COMMISSIONERS OF PUBLIC WORKS
Minutes of October 25, 2007

The regular meeting of the Board of Commissioners of Public Works was held on Thursday, October 25, 2007, at 10:00 a.m., in the Boardroom at 121 West Court Avenue.

In attendance:

 

           

 

Commissioner Monaghan referred to the variances in sales and expenses and the likelihood of those being due to the price of gas and electricity, adding that we are still $700,000 favorable in the budget. He commented on a discrepancy between billings and power purchases on the electrical side, and asked Mr. Meredith about the need for some kind of cost structure where it is adjusted like with gas. Mr. Meredith responded that was already being done through the PPAC. Ms. Ogletree added that with the PPAC, we are not adjusting the month after but there is a two-month lag. Basically, the fuel cost is driving the electric to be over budget. She stated that the reason there is a big difference this month is because it is passed through to the customers but we are not actually collecting it in the same month as the bill is paid. Commissioner Monaghan noted $1,137,000 over budget shown this month. Ms. Ogletree responded that it was unexpected fuel costs when the budget was put together; some of it may also be timing because the budget was projected based on pre-year average, and if the usage is different than over the last three years, then it will show something else. Commissioner Monaghan asked if we are happy with the way we are adjusting. Ms. Ogletree responded that we are adequately recovering the costs. Commissioner Monaghan referred to a special exhibit showing gas and asked if this was tracked in a similar manner as with gas. Ms. Ogletree stated that a PPAC is prepared every month and a spreadsheet is done. Mr. Meredith responded that it would be different than with gas; the way the spreadsheet is set up would have a different look than the gas. Commissioner Monaghan stated that he wanted to know whether we had over collected or under collected. Ms. Ogletree responded that if it is over or under, the PPAC is adjusted every month to collect. Commissioner Monaghan commented that if that is a phenomenon to be seen from now on, the Commissioners might want to have a better understanding of it. Commissioner Monaghan referred to page 16 showing total gas revenues for fiscal year-to-date and the previous pages where total gas revenue was $27 million. He pointed out that page 16 showed $21 million and page 3 showed $27 million and he could not reconcile the numbers. Ms. Ogletree responded that page 3 also has other revenues included such as transportation cost recovery; page 16 is strictly gas cost recovery; the revenues associated with the gas cost recovery does not include any demand charges or transportation cost charged to the customers. Mr. Barnett added that page 16 is strictly the cost of gas, not the margin or demand charges; all of that is reflected in sales on page 3. Ms. Ogletree added that page 3 should be higher than page 16.  Commissioner Monaghan asked if it should be higher by $6 million. Ms. Ogletree responded that there are a few million dollars just in transportation costs. She stated that on page 16, you are measuring how much is being recovered against the actual cost of gas, and then take out all of the extras revenues that are not directly associated with the cost of gas. Manager Reeves asked Ms. Ogletree how difficult it would be to show on page 16 the other costs that would then equate to the number on page 3, and Ms. Ogletree responded that it could be done. Commissioner Monaghan noted that would be helpful because page 3 does not break it out. Mr. Lemon added that he and Denise go over the numbers monthly and they are accumulative for the year. With no further questions, the financial statement was accepted as information.

 

Commissioner Monaghan made a motion to provide the additional funding in the amount of $50,000 to the Partnership for 2007 and Commissioner Hancock seconded. Chairman Watts asked if an immediate decision was necessary, and Mr. West indicated the sooner the better. The motion was approved by a vote of two to one with Chairman Watts voting “no”. Chairman Watts stated that he was not opposed to the request but needed more time to think about it. Commissioner Hancock commented that both he and Commissioner Monaghan are on the Partnership Board and had the opportunity to know what was going on more so than Chairman Watts and they had tried to keep him apprised of everything. He pointed out that they are looking at this as a win/win situation with upcoming projects where CPW would get some return back. He noted that it only takes one good industry like the $800 million one to get the electrical back and then some. Mr. West noted projections of $20,000 per month usage with SPF going to $60,000; CPW’s revenue went from $240,000 per year to $720,000 per year. Chairman Watts stated his concern with wanting to talk with staff first to determine what kind of return we would get on our investment. Commissioner Monaghan noted that Chairman Watts had a good point that in the future, it would be best to have a couple of weeks notice on something of this nature. Mr. West responded that his point is that this should not happen again in the future. Commissioner Hancock told Mr. West that we are taking what he said about this being one time very seriously.

 

A motion was made by Commissioner Hancock to authorize the grant application; the motion was seconded by Commissioner Monaghan, and unanimously approved.

 

A motion was made by Commissioner Monaghan to approve a policy pertaining to water sampling, and the motion was seconded by Commissioner Hancock. Chairman Watts stated that the new policy would provide for two samples at no charge; any additional samples would be $45 for the first sample and $10 for each additional sample. The motion was unanimously approved.

 

A motion was made by Commissioner Monaghan and seconded by Commissioner Hancock to incorporate the tap fee charges as recommended. Commissioner Hancock stated that Metro is combining residential 5/8-in. and 1-in. together and CPW should discuss doing that as well. He noted that with putting in a 1-in. meter they are just recovering cost and not making any money. After discussion, the motion was unanimously approved.

