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Commission Minutes
GREENWOOD METROPOLITAN DISTRICT
MINUTES OF THE
july 22, 2009
Regular meeting
The regular meeting of the
Greenwood Metropolitan District Commission was held
Wednesday, June 24, 2009 at 3:00 p.m., in the Commission
Room of Greenwood Metropolitan District’s Emmett F Brooks
Facility, 110 Metro Drive, Greenwood, SC 29646.
In attendance:
Commissioner Michael G.
Monaghan, Chairman Richard Coleman Bill Moore
Commissioner Tim Burke, Vice
Chairman George
Martin Michael Nix
Commissioner Gene Hancock,
Secretary Ken
Davis Brian Waldrep
Commissioner Byron
Smith Gayle
Grogan Danny Ware
Commissioner Bob Haynie
Roy Hemphill Tony Williamson
Commissioner Henry
Watts Paige Holley
I.
Chairman Monaghan called the meeting to order and
gave the statement of compliance with the notification
provision of the Freedom of Information Act.
II.
Mr. Martin gave the invocation.
III.
Wilson Creek Update
Mr. Danny Ware of Davis and
Floyd, Inc (D&F) updated the Commission on the progress of
the Wilson Creek Plant expansion project. He said a lot of
time and attention has been devoted to start-up of the BNR
#1. A gear box seal has failed and will need to be replaced
on the #1 aerator. A new gear box has been shipped. The
BNR is running on two aerators instead of 3. Commissioner
Hancock wanted to know what happened to the gear box. Mr.
Ware said it appeared to be a seal failure. There was oil
running out of the gear box and down the shaft. Chairman
Monaghan wanted to know the cost for the new gear box. Mr.
Ware said there no cost to Metro because it is still under
warranty. Chairman Monaghan asked if Metro needed to keep a
back-up on hand. Mr. Ware said Metro should not need a
back-up on site. Metro should be able to run the BNR with
two aerators should one fail. Chairman Monaghan wanted to
know how long the aerator is under warranty. Mr. Ware said
there is a standard one year warranty from substantial
completion of the unit. Punch list items are still being
worked on. Commissioner Burke inquired if Mr. Ware felt
like the warranty period has started. Mr. Ware replied he
does not think so. Commissioner Burke wanted to know the
definition of substantial completion. Mr. Ware said per the
contract once it is placed into operation and accepted by
the owners. He said only half of those condition have been
met. The contractor has started demo of the trickling rock
filters. Mr. Ware said the pouring of concrete for
clarifier #4 is almost complete with only a short section of
wall remaining to be poured. Overall the contractor is 17
days behind the project schedule. The contractor is very
hopeful that they can make up some of those days. Mr. Ware
presented three change orders to the Commission for their
consideration. Change order #19 will add $2,976.60 to the
contract price and is the cost of moving an influent sampler
and demo of the chlorine contact shelter. The influent
sampler was previous designed and located at the head of the
influent pump station. After a visit from EPA, it was
suggested that the sampler to be moved to the top of the
grit removal structure. Change order #20 is the amount
Wharton Smith had agreed to pay for the early tie-in of the
Wilson Creek Trunk Sewer Line. The amount is a deduction to
the contract price of $50,972. This will now be a change
order for the Wilson Creek Trunk Sewer Line Project.
Chairman Monaghan asked for Mr. Ware to explain this change
order. Mr. Ware said the Wilson Creek Trunk Sewer Line was
not slated to be tied-in to the new 72” line until this
fall. Before Wharton-Smith could start any excavation for
clarifier #3 the Wilson Creek Trunk Sewer Line was going to
need to be taken out of service because the existing trunk
line runs right through the clarifier site. Wharton-Smith
requested the tie-in be made early. Chairman Monaghan
wanted to know who will receive the $50,972. Mr. Martin
said it is a swap for Metro. Mr. Ware said Wharton-Smith is
paying the $50,972 for Chandler to complete the early
tie-in. Commissioner Burke said this was in the cost for
the Wilson Creek Trunk Sewer Line Project. Manager Coleman
said no it was not in the bid amount. Chairman Monaghan
asked if this was not originally in the contract with
Chandler Construction. Mr. Martin said it was, but
Wharton-Smith wanted to move the tie-in to an earlier date
so they could start digging for the clarifier. Chairman
Monaghan said he does not understand why Chandler is getting
an extra $50,972. Mr. Ware said there was an extra section
of line they had to install that will be of no use once the
final tie-in is made. Manager Coleman said the final tie-in
was scheduled to be made in at the end of the pipe line
project; this change order is to tie-in the trunk line at
the beginning of the project. Commissioner Burke said this
change order is attributed to clarifier #4 floating. Mr.
