COMMISSIONERS OF PUBLIC WORKS

Minutes of January 23, 2006 

The regular meeting of the Board of Commissioners of Public Works was held on Monday, January 23, 2006, at 4:00 p.m., in the boardroom at 121 West Court Avenue.

 In attendance:

Gene P. Hancock  Steve D. Reeves, Jr.      Scott Banks

Vickie Gorham      Michael G. Monaghan   Denise Giannetti

Jeff Auman            Ron Lemon                   Henry O. Watts

Jeff Meredith         Stacia May                    Lee Roper

Ken Barnett          Richard Gentry               Charles Schulze

Melinda Bishop     Curtis Burnett                 Jean Martin

Michael Nix                                                                                      

I.              Chairman Monaghan called the meeting to order. The invocation was given by Commissioner Hancock.

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 December 19, 2005 regular meeting; Commissioner Watts seconded and the motion was unanimously approved.

IV.              Financial Statement:

 Chairman Monaghan asked if there were any questions on the financial statement. Commissioner Watts asked about the new janitorial service. Mr. Reeves responded that Jani-King started on January 1 and so far there are mixed reviews. He noted that they have a thirty-day grace period to get oriented and develop a routine. He stated that one good thing is that they have left notepads at each location for us to write down comments. Commissioner Watts asked about a check to the County Clerk of Court. Mr. Reeves responded that it was for child support. Chairman Monaghan complimented Ms. Giannetti on the variance comments and stated the desire to continue looking at this over the next few months in an effort to better understand and control the budget since that is how rates are determined. He suggested that this be done at least quarterly or semi-annually, and certainly at year end. He then asked Ms. Giannetti to look at areas where we are not budgeting salaries and fringes and how it is skewing and causing these variances. Ms. Giannetti stated that in looking at this report, she disregarded the salary and fringe portion and looked at everything else within that budget to determine if there was anything throwing that department off. Chairman Monaghan stated that we would like to get department managers looking at the budgets and explaining the variances, but we cannot do that if it is not really accurate. He stated that the goal is to have no variances to report. Chairman Monaghan asked about customer site work and noted $243,000 of revenue shown. He inquired as to whether the site service “no charge” is inclusive of the piping hookup that is charged, and where the piping hookup revenue is reflected as an expense. Ms. Giannetti stated that it should be part of the chargeable customer site service. Chairman Monaghan asked if we made $70,000. Ms. Giannetti stated that we are separating out piping and repair services, but it depends on what kind of repair and what kind of work they are doing as how it is expensed out into those expense categories. Chairman Monaghan asked about total revenue for customer site work, the total expenses incurred, and whether $182,000 on the customer site service is chargeable. Ms. Giannetti responded that it would be a combination of the “no charge” and the chargeable. Chairman Monaghan asked Ms. Giannetti to take a look at this and stated that he wants to know if we are even, are we less, or did we make money, because it shows that in one case we made money. Mr. Reeves stated that the way he read the report was that the customer site repair work when they were called out to do service work took in almost $181,000 and the expense for that same service was $182,000. He added that he felt that was pretty close. Chairman Monaghan referred to $62,000 and asked whether it is it part of the $182,000. Mr. Reeves stated that he did not believe it was. Ms. Giannetti suggested that she could add a column for budget to show where it has been calculated and how it should be recovered, and to give a little more description. Chairman Monaghan stated his interest in knowing where we are with cost, and in making sure we are not losing any money or making any money. With no further questions, the Financial Statement was accepted as information.  

