COMMISSIONERS OF PUBLIC WORKS
Minutes of December 14, 2006

A regular meeting of the Board of Commissioners of Public Works was held on Thursday, December 14, 2006, at 10:00 a.m., in the Boardroom at 121 West Court Avenue.

In attendance:
Gene P. Hancock                   Steve D. Reeves, Jr.    Vicki Gorham            Jeff Auman
Michael G. Monaghan          Denise Ogletree         Carlos Cometto          Stacia May
 Henry O. Watts                    Jeff Meredith              Curtis Burnett            Vicki Knott
Ken Whittle                            Ken Barnett                Richard Gentry          Ron Lemon   

1.       Chairman Hancock called the meeting to order. The invocation was given by Kenneth Barnett.

1. Chairman Hancock gave the statement of compliance with the notification provision of the Freedom of Information Act. 

1. A motion was made by Commissioner Monaghan to approve the minutes of the November 9, 2006 regular meeting; Commissioner Watts seconded, and the motion was unanimously approved.

Manager Reeves informed the Commissioners of a request from Mr. Auman to open bids for power and standard PC workstations before getting into New Business. He stated that Mr. Auman would then leave the meeting to evaluate the bids and return with a recommendation for their consideration. Mr. Auman defined the difference between power and standard PC’s. He explained that GIS and AutoCAD need the power processors which have more memory, better video cards, and faster processors.

1. New Business:

A.  Commissioner Monaghan noted that the 2007 budget was reviewed in depth at a work session on December 7, 2006. Commissioner Monaghan made a motion to approve the 2007 budget; Commissioner Watts seconded, and the motion was unanimously approved.  

1. Chairman Hancock suggested one motion to approve annual bids for Agenda Items B. – R. Manager Reeves pointed out two transformers in Items B. 3. & B. 4. that were not lowest cost of ownership but rather lowest cost of ownership and delivery. He noted that another item under Item D. for the delivery of wire is not the low bid but rather the lowest bid with a faster delivery time. Based on the recommendations of staff, a motion was made by Commissioner Monaghan to approve annual bid amounts for Items B. – R.; the motion was seconded by Commissioner Watts, and unanimously approved. (Detail of recommendations and descriptions of Items B. through R. shown below.)

1. 1.   Recommendation: Acceptance of the bid from Line Equipment Sales in the      amount of $31,230 based on lowest cost of ownership that meets             specifications for thirty (30) 25-KVA aerial transformers.        2.  Recommendation: Acceptance of the bid from Line Equipment Sales in the      amount of $29,800           based on lowest cost of ownership that meets         specifications for twenty (20) 50-KVA aerial transformers.
         3.   Recommendation:  Acceptance of the bid from Line Equipment Sales in            the amount of $20,910 based on next lowest cost of ownership and    delivery time that meets specifications for ten (10) 25-KVA padmount transformers.
         4.   Recommendation: Acceptance of the bid from Line Equipment Sales in the      amount of $121,100 based on lowest cost of ownership and delivery time           that meets specifications for fifty (50) 50-KVA padmount transformers.
         5.   Recommendation: Acceptance of the bid from Line Equipment Sales in the      amount of $26,380 based on lowest cost of ownership for ten (10) 75-KVA         padmount transformers.
         6.   Recommendation: Acceptance of the bid from Shealy Electrical in the   amount of $29,919 based on lowest cost of ownership that meets specifications for three (3) 225-KVA padmount transformers.

1. Recommendation: Acceptance of the low bids as follow: Hughes Electric for Item E. @ $4.10 each; Item I. @ $7.55 each; Item J. @ $10.35each; Item. L. @ $22.30 each; and Item P. @ $2.35 each; Line Equipment Sales for Item F. @ $29.30; Item G. @ $2.70 each; Item H. @ $13.80 each: Item K. @ $22 each; Item M. @ $18.50 each; Item Q. @ $68.65 each; Item R. @ $58.05 each, and Item T. @ $11.35 each. Shealy Electrical for Item A. @ $98.21 each; Stewart C. Irby Co. for Item B. @ $7.54 each; Item C. @ $9.35 each; and Wesco for Item D. @ $9.10; Item E. @ $4.10 each; Item N. @ $0.4160; Item O. @ $0.6835 each; and Item S. @ $18.29 each. Item E. will be split equally between two vendors, Hughes Electric and Wesco, who both bid the same amount.

