COMMISSIONERS OF PUBLIC WORKS Minutes of March 28, 2005 The regular meeting of the Board of Commissioners of Public Works was held on Monday, March 28, 2005, at 4:00 p.m., in the boardroom at 121 West Court Avenue. In attendance: Gene P. Hancock, Steve D. Reeves, Jr., Lee Roper, Ken Whittle, Michael G. Monaghan, Kenneth M. Barnett, Jeff Meredith, Ron Lemon, Henry O. Watts, Denise Giannetti-Walsh, Charles Schulze, Scott Banks, Jeff Auman, Stacia May
I. Chairman Monaghan called the meeting to order and Commissioner Hancock 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 Hancock to approve the minutes of the February 28, 2005 regular meeting and the March 8, 2005 work session; Commissioner Watts seconded and the motion was unanimously approved.
IV. Chairman Monaghan asked questions about the financial statement and pointed out that he had asked for details of the breakdown of miscellaneous. Ms. Giannetti-Walsh stated that had not been included and would be done. He added that he would like to know the breakdown on miscellaneous income and where the money received from bad debts that are settled would be reflected. Ms. Giannetti-Walsh responded that for the check just received it would go back against that debt and be shown as a line item called “bad debt”. Chairman Monaghan asked why there was nothing under “sales of gas lights”. Ms. Giannetti-Walsh stated there were no sales last year. Chairman Monaghan inquired about unallocated service charges and fees. Ms. Giannetti-Walsh stated that would be any service charges directly related to the gas department, such as gas turn-on. Mr. Barnett explained that if you have a service charge where a gas service person goes out and it is specific to the gas department, it comes in under unallocated, such as fixing a furnace, and he would e-mail the breakdown. Chairman Monaghan asked why only $900 was spent under the propane plant. Mr. Reeves responded that we had put $30,000 or $40,000 in this year’s budget. Mr. Whittle replied that he was waiting on budget approval before spending money. Mr. Reeves informed Mr. Whittle that he did not have to wait on formal budget approval, if there is a need, he should go ahead and issue a request. He added that they are moving forward with other things because the Board has met and agreed the items need to be there, they just haven’t voted. Chairman Monaghan asked for an explanation of over/short. Ms. Giannetti-Walsh stated this is for the cash drawers downstairs. Every girl has to keep a count of their cash drawer and make a deposit. If they are short or over any money, it goes against this account. It is usually something they haven’t done correctly on the deposit that is picked up the next day. Chairman Monaghan stated he would like to meet with Ms. Giannetti-Walsh to go over the new bond report and Ms. Giannetti-Walsh noted that this is not a new report. Chairman Monaghan stated that he still needed help. Chairman Monaghan inquired about the restricted cash left from the bond and whether the money is invested. Ms. Giannetti-Walsh stated the investment itself is what is held at Greenwood Capital and is not bond funds. Chairman Monaghan asked why the bond funds are not invested. She responded that it is in sweep accounts and debt service is at The Bank of New York. They do buy some longer term bonds, but for our purposes we account for those as cash. Mr. Barnett stated that we do not control the money that is actually at The Bank of New York. He added that every month we are required to put a portion of the principal and interest at The Bank of New York. Part of what you see that is restricted is what is left of the 2003 bond construction. Ms. Giannetti Walsh added this is money available for bond construction, plus the money that we sent to the debt service fund that they will pull from the interest and principal payments, and a portion of this payment is sent monthly. Chairman Monaghan asked why we aren’t earning something on the money we have. Mr. Barnett responded that there are some investment earnings, we just are not taking it out and putting it into securities, it is in an overnight investment account. Chairman Monaghan asked whether accounts receivable over 90 days includes Solutia and Medical Textiles. Mr. Barnett stated that Solutia has been written off. Ms. Giannetti-Walsh stated these are active accounts that are over 90 days and have not been written off yet. Chairman Monaghan asked what triggers the write-off and Ms. Giannetti-Walsh referred to an explanation from Vicki Gorham included with the financial statements. She further explained that after it has gone through all of the final billing and is deemed uncollectible, it is sent to debt set-off; if they are unable to collect anything, then it is written off. Chairman Monaghan suggested having some automatic triggers to determine when to write them off so we are not carrying things and overstating our assets and cash. Mr. Reeves stated that they would discuss this and make a recommendation. Chairman Monaghan then brought up the possibility of using a collection agency and his belief that it could be worth pursuing when the amount is large enough. Mr. Reeves stated that would be examined as well.
