GREENWOOD METROPOLITAN DISTRICT

MINUTES OF THE July 11, 2007

Regular meeting

 

The regular meeting of the Greenwood Metropolitan District Commission was held Wednesday, July 11, 2007 at 3:00 p.m., in the Training Room of Greenwood Metropolitan District Technical Service Facility, 110 Metro Drive.

 

In attendance:

Commissioner Bob Haynie, Chairman               Richard Coleman          Roy Hemphill

Commissioner Byron Smith, Vice Chairman      George Martin              Paige Holley

Commissioner Gene Hancock, Secretary          Marion Boone              Marsha Meyer

Commissioner Michael G. Monaghan                Daniel Clark                 Bill Moore

Commissioner Henry Watts                              Wayne Daniel               Steve Pohlman

Commissioner Tim Burke                                  Richard Gentry             Laurie Smith

                                                                        Gayle Grogan               Danny Ware

 

1. Chairman Haynie called the meeting to order and George Martin gave the invocation.

 

2. Chairman Haynie gave the statement of compliance with the notification provision of the Freedom of Information Act.

 

3. Chemical Bids for Rice Size Lime

Bidder                          Amount

Chemical Lime              $.073940 per pound

 

4. Chairman Haynie inquired if the bid amount was in line with last year’s amount.  Mrs. Meyer responded that the bid price is close to the same amount as last year.  Commissioner Monaghan asked if Chemical Lime was the only company that returned a bid.  Mrs. Meyer responded yes.  She noted that on CPW’s chemical bid only two lime bids were received.  Commissioner Watts asked if the contract is for a year.  Mrs. Meyer stated all chemical bid contracts are for a year. 

 

Staff will review the bid to assure compliance with the specifications.  If the bid is in compliance, the bid will be awarded to Chemical Lime at the next Board Meeting.

 

