COMMISSIONERS OF PUBLIC WORKS

Minutes of May 25, 2006

The regular meeting of the Board of Commissioners of Public Works was held on Thursday, May 25, 2006, at 10:00 a.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   Ken Barnett

Jeff Auman                Ron Lemon                     Henry O. Watts

Jay Thompson           Stacia May                     Mark Amick

Denise Giannetti        Richard Gentry              Bill Patrick

Curtis Burnett            Ken Whittle                    Jeff Fowler

Cary Bishop               Melinda Bishop              Jerry Spearman, Sr.

Jerry Spearman, Jr.

I.              Chairman Hancock called the meeting to order and noted that Commissioner Monaghan would be arriving later. The invocation was given by Commissioner Watts.

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

III.               A motion was made by Chairman Hancock and seconded by Commissioner Watts to approve the minutes of the April 24, 2006 regular meeting; and the May 11, 2006 work session. The motion was unanimously approved.

IV.              Financial Statement:

            With no questions from Chairman Hancock or Commissioner Watts, the financial statement was accepted as information.  

A.     Mr. Jeff Fowler gave a report from the Greenwood Economic Alliance. Mr. Fowler stated that a public appearance or county platform type meeting had been held. He made an announcement at that meeting of fifty-four jobs with the likelihood of somewhere between 70 and 80. He added that the announcement is somewhat premature; although they have technically chosen a site in Greenwood, the facility decision will not be made until the end of June. He stated that they are looking at an acquisition. The president of the company out of France and the people involved on the working side do not want to do the acquisition. He explained that the company makes and tests the ingredient that goes into dog and cat food that makes it taste good and briefly explained the process. Mr. Fowler reported on 128 current projects. Of those, they have won seven and lost 35; 72 are still ongoing; and nine are in the final stage. Two of the nine in the final stage are commercial projects. Those already closed this year (July to July) is $153,000,000 and 322 jobs. With a typical close ratio of about 14%; projects can be taken to the closing phase about 26% of the time. He reported on some of the larger projects of interest to CPW in the southern part of the County, Project Arrow and Project Neighbor. Both are heating back up and they have visited and are laying out the site now to determine the cost in terms of infrastructure. They will go to the state first, look at where the shortfalls are, then come back and work with CPW and the County to see what can be done to make those up. He added that the site does not have sewer and they had talked about a wastewater package plant there. Project Neighbor represents about a $90,000,000 investment and 120 people; Project Arrow represents a $150,000,000 investment and about 150 people; and Project Bridges with five phases could be as small as $80,000,000 and 250 people or as large as $500,000,000 and 800 people. He reported on a new project, Project Chair, involving a research facility, and a manufacturing facility that would be a $50,000,000 project with about 50 to 60 people. This will go to the Coordinating Council for the state to decide on state incentives. Mr. Fowler reported that Project Health, a rehabilitation hospital, will employ between 100 and 120 people and is in the final phase with the state. It is about a $20,000,000 project. Commissioner Monaghan noted they would be a potential electric customer. Mr. Fowler reported on commercial projects and noted that they are working with Zimmerman, Corley, Timms, and Countybank. There are proposals in front of Zimmerman and Corley; there is not a proposal in front of Timms. He added that City Council is concerned with how much they will have to put on the table, and they might want to talk with CPW during an Executive Session about some of the details. Mr. Fowler reported on an incentive tool the City is using to encourage annexation where property taxes are rebated on the City portion. As part of the incentive package agreement, they could put that they would have to use CPW power. Technically they could annex into the City and not use CPW power, but then they would not receive the benefits of the incentives. He concluded by stating that the outdoor café ordinance passed first reading with the City Council and the second reading will be on the third Monday. They are moving forward with the Sales Tax Commission and the Partnership will be assisting the County. Chairman Hancock asked about the 187 acres at the Genetic Center and noted that CPW was promised 60 acres there a long time ago with what we did. Mr. Fowler stated the need to talk with them about annexation. The reason they have held off on doing annexation is because they want the incentives to go in at the same time that the annexation happens. If a company comes in there, they want them to have the benefits of the incentives. He explained that Clemson University will be building a research center and also a graduate program around genetics and nutriceuticals. Mr. Fowler stated that two grants have been approved for the road to the facility. Commissioner Monaghan noted the desire to annex this property. Mr. Fowler stated we can start that process. Mr. Fowler asked about the incentive packages and having a “kick point” that starts a twenty year process. He added that all incentives work between a five and twenty year period and normally start at “day one”. There could be a clause that the incentive actually starts at the point where there is significant change or when the property is sold. They could end up doing this in two, five, or ten years from now, but that twenty year window would not start until that time. He stated that if we want to do that, we need to get hold of Steve Brown and start the annexation process. Mr. Fowler stated he would get with Dr. Roger Stevenson. Commissioner Monaghan noted that the City benefits from us having the electrical business and added that they will need electricity before starting construction. Mr. Barnett stated that it makes a difference in the design of the system if we know we are going to have the whole area or if we will have to fight for it piecemeal. Mr. Lemon asked about a group out of New Jersey who was looking at buying National Textiles. Mr. Fowler stated they had talked and it would be 35 jobs. Almost 450,000 square feet will be used as warehouse space. The company has a good track record in this state of understating what they do. They did buy another facility in Cherokee and are planning to grow it up to 150 people. We will have to wait until they are maxed out at the Cherokee facility to see the additional growth here. Mr. Lemon added that they would be a big gas user. 

