WORK SESSION

COMMISSIONERS OF PUBLIC WORKS

May 11, 2006

A work session of the Board of Commissioners of Public Works was held on Thursday, May 11, 2006, at 10:15 p.m., in the Boardroom of the Greenwood Commissioners of Public Works at 121 Court Avenue.

In attendance:

Gene P. Hancock                 Steve D. Reeves, Jr.     Vickie Gorham             Curtis Burnett

Michael G. Monaghan              Kenneth Barnett           Ken Whittle                  Richard Gentry

Henry O. Watts                    Jeff Meredith                Melinda Bishop            Scott Banks

                                            Jeff Auman                   Cary Bishop                 Mark Amick

I.          Chairman Hancock called the meeting to order. Chairman Hancock gave the invocation.

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

III.               Discussion Items:

A.     Manager Reeves explained and recommended an agreement with the Countybank to provide an extension to the business relationship for an additional five-year period from January 1, 2007 through December 31, 2011. He added that this is in exchange for Countybank annexing into the city limits and taking CPW services. Mr. Reeves noted that this agreement comes with no change in pricing. A motion was made by Commissioner Monaghan to accept the agreement with the Countybank; the motion was seconded by Commissioner Watts, and unanimously approved.   

A.     Manager Reeves reminded the Commissioners of an issue raised at the last Board meeting as to whether to force customers to sign an agreement that they would annex into the city limits in exchange for receiving water service. Commissioner Monaghan stated there would need to be a motion to take this off the table from the last meeting. Mr. Reeves asked if it was tabled indefinitely. Commissioner Monaghan responded that when you table it, you table it. Mr. Reeves asked for direction and stated that if there is no action, then there is no decision to move forward. Chairman Hancock stated that he has made his feelings known. Commissioner Watts stated his agreement with Chairman Hancock that they do need to annex but was not in favor of withholding water as a means to get them to annex. Commissioner Monaghan stated his agreement with Commissioner Watts.

B.     Manager Reeves presented a change order request for the water treatment plant in the amount of $46,145.00. He added that additional bond funds of $250,000.00 are available and could be used. Mr. Banks explained that there are four individual pieces to the change order request. Two are fairly small, the first of which is a 4-in. gate valve that had to be added to the carbon building. As part of the overall project, a larger line to the carbon building was included to feed it and we needed the 4-in. gate valve to be able to disconnect the current line that is feeding it to isolate that line once we are done with it. The labor, materials, and equipment are $2,700.00. Commissioner Monaghan asked if the original engineering plans called for this. Mr. Banks stated they did not at that point. This was realized once they were into the project. Mr. Banks stated that the other smaller piece is on the sodium hypochlorite system and involves installing a backflow preventer. Once it is hooked up to the system, it becomes a potential for contamination. With current regulations, the backflow preventor required is $2,164.00 for materials. There is no labor. Mr. Banks added that this was not in the original design. Mr. Banks explained the other two larger items. He noted that the first is with the on-site generation system. The equipment we were given was pretty close to our maximum electrical amount we could put in that area. There was also another piece that came along after design. He added that we will not have to pay for the actual piece of the generation equipment because they gave us a package price, but we did not have enough electrical capabilities in that particular area. It requires a new splice cabinet there at the TP-3 supply, also quite a bit of duct bank and conduit to get to that piece; also instead of using a 400 amp breaker we will have to upgrade to 600 amps. The total cost is $20,235.00. The last item is for the carbon building where we need to have sampling capabilities. In order to meet the upcoming water quality regs, we will need to sample prior to adding carbon and also afterward. There will also be some laboratory worktables installed in that carbon building that have to meet certain requirements and regulations. The total of that particular piece along with three additional taps for some spares come to a total at the carbon building of $20,984.00. Commissioner Monaghan requested a copy of this information. Commissioner Monaghan made a motion to issue the change order in the amount of $46,145.00; the motion was seconded by Commissioner Watts, and unanimously approved.

C.     Manager Reeves informed the Commissioners that Mr. Ron Lemon was not there due to family illness. He sent an e-mail requesting that the Board give consideration to extending the contract with SCANA Energy Marketing. The contract is due to expire at the end of June 2006 and SCANA has agreed to extend the agreement for a one-year term with no changes or increases. Mr. Lemon checked with several other suppliers and none expressed an interest in trying to compete and could not give the same service at that price.  Mr. Reeves recommended acceptance of a one-year extension on the contract. Commissioner Monaghan made a motion to accept the one-year extension of the contract with SCANA Energy Marketing; Commissioner Watts seconded, and the motion was unanimously approved.