1. Recommendation: Purchase of all wire from Line Equipment Sales for Items A. – G on bid form E-3-2007. For Item H. of bid form E-3-2007,  acceptance of the bid from Line Equipment Sales in the amount of $104,900 for 50,000 feet of 1/0 AWG cable. Although this is not the low cost provider, escalation charges will apply to the low bidder. For Item I. of bid form E-3-2007, acceptance of the bid from Line Equipment Sales in the amount of $105,300 for 15,000 feet of 750 MCM cable. Although this is not the low cost provider, the cable can be delivered sooner and does not have any escalation charges.

1. Recommendation: Acceptance of the low bid in the amount of $170 each from Line Equipment Sales for fifty 250/400 watt HPS flood lights.

1. Recommendation: Acceptance of the low bids in the amount of $57.75 each and $173 each from Shealy Electrical for 192 house meters and ten (10) 3-PHZ class-200 meters respectively.

1. Recommendation: Acceptance of the low bid from Shealy Electric for seventy (70) each decorative lights and poles for a total amount of $128,765 plus tax. These lights will be used for Uptown area projects. 

1. Recommendation: Acceptance of the low bid in the amount of $60.49 each from Equipment Controls Company for an annual supply of gas meters.

1. Recommendation: Acceptance of the low bid of $43.25 each for an annual supply of gas meter ERT’s. 

1. Recommendation: Acceptance of the low bid in the amount of $17.25 each from Robert E. Mason Co. for an annual supply of gas regulators.

1. Recommendation: Acceptance of the low bid in the amount of $13.52 for Item A. (300 each 3/4” couplings) from Consolidated Pipe; and acceptance of the bid of $13.10 on Item B. (500 each 3/4-in. cut-offs) from Utilities Supply, Inc.

1. Recommendation: Acceptance of the total low bid for an annual supply of water meters from Carolina Meter & Supply on an each meter cost based on the total low bid of $186,826; also, recommend acceptance of their offer for a three-year contract, at least for the 5/8 X ¾ and the 1-in. meters.

1. Recommendation: Acceptance of the low bid in the amount of $57.60 each from Carolina Meter & Supply for an annual supply of ERT’s for water meters.

1. Recommendation: Acceptance of the low bid from Pipeline Supply including the 1% discount on Items A. – H. for an annual supply of service line tap materials.

1. Recommendation: Acceptance of the low bid including the discount from Pipeline Supply on all items for an annual supply of valves, mega lugs, and valve boxes.

1. Recommendation: Acceptance of the low bid of $16.07 each for forty-eight (48) small and $29.05 each for forty-eight (48) 1-in. meter boxes including the discount from Pipeline Supply for an annual supply of water meter boxes.

1. Recommendation: Acceptance of low bids for the purchase of an annual supply of chemicals for the water treatment plant beginning with sodium @ $0.295 per dry lb. from Acme Southern, Inc.; salt @ $0.0535 per dry lb. from Acme Southern, Inc.; ammonia @ $0.0640 per web lb. from Brenntag Southeast; lime @$0.04350 per wet lb. from Burnett Lime Co.;  alum @ $163.00 per dry ton from C & S Chemicals, Inc.; carbon @ $0.6357 per dry lb. from CFS Enterprises, Inc.; caustic @ $369.00 per dry ton from JCI; hydrochloric acid @ $260.74 per wet ton from Key Chemical, Inc.; purate @ $0.315 per wet lb. from Thornton, Musso & Bellemin; sulfuric acid @ $0.085 per wet lb. from Thorton, Musso & Bellemin; and polymer @ $0.7425 per wet lb. from Univar USA.

1. Recommendation: Acceptance of Allied Waste Service to provide sludge and trash hauling and disposal. This cost remains the same as for 2006.