Commissioner Monaghan stated that since they were already on the subject, they should go ahead and talk about it. Commissioner Hancock commented that he had asked Richard Coleman to join them for this discussion; Manager Reeves stated that he had talked with Richard earlier and he had another engagement. Commissioner Monaghan stated that at the Metro meeting held the previous day, they determined that there are 13,000 households on the metropolitan sewer system. Of those 13,000 at a base rate of $8 based on a single-family residential unit, there are around 600 that have 1-in. meters and are paying three times the amount that the 5/8-in. meter customer pays. They are still a single-family household. He stated that the Metro Board passed a motion to make a new customer classification with one as single-family residential at one REU and to charge a base fee of $8.64 for any single-family resident whether they have a 5/8-in. or 1-in., and they would like to do the same for water. He noted that there would be a second class for multi-family. He asked about the base rate for water, and Mr. Chapman responded that it is about $10 more when you go from a ¾-in. up to a 1-in. Commissioner Monaghan asked about the price for a single-family residential 5/8-in. meter. Manager Reeves responded that the minimum charge had gone to $7.84. Commissioner Monaghan noted that it is about the same as the Metro charge; noting that it is more when you go to 1-in. He expressed a desire for the single family residential class be billed at the same rate whether it is a 5/8-in. or a 1-in. meter that goes into the house, not for irrigation. Mr. Chapman referred to a letter that went out and calls coming in; he stated that so far, it is about a 50/50 split with customers who want to keep the 1-in. meter. There are those out there who do have their irrigation system on the 1-in. meter and there is a capacity issue in that we obligate more capacity to that 1-in. meter than with a ¾-in. Commissioner Monaghan expressed the desire for billing to be less complex, adding that Metro’s billing is the same as CPW’s. Manager Reeves responded that it is a little different than Metro given that CPW is based on capacity. He provided a scenario where if you are a residence, you would have no reason not to put in a 1-in. meter because it is the same cost as a 5/8-in., you would just go ahead and take the extra capacity at the same cost because there is no additional cost for the extra capacity. Commissioner Monaghan commented that you would not really need that unless you had a sprinkler system. Manager Reeves explained that the difference is that we have offered the opportunity to all of these customers with the 1-in. to change to a 5/8-in. at no cost, and they are choosing based on their own personal needs. They recognize that they will pay a higher premium for the 1-in. meter over the 5/8-in., and they are accepting that based on the letter that went out. Commissioner Monaghan inquired about whether there would be a billing problem with Metro. Manager Reeves responded that he and Richard had discussed how a special rate code could be done just for that application. Commissioner Monaghan pointed out that it is a little different between sewer and water because instead of paying $8, they are paying $20 plus and it is going into the ground, whereas, with commercial and multi-family there is a strength differential. Mr. Chapman stated that he would support what they are doing with Metro because it would make sense. He stated that they are finding that in response to the letters, each customer that calls back with a 1-in. meter is not putting any more strain on the sewer system because they have it either for irrigation or for horses and ran additional water lines on their side. It is a capacity issue on us. Commissioner Monaghan stated that he was convinced as long as Ms. Gorham did not have any problems with the billing. Manager Reeves responded that during the conversation with Richard, they discussed how it will be very clear with the majority that are either a single family unit or a multi-family unit so that we can separate those. However, there would be some instances where Metro would need to make the call. He provided an example of a single family home with a garage apartment behind the house and whether that would now be multi-family or single family. He stated that in his opinion it would probably be single family, but that is a Metro billing question they would need to answer and not us. He stated that he would meet with Vickie Gorham to identify those situations. Commissioner Hancock stated that his residence has two single families living side by side sharing one wall, but with two separate meters. Commissioner Hancock referred to a 2,300 cubic feet cap on the water as far as it goes to sewer; if they irrigate on top of that, adding that the 2,300 is too high. He stated that there are customers out there who actually use that much water per month in a house, so they need to find out who those customers are so they can put that cap on. Commissioner Monaghan noted that the average is 800 cubic feet which is about 6,000 gallons. They don’t stop charging for sewer until you use 17,000 gallons. He added that they have asked to look into making it more reasonable. Mr. Chapman stated his agreement because most of the time if something is extremely high, it is a leak on their side that is causing it; whereas, if they are using our commodity that leak does not put any strain on Metro unless it is going down the drain, in which case it is usually going down the drain as clean water and that is not putting a strain on their system either. Commissioner Hancock stated that they did not want to cut the bills of those people who use that much each month. If that number should be 1,800, then that is what they want, but if it needs to be 1,900, that is what they want. They do not want to cut anybody’s rates because they are hitting that cap. Manager Reeves noted that the cap in Newberry sixteen years ago was 1,600 cubic feet because that is basically double the average residential usage.

 

     
      A motion was made by Commissioner Monaghan to establish a reserve fund that would be used to offset any negative numbers on the PGC; the motion was seconded by Commissioner Hancock, and unanimously approved.
     

 

 

A motion was made by Commissioner Monaghan to approve the bid from MST Concrete Products as recommended to purchase three concrete vaults at a cost of $36,915; the motion was seconded by Commissioner Hancock, and unanimously approved.

 

                             

A motion was made by Commissioner Monaghan to approve the purchase of relays as recommended by Mr. Meredith; the motion was seconded by Commissioner Hancock, and unanimously approved.

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

    

                                               

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