Ware said that is the reason Wharton-Smith is paying
Chandler the money Commissioner Burke said the net effect
in dollars to Metro is zero. Mr. Ware said that is
correct. Change Order # 21 is for administration building
modifications. The change order includes a $1400 credit for
changing the hood size from 36 inch to 30 inch in the
kitchen. It also includes the cost ($242.94) of elimination
of the records room in the administration building to make
room for a larger kitchen area. The last proposal summary
that is included with this change order is a credit
(6634.70) for eliminating the fire alarm system in the
administrative building contract. The total credit amount
for change order #21 is $7,791.76. If all of those change
orders are executed the net change to date on the project is
.33% or 53,216.67. Chairman Monaghan wanted to know the
total cost for rehabbing the administrative building. Mr.
Ware said he would email that information to the
Commissioners, but his estimate is $400,000.
Commissioner Hancock made a
motion to approve change orders #19 - #21; Commissioner
Smith seconded, and the motion was unanimously approved.
IV.
Emmett F Brooks Facility (EFBF) Expansion
Mr. Bill Moore of D&F
updated the Commissioner on the status of the expansion.
The contractor lacks 7 items on the punch list.
V.
Minutes
Commissioner Watts made a
motion to approve the June 24, 2009 as mailed, Commissioner
Hancock seconded, and the motion was unanimously approved.
VI.
Financial Report
a.
Mr. Michael Nix of Greenwood Capital gave a report on
the District’s portfolio. This report covers the past
fiscal year. Greenwood Capital is managing the 2009 GO Bond
that Metro issued in June for Greenwood County. Greenwood
County has asked Greenwood Capital to provide the reports
for this account directly to Metro. This account will be in
the report for the next quarter. The 1081 account
represents the Reserve Account. Mr. Nix pointed out that
page 1 and 2 show which bonds have matured, been called or
were sold during the fiscal year. Chairman Monaghan asked
if Metro gained $660,892.57 on bonds. Mr. Nix said that was
the net gain on the bonds during their life. Page 3 and 4
of the report provides details of the portfolio to date.
Page 6 is the performance report for the 1081 Account. The
interest earned on the account for the fiscal year was
4.02%. Greenwood Capital had budgeted $760,000 in cash
flows. Page 6 shows which bonds have matured, been called
or were sold during the fiscal year in the Capacity (1082)
Account. Page 7 is the statement of current assets in the
account. Page 8 is the performance report for the 1082
Account. The performance for this account for the fiscal
year is close to 3%. The 2008 Revenue Bond Proceeds (1893)
Account starts on page eight showing all items that have
been called, sold, or matured. The account is designed to
match the pay request schedule for the Wilson Creek Plant
Upgrade. Page 11 lists the current holdings in the
account. Mr. Nix said this account has a good bit of cash
in it. Chairman Monaghan said the contractor for the Wilson
Creek Project has indicated that he has some pay request
ready to submit to D & F. The performance report for this
account is listed on page 12. The performance for the year
was 2.19%. Mr. Nix handed out a chart that shows the
treasury curves for the fiscal year. The drop in yields
over the 6-month period has bond values increasing and rates
are decreasing. The short term maturity bonds have stayed
flat. The longer maturity yields have increased. Greenwood
Capital is reinvesting more in longer maturity now instead
of the short term maturity. Mr. Nix said overall they were
please with the performance during the fiscal year.
b.
Chairman Monaghan asked if any of the Commissioners
had any questions regarding the June financial reports.
Commissioner Watts asked if there was a typo on the City
Pond Payment invoice #11. Mrs. Grogan said yes there is a
typo. Commissioner Haynie inquired about the interest that
is being deducted from the millage account. Mrs. Grogan
said there were adjustments in the interest amount by the
County. She said there was an explanation in the prior
months’ report. Chairman Monaghan said the sewer service
income is 1.2% or $118,000 greater than the previous year;
so as the volume went down, but it was offset by the rate
increase. He said the net operating income was 4.6% lower.
Manager Coleman said the industrial flow is down; FY 08 the
flow is down 3.8% and FY 09 the flow is down 9.0% from the
previous year and Metro is projecting in FY 10 to be down
4.1%. Chairman Monaghan said at first Metro said it would
be 4% lower. Manager Coleman said the 4% was from FY 09 to
FY 10. He explained that the volume of flow was down 13%
from FY 08 to FY 10. Commissioner Watts wanted to know why
Metro was predicating a decrease of usage for FY 10.