D.     Manager Reeves asked Mr. Gentry to explain the recommendations for gas incentives and commercial service lines. Mr. Gentry stated that he met with Cary Bishop to research some existing customers and explained that they used an average house size of 1,600 to 2,500 square feet. They took the profit margin for an average size home using a 7,500 cubic foot primary heating unit and took out the $8.00 monthly fee which left $25.95. They multiplied that by five months of usage which came to an annual margin of $129.75. Commissioner Monaghan asked how much the gas heat bill was per month with that estimate. Mr. Bishop responded that they took the cost out because they were using strictly consumption because they did not want the purchased gas cost to influence the numbers. They were trying to separate the cost of the gas from what CPW was actually making on the consumption. Commissioner Watts asked for copies of the examples and Mr. Reeves stated he would get copies. Commissioner Monaghan stated that the methodology is OK except he cannot relate to it. He stated that he knows what he pays per month for gas and wondered what the average cost people are paying for gas. Mr. Bishop stated that this particular example was based on heat only because they were trying to isolate how much rebate incentive they were going to give back for each appliance. Mr. Reeves explained that they took the average size heating unit and how much that average size heating unit would use on a monthly basis. Then they came up with an average consumption monthly just for that heating unit knowing that the heating season is five months long. They took the margin created just by that heating unit per month and multiplied by the five months to give a payback. They have also done the same with a hot water heater. Mr. Gentry continued and stated they had proposed a $250 rebate which would take approximately two years to recoup that amount on an average heating unit at $129.75 per year. Mr. Gentry stated that the same incentive was proposed for new construction. He noted that it was a little lower for an existing customer who converts to natural gas than a new customer or new construction. Commissioner Monaghan asked if the average new construction in this community is 1,600 square feet. Mr. Gentry stated they took an average of 1,600 to 2,500 square foot homes. Mr. Bishop added that with these numbers, the larger the consumption, the faster the payback. The smaller the house, the longer it will take to recoup. If you have a 4,000 square foot house, you will probably have three or four units of this particular size. Mr. Gentry stated they did the same thing with hot water which came to a margin of $6.15 per month times twelve months for an annual margin of $73.80. They proposed $150 on hot water heaters for a payback of approximately 2 ½ years. Commissioner Monaghan asked about the purchase price of an electric hot water heater versus gas to see if the incentive means anything. Mr. Gentry responded that a gas hot water heater costs about $80 more. Mr. Reeves stated they are proposing an incentive for water heaters of $150 for new construction and $125 for existing customers. The Commissioners discussed the cost difference between electric heat pumps and gas furnaces. Commissioner Watts asked about the lifespan and Mr. Barnett stated it would be about 15 or 20 years on either. Mr. Reeves stated that before taking action, they needed the cost of a heat pump versus a gas unit for just the units themselves to see if the incentive would be worthwhile to consumers. Mr. Gentry stated he would get those prices. Chairman Hancock asked about discussion of commercial service lines. Mr. Reeves reminded the Commissioners that they approved extending the residential service lines up to 400 feet at no cost and anything over that $1.00 per foot at the last meeting. Currently, with commercial it is $30 for the first 100 feet and $0.50 per foot thereafter. He stated that it would make sense to change the commercial to $1.00 after 100 feet, but was not sure about eliminating the $30 for the first 100 feet. Chairman Hancock noted that we are not doing any piping for commercials; they have to put it in and test it, all we are doing is setting a meter there. He stated his belief that we should give them the service line because it is a lot bigger load than anywhere else and will not typically be over 100 feet; it’s just a bigger pipe. Mr. Whittle stated that in doing a survey on commercial regulators, some of those places have gas meters sitting there that are never turned on. Some have water only, and he stated his belief that there should be a minimum usage or be guaranteed by so many months and then they have to use it. He added that we run all these services to a strip mall and then some don’t ever hook up and some just have hot water. He added that for those with big loads, free service lines would be great. Mr. Reeves asked about the possibility of some of them having a gas furnace or boiler that would make the consumption high enough to justify, or is there a definition that we can give to consumption. Mr. Whittle stated we can come up with amounts and Mr. Barnett suggested a connected load amount. Mr. Whittle agreed that a minimum btu usage would be good. To determine that we would look at the figures for what we are making off the usage versus how much it costs to run a line. Mr. Barnett stated we could find out what they are going to hook up and then verify they did indeed hook up that load because you know what the load is going to be off of the unit. Mr. Reeves stated that we may want to go back to our current policy and make the first 100 feet for commercials free, then everything past 100 feet is $1.00 per foot unless they have a consumption of “x” cubic feet, and at that point in time it becomes free. Commissioner Monaghan noted the large amount of turnover with commercial businesses and that it may be cheaper to put in a line while under construction rather than later. Mr. Reeves continued that if it is commercial where they only have a hot water heater, go with the free up to 100 feet and $1.00 thereafter; if it is for cooking or a boiler with high usage, make it free all the way to the structure. Mr. Reeves stated that something would be put together for the next meeting that would define the consumption level. 