 V.                 New Business: 

A.     Ms. Jean Martin with The Countybank stated that Ms. Steifle was unable to attend and asked if there were any banking relationship questions.  With no questions, Mr. Michael Nix with Greenwood Capital gave an update on the investment account from June 30, 2005 through December 31, 2005. He referred to the first page of the report showing realized gains and losses on the accounts, any bonds that would have been called, matured or sold during the fiscal year period to date. He pointed out that there were four issues and each of these had matured. He stated that the first line item is a zero coupon bond, this is a Fannie Mae discount note bought in June, bought as a short paper discount to pick up yield over shorter term maturities. He pointed out the United States Treasury notes had matured but were shown in two separate lots. He stated that because these were combined, effectively there were three issues that actually matured or called during that time period. He then referred to the following two pages of the report giving an appraisal or an accounts statement of current positions. He noted a combination of U. S. Treasury obligations as well as U. S. Agency issues. Mr. Nix pointed out that in planning to have cash available at the beginning of the year to meet potential needs with higher gas prices, there is a $1 million treasury note coming due on February 15, 2006. Plans are to let that mature and hold the cash until there is a further indication as to whether the money will be needed. The same is the case with an agency bond, Federal Home Loan Bank that matures on January 27, 2006. They will let that bond mature and hold that in cash probably for the next thirty days until there is a better indication of short-term cash needs. He stated that coupled with current cash, we will be sitting on roughly $1.7 million in cash heading into February. If those funds need to be disbursed, they can be. If there is a determination that those funds will not be used, they can be reinvested. He then referred to the last page of the report showing a performance report of the portfolio value plus accrued interest from the start of the fiscal year on June 30, 2005 up through December 31, 2005. He stated that the account performance year-to-date for the fiscal year, the number which is net of fees is .88%; gross of fees is 1.01%; and versus our benchmark, which is the Lehman Brothers Government 1 to 5 Year Index, the returns were .42%. He stated that on an absolute return basis it doesn’t seem like a whole lot; however, they are pleased with the relative return. He added that in looking at it from a benchmark standpoint this is a true apples-to-apples comparison, and in looking at the long-term objective for this account, as well as the guidelines or restrictions being government securities. Chairman Monaghan asked when the investment account was started and Mr. Nix responded that it started in February of 2005. Chairman Monaghan noted that in looking at Ms. Giannetti’s report, interest during this year was $154,000 versus $52,000 last year. He thanked Mr. Nix for the partnership and for his work. Mr. Nix stated that in looking at what interest rates have done over the period of time since this account was started, we have seen shorter term interest rates move up, a lot of that has coincided with Federal funds rates and looks like that will continue. The Fed is expected to raise rates another quarter a point at the end of January and all indications look as if they will raise them another 25 basis points in March. Most people are expecting them to hold there at 4.75%. That would mean that short-term interest rates would most likely continue to move up. He noted that there is a little lag effect as bonds that you hold mature and are reinvested, but you will start seeing that interest income actually increase over the next six to twelve months based on the ability to reinvest at higher rates. He concluded by stating that relative to the benchmark, they are very proud of where we are and will continue to provide that level of performance.

B.     Mr. Reeves presented recommendations to accept the low bid for a seven-passenger van at a cost of $15,329.00 from Ballentine Ford, the low bid for a compact pickup at a cost of $11,096.00 from Ballentine Ford, the low bid for a ½-ton pickup at a cost of $12,638.00 from Love Chevrolet, the low bid for a ¾-ton service truck at a cost of $13,871.00 from Love Chevrolet, and the low bid from Carolina Ford for a one-ton cab and chassis at a cost of $21,477.15. Mr. Reeves added that the local dealer was only some $300 higher at $21,791.00 on the last item. Chairman Monaghan asked if the bids were for the delivered price and Mr. Burnett responded that they were. Commissioner Hancock noted that Ballentine was getting two other vehicles and this was the delivered price for the one-ton cab and chassis. A motion was made by Commissioner Watts to accept the low bids as recommended; the motion was seconded by Commissioner Hancock and unanimously approved.

C.     1.         Mr. Reeves recommended acceptance of the low bid total of $66,451.00 for two backhoe loaders from V & V Equipment, Inc. A motion was made by Commissioner Watts to accept the low bid as recommended; the motion was seconded by Commissioner Hancock and unanimously approved.

2.         Mr. Reeves recommended acceptance of the low bid in the amount of $51,300.00 from Linder Industrial Machinery Company for a 93 HP backhoe loader. A motion was made by Commissioner Hancock to accept the low bid as recommended, seconded by Commissioner Watts, and unanimously approved.

