COMMISSIONERS OF PUBLIC WORKS

Minutes of June 20, 2005

The regular meeting of the Board of Commissioners of Public Works was held on Monday, June 20, 2005, at 4:00 p.m., in the boardroom at 121 West Court Avenue.

In attendance:

Michael G. Monaghan,  Steve D. Reeves, Jr.,  Scott Banks,  Charles Schulze,  Henry O. Watts,  Denise Giannetti,  Ken Whittle, Bill Patrick, Jeff Meredith,     Stacia May    

I.              Chairman Monaghan called the meeting to order and Mr. Reeves gave the invocation.

II.                 Chairman Monaghan gave the statement of compliance with the notification provision of the Freedom of Information Act.           

III.               A motion was made by Commissioner Watts to approve the minutes of the May 10, 2005 work session and Chairman Monaghan seconded. Chairman Monaghan noted that his name was omitted from the May 10, 2005 work session minutes. He added that although he arrived late, all action taken was reviewed with him, and he requested that his name be in the minutes. The motion was unanimously approved with the addition of Chairman Monaghan’s name. A motion was made by Commissioner Watts to approve the minutes of the May 23, 2005 regular meeting; Chairman Monaghan seconded and the motion was unanimously approved.

IV.              Commissioner Watts referred to gas purchases on page three of the Financial Statement and asked if this large purchase was unusual for this time of year. Mr. Reeves stated that anything shown here would be for gas purchased along and not for any contracts for future purchases. Ms. Giannetti stated that the biggest purchase was interruptible industrial and would be dependant on how much gas they used and the price. Mr. Reeves added that the interruptible gas sales were much higher this year than last year at this time because we have been able to keep them all on the system. Interruptible will sometimes switch fuels and go off natural gas in favor of fuel oil. Commissioner Watts inquired about bad debt and whether that was primarily residential customers. Ms. Giannetti stated it is residential and commercial and the number actually shown in the Financial Statement is a positive number because of the Solutia check applied back to bad debt. Chairman Monaghan referred to $645,000 submitted to Department of Revenue and asked whether it was inclusive of the 61 to 90 days amount shown at the top of Accounts Receivable. Ms. Giannetti stated that not all would have been submitted, no industrial customers would be submitted, only those residential customers we hope to collect from their tax refunds. Chairman Monaghan asked if the $645,000 is inclusive of what is reported in Accounts Receivable and Ms. Giannetti stated that it is. Mr. Patrick added that they have a time period like October or November when they are submitted; the Municipal Association processes them and sends them to the Department of Revenue who has them shortly after January 1 so that when they start making refunds, they have the list and know what to send to the agencies that have made claims. He added that it probably has to be a specific number of days past due before you send them in October, but they are sent to DOR one time a year.  Mr. Patrick noted that you might send them in several years in a row in cases where someone might not get a tax refund or enough of one. Chairman Monaghan asked at what point bad debt is written off. Ms. Giannetti stated that Ms. Gorham reviews the accounts quarterly and they are written off when they are over 90 days. Mr. Patrick added that just because you have written them off the books for Financial Statement purposes, it does not mean you have stopped your efforts to collect. Chairman Monaghan stated his concern with overstating Accounts Receivable. Ms. Giannetti stated that there is $355,000 in an allowance account. Mr. Schulze added that at year end there is an allowance based on history; at 12/31 it would not be overstated, it would be “net of” what you think you are going to collect. Chairman Monaghan asked about “Sales to Public Authorities” and “Transfer to the City of Greenwood” on page one. Ms. Giannetti responded that one is an income item and the other is the offsetting expense and includes the accrual of the additional amount paid to the City.

V.                  New Business:

A.     Mr. Reeves stated that five bids were received for substation maintenance and recommended acceptance of the low bid of $27,750 from Shaw Energy Delivery Services. He noted that this firm has done this work in the past. A motion was made by Commissioner Watts, seconded by Chairman Monaghan, and unanimously approved to accept the low bid as recommended.   

