Subject: File No. S7-45-10
From: Robert J. Dieter
Affiliation: General Counsel, Cedar Falls Utilities

February 22, 2011


Dear Securities Exchange Commission::

Thank you for the opportunity to submit this comment regarding the proposed Rule File Number S7-45-10. Please consider the following in the deliberations prior to making this rule final.

While we appreciate the intent of this proposed Rule which would require appointed Municipal Utility Trustees to register as financial advisors. It is not well founded and will have peripheral adverse effect. There should be an exemption clearly established for appointed Trustees of Municipal Utilities.

The Trustees at Cedar Falls Utilities are selected by the elected Mayor for their proven dedication to the community and public service. They are approved by the elected City Council. They receive only a token stipend.

The Trustees authorize the issuance of public bonds, but are not involved in the specifics of the issuance. They receive no personal or individual benefit in the bonding or borrowing process except the satisfaction of advancing the goals of the Public Agency Utility. The Trustees represent the interests of the citizens of Cedar Falls. There are appropriate safeguards in the process with external financial advisors and rating agencies.

There are a myriad of factors that support an exception from a registration requirement for appointed Municipal Utility Trustees.

1. They are serving in an environment of open meetings, open records and freedom of information. The Trustees operate in an environment of transparency.

2. The municipal utilities are authorized as public agencies by Iowa Law. The process of having appointed Trustees is provided for in the Iowa Code and was approved and authorized by the voters of Cedar Falls in a municipal election.

3. There is no pattern or instance of abuse known in the experience of the staff here at CFU, or otherwise mentioned in any professional reading or journal, or through our professional associations.

4. The effect will be to chill the acceptance of this public service role. Just because Trustees are selected for their conservative nature, their wisdom and reluctance to be exposed to risk, the set of willing and able eligible persons will diminish as they realize that service to the community as a Utility Trustee requires registration, personal financial disclosure subject to open records law.

5. There is an additional cost to the regulatory burden which must be borne by the municipal ratepayers. It will come in the form of regulatory filing fees, internal compliance staff and additional insurance coverages.

6. Municipal Utilities are already subject to the external audit process. The Utilities must file an annual report with the elected Mayor and elected City Council.

7. To have any impact, the registration requirement would have to catch something unseen by the elected Mayor in making a Trustee appointment, unrecognized by the City Council approving the appointment, result in an evil not seen in open meetings with a published agenda, not exposed by open records or published minutes, with the complicity of staff, not stopped or caught by other Trustees or members of the public and not reported as an exception by the external CPA firm which audits the records.

8. The proposed Rule will result in contrivances as Cities "hire" the Trustees appointed so as to bring them into the employee exemption, or move to have single candidate elections which approve the designation of the elected Mayor. The SEC can avoid this by simply recognizing that appointed Trustees are persons of good will who are doing their utmost at personal sacrifice to further the provision of essential power, gas and water in their communities. Our Trustees are already the gatekeepers of our public agency. They do not need to have gatekeepers of the gatekeepers.

There should be an exemption clearly established for appointed Trustees of Municipal Utilities. At a minimum, if this Rule is made effective, the directly elected Mayor and City Council, who appoint the CFU Trustees in the manner set out in the Iowa Code, should be authorized to waive these registration requirements.

Respectfully, the SEC should recognize that this proposed Rule will have negative and adverse impact, far beyond any perceived benefit.

Thank you for your consideration.

Robert J. Dieter
General Counsel
Cedar Falls Utilities
1 Utility Parkway
Cedar Falls IA 50613