1. Mr. Auman returned with a recommendation for PC workstations. He noted that in both cases Dell was the low bidder, although the PC Mall guy who bid Dell was only $60 higher. Manager Reeves stated that the amount recorded for the PC Mall guy was $60 lower on the power PC’s; and with standard PC’s, Dell was lower. Commissioner Monaghan noted that there was only a $60 difference and suggested buying everything from Dell. A motion was made by Commissioner Monaghan to approve the combined total of the bids submitted by Dell, the second low bidder and the overall low bidder for power PC’s at $3,044.83 and standard PC workstations at $16,323.27; Commissioner Watts seconded, and the motion was unanimously approved.

1. Manager Reeves noted a decrease in the price of the Ericsson Contract for Network Switch Hardware Support Renewal from what had been submitted. The price was $38,460.28; they resubmitted at a reduced price of $34,118.13. A motion was made by Commissioner Watts and seconded by Commissioner Monaghan to approve the Ericsson Contract for Network Switch Hardware Support Renewal; the motion was unanimously approved.

V.        Other Business:
                          
1.   Manager Reeves provided an update on health insurance costs. He stated that it appears to be dropping but is still in a deficit position; a payment of $86,792.28 is needed, of which CPW’s portion is $63,358.36. Commissioner Monaghan suggested waiting a month to send a payment. Manager Reeves responded that the reserves are down but should be sufficient to hold us for a little while; Mrs. Ogletree agreed. The Commissioners were in agreement to revisit this at the first meeting in January. Commissioner Watts asked about the total amount added for the year. Ms. Ogletree responded that including this amount, it would be close to $400, 000.
2.   Manager Reeves presented a first place trophy for the CPW float in the Ware Shoals Christmas parade and added it would be on display at the COC. He added that the float placed second in the Ninety Six parade.
3. At the request of Chairman Hancock, Manager Reeves provided a price of $250 for approximately fifteen name badges to be worn by department heads and Commissioners who attend meetings. Commissioner Monaghan stated that he would not wear one, but that Chairman Hancock should if he wanted. Mr. Reeves stated that he would order a couple; Chairman Hancock responded that he would pay for his.
4.   Manager Reeves provided a Public Affairs Advisory from American Water Works referencing newspapers across the country contacting utility companies to find out who uses bottled water in their facilities, and paying for the bottled water with taxpayer or ratepayer money. He suggested caution with what we do. Commissioner Monaghan asked for clarification and Mr. Reeves responded that some newspapers are calling utilities and asking how much bottled water is being bought and kept in their facilities for their own use; for instance, if we had provided bottled water for meetings. It is sending the message when you sell water that the water you sell is not good enough, and the newspapers are making an issue out of it.
5.   Manager Reeves provided a map and informed the Commissioners of a sewer question from Richard Coleman. He pointed out on the map a facility marked “Subway” which is a sandwich shop on Epting Avenue across from the hospital. He indicated a line on the map where the sewer currently follows. He informed the Commissioners that someone is purchasing a vacant lot behind Subway and wants the sewer moved. Apparently, the contractor for Subway did not get a right-of-way or easement to put that in; the question now is how to get sewer if they have to move that. Mr. Reeves stated the opinion that it was not reasonable for them to tear up their driveway and go into Epting Avenue; the only solution would be to extend the sewer up to the edge of the Subway property line and reconnect them. He added that there is a problem because this is inside the City limits. He stated that unless the Commissioners disagreed, this is something that should be done because it is in the City. He noted that it would cost around $14,000 - $15,000. The Commissioners directed Mr. Reeves to proceed with the design and to at least start the bidding on an extension.
6.   Commissioner Monaghan shared information on a call from the Chamber of Commerce requesting CPW’s assistance to provide temporary lighting at an outside ceremony planned for the renaming of their building. Mr. Meredith responded that there is a lighting trailer that runs off generators that could be used. Manager Reeves noted that we have provided this for them and others in the past; there is also a lighting tree that could be used. Commissioner Monaghan stated this would be a good public service and asked Mr. Meredith to contact Toni Able to make the arrangements.
7.   Manager Reeves thanked the Commissioners on behalf of all employees for the service awards and food certificates and for their support during the year.