B.     Chairman Hancock acknowledged the low bid from Allied Waste Service at a total cost of $13,028.00 for sludge and trash hauling and disposal. He noted that Mr. Burnett had provided a comparison of bids from last year. A motion was made by Commissioner Monaghan, seconded by Commissioner Watts, and unanimously approved to accept the low bid from Allied Waste Service in the amount of $13,028.00.

C. Chairman Hancock asked Manager Reeves if there were any stipulations on the sale of the Pump House Road property. Mr. Reeves responded that the sale was contingent on a perk test and a requirement for zoning to be changed. In order to provide the proper perk test, we have signed the documents that Mr. Spearman provided and that is in process. Once that is completed, we will be ready to proceed. Mr. Reeves stated that it would be appropriate to accept Mr. Spearman’s bid contingent upon those items taking place, at which time we will deposit the 10% deposit check. Chairman Hancock entertained a motion to approve the sale of 308 Pump House Road to Carolina Properties for $250,000.00 subject to the perk test and rezoning. A motion was made by Commissioner Watts, seconded by Commissioner Monaghan, and unanimously approved.   

D.  Manager Reeves reminded the Commissioners of discussions at the last several meetings on the policies addressing natural gas incentives. Mr. Reeves then explained a couple of changes for their consideration. The first change noted was with the primary heat source where the incentive had been proposed at $250 and was increased to $450, based on the differential cost between natural gas units and electrical units. The other change was in the piping cost. After the first 400 feet we had proposed $1.00 per foot. In looking at actual cost of installation, it is closer to $2.00 per foot; therefore, the recommendation is that all costs over the 400 feet be at $2.00 per foot. He noted the inclusion of some definitions in the policies pertaining to primary heat source. So there is no confusion, they used the same stipulation from piping as for 50,000 btu’s. Chairman Hancock pointed out that the cost shown for a propane 40-gallon water heater with a six year warranty was $338.00 and for a natural gas 40-gallon water heater it is $269.00. He asked how there could be that much difference in price with only two orifices. Mr. Whittle noted that there is a regulator on a propane water heater. Commissioner Monaghan stated that he was not sure he understood Item 2. with regard to whether a person who replaces their current gas furnace would get an incentive. Mr. Reeves responded that they wanted to present this to the Commissioners today knowing it could be changed if they did not agree. Mr. Reeves explained that when somebody is changing out a unit, they still have a choice between another gas unit and a heat pump. Just because they have a gas unit today, doesn’t mean they will choose to replace it with natural gas. They could decide to go with electrical or gas pack. He stated that it would be appropriate to offer them an incentive to keep their business. Mr. Gentry added that it also says to existing customers that we will take care of them as well. Commissioner Monaghan stated the need to get the message out because he had recently talked with a guy who was going to change to an electric water heater, but after giving him information, he bought a gas water heater. The impression is that electric is cheaper until you show people the actual numbers. Mr. Lemon stated that after approval, the next step would be a big push to get the information out. Mr. Gentry will be working on a poster and they will be visiting the appliance stores, bill inserts will be sent out, an announcement on the cable station, and newspaper ads. Mr. Reeves stated that Mr. Bishop had put together a report showing the rebate cost. Assuming that everybody applies, the estimated annual impact on the rebate program would be $96,000. Mr. Lemon added that they have limited the application to six months and that can be adjusted or eliminated at any time. Commissioner Hancock noted the cost of double wall vent pipe shown at $15.00 per foot. Mr. Bishop responded that was probably a five-foot section. Mr. Lemon stated that commercial customers will be asked to sign something as part of the commercial policy stating that if they don’t start service within six months, we have the right to recoup all of our costs, not only the 400 feet but all the way back to the main line. Mr. Barnett commented on how helpful Lee Roper had been with these policies. Mr. Patrick added that he talked with Mr. Roper about whether there is a need for a contract and there probably is with commercial, particularly if you are going to try to recoup, but not for residential. Mr. Barnett stated he did not believe we have that back yet. Chairman Hancock noted that gas lights are high maintenance items and there is a lot of cost to maintain them. Mr. Whittle stated that the way it is now, there is not a basic maintenance charge. It is basically a service call plus hourly charges and material. He added that most of what is being installed now in Greenwood is without mantles and just a constant burning flame, which does not require much maintenance. Mr. Reeves pointed out that gas logs were not included in the incentives. A motion was made by Commissioner Monaghan to adopt the Natural Gas Incentive Policy and the Commercial Gas Usage Policy as presented; Commissioner Watts seconded and the motion was unanimously approved.