B.     Mr. Reeves explained a bid request for underground cable and recommended the low bid that met the specifications from Hughes Supply at $4.925 per foot for 3,000 feet of 750 MCM aluminum underground cable. Chairman Monaghan asked why the cable could not be rewound and cut before shipping. Mr. Meredith replied that he did not know and added that the cable the other two bid on was actually old cable in inventory out in Texas and they would not rewind and cut. Mr. Reeves noted that of the four bids received, only two met the specifications.  Commissioner Watts made a motion to accept the low bid that met specifications from Hughes Supply; Chairman Monaghan seconded and the motion was unanimously approved.

C.     Mr. Reeves stated that bids were received for lawn care and right-of-way maintenance and recommended splitting the contract between two service providers. The low bid on lawn maintenance came from Green Thumb Landscaping at a price of $42,495, and the low bid for right-of-way clearing came from Palmetto Lawn Care at $19,376, for a total bid of $61,871. Mr. Reeves added that Mr. Meredith had talked with Green Thumb Landscaping and would talk with Palmetto Lawn Care if the Board agrees to the recommendation. Mr. Reeves noted that Mr. Meredith believes $20,000 is a fair price and if Palmetto rejects that, we will probably do it in-house. A motion was made by Commissioner Watts and seconded by Chairman Monaghan to split the services between the two service providers as recommended; the motion was unanimously approved.

D.    Mr. Reeves reminded the Commissioners of bids received for a number of projects at the water treatment plant and that the bid came in well over the engineer’s estimate. The low bidder was M. B. Kahn Construction Company at $4,370,040.00. The estimate was around $3.5 million; the total allocated bond funds for these projects is closer to $3 million. Because of the price difference, the engineer and staff recommend that all bids be rejected, the scope of services be redefined more in accordance with the funds available and then to rebid. Mr. Reeves stated that either we will have to cut the project back or come up with funding from the reserves. Mr. Reeves noted that the engineer’s estimate was off by about $800,000. Mr. Banks added that a lot of the projects came in high due to higher costs of fuel, metals, and concrete. Mr. Banks stated the main projects that we should be able to cover are on-site generation and a couple of other EPA regulatory driven or vulnerability assessment driven projects. At the request of Chairman Monaghan, Mr. Banks explained item four in the letter from the engineer about the impact on cost of the project being attributed to the expanded scope of work during the design phase to address issues and problems with existing plant. Mr. Reeves stated that some projects are really maintenance type projects that were added to the project list from the original scope. Mr. Reeves added that they knew there were items like paving and fencing that could be negotiated out if they came in somewhat over, but this is too much to recommend negotiating. Mr. Patrick asked about a more recent estimate from the engineer after additional projects were put in. Mr. Banks stated that the engineer gave a rough estimate revision but never went back and refined the estimate. A motion was made by Commissioner Watts, seconded by Chairman Monaghan, and unanimously approved to authorize rejecting all bids.  

E.     Mr. Reeves explained a request from Ms. Giannetti to transfer funds in the amount of $407,456.06 from the 2003 Bond Construction Fund into the General Fund. This is to cover projects listed in the Bond Construction Fund project listing, already performed and paid for out of General Operating funds. A motion was made by Commissioner Watts to approve the fund transfer; the motion was seconded by Chairman Monaghan, and unanimously approved.

F.      Discussion of pay rate changes was postponed until Executive Session.

VI.              Other Business:               

1.   Mr. Reeves presented the eleventh consecutive Certificate of Achievement for Excellence in Financial Reporting for Fiscal Year ending December 31, 2003.

2.   Commissioner Watts asked about the status of the Sprint Pole Attachment Agreement. Mr. Reeves stated that he did not have an update from Lee Roper. Mr. Patrick stated that Mr. Roper had tried to get in contact with someone from Sprint but he did not know if he was successful. He added that the old agreement did not have a provision for any change to the rate.

3.   Commissioner Watts asked about the Grace Street property. Mr. Reeves stated he was still trying to arrange a joint meeting with the engineer and the Parks Commission representative. He added that he was in agreement with the representative as to how to proceed. In principal, there is agreement on what to do with the property and how to get there; it is now a matter of refining some cost figures on some of the in-kind services where CPW may have an interest.

4.   Chairman Monaghan asked Mr. Schulze whether they had looked at incentives. Mr. Schulze responded they would within the next two weeks.