8.   Commissioner Monaghan stated a desire to know what the result would have been had we bought “puts” as soon as gas was priced in November and December. He stated that he would also like to know what the “put” prices would have been; what the value of the “puts” if we had bought “puts” for January pricing at the time that we priced it. Mr. Lemon stated that he had the information and referred to a previous conversation where they discussed if they give you a spot this year, it is one time, but we don’t have the history. Commissioner Monaghan noted that right now we are $100,000 over market for December. He asked about the price of the “puts” and if it was $150,000. Mr. Lemon responded that had we bought the “puts” at the time we bought December, we would have lost $35,000 or $0.35 per dt. Mr. Lemon stated he would provide the information in writing to Commissioner Monaghan. Commissioner Monaghan asked if the “puts” were more expensive than the $100,000 so far this month. Mr. Lemon responded that is against “gas daily” and that is not a fair comparison because “gas daily” is something that is going to happen; you don’t know what the weather or daily pricing will be. Commissioner Monaghan stated his understanding that had we not hedged at all we would have bought “gas daily”. Mr. Lemon responded that we would not have bought “gas daily”; we bought “index” to which Commissioner Monaghan responded “not necessarily”. Commissioner Monaghan stated a desire to know what the difference would have been if we did not hedge at all and used “gas daily” daily. He requested that anything bought on “index” be shown in a column in the current analysis, along with what is bought on “gas daily”. He expressed the need for this information in order to have a fair comparison and gain better understanding. He stressed that this is not meant as condemnation of what they are doing. He noted the price of $0.50 per dt for February on a “put”. Mr. Lemon stated that with buying a “put” yesterday, the price would have to close at $6.95 or below in February for a “put” to be of value; he added that he did not see February doing that at close. Where the market closes and where the market trades during the month are functions of something other than what you base your decision on when hedging. Your hedging decision is made on technicals and history and when making the comparison, you are not comparing it against present day. Commissioner Monaghan stated that his hedging scenario would be that he was hedging because he did not know what was going to happen; you are buying insurance. He noted a more volatile market with wars and hurricanes than five years ago. Mr. Barnett stated that we know we don’t have the past history, but for now we are trying to build what the history will be to see whether we would have been better off over time either doing straight “gas daily” or buying “puts”. The history will be built over a couple of years. Mr. Lemon further stated that every month while putting the purchasing program together, they look at hedge volume and make a decision on the remaining volumes. For example, in December they did not hedge the full 80% because through the first quarter and third quarter the winter weather patterns changed from normal to warmer than normal. In order not to have extra gas, they stop hedging before getting the full 80%. That leaves them with the ability at right at 5,000 per day, part of which could buy “no notice”, which is “index” gas or could buy “gas daily”. They opted not to fix any price other than the hedge price so any extra gas bought is well below the hedge price, well below the index. Commissioner Monaghan noted that we are still $100,000 over market at this point. Mr. Lemon responded that would be a correct statement had he bought 100% of gas on “gas daily”. Every month they look at what they believe will be the best combination of gas purchases after they have the hedge; if they go back and look at when they hedged, what they had at that time was good solid information and good decisions were made at the time. There was no way of knowing when he was sending Steve a recommendation back in July and August that there would be historical “highs” as far as storage and also historical high temperatures, and record high temperatures through the Midwest and Northeast today. Commissioner Monaghan stated that is why we hedge and Mr. Lemon responded that is correct. He noted that it could have been the opposite.

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

The meeting returned to open session. Chairman Hancock noted discussion of two personnel matters during Executive Session.

Manager Reeves stated that the first matter dealt with terminating an existing Contract from 2003 with the General Manager and addressed a Re-employment Contract. That contract would be dated today, and the blanks filled in for termination date and renewal date, which are anticipated to be January 3, 2007 and January 5, 2007. A motion to approve a Re-employment Contract for the General Manager was made by Commissioner Watts, seconded by Commissioner Monaghan, and unanimously approved.

Manager Reeves stated that the other personnel matter pertained to a section in the Personnel Handbook under the heading of “Funeral Leave”. The Handbook currently states “should a death occur to an employee’s parents-in-law or grandparents, a maximum of one day leave will be granted to attend the funeral provided it occurs on a scheduled work day”. The wording would be changed to delete “provided it occurs on a scheduled work day”; and replaced with “a maximum of two days leave would be granted”. A motion was made by Commissioner Watts, seconded by Commissioner Monaghan, and unanimously approved to change the Personnel Handbook as stated.

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