E.      Manager Reeves asked for information on sewer at the City Pond property. Commissioner Monaghan stated that Metro has it in their budget. Mr. Reeves noted that he had not received any information to complete the proposal for bidding. He stated that he would talk with Mr. Richard Coleman about how to finish the wording for the RFP as to who will pay for what portion of the sewer.

F.      Manager Reeves stated that a copy of the appraisal from Ben Lawrence for the administrative building had been sent to Richard Coleman. He further explained that he found several appraisal firms in the Greenville area online and sent them an e-mail. He looked for those that had a MAI on staff, which is required for commercial-type property appraisals. He stated that only one has responded and that was Crider and Associates who has done work in Greenwood quite often. Mr. Reeves stated that they have quoted a fee of $8,000.00 which is probably reasonable and would be shared with Metro on a 75/25 basis. Commissioner Watts stated he did not think Metro would be willing to pay 25% for an appraisal. Commissioner Monaghan noted that we do not really care what the CPW side appraises for and added that he thought Metro should pay for half. Mr. Reeves stated that he thought the appraisal from Ben Lawrence was fair and equitable and added that he probably knows the value of square footage in this area as well as anyone. Mr. Reeves stated he would continue to seek some response from other appraisers and noted that there is not an appraiser in town that is an MAI. Mr. Jerry Spearman and Mr. Bob Haynie both had instructed him at the Metro meeting that the appraiser should have an MAI.

IV.              Executive Session:

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

            The meeting returned to open session.

            Manager Reeves stated that during Executive Session there were several matters of discussion requiring motions. The first item was a request for consideration to add an Underground Foreman position in the electric department. A motion to add the position was made by Commissioner Monaghan, seconded by Commissioner Watts, and unanimously approved.

            Manager Reeves stated that the second matter pertained to the adoption of the Vehicle Management Policy discussed in detail during Executive Session. The only item recommended for change was to add that the General Manager would have to authorize the employee’s personal use of vehicles. Commissioner Monaghan made a motion to adopt the Vehicle Management Policy as discussed; Commissioner Watts seconded, and the motion was unanimously approved.

            Manager Reeves stated that the last item discussed was the Moonlighting Policy which had been revised and approved at the April 24, 2006 meeting. Discussion took place on adding language to the Policy that makes the provision in Item 2. pertain to exempt (salaried) employees only and any other use of the Moonlighting Policy for work outside CPW must receive the authorization of the General Manager. A motion to approve the revision to the Moonlighting Policy as discussed was made by Commissioner Monaghan, seconded by Commissioner Watts, and unanimously approved.

            Manager Reeves informed the Commissioners of a pre-bid meeting at the water treatment plant at 1:00 p.m. on the roofing project. Commissioner Monaghan asked how often the engineer comes to check on the water plant project and if he charges anything. Mr. Reeves stated he was not sure how often, maybe once a week or every other week, and we pay an hourly rate depending on who is doing the inspection. Mr. Reeves added that part of the reason for the change order today is because the “as-built” drawings were not accurate. There was some conduit in electrical line showing that were not there on the drawings.

            Commissioner Monaghan stated it would be good to have nameplates for when there are large crowds at meetings. Mr. Reeves responded that he would either go down the hall to borrow Metro’s or have some made.

            Chairman Hancock asked if anyone had heard from National Textiles. Mr. Barnett stated that several staff met with them a week ago and it looks like based on that meeting their load will be similar to that of Capsugel. Commissioner Monaghan asked about putting water at a factory in Abbeville County. Mr. Reeves responded that it is a doctor’s office down Highway 72. Donalds-Due West has asked us to increase the size to a 12-in. line with them paying the differential cost between a 6-in. and 12-in. with the idea of them purchasing wholesale from us sometime in the future. He added that he wrote Abbeville County Council and asked permission because they had asked us to negotiate through them and not Donalds-Due West. He informed the Commissioners that he had just received a letter this morning from County Council to go ahead and provide water to Donalds-Due West. We will proceed with putting in a 12-in. line; CPW will cover the cost of the 6-in. line and they will cover the additional cost for the 12-in. line. Commissioner Monaghan stated we should get the money up front. Mr. Reeves stated that we always have the leverage that if they ever want wholesale service and have not paid, they don’t get it. Commissioner Watts asked about two Waffle Houses that are supposed to come to Greenwood. No one had any information. It was noted that one was to be near CVS on the By-pass, and the other at the Cross Creek Connector at the By-pass next to Buck Stove.

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