 18, 2007
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Manager talks about DU’s future, opportunities

By Eric Fleischauer
Eric@decaturdaily.com · 340-2435

Kem Carr, general manager of Decatur Utilities, is leaving his employer of 24 years — and the town he’s called home all his life — to run a small utility in mountainous Manson, Wash., population 3,178.

Carr said he has long wanted to experience living in a different part of the country. After working a short time in Montgomery, he returned to Decatur in 1983 to help care for his mother after his father’s death. He planned a short stay, but discovered he enjoyed the work.

“Long story short, I kept enjoying the task, I kept getting the promotions, and 24 years later, here I sit.”

A vague desire to leave Decatur became pronounced last summer after a bout with a serious intestinal illness.

“Both my parents passed away at 58. Here I am 50 and I’m thinking, just in case — hopefully, I live to be 100 — but just in case I would like to live in a different area.”

He’ll be running a utility that serves 2,000 customers — dominated by apple orchards and wineries — on the banks of a 1,000-foot-deep glacier-fed lake. All northbound roads end 25 miles away at the Cascade Mountains.

His decision is not a financial one. He will take a pay cut. Then a grin. “Oh yeah.”

DUin good shape

Helping his decision to leave, he said, is his confidence that he is leaving DU in good shape.

“DU has no debt in electric. No debt in gas. The water rates are about the cheapest in the state. We’ve only got 13 years of debt left on the water system, which is unheard of. The wastewater system is in very good shape with very competitive rates,” Carr said.

“If you’re going to go out, it’s good to go out on a high note, as opposed to everything having gone to heck in a handbasket.”

“DU has great employees,” he said. “We’ve got a very good board. I’ve got zero complaints with any board member or employee.”

Carr sees tremendous opportunities on Decatur’s horizon, but challenges as well. He spoke to The Daily about some of those challenges and how he thinks the city should meet them.

Economic development

Q: Is Decatur headed in the right direction in terms of economic development?

Carr: Decatur is going to be better off long term if it has a better balance. We’re still weighted into the industrial, and now industrial and service, sectors. Long term, I think we need a balance that includes a professional and white-collar economy.

Carr said the heavy focus on industrial development, as opposed to development that focuses on attracting professionals, is increasingly problematic. Automation in industry means that large incentive packages that attract large plants do not translate into as many employees as they once did.

Carr: Decatur has taken a big risk on industrial parks, with the amount of money (in tax abatements) and infrastructure costs. That kind of investment would be a good thing to pursue for a high-tech professional park.

Even though some positive things are happening, I think Decatur has got to be aggressive in developing white-collar, professional work sites. We need a research or professional park with all the amenities, something that really draws that group and keeps that group here.

We’re very used to providing incentives for industry, but I wish we would look at providing incentives to the consultant- or professional-type company.

Carr said he thinks our engineering base at existing plants, our aerospace niche by virtue of United Launch Alliance and our proximity to Huntsville would increase the likelihood that a professional park would succeed.

Q: We are still pursuing industry with aggressive abatement packages. Is that a mistake?

Carr: If you’re realistic on the numbers and still want to give the abatements, fine. I’ve just seen very optimistic employee and usage estimates that never did materialize. What hasn’t been done very well from the beginning is tying those abatements to the number of employees or some other benchmark.

There’s kind of a joke around here. The new client comes in with his consultant and they have utility usage and employee promises. You can basically take those numbers and divide by three and come close to what will eventually go there.

There haven’t been benchmarks they had to attain to get the abatements. They made promises, and a lot of times they didn’t come close.

Regional partnerships

Q: Are there ways Decatur can better take advantage of growth in North Alabama?

Carr: Partnering with our neighboring cities and counties is something we can all do better. Locally, we see the same problem. I see a challenge in the district system with the council. You get too focused on district or neighborhood needs as opposed to the city or area in general. You’ve got to have people who look at Decatur and the county as a whole. A lot of projects may have a negative impact in the particular district, but for the overall area it’s a big plus. That’s a pretty major conflict.

Regionally, you still have the mentality that the governments you deal with have their own territory. They feel like they’ve got to win the prize, when in reality everybody would benefit if they would work together.

For example, Decatur right now has three different electric utility companies serving inside the city. Common sense would tell you long term that’s probably not the best idea. I think operationally, utility boards and other government boards need to explore some good fits, some good win-wins to where you streamline efficiencies.

Combining the functions of entities from different governments, including utilities, can benefit ratepayers and taxpayers, Carr said. He used the consolidation of various utilities at DU as an example.

Carr: Having four utilities has helped DU quite a bit. There’s some parts of it you have to keep separated, but there’s a lot — when you get into billing, accounting, cashiering, customer service and management — where you gain a whole lot by not having to duplicate.

Partnering with other cities and counties would be an important plus. Regional economic development is the best direction for Decatur. Partnering with Huntsville as much as it can is, I think, the way to go. Huntsville has a lot of political and other clout that I think Decatur can take advantage of.

Partial mergers, or broad partnerships, could accomplish the same thing if applied to the relationship between DU, Joe Wheeler and Athens Utilities, he said.

Q: Wouldn’t mergers tend to hurt DU ratepayers?

Carr: If you look at the long term, DU electric-wise is rather limited. If 10 years down the road we have a large industrial drop-off, it becomes more problematic for us to keep the rates lower. From DU’s perspective, having a (geographical) area where there is more growth is an advantage. On the Joe Wheeler side or the Athens side, a combination adding (population) density works.

I want to forget the boundaries, just look at what operationally makes sense. Look at operating in as big an area as you can. Forget about the politics. Public utilities are supposed to be nonprofit. The whole premise on all of that is just to provide basic services and economic growth for the area. You’re not supposed to be trying to sock away a bunch of money in the bank.

Q: Can our current local political leaders make regional partnerships work?

Carr: Decatur has a good group in the council and a good mayor. I sense that the political leaders are still a little gun-shy about the naysayers, the people who criticize anything and everything. To move Decatur forward you’ve got to be a little bit of a risk taker, a leader, and not let naysayers keep you from doing what’s right.

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