5. Accounting Methods for Monthly Reporting

Mrs. Laurie Smith of Elliott Davis was at the meeting to answer some general questions regarding budgeting and accounting.  Mrs. Smith stated Gayle has asked for her to provide the Commission with information about what is common practice in budgeting.  Mrs. Smith stated she focused on the difference between cash based budgeting and full accrual budgeting.  Metro is on full accrual from the standpoint of the audited financial statements.  Most governments are reporting on a cash basis for internal financial reporting.  When year end adjustments are made most governments will adjust to modified or full accrual basis depending on if the company is government fund oriented or enterprise fund oriented.  The cash basis budgeting approach is used by most governmental entities.  The capital items are oriented toward projects and are commonly seen as a separate budget by capital project and is monitored by project; budget by project as to what is expensed so far against the percentage completed.  Commissioner Monaghan inquired about the difference between cash basis and accrual basis.  Mrs. Smith responded the biggest difference is how capital expenditures are handled.  On an accrual base budget, Metro would not budget capital expenditures because the capital expenditures are written off over their estimated useful life.  Commissioner Monaghan asked about capital funded from the operating funds.  Mrs. Smith responded any type of capital item whether it is a vehicle or a new distribution system on an accrual base budgeting process it would not be budgeted at all.  On Metro’s monthly reports, depreciation is included, that is a way that Metro looks at utilizing those capital items over time.  On an accrual basis, depreciation is reported and expensing that capital item off over its useful life.  On a cash basis budget each year stands alone as far as what capital items are going to be incurred to improve the system against what Metro is actually spending.  Commissioner Monaghan stated he is interested in seeing how much Metro is spending from operating accounts for capital expenditures and how much Metro is spending from the restricted funds.  Mrs. Smith responded that if Metro did a capital project budgeting in a cash basis Metro would see how those projects are being funded and how those funds are being expensed and in which months they are being expensed.  Mrs. Grogan commented that information is provided to the Commissioners each month in their package.  Commissioner Monaghan stated he is talking about the income statement.  Mrs. Smith stated that Metro may need two different budgets.  She recommends that Metro not call the bottom line “net income” but to call it “excess of revenue over expenditures” and drop the depreciation number to the bottom.  Metro would also have a second page that would be for capital project budgeted by project.  On this page Metro would include the funding source for that project and the actual expenditures against the budget.  Metro would work on two budgets instead of one; an operating budget and a capital project budget.  Mrs. Smith commented that the full accrual budgeting will not show projects.  She believes that Metro should use the cash basis budget by projects.  Commissioner Monaghan asked if currently Metro is doing cash basis.  Manager Coleman responded that Metro pretty much used the cash basis budget.  He noted that a project more than likely will not take place within a single fiscal year.  The project is not accounted for in the audit until the project is closed out.  Mrs. Smith stated that when looking at a project budget you might notice it takes two to three years for a project so you will look to see where you are this year.  When talking about retainage you are talking about an accrual basis.  If you are budgeting on a cash basis you will see what you have related to the funding source for that project, then you will see what you have actually expended.  Commissioner Monaghan stated that to his understanding on page 18 of the packet, Metro does not include any outstanding accounts payable nor does Metro include any outstanding debt.  Mrs. Smith stated the only thing that tells her it is not totally cash basis is the depreciation number.  Commissioner Monaghan stated the only problem he sees with not seeing depreciation is that is a real number because assets are wearing out.  He stated that without having the depreciation number it may show Metro is in the good more than what they really are.  Metro is going to have to spend that money on replacing those items.  Mrs. Smith stated that she mentioned to Gayle about moving the depreciation line underneath the net income line and then change the net income line to excess of revenue over expenditures and then put depreciation and say excess of revenue over expenditures and depreciation.  When you go from cash basis to full accrual with the audit Metro should not see a lot of difference between those numbers in regard to account receivables and account payables.  Manager Coleman noted that the amount that has been billed but not collected is about the same every year.  Mrs. Smith stated that if the depreciation is at the bottom that number will look right when converted to full accrual net income on the audit.  Manager Coleman commented that when Metro has a large project that will take a long time to complete, Metro will typically pay the engineering cost up front out of reserves and funds the project with a bond issue.  Metro can reimburse themselves with the money from the bonds for the upfront cost if needed.  Every project includes the cost of the project plus the engineering, rights-of-way, etc.  Some of these are paid before the project begins.  Commissioner Burke asked if those cost are classified as a “soft” cost.  Manager Coleman responded they are classified as a “soft” cost.  Commissioner Burke asked if the actual construction is classified as the “hard” cost.  Manger Coleman responded yes that is right.  Mrs. Smith stated budgeting is a tool for Metro to use to monitor where Metro is internally each year.  Metro can amend the budget at any point in time.  Commissioner Monaghan asked if Mrs. Grogan had talked to Denise on the way she records CPW information.  He is not sure if she accrues CPW’s outstanding bills.  Mrs. Smith responded that she believes CPW is also on the cash basis budgeting.  She believes Metro needs to find the basis that works for them.  Mrs. Smith reminded the Commission that depreciation is an estimate of how long Metro is going to use that particular capital item.  When the estimate becomes unrealistic, the estimated useful life will then be adjusted.  When a new project is started, all of the expenditures will be placed into a construction in progress account.  The depreciation will not start until that line item is put in use.  Commissioner Monaghan stated the assets are reported at their original value and depreciation is subtracted from that.  He asked what does Metro do when the assets are fully depreciated.  Mrs. Smith responded some assets will never fully be depreciated as long as they are in use.  If Metro gets to the end of an asset’s life and sees that they are going to continue to use that asset, then Metro would expand that useful life.  Some assets have salvage value and the asset will depreciate to the salvage value.  Commissioner Monaghan inquired on how Metro treats the sewer system within the city limits.  Manager Coleman responded that when Metro put the value on their books they came up with a value if the system was new and took a certain percentage of the value based on the age and condition of the system.  The number from CPW was just transferred over.  Commissioner Monaghan asked how important is it to have the values as accurately as possible.  Mrs. Smith responded it is very important.  Metro’s biggest assets are the infrastructures of the system.  Metro should make sure they have properly accounted for how much life is left in them.  Manager Coleman stated that from the stand point of the long range financial plan it backs the depreciated number out and Metro calculates a replacement cost.

 

6. Commissioner Smith made a motion that the minutes from the June 14, 2007 Regular Meeting be approved as mailed and Commissioner Watts seconded.  The motion was unanimously approved.