V. New Business:
A. Mr. Reeves explained that last month the Board asked us to look at incentives for natural gas to improve or increase the number of connections. He stated that there was a particular case where a customer had called wanting to know why they had to pay for piping certain appliances. He added that he had enclosed the policy adopted on March 3, 2003 which clearly states that with residential customers who have natural gas as their primary heat source and for water heating, CPW will make no charge for piping for gas water heater, gas cook stove, gas clothes dryer, and gas primary heat source. All other gas piping will be charged according to the miscellaneous rate tariffs. He added that the question has come up as to whether we should charge for the other gas piping items. Prior to this policy, the old policy stated that if they had primary gas heating and gas hot water heating, we piped any appliance at no charge. Chairman Monaghan referred to a conversation with a builder who is putting in gas stove, water heater, and gas range, and asked why we are charging for gas logs. He then suggested changing the policy with new construction if they put in all gas house, furnace, hot water heater, then pipe the rest of the appliances they want. Commissioner Hancock stated this should be the case with only new construction. Mr. Whittle noted that the current policy states that if they use gas for primary heat source and have gas hot water heater, we will pipe a range and dryer free. After further discussion, Mr. Reeves clarified what the Commissioners were saying that with an existing gas account already on gas, the old policy will stay the same. A motion was made by Commissioner Hancock, seconded by Commissioner Watts and unanimously approved to change the Natural Gas Piping Policy with new construction to include piping any appliance, as long as the primary heat source is gas, there is a gas water heater, and everything can be done at one time, to be effective April 1, 2005. Mr. Barnett inquired as to whether the current distance of 100 feet would change. After discussion, the Commissioners agreed that 100 feet is reasonable and the policy would remain the same. Chairman Monaghan asked how long it takes to recoup incentives or payback on gas appliances. He asked that we consider incentives for those outside the city to put in a gas furnace instead of heat pump and to determine the payback and whether it would make sense. Mr. Reeves responded that the public perception is that gas is higher than electric and we need to educate the public in that regard. Mr. Barnett added that the thing we have to show people is that our gas rates can beat Duke’s all-electric rate. Chairman Monaghan requested that other utilities be surveyed to find out what they are doing to sell gas.
B. Mr. Reeves stated that the Board had requested a review of the reimbursement policy for water and sewer installations by developers who are willing to annex into the city limits. He stated that the agenda package included two reports with one showing water reimbursements and the average cost to install water today compared to our current reimbursement. Our reimbursement basically still covers the cost of water installation today and we do not recommend a change in that reimbursement amount. Chairman Monaghan asked who gets the incentive and Mr. Reeves responded that it is the developer who signs the agreement and paid the cost of the installation of the water and sewer. Chairman Monaghan asked for clarification on developer reimbursement. Mr. Reeves explained that under the current policy, it was first anticipated that the cost for sewer to cross one lot was running about $1,500. The developer picks up the remainder of the cost after CPW reimburses $500 and the City $500. It was noted that the City also gives additional incentives to developers for roads, storm drainage, curbing, etc. Mr. Reeves stated that because of the projected cost of sewer per lot now, we are recommending that reimbursement be increased from $1,000 per lot to $1,600 per lot, with CPW paying $800 and the City paying $800. He added that this has not yet been reviewed by City Council. A motion was made by Commissioner Hancock, seconded by Commissioner Watts, and unanimously approved to increase the CPW’s portion for reimbursement of sewer installation to $800. The Commissioners stated that regardless of what the City decides, CPW will still increase their portion to $800.
