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Commission Minutes

GREENWOOD METROPOLITAN DISTRICT

MINUTES OF THE October 24, 2007

Regular Meeting

The regular meeting of the Greenwood Metropolitan District Commission was held Wednesday, October 24, 2007, at 3:00 p.m., in the Board Room of CPW/Greenwood Metropolitan District Administrative Building, 121 West Court Avenue.

In attendance:

Commissioner Bob Haynie, Chairman               Richard Coleman          Marsha Meyer

Commissioner Byron Smith, Vice Chairman      George Martin              Michael Nix

Commissioner Gene Hancock, Secretary          Wayne Daniel               Joe Swofford

Commissioner Michael G. Monaghan                Gayle Grogan               Brian Waldrep

Commissioner Henry Watts                              Roy Hemphill                Danny Ware

Commissioner Tim Burke                                  Paige Holley

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

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

3. Bids on Easement Machine

Bidder                                      Amount

Adam’s Equipment                   $26,381.92

Jet-Vac                                    $31,235.44

Rodders and Jets                      $27,991.00

3T Equipment Company, Inc    $30,610.00

Staff will review the bids to assure compliance with the specifications.  If the bid is in compliance, the bid will be awarded to the apparent low bidder, Adam’s Equipment at the next Board Meeting.

4. Wilson Creek Update

Mr. Ware reported the contractor is finishing up phase 1A.  Everything is almost complete with the exception of dressing up.  Davis and Floyd will have a walk through inspection tomorrow morning Thursday, October 25^th to generate punch list items for the contractor to correct and fix.  All of the grading work has been done; the trailers have been removed.  Chairman Haynie asked if the punch list is extensive.  Mr. Ware responded the preliminary punch list is about 2 pages of small items.  Chairman Haynie asked how much did the contractor actually use of the penalty phase time.  Mr. Ware responded 144 days; the liquidated damages are $72,000.  Commissioner Monaghan asked if the penalty days stop now with the punch list items.  Mr. Ware said substantial completion was reached on August 31^st; the contractor has 60 days from that date to complete; which will be November 6^th.  As long as the punch list items are addressed before November 6^th, the contractor will meet the final completion date.  If the contractor does not meet the date, there are additional liquidated damages to be assessed beyond the $72,000.  Manager Coleman said at the substantial completion date the liquidated damages were stopped.  Commissioner Monaghan inquired how much money is Metro withholding.  Mr. Ware responded they are still withholding about $700,000 and about $300,000 of that is retainage.  Commissioner Monaghan commented the plant is fully commissioned.  Mr. Ware said Metro was granted an operational permit on August 31^st and it has been operating since.  After the clarifiers were operational, the contractor had to do additional work.  Mr. Ware stated Davis and Floyd advertised on October 14^th and 21^st for phase 1B.  So far Davis and Floyd has sent out 25 sets of documents, but only about 6 of those are for prime bidders.  The pre-bid meeting is Thursday, November 8^th.  Commissioner Monaghan wanted to know where the notice was advertised.  Mr. Ware responded it was advertised in the Greenville News, The State and the Index Journal.  It was also advertised in the AGC office, the Dodge Office and the reconstruction data office.  Commissioner Watts asked if the contractor for phase 1A requested documents on phase 1B.  Mr. Ware responded yes, the contractor has secured a set of documents.  Commissioner Monaghan wanted to know the status of the Value Engineering.  Mr. Ware said they have addressed the comments and filled out a response that has been submitted.  Commissioner Monaghan said he is scared about change orders.  Mr. Ware said hopefully the review process along with the QAQC review should lower the number of change orders.  Commissioner Watts inquired on what is the normal percentage of change orders.  Mr. Ware responded generally on a bare site the number is 3%; on an existing site the number is 5%. 

5. Commissioner Burke asked for an update on the expansion of the Technical Service Facility (TSF).  Mr. Ware said he is not involved in that and therefore does not know the status of the project.  Mr. Martin said Mr. Moore has asked for some information which Mr. Waldrep has provided.  Davis and Floyd is working on it. 