5.  Chairman Monaghan inquired about the little bit of Solutia debt left. Mr. Patrick stated that it had not been finalized yet, but apparently, Solutia has agreed with our figures to within less than $1,000. All of the paperwork is in the process of being filed with the bankruptcy court.  We can then explore with folks who are purchasing those claims to see  what they will offer and at that point bring it back to the Board.

6.   Chairman Monaghan inquired about the old electric center since the City  does not want it. Mr. Reeves stated it could be added to the list of  properties. He stated it would be necessary to hire a surveyor to go in and split it. Mr. Meredith has indicated he would like to keep the property from the driveway north and we can dispose of the property   from the driveway south.

7.   Chairman Monaghan noted that at the last meeting, a $359,000 bid was approved for instrumentation at the water plant and asked if that was included in the $3.5 million estimate for projects. Mr. Reeves responded that it was included.

8.   Chairman Monaghan asked if the $5 million had been moved into the investment account. Ms. Giannetti stated that it was being moved today and added that she met with Michael Nix last week to discuss some of the short-term investments. About $2 million will go into short-term and $3 million into the longer term with the understanding that the money is liquid and we could get our hands on it within 24 hours.

9.   Chairman Monaghan inquired about what will be done with the old postage machine. Mr. Reeves stated that there was interest expressed by The Index Journal. After a demonstration, they found they can buy a new unit for not a lot more money and were afraid of the age and maintenance.  Mr. Reeves stated that the old one will be scrapped.

10. Chairman Monaghan inquired about the status of the SEMI contract. Mr. Reeves stated that the last he heard, it was practically ready. SEMI is ready to accept the language as presented.

11. Chairman Monaghan stated that he noticed on approved electric projects, we will spend $95,000 on the Lander entrance. Mr. Meredith noted that this money will be reimbursed by Lander.

12. Chairman Monaghan inquired about the development to be annexed into the City across from CVS. Mr. Meredith stated he had talked with Bob last week and no progress has been made but they hope to get back ton it.

13. Chairman Monaghan inquired about credit card processing. Ms. Giannetti stated that she had gotten more rates from LINK Merchant Services and was holding off until Jeff Auman had Ken Davis on board because it will require some programming on our system. She stated she would present the percentages and expenses at the next Board meeting so a decision can be made as to which one to go with.

14. Chairman Monaghan asked about the electric rate fuel adjustment and if it is done like gas pricing. Mr. Meredith stated that it is and is set up on purchased power so that every month they give us a projection of what the fuel will be and that is what we pay. The next month, they give us an adjustment based on the projection versus actual cost. It is shown as another line item on the bill that is either up or down. Mr. Reeves stated it will be kept separately for record keeping purposes, but when the customer receives their bill, it will be one line item. Mr. Meredith stated he has the projected costs through 2005; all we have to do is take actual cost prior month and adjust that.

15. Chairman Monaghan asked about underground line at Lodge Grounds Mr. Meredith stated the design is on his desk. He noted that he would be out of town next week, but would review and talk with the Homeowners’ Association about a time to present it to the Board.

16. Chairman Monaghan asked about the meeting with City Council. Mr. Reeves stated he had called Mr. Brown again about a date.

VII.            A motion was made by Commissioner Watts, seconded by Chairman Monaghan, and unanimously approved to go into Executive Session to discuss a personnel matter.

            The meeting returned to open session.

            Mr. Reeves stated for the record a response from the Board to an employee’s request for a grievance hearing. The Board acknowledges that a policy is in place at this time that they will continue to enforce.

            Mr. Reeves stated that based on discussion during Executive Session, it would be appropriate to pass a motion approving an overall 4% salary increase, with a 2% general increase and 2% to be distributed as merit increases based on performance appraisals. Commissioner Watts made a motion to approve the salary increases, Chairman Monaghan seconded, and the motion was unanimously approved.

            Commissioner Watts made a motion to increase the General Manager’s salary by 7%. Mr. Reeves noted that all of the increases would have an effective date of July 4, 2005, which is the first Monday of the first pay period in July. Chairman Monaghan seconded and the motion was unanimously approved.

VIII.         With no further business, the meeting was adjourned.