C. Mr. Reeves explained the request to renew the support agreement for the Advance Control Systems that operate the SCADA network. This is an annual support agreement and renewal is recommended by staff. A motion to approve the annual support agreement for the SCADA network in the amount of $24,936 was made by Commissioner Hancock, seconded by Commissioner Watts, and unanimously approved.
D. Mr. Reeves stated that bids were opened at the bid opening for caustic soda with prices varying from $437 to $457 per dry ton for three months, six months, and nine months, and staff is recommending the higher cost per dry ton for a nine-month period. He added that another vendor that does not sell this product tells us that the cost is expected to rise $50 per dry ton. The Commissioners noted that Metro also uses this chemical and is having problems getting it from their supplier. Commissioner Hancock suggested that Metro could add their order to ours and then reimburse us. A motion was made by Commissioner Watts to approve the longer term agreement for nine months to purchase caustic soda at $457 per dry ton; Commissioner Hancock seconded and the motion was unanimously approved.
E. Mr. Reeves stated that the last 1,500 KVA transformer in the yard had been used and a unit was bid to give us a spare. A motion was made by Commissioner Hancock, seconded by Commissioner Watts and unanimously approved to accept the low bid from Hughes Electric in the amount of $13,850 based on lowest ownership cost for one 1,500-KVA transformer. Chairman Monaghan asked what is done with the old transformers. Mr. Meredith responded that after they are tested, they are then sold for $0.50 - $1.00 per KVA depending on the transformer.
VI. Other Business:
1. Chairman Monaghan asked about impact rates for water. Mr. Reeves responded that would be discussed at an upcoming work session on rates.
2. Chairman Monaghan inquired about the status of the letter to Dr. Stevenson. Mr. Reeves responded that he had heard nothing but would follow up with a phone call.
3. Chairman Monaghan inquired about the status of the Marketing Director position. Ms. Giannetti-Walsh stated they are still taking resumes.
4. Chairman Monaghan inquired about the bill for the Ninety Six fire. Mr. Reeves stated that he had not seen the bill yet. Mr. Banks added that the difference in pumping capacity was about 400,000 gallons.
5. Chairman Monaghan inquired about installation of the two additional fibers the School District had requested. Mr. Reeves stated that we have not received a release from Countybank. He has asked on three different occasions with no response. He added that he will talk with Mr. Meredith and then proceed. They (Countybank) can file a claim against us if they wish. Mr. Reeves added that he believes the agreement can be worded so that it is clear this is a second set of fibers, and we don’t have a second set with anyone else.
6. Chairman Monaghan asked about utility pole rental and when it is paid. Ms. Giannetti-Walsh stated it is billed and paid annually. He noted that about five years ago we raised the rental to the cable TV. Mr. Reeves responded that we also added an escalation clause at that time. Chairman Monaghan inquired about what can be done legally with the Sprint agreement, and added that it is ridiculous to have a rate that is 20 years old. Mr. Reeves responded that we have tried before and the problem is that the agreement was dated back in 1962 with no escalation or expiration clauses. The Commissioners discussed the agreement and how CPW pays Sprint for the use of their poles at the same rate. Mr. Reeves added that Sprint is using many more of our poles, so we still gain. Mr. Lee Roper stated he would look at the agreement again.
7. Chairman Monaghan asked if cable replacement is considered capital improvement or maintenance and if bond funds can be used. Mr. Meredith responded it is capital improvement and we are using bond funds.
8. Chairman Monaghan inquired about the sewer projects at Pebble Creek that are waiting for a permit to operate. Mr. Reeves stated we did coordinate with Metro. He added that a letter of acceptance is needed from Metro and he did not know where that stands. Then we have to wait for DHEC to issue a permit to operate, and that status is also unknown. Mr. Reeves stated he would check and Chairman Monaghan asked to be informed if we are waiting on Metro.