 

VII.      Financial Report

Chairman Haynie asked for questions from the Board on the Financial Report.  Manager Coleman noted the revenue is still under what was projected.  Commissioner Watts inquired about the line size for the City Pond Project.  Mr. Martin responded the route is being chosen and the engineer will determine the line size.  All of that information will be brought to the Commission’s attention.  Commissioner Monaghan stated the line will go to other areas like Virgin Heights.  Mr. Martin responded that Virgin Heights will come in on the Park Seed line. 

 

VIII.   Service Reports

1. Collection System

Chairman Haynie noted that the low pressure system is now district wide.  Mr. Martin stated the billing cycle for Harborside starts this month and the header will be change to reflect district wide low pressure systems.  Chairman Haynie noted the expenses are higher than the revenues.  He stated if Metro had a $5 increase the revenue would still be under the expenses.  Commissioner Hancock noted that Metro was going to review the rate after a three year period.  Commissioner Burke commented that the expenses and revenues will check themselves.  Right now Metro is maintaining an older system and all systems added will be new systems.  Mr. Martin noted that some of the expense is in investigating and locating.  Commissioner Burke asked for Metro to identify what has been spent on investigation and locating versus maintenance.  Manager Coleman stated that the majority of the six months was spent on investigations.  Mr. Martin stated Metro did have one pump failure during the first six months.  Mr. Daniel stated it costs about $650-$700 to replace a pump.  Mr. Daniel commented there is one septic tank that Metro has not found. 

 

2. Engineering

Chairman Haynie noted that Greenwood Fabricating and Plating is still having problems.  Commissioner Monaghan asked what does it mean to process the Palmetto Utility Protection Services (PUPS) locater tickets.  Mr. Martin responded it means that Metro has to physically identify where the sewer line is located or if there is no sewer lines in that particular area.  Metro has to sign off on the ticket and send it back to PUPS.  Mr. Martin stated it is a lot of work.  Commissioner Monaghan asked if the 263 locater tickets were for one month.  Mr. Martin responded yes.  Chairman Haynie asked if Metro thought it was beneficial.  Mr. Martin responded that he would like to wait to answer that question once Metro has been doing this longer.  Commissioner Hancock commented that once Metro locates the line and a person cuts the line that person is responsible for repairing the line.  He stated that if Metro does not locate the line within 72 hours, Metro is responsible for repairing the line if the line is cut.  Mr. Martin stated that Metro will need to balance the cost against the benefit.  Commissioner Monaghan commented that it looks like a lot of work.  Commissioner Hancock inquired about the new industrial pretreatment permits and if any changes were made.  Manager Coleman responded some changes were made and Metro is still discussing some of the permits with the industry.  Commissioner Hancock asked about Solutia.  Manager Coleman responded that we are still discussing. 

 

3. I/I Abatement

No questions were asked by the Commissioners regarding this department.

 

4. Maintenance

No questions were asked by the Commissioners regarding this department.

 

5. West Alexander

Commissioner Hancock noted that about two months ago something was mentioned that the water discharged into Hard Labor was warmer than the stream itself.  He wanted to know if the UV lighting had helped with that situation.  Mr. Martin stated the problem was before the UV lighting.  Manager Coleman stated the time frame referenced was 2003-2006.  Chairman Haynie noted it was tested on the 5th of July according to the report.  He asked if Metro had received the results.  Manager Coleman responded that Metro would not receive the results for at least 45 days. 

 