6. Commissioner Monaghan made a motion that the minutes from the September 26, 2007 Regular Meeting be approved as mailed and Commissioner Hancock seconded.  The motion was unanimously approved.

VII.      Financial Report

1. Mr. Michael Nix of Greenwood Capital gave a report on the District’s portfolio.  The 1081 account represents the general reserve account.  Mr. Nix pointed out that the first page shows which bonds have matured, sold or called during the fiscal year.  The next two pages are the statement for the account.  Commissioner Monaghan asked if Metro earns interest on the money market.  Mr. Nix responded yes and the interest is around 4.5%.  Mr. Nix said at no point is the money/cash sitting idle.  If a bond pays interest it is automatically swept into a money market; it would stay in the money market until it goes to a new issue for purchase.  Commissioner Monaghan asked if the gain or loss is shown.  Mr. Nix said it is reflected on the income of the account, but it is not reflected on these statements.  Page four is the performance report for the account as of September 30, 2007.  The $600,000 is from proceeds from the sell of the Administrative Building.  A big part of the withdrawals are for the Cambridge Avenue Project.  The realized gains are bonds that have been sold or matured during the period.  The unrealized gains are bonds that are still held but there is a change in value.  The difference is the interest that has been paid off of the bonds.  Mr. Nix directed the Commission to the next account which is the 1082 (Capacity) account.  On page five it shows the bonds have matured or came due during the period.  Mr. Nix said page six & seven reflect the assets in the account.  Page eight shows the beginning value as of June 30, 2007, contributions ($45,000 roughly was for Newport Subdivision Phase 2), realized gains and losses, interest generated on the account and then the change in value.  Mr. Nix stated page nine is the Bond Proceed Account.  He reminded the Board this account is designed to have bonds maturing at specific periods to meet draw schedules.  Commissioner Monaghan said these are revenue bond proceeds that are still unspent.  Commissioner Monaghan said Metro does not want to accrue any arbitrage on the bonds.  He asked does the money spent have to be used for what the bond was obtained for.  Commissioner Monaghan said the reason he is asking is would Metro not want to spend the bond revenue before they start spending the reserves that are not designated.  Manager Coleman responded Metro cannot say they are going to issue a bond for a certain reason and spend the money on something else.  Commissioner Monaghan said Metro is still going to spend the money.  Manager Coleman said Metro cannot issue the bonds for one thing and spend the money on something else.  Commissioner Monaghan wanted to know who says that Metro cannot do that.  Manager Coleman responded the Board says it when they issue the bond.  Metro has to say what they are issuing the bonds for.  Commissioner Monaghan said as long as Metro is going to do the project and the project gets done what difference does it make on where the money comes from.  He thinks that Metro would want to get rid of the revenue bond money first so they don’t get in any arbitrage issues.  Mr. Hemphill said he is not aware of the amount left in the bond.  Commissioner Monaghan said quite a bit of money.  Manager Coleman said Metro has not reached the end of the bond period.  Commissioner Monaghan said he knows Metro has not.  He wanted to know why Metro takes the money out of the Reserve Account before they take money out of the Revenue Bond.  Manager Coleman said when Metro issues a bond they are required to say what the bond is for.  Metro can then only spend the bond money for what they say it is for within the designated time period.  Commissioner Monaghan said he is not sure.  He feels that as long as Metro does the project; Metro has fulfilled the requirements of the revenue bond.  Commissioner Burke inquired if there is a legal obligation.  Chairman Haynie said he thought that was the way the bond was written.  Mr. Hemphill said that is his thought too.  Metro is to follow the track of how the bonds are issued.  Mr. Hemphill will check with Metro’s bond counsel on this item.  Commissioner Hancock said Metro can repay themselves back from the bonds for any money spent on the project prior to the bond being issued for the designated projects.  Mr. Nix said on page ten of the report the cash amount is roughly $900,000 as of September 30, 2007.  Page eleven of the report is the performance breakdown for the Bond Proceed Account.  Metro is generating a fair amount of income on the bonds.  Fiscal year-to-date Metro has generated $113,000 in income on the Bond Proceed Accounts.  Commissioner Monaghan wanted to know who tracks the end dates for the bonds.  Manager Coleman replied the IRS and they can track the bonds in arrears.  Commissioner Monaghan wanted to know if someone at Metro tracts the bonds.  Manager Coleman said Metro knows when the account is opened and closed.  Chairman Haynie asked if Metro can amend the bond.  Commissioner Burke said for an overage within the project.  Mr. Hemphill said the bond usually states for an “amount not exceeding”.  Chairman Haynie said he is talking about any excess funds left in the bond.  Commissioner Monaghan inquired if Metro had ever paid the arbitrage penalty.  Manager Coleman responded no.  Mr. Nix said there has been a decline in the interest rates.  From what Mr. Nix is able to see based on different reports, companies are doing very well overseas but the ones domestically are saying the United States is in a recession. 