9. Chairman Monaghan inquired about the progress of the survey on Corrie Court. Mr. Reeves responded that every house had been surveyed and only two of the eight indicated they would be willing to connect to sewer, and then only if they did not have to pay the impact fees or any tap fees. They were told that the costs could be spread out over 90 months and they still did not feel they should have to pay anything. Commissioner Hancock stated that something should go in the files to indicate that customers refused the offer. Chairman Monaghan added that he thought each homeowner should be sent a letter and Mr. Reeves responded that could be done.
10. Chairman Monaghan inquired about the New Market Street area and an approved gas project on hold for some reason. Mr. Meredith responded that he had heard Mr. Whittle say that if one of the things in the budget was approved, he would not need that project. Mr. Barnett explained that we won’t need to actually do the new construction on New Market if we are able to upgrade the pressure from 25 lb. to 90 lbs. Mr. Whittle is waiting for certification for the line to go to the higher pressure. Commissioner Hancock stated that he wanted to see the pressure charts and Mr. Barnett stated he would be glad to provide them.
11. Chairman Monaghan inquired about the network projects on the work in progress report and asked to see a value. Mr. Reeves noted that he had also noticed that the report was lacking some detail information.
12. Chairman Monaghan inquired about the big variation in reworked meters. In the last two months there were over 200; in January there were 9; and November and October there were none. Mr. Barnett stated that we just recently started to actually take a lot of the parts, such as the ERT modules off the Metris meters, and try to rework some of our other meters with those parts. Mr. Lemon added that part is due to the timing of when they were told to remove the ERT’s off the old meters and install them on the new meters. Chairman Monaghan asked what a work order in the gas meter shop involves. Mr. Lemon stated it could be a meter that has been stopped by a meter reader, or a dial broken. These could also be meters that are all tested annually.
13. Chairman Monaghan inquired about the last time we did a price comparison and negotiated for vehicle repair. Mr. Reeves stated not since the original was done, but that none of the pricing has changed, none of the vendors have called and said they were going up on pricing, so they have been kept the same. Mr. Reeves stated that if we rebid, the prices are likely to go up; on the other hand, there are probably some vendors that some of our employees would like to see us replace because they do not give the quality of service. Chairman Monaghan stated we could select the one that does not give good service. Mr. Reeves stated we have done this before and found another vendor who agreed to match the price. Chairman Monaghan stated that we talked some time ago about randomly doing price comparison on parts to make sure they are not overcharging. Mr. Meredith stated he had done random checks a couple of times after receiving an e-mail and found them to be accurate. He stated that they called NAPA, who both Emerald Center Automotive and Price’s Automotive normally use. He added that there is a small handling fee, but then they discount the parts 10%. Chairman Monaghan stated we should continue to randomly check prices on parts.
14. Commissioner Hancock inquired about high gas prices. Mr. Reeves stated the reports given out today were just finalized and put together. He added that they need to look closely at December of 2004 to verify that those numbers are accurate, and if they are accurate, we are short. He added that the Commissioners will be informed either way, whether they find a mistake or verify that the numbers are accurate.
15. Mr. Schulze stated that he would meet with Ken and Denise on the electric, water, and sewer incentives to try to define the payback and see if what we are doing is in effect producing results, and to develop a strategy or concept.
16. Commissioner Hancock asked for information on where most of the gas cook stoves and water heaters are located before the next meeting. Mr. Reeves stated he could find out from service people; we would also have records on work orders.
VII. A motion was made by Commissioner Hancock, seconded by Commissioner Watts, and unanimously approved to go into Executive Session to discuss legal and contractual matters.
The meeting returned to open session.
Mr. Reeves stated that discussion took place during Executive Session on an addendum to Rate Schedule 34 pertaining to gas purchases for certain interruptible customers. He added that it would be appropriate for the Board to approve authorizing the Manager to execute an Addendum to Rate Schedule 34, with the approval of the CPW attorney. Commissioner Hancock made a motion, Commissioner Watts seconded, and the motion was unanimously approved.
VIII. With no further business, the meeting was adjourned. |