6. Wilson Creek

Commissioner Watts inquired if Mr. Pohlman had heard any more on the differing toxicity reports from the different labs.  Mr. Pohlman responded that Wilson Creek passed both labs.  Commissioner Watts asked if Metro had determined what the difference was with the labs.  He asked if Metro was now using both labs.  Mr. Pohlman responded that Metro never really used both labs.  The other lab volunteered to do a test for their benefit.  Commissioner Watts asked if the lab Metro is currently using the same one used in the past.  Mr. Pohlman responded Metro is using the new lab.  Chairman Haynie asked if the clarifiers were still making a noise.  Mr. Pohlman responded that they were, but they should make it.  Chairman Haynie inquired how much longer will it be before the contractor will be able to replaced the clarifiers.  Mr. Ware responded the contractor is still saying the middle of September or the first of October.  Manager Coleman stated if the old clarifiers were to fail before the new ones are installed, Metro could possibly skip some of the testing to get one operating sooner.  Mr. Ware stated the contractor still has around 600 feet of effluent line to get back to the screw lift.  The contractor also has to get the RAS/WAS pump station operational from the return pumps.  They are currently working on the electrical controls.  Commissioner Watts inquired as to how feasible it would be to grow corn instead of hay.  Manager Coleman responded that Metro could grow anything it wants.  The reason hay is grown is because it removes more nitrogen.  With the hay Metro can apply up to 400 pounds of nitrogen per acre per year.  Commissioner Monaghan inquired about growing soy beans.  Manager Coleman stated everything else has less nitrogen removal than hay.  Commissioner Burke noted those are all single season crops as well with only one cutting where as hay you can cut three to four times a year.  Mr. Pohlman shared that the biosolids are applied year round.  Metro can only apply the biosolids when the product (hay, corn, soybeans, etc) is growing.  If it is not growing you cannot apply the biosolids.  Commissioner Monaghan asked if Metro could grow corn and then plow the corn up and plant clover.  Mr. Pohlman responded Metro could do that, but Metro will still have to wait for the clover to come up before they can apply the biosolids. 

 

7. General Service Report Information

Manager Coleman stated that he heard that the part of Eagles Harbor that the State was going to fund did receive funding, but he has not received any confirmation on this.  Commissioner Burke stated that he heard the sewer for Eagles Harbor would be going to Ware Shoals and not Metro.  Manager Coleman stated that he has told them they will need to annex into Metro’s District, and to show Metro their plans to build and finance a collection system.  Once Metro has received all of this information Metro will act on it.  Commissioner Hancock inquired about Travis Campbell wanting to connect to a line in Hunter’s Creek.  He noticed that it looks like there will be four services on a 6 inch PVC pipe.  Mr. Martin responded that right now that belongs to the developer, Mr. Anderson. 

 

9. Action Items
   1. Recommendation of Chemical Bids

Staff is recommending that the bids for chlorine be awarded to Brenntag at a cost of $.26 per pound and the sulfur dioxide bid be awarded to Brenntag at a cost of $.24 per pound.  Mrs. Meyer stated that Brenntag withdrew their bid for the magnesium hydroxide slurry due to a supplier issue.  Staff is recommending that the bid be awarded to Suffolk Sales and Service at a cost of $292 per dry ton.  Staff is recommending that the polymer sludge dewatering bid be awarded to Environmental Specialties at a cost of $1.58 per pound.  The bids that were received from Ondeo Nalco and Water Treatment Consultants were emulsion bids and the bid specifications were for dispersion polymer.  Commissioner Monaghan asked if these were US tons or Metric tons.  Manager Coleman responded they are US dry tons. 

 

Commissioner Watts made a motion to approve staff’s recommendation on the chemicals bids; Commissioner Smith seconded, and the motion was unanimously approved.  A copy of the bid tab sheet is included as Attachment A. 

 

2. Change Order on Wilson Creek Plant Upgrade

Mr. Ware presented a new change order in the amount of $866 to the Commission for their approval.  This change order is for the electrical room in the RAS pump station.  There are large metal suspended ceiling panels in that area and the HVAC system is above it.  The contractor suggested installing three small access doors to help with maintenance.  To date the change orders total is 2.34% of the original contract value.

 

Commissioner Hancock made a motion to approve change order number 14 in the amount of $866; Commissioner Smith seconded, and the motion was unanimously approved.

 

Commissioner Monaghan made a motion to ratified change order number 13 in the amount of $21,870; Commissioner Hancock seconded, and the motion was unanimously approved. 