2. Chairman Haynie asked for questions from the Board on the Financial Report.  He noted on page 17 under sewer service even with the 8% increase the income is still static.  Manager Coleman said Metro started out the fiscal year with the first month behind and it is maintaining the shortfall.  Commissioner Monaghan noted Metro is $74,000 favorable to budget and Metro has not received any tax revenue.  Manager Coleman said the water sales (usage) are down; primarily in industrial sales.  Commissioner Monaghan inquired who was the biggest industrial user.  Manager Coleman replied the biggest one is Fuji and then Solutia.  He reminded the Board that Fuji has decreased their usage due to the closing of an old line.  Metro has changed Fuji’s permit to reflect the line closing.  Commissioner Monaghan commented that Metro is doing a good job of containing expenses.  Commissioner Monaghan noted that all departments are doing well containing their expenses; they are all under budget.  Chairman Haynie asked Manager Coleman if there are any items that he would like to address.  Commissioner Monaghan referenced page 24 of the packet he said on the 2006 GO Bond; he wanted to know what the $327,417 represents.  Mrs. Grogan replied that is the remaining proceeds Metro has left to spend in the account.  Commissioner Monaghan said he did not see the 2006 GO Bond listed on page 19 of the packet.  Mrs. Grogan responded it is in the list at the top of the page.  Commissioner Monaghan asked if Metro owes more money.  Mrs. Grogan said in June Metro paid in full for the GO Bond.  Commissioner Monaghan said that is why it is not listed on the bottom part on page 19.  Mrs. Grogan responded yes, that is correct.  Commissioner Monaghan inquired where the proceeds from the 2006 GO Bond are going to be used.  Mrs. Grogan replied it will be used on the Cokesbury and Turner Branch Projects.  Commissioner Monaghan asked if that is the amount to be paid.  Mrs. Grogan responded those are the dollar amounts that have been paid for this fiscal year.  Commissioner Monaghan asked if Metro anticipates having problems from the County on getting the money out.  Manager Coleman replied the money is already out.  Commissioner Monaghan said that is not what the spreadsheet says.  Mrs. Grogan said this is proceeds that Metro can pay for those projects.  Commissioner Monaghan said the money is still in a County account.  Mrs. Grogan said yes.  Chairman Haynie stated Metro met all of the County’s requirements for Metro to use that money.  Mrs. Grogan stated the Millage Account is the one where the County would not allow Metro to use the money.  Commissioner Monaghan asked if these were two different accounts.  Mrs. Grogan replied yes.  Commissioner Monaghan said he liked having the monthly explanation of overage/underage for each department ahead of time.