V.                 Financial Statement:

Commissioner Monaghan asked Ms. Giannetti to again define “restricted cash” and asked why that $6,000,000 is not put into some type of short-term investment. Ms. Giannetti explained that it is basically made up of the bond money for projects, either the debt service fund to pay the bond payments, or the money available to reimburse ourselves for projects in a sweep account. The rest is at The Bank of New York with them as trustee, and they control where it is while it is with them. Ms. Giannetti added that about $3,000,000 in bond funds is available for reimbursement, so probably about half of the $6,000,000 is at Bank of New York. Commissioner Monaghan asked why the $3,000,000 is not in some kind of short-term investment. Ms. Giannetti responded that it is in a sweep account at Countybank and is part of the funds that we have the option to move into the investment account. If the Board decides to do that, it only takes a matter of a few days to transfer those funds. Ms. Giannetti added that information was just received this morning from Countybank concerning the collateralization of those funds. Mr. Reeves stated that this was one of the items for discussion at the next work session.

VI.       Other Business:

1.   Manager Reeves presented a contract with Cornerstone to renew EAP services. He added that he had asked Vicki Knott to look at alternative programs, and one was identified that would be a little cheaper but may not be the best alternative at this time. He stated that his recommendation is to renew the EAP Program with Cornerstone at a cost of $4,100 per year. A motion was made by Commissioner Monaghan to renew the contract with Cornerstone for one year; the motion was seconded by Commissioner Watts and unanimously approved.

2.   Manager Reeves presented a request for changes to our insurance policy from Medical Claims Management Corporation through the SCLGAG. Ms. Giannetti addressed the first issue concerning the internal stop loss cap. Ms. Giannetti explained that the company is telling us that there have been too many claims in excess of the $50,000 stop loss and it has become a loss for SCLGAG. Commissioner Monaghan asked for an explanation. Ms. Giannetti explained that we are insured separately for claims that exceed $50,000. There have been a number of claims recently exceeding the $50,000 so that the cost of that insurance is becoming a loss for the whole insurance fund. Mr. Reeves pointed out that no one in the fund is being given the option of keeping the $50,000 cap; all participants will have to make a choice between $60,000 or $75,000. Ms. Giannetti explained an analysis done to determine the best option for CPW and Metro. Over the last ten months, we have already had nine claims in excess of $60,000 just for our plan. Four of those were between $60,000 and $75,000 and five were greater than $75,000. The increase per month per person for $60,000 stop loss is going to be $73.45 per employee; at $75,000 it is $59.90. Commissioner Monaghan asked about the risk by going to a higher stop loss. Ms. Giannetti stated that our risk would be that if we had a $75,000 stop loss right now and we had already had nine claims only ten months into the plan, it would have cost us $225,000 extra that we would have had to put into the reserve fund. Mr. Patrick stated his understanding that stop loss kicks in to protect you from the bigger claims, but up to that stop loss, whatever has to be paid comes out of your fund or pool. With just one claim, you have got an additional $15,000 (between $60,000 and $75,000) exposure for your funds that you have to replenish in the pool. Ms. Giannetti recommended the $60,000 stop loss because the actual cost to us would be about the cost of maybe two claims. From what John Phillips said, it could be nine claims this year and four next year. We do not want to expose ourselves to that kind of cost. If we went with the $60,000 stop loss, it would cost CPW $36,852 more per year.  A motion was made by Commissioner Monaghan, seconded by Commissioner Watts, and unanimously approved to increase the stop loss cap to $60,000.

       Manager Reeves reported on two additional revisions to the health insurance plan for the 2007 plan year. He stated that the SCLGAG Board has considered and is offering both changes in the election form. The first would include colonoscopies under the wellness benefit; the other is for smoking cessation. Mr. Reeves recommended including both revisions, and noted that apparently there is no cost additive at this time. A motion was made by Commissioner Watts, seconded by Commissioner Monaghan, and unanimously approved to include both benefits in the insurance plan.

VII.      Executive Session

            A motion was made by Commissioner Monaghan, seconded by Commissioner Watts, and unanimously approved to go into Executive Session to discuss an ongoing legal matter and personnel matters regarding pay increases and a revision to personnel policies.  

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