 

3. Expansion of the Technical Service Facility (TSF)

Manager Coleman stated that staff met this morning to discuss the new plans.  Drawings of the proposed layout were distributed to the Commissioners.  The staff has met to discuss the design and right now the only change is adding two more women’s toilets.  In general both sides of the building will be expanded.  Metro is to get back with Davis and Floyd next week with any major changes.  Commissioner Monaghan asked if the purchasing office would be big enough.  Manager Coleman stated not all offices will be used.  Some of the offices will be for future growth.  Commissioner Burke asked what would the existing break room be used for with the construction of the new kitchen.  Mr. Martin responded the existing break room would remain the same.  The kitchen would be used when all of the employees are at TSF (i.e. safety luncheon).  Commissioner Monaghan asked if this was the original square footage.  Mr. Martin responded yes.  Chairman Haynie inquired about the number of extra offices.  Mr. Martin responded four or six.  Manager Coleman stated some rooms are big enough to house two employees (i.e. foreman offices).  The room that houses the network server would expand to house more than one server.  Commissioner Monaghan asked if the multipurpose room doubled in size of the current training room.  Mr. Martin responded not exactly.  Commissioner Monaghan asked if the table storage room is needed rather than making the Commission Room larger.  Commissioner Watts inquired about the capacity of the current training room.  Mr. Martin responded that everybody felt that room was big enough.  The capacity of the current training room is 40 people.  Commissioner Monaghan asked if the walls on the table storage and conference room could be removed if expansion was needed.  Mr. Martin responded those walls will not be load bearing walls.  Chairman Haynie asked what is the next step.  Manager Coleman responded staff received the plans this morning and would review them and let Davis and Floyd know of any changes next week.

 

4. Traffic Signs

Mr. Martin reported that traffic signs have been ordered.  The cost for the signs was around $26,000.  Commissioner Monaghan inquired about where would the signs be used after the Cambridge Avenue Project is finished.  Mr. Martin responded that he believes there will be more jobs to utilize the signs.  Commissioner Hancock stated there is a project for next year at Mathews Mill Village.  Mr. Martin stated Metro spent more money on renting signs for the Bailey Circle Project then the cost of these signs.  Manager Coleman stated Metro may still have to rent some signs in addition to what is already purchased. 

 

Commissioner Smith made a motion to ratify the purchases of traffic signs in the amount of $26,000; Commissioner Hancock seconded, and the motion was unanimously approved. 

 

5. Long Range Financial Plan 

The discussion on the financial plan was deferred to the next board meeting. 

 

6. Grants Update

Mr. Richard Gentry shared with the Board that the appropriations request for Wilson Creek has gone through the House and nothing was appropriated for the Third District.  It still has to go through the Senate.  Mr. Gentry will send the request again in February.  He has a meeting with Homeland Security in Columbia to help with grants.  Commissioner Monaghan commented that he understood that Metro could not apply for another grant until one grant is finished.  Chairman Haynie stated as he recalled Metro could request a grant, but Metro would lose points if they have not completed previous projects.  Mr. Martin responded that Metro cannot apply until the current grants are finished or closed out.  Commissioner Monaghan inquired as to when the lake grant would be closed.  Mr. Boone responded around October.  Commissioner Monaghan asked if that applies to any grants in Greenwood County or just the grants by the lake.  Mr. Martin responded it applies to the Community Block Development Grants (CBDG).  Commissioner Monaghan asked what type of grant would be used to upgrade the sewer system at the mill villages.  Manager Coleman stated probably a CBDG.  Mr. Gentry stated he believes you can only have two grants at one time.  Commissioner Monaghan asked if Metro has to go through the County or the City to get grants.  Manager Coleman stated the grant for the lake was through the County.  Commissioner Monaghan shared that he had read where there is a lot of Federal Grant money for sewer updates and things like that.  Mr. Gentry stated he is talking about appropriations. 

 

10. Commissioner Hancock made a motion to go into Executive Session to discuss a personnel issue and receive legal advice; Commissioner Smith seconded, and the motion was unanimously approved. 

 

11. The meeting returned to open session.  No action was taken during executive session.

 

XII.      Commissioner Monaghan made a motion to have the rates readjusted with the exception of the Manager and Assistant Manager to 4% overall; Commissioner Hancock seconded, and the motion was unanimously approved.

 

XIII.   Commissioner Monaghan made a motion to increase the wages for the Manager and Assistant Manger by 6%; Commissioner Hancock seconded, and the motion was unanimously approved.

 

XIV.   Commissioner Smith made a motion to go into Executive Session to discuss a contractual matter; Commissioner Hancock seconded, and the motion was unanimously approved. 

 

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