VIII.   Action Items

1. Bond Resolution

Chairman Haynie stated Metro has a resolution confirming the intention of Greenwood Metropolitan District to be reimbursed for certain expenditures related to capital projects to be financed by the issuance of bonds.  He said this resolution will allow Metro to reimburse themselves for any money that was spent in advance for the capital projects that are related to the bonds.  Commissioner Monaghan wanted to know how much money is Metro going to ask for.  Chairman Haynie said the bond is not to exceed $40 million.  Manager Coleman said right now it is around $30 million.  He said the reason the amount was set high is because Metro has not actually received the bids.  Commissioner Monaghan said in the minutes from the September 12^th meeting it says “Metro is borrowing $20 million now and will borrow about $15 million in two to three years”.  Manager Coleman said the numbers changed after the bond meeting.  He said at the September 26^th meeting he explained that “Metro is looking at the possibility of issuing a $30 million bond now and wrapping that around the current debt.”  Manager Coleman said bids will not be received until December 5^th or 8^th.  If needed this will give Metro time to adjust what is actually borrowed.  Manager Coleman said Metro was looking at not having to issue two bonds for the same project.  Commissioner Monaghan wanted to know why that would make a difference.  Manager Coleman said there would be one less issuance cost.  Commissioner Monaghan asked if Metro has looked at the interest rate since they are going down.  Commissioner Burke said Metro would be in better shape in January.  Manager Coleman said right now the interest rate is relatively low and there is not much difference between the front end and back end of the bond.  Commissioner Monaghan wanted to know if Metro borrows the larger amount can it be paid off within the arbitrage limit.  Manager Coleman replied yes, that is what Metro is anticipating.  Manager Coleman noted that Metro was trying to make sure the amount would fit into the rate structure and to ensure that Metro will have the amount of coverage that is needed.  Commissioner Monaghan asked if Metro had a requirement on the bid that stated there would be a penalty for being late and he wanted to know if that was smart.  Manager Coleman said Metro now has a 2 ½ year project instead of a nine month project.  Metro knew they needed to have phase 1A done as quickly as possible.  Manager Coleman said Metro is not under a deadline for the project.  Commissioner Monaghan asked if Metro was going to have a penalty.  Manager Coleman replied Metro will have a penalty for going over.  Commissioner Monaghan wanted to know when the 6’ pipe is going to be installed.  Mr. Martin replied Metro will talk about that in a few minutes. 

Commissioner Hancock made the motion to approve the bond resolution; Commissioner Smith seconded, and the motion was unanimously approved.

9. Miscellaneous Administration Matters
   1. The meeting to discuss the Long Range Planning was set for Wednesday, November 14, 2007, at 10:00 am at TSF.  A lunch will be provided.

2. Commissioner Monaghan asked for an update on the trailer situation.  Mr. Martin replied no work has been done on the trailer situation since the last meeting.  Commissioner Monaghan wanted to know why.  Commissioner Monaghan asked for Metro to find out if a legal document is made, will the Highway Department accept it.  Mr. Hemphill is to draft a legal document regarding the trailer situation for the Board to sign.  The document will then be taken to the Highway Department to see if Metro can obtain tags for the trailers.  Commissioner Hancock inquired about the forms for the Certificate of Origin.  Mrs. Meyer replied that is what Metro does not have.  Commissioner Hancock asked who would have the Certificate of Origin.  Commissioner Burke said the manufacturer provided one when the trailers were purchased. 

3. Commissioner Monaghan asked if the distribution cost has been calculated.  Mr. Martin responded that has been done.  Commissioner Monaghan asked for Mr. Martin to send an email to the Board with the cost.

4. Commissioner Monaghan wanted to know what pecan trees are to be relocated and why.  Commissioner Hancock said they are on the right hand side going down to the plant.  Commissioner Monaghan asked why Metro wanted to relocate them.  Manager Coleman responded that Mr. Pohlman asked to see if we could relocate them.  He said if Metro does that it would be outside of the 1B contract. 

5. Commissioner Monaghan stated that usually procedures are ratified by the Board.  He noted that Metro has a Biosolids Distribution Procedure.  Commissioner Monaghan asked if that was ratified by the Board.  Mr. Martin responded no.  Commissioner Monaghan asked if the procedures should be ratified.  Mr. Martin replied yes.  Commissioner Monaghan wanted to know when the Board will ratify the procedures.  Mr. Martin replied the procedures will be brought to the Board once corrections and changes have been made. 

6. Commissioner Monaghan noted that he gave Mr. Martin an analysis from Carlos Cometto (CPW in-house engineer).  He said the one thing that CPW is concerned about is having access on the other side of the pond.  Mr. Martin said Commissioner Monaghan just handed the information to him and he has not had a chance to review it.  Mr. Martin said this line is put in the route Metro would take if it was a trunkline.  Commissioner Monaghan said it should be and that is why he gave it to Mr. Martin.  He said if that other way can’t be done, it can’t be done.  Mr. Martin said they will look at it.