VI.       Other Business:  

1.   Mr. Reeves reminded the Commissioners of a recommendation and a motion at the last work session to purchase G. E. meters from the low bidder. He informed the Commissioners that since the meter reading department has requested the purchase of an additional 770 meters that was not originally planned, Mr. Meredith went back to the low bidder who held their same price, and the second low bidder who lowered their price. The second low bidder, Schlumberger, is now lower than the low bidder with the purchase of an additional 770 meters. He added that the recommendation now is to accept the lower cost from Schlumberger. Commissioner Hancock noted that we had actually awarded the bid to the other company the first time. Mr. Meredith stated that since we knew we were going to be ordering almost 800 meters, he asked both vendors to go back on just the single-phase residential meters and do it on a blanket of 1,200 meters instead of 240, and both were asked to submit new prices. One said they needed to stay where they were and the other came in with lower pricing. Mr. Meredith noted that we would only be going back to the lower bid on the single-phase meters; we will still be buying the G. E. meters on the blanket. Commissioner Hancock asked if we were treating the vendor with the 200 meters right. Mr. Meredith responded that he thought we were because we went back and gave them an opportunity to bid on the additional amount. A motion was made by Commissioner Hancock and seconded by Commissioner Watts to approve the bid from Schlumberger for single-phase meters; the motion was unanimously approved.

2.   Chairman Monaghan asked for a report from the Marketing/Grants Coordinator and that a report be given at every regular monthly meeting in the future. Mr. Gentry distributed three brochures to the Commissioners for their review. Mr. Gentry stated that one brochure would be aimed at people who are currently using propane; Commissioner Hancock suggested that a brochure also be done for people using fuel oil. Mr. Gentry stated that the brochures were done on the printer at the COC and noted that this works fine for small amounts; if we need a larger amount, we would have to look at outsourcing the printing. Chairman Monaghan noted the addition of the part about service and that it was good. He added that it would be nice to have on the others as well.  Chairman Monaghan asked Mr. Gentry if he was talking with builders and real estate people. Mr. Gentry responded that he was attending the Builders’ Association meetings. He pointed out one of the three brochures that was specifically designed for builders and developers outside the city. He stated that a letter will be mailed to all of them that will include the brochure. Chairman Monaghan asked if we have ever offered builders a rebate on a gas furnace. Commissioner Hancock responded that we have if they go with more than just heat, if they included gas water heater, maybe gas logs when initially built, we pipe it and have bought appliances for them on some developments. Mr. Whittle added that we do the piping now but are not doing anything on appliances. Chairman Monaghan asked if we should look at the possibility of perhaps a 10% rebate if they buy a gas furnace. Commissioner Watts asked about the cost of a gas furnace versus a heat pump. Mr. Reeves responded that a heat pump costs less by about two thirds.  Mr. Reeves stated we could look at the benefits and make sure that we can do it legally, but added that a rebate may be a little different. Mr. Gentry informed the Commissioners of a meeting that he attended in Columbia at the Department of Commerce, with Charlie Barrineau, and Jamie Gilbert of the Economic Alliance. They found out that they are getting ready to announce the 2006 Opportunity Grant. We will be applying for a grant of up to $950,000 for the Maxwell Street project.  

VII.      Executive Session

            A motion was made by Commissioner Watts, seconded by Commissioner Hancock, and unanimously approved to go into Executive Session to discuss contractual matters pertaining to electric, fiber, and natural gas contracts.

            The meeting returned to open session. Mr. Reeves stated that two items were discussed during Executive Session that required motions.

Mr. Reeves stated that the first item pertained to a service agreement with Transcontinental Gas Pipeline and that it would be appropriate to pass a motion authorizing the Manager to sign a Service Agreement under Rate Schedule WSS Open Access with Transcontinental Gas Pipeline Corporation. A motion was made by Commissioner Hancock, seconded by Commissioner Watts, and unanimously approved.

            Mr. Reeves stated that the second item pertained to an Amendment 3 to the Power Service Agreement. It would be appropriate to consider a motion to authorize the Manager to sign Amendment 3 to the Full Requirements Firm Power Service Agreement with SCE&G. A motion was made by Commissioner Hancock, seconded by Commissioner Watts, and unanimously approved.  

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