7. Commissioner Monaghan inquired on the status of the physical inventory policy and procedure.  Manager Coleman said Metro would have it done by the end of the fiscal year.  Commissioner Monaghan wanted to know if anyone was going to help Metro.  Mr. Martin said yes.  Commissioner Monaghan suggested Elliott Davis as the auditing firm to help with the procedures.  He said it is very important for Metro to have a good procedure and then Metro is supposed to work on the differences between Peachtree and CASSWORKS.  Commissioner Monaghan said the programmers should be working on that issue.  Mr. Martin said he and Mr. Waldrep have talked about that issue; the conclusion that they came up with is Peachtree will do exactly what it is supposed to do as far as accounting.  Mrs. Grogan said whatever is keyed into Peachtree is paid out.  Mr. Martin said with CASSWORKS Metro can do the inventory and those two number can both balance exactly.  Commissioner Monaghan said so Metro can check them.  Mr. Martin replied yes, but Metro cannot make Peachtree and CASSWORKS talk to each other.  Commissioner Monaghan asked if it is necessary to make them talk.  Mr. Martin responded he thinks it works fine the way it currently is.  Mrs. Meyer said that she thinks Metro would spend so much money trying to make them talk that Metro could invest into a new program.  Mr. Martin said from the inventory control side Metro knows what they have.  He said from the expenditure side Mrs. Grogan knows exactly what has been paid.  Mrs. Grogan said that she checks to make sure everything has been cleared out that was keyed in.  She said there are no purchase orders in the system because no purchase orders have been issued through Peachtree.  Mr. Martin stated all purchase orders are issued through CASSWORKS.  Commissioner Monaghan wanted to know if a purchase order is seen before the invoice is paid.  Mrs. Grogan replied Mrs. Gray (Account Payable Clerk) pulls them from CASSWORKS to match it with the invoice.  Commissioner Monaghan said Mrs. Gray gives the receiving report, the invoice and the purchase order to Mrs. Grogan.  Mrs. Grogan said Mrs. Gray gives her the invoice with the receiving report and she (Mrs. Gray) has already checked the information before the check has been issued.  Commissioner Monaghan said Metro needs to see the purchase order and receiving report.  Mrs. Meyer said Mrs. Gray does see the purchase order in the computer and once she sees that she prints out the receiving report.  Commissioner Monaghan asked if the purchase order has a signature on it.  Mr. Martin replied his signature is on all purchase orders.  Commissioner Hancock said every check has the supporting paperwork attached.  Commissioner Monaghan said he wanted to make sure before the invoice is paid the purchase order, receiving report and invoice are checked.  Mrs. Grogan said Mrs. Gray checks all of that information before she gives it to her to print checks.  Commissioner Monaghan said he really has a problem with the assets.  He said at his company when an asset was scraped they had to have documentation that the asset was scraped and the asset tag; all of that information went to the accountant and the accountant removed it from the asset list.  Commissioner Monaghan said if Metro keeps valuing assets and assets than Metro is overstating their worth.  He hopes that Metro enlists Elliott Davis to help.  Mrs. Grogan said she has talked with Laurie at Elliott Davis, but it will take a while to get all the information together.  She said it will not be done in a month’s time.  Mrs. Grogan said staff is limited as to when they can leave the office to go out and check the assets.  Commissioner Monaghan said usually for a physical inventory at the end of the fiscal year everybody shuts down.  Commissioner Monaghan said the Board can even help.  Chairman Haynie suggested doing the physical count on a Saturday.  Commissioner Monaghan said usually everybody shut downs and does the physical inventory and the accountant makes sure it is done right.  The accountant is going around and testing.  The physical count would then be reconciled with the books and anything that is not there is written off.  Commissioner Hancock said the biggest part of the inventory is repair parts.  Commissioner Monaghan said Metro has cars, trucks, etc.  Commissioners Hancock said other than equipment and big trucks; the rest of it is repairs parts.  Mrs. Grogan said that Mr. Smith (receiving agent) gives her a supply room inventory report every month. 

8. Commissioner Monaghan inquired on the status of Eagles Harbor.  He said The Index Journal said there will be another meeting.  Commissioner Burke said there is to be a meeting with the Homeowner Association of Eagles Harbor in order to establish if they will annex into Metro’s district and what the participation is going to be within their subdivision.  Commissioner Monaghan said there are areas within the Metro District that have been paying taxes for years.  He asked how Metro could run a line to a new subdivision without serving those areas that wanted sewer for years unless they pay for it.  Commissioner Burke asked how could Metro justify spending $4 million on 60 independently owned lots.  Commissioner Hancock said the biggest thing is the State messed up.  Commissioner Monaghan said if the State funds it Metro would be happy to provide service.  He said he would like to have the sewer extend to Virgin Heights.  Manager Coleman said all Metro has talked about is getting the sewer up to Virgin Heights area with a pump station that would receive Eagles Harbor.  Eagles Harbor would be responsible for getting the sewer to that point.  Commissioner Monaghan said he thought if Metro installed a trunkline Eagles Harbor would have to tap in whether they wanted to or not.  Commissioner Burke said DHEC will not issue additional septic permits after the trunkline is available, but there are roughly 20 homeowners that have already spent $18,000 to $20,000 on an engineered septic system.  Commissioner Monaghan wanted to know the difference between an engineered septic system and a non-engineered septic system.  Commissioner Burke said an engineered septic system is a mechanically lifted system.  Manager Coleman said if Eagles Harbor can come to the Metro trunkline, Metro will consider getting the sewer up to Virgin Heights.  He said some homeowners have met with Metro to find out what steps they will need to take in order to finance the sewer collection system. 

9. Commissioner Monaghan wanted to know if Metro was finished with the Shrine Club Road Project.  Mr. Martin responded no, but the contractor is now hooking up the pumps. 

10. Mr. Martin said he was asked to present to the Board a request from Calhoun Mays regarding some property across from Mathews Elementary School and Mathews United Methodist Church.  Metro’s sewer line presently goes across those properties.  Mr. Martin asked if the Board would install a new sewer line and abandon the old line for those pieces of property.  Chairman Haynie asked if this would be at Metro’s expense.  Mr. Martin replied yes.  Chairman Haynie said so Mr. Mays would be able to sell those lots.  Mr. Martin replied yes.  Commissioner Burke asked if Metro has a right-of-way.  Mr. Martin said Metro does have a right-of-way.  He said Mr. Mays has not purchased the property, but he is looking at it.  Mr. Martin said he was asked by Mr. Mays to bring the question to the Board.  Commissioner Monaghan said it is good that people are thinking about developing around that area, but he is not sure that Metro should pay for it.  Chairman Haynie said typically if someone was doing a subdivision the developer installs the lines and Metro accepts them.  Commissioner Monaghan said Mr. Mays would get from both the City and CPW incentives for doing that.  Mr. Martin noted that he shared that information with Mr. Mays.  Commissioner Monaghan stated Mr. Mays would get a tax write off from The City and he would get a utility reimbursement for each house that is developed.  Chairman Haynie said he does not see how Metro can move the line.  Commissioner Monaghan asked how would that work.  Mr. Martin said Mr. Mays would have to offset it and install a collection line between them to serve the area.  Commissioner Hancock said Mr. Mays needs to go to The City and CPW first. 

11. Partnership / Economic Alliance

Commissioner Monaghan said that he and Chairman Haynie are scheduled to have a financial meeting on October 31^st.  Commissioner Hancock commented that there are some businesses that are going into the empty box buildings.

10. Commissioner Smith made a motion to go into Executive Session to discuss a contractual matter; Commissioner Watts 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 accept The Davis’ offer of $185,600 to also include that the buyer would pay any roll back applicable and to allow the hunting lease to extend through the end of the season (January 1, 2008); Commissioner Hancock seconded, and the motion was unanimously approved. 

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