Manager Coleman said Solutia announced in October a closing
and using the information from October forward the
projection of flow was decreased. Chairman Monaghan said
Solutia is under new ownership and wanted to know if their
flow could increase. Manager Coleman said he did not
project an increase in the Solutia flow. Chairman Monaghan
asked if the new Fuji announcement would have an effect on
the volume. Manager Coleman said he does not think it will
have a big effect. Chairman Monaghan asked for more detail
on how a 9.9% rate increase would result in a balance
budget. Manager Coleman said the 9.9% rate increase would
allow for Metro to have a balance budget for bond coverage.
Chairman Monaghan said last year Metro generated $2.2
million for capital improvement purposed from the O&M
Budget. He said the current budget summary says that Metro
is going to have a favorable balance of $1.503 million; yet
the draft budget says $38,000. Commissioner Monaghan said
neither the draft nor these numbers include depreciation.
Manager Coleman said the cash flow does not account for
depreciation; it is income minus expenses has to equal 1.2
times the total revenue debt service. It does not include
the tax revenue or the GO Bond debt. Chairman Monaghan
explained how he came up with his numbers. Chairman
Monaghan and Manager Coleman will get together to discuss
the figures and difference in more detail. Chairman
Monaghan asked if the budget summary had the rate increase
starting in October. Manager Coleman said the budget
summary was with the rate increase starting in October.
Chairman Monaghan said he does not understand why one report
says $1.5 million and the other report says $38,000. He
wanted to know the basis for the rate increase. Manager
Coleman said the basis for the rate increase is the amount
needed for debt coverage. Chairman Monaghan inquired if
GASB 45 was included in the amount. Mrs. Grogan said it is
not included. Manager Coleman said GASB 45 is required to
be included in the coverage sheet. Chairman Monaghan said
this year Metro generated $3.3 million for capital
improvements and debt principle payments according to this
last sheet and 1.154 million was for debt services, so
approximately $2.2 million was available for capital
improvements. He said the report said Metro only spent $1.6
million for capital improvement. Chairman Monaghan said
Metro spent approximately $580,000 less than what was
available and Metro took some of the money out of the
Reserve Account. He wanted to know why Metro would do
that. Chairman Monaghan said Metro needs to keep the money
in the Reserve Account earning interest. He said Metro
should take the money out of current revenue before taking
it out of the Reserve Account. Chairman Monaghan said the
sewer service income was greater than the year before.
Chairman Monaghan wants to make sure the forecast are
accurate and based on hard evidence before Metro has a rate
increase. Manager Coleman explained how he came up with the
numbers that were used to determine the percentage of rate
increase. Chairman Monaghan wanted to know how Metro
forecast the amount of money they were anticipating making
on interest. Manager Coleman said Metro provided Greenwood
Capital with the estimated draw schedule and they provided
Metro with the anticipated interest income amount.
Commissioner Burke said the draw schedule for Wilson Creek
Plant Upgrade is behind so it increased the amount of
interest Metro earned. Chairman Monaghan asked that all
financial information given to the Commissioners be dated.
VII.
Action Items
a.
Consideration of a Proposed Rate
Chairman Monaghan said this
is to decide if the Commission wants to approve a 9.9%
across the board rate increase or base the increase on
volume sales and not change the base rate. Commissioner
Burke said it could be a risky proposition because if the
rate increase is strictly on the volumetric side; if the
water sales are less than expected the monetary impact could
be large. Commissioner Hancock said Metro would have to
raise the rates more the next year. He said if water sales
were to increase Metro could decrease the amount of the rate
increase next year. Chairman Monaghan inquired if Metro had
ever reduced the rates. Manager Coleman said he was not
aware of Metro ever lowering the rates. He said there have
been some years where Metro did not have a rate increase.
Chairman Monaghan said the big impact was the decrease of
water usage by industry. Manager Coleman said in looking
over the past three years industry was using less water.
Chairman Monaghan wanted to know if there will be an
increase in the Capacity Fee and the Transmission Fee.
Manager Coleman said the dollar amount was increased but the
projected numbers of taps were decreased. Commissioner
Burke said the price has gone up, but the amount of people
paying the price has gone down. Commissioner Burke said if
Metro keeps the base rate the same and only does a
volumetric rate increase he is very concerned that it might
destroy the projected rate increases for the next few
years. He said Metro could not do a rate increase this year
which would require having a substantial rate increase the
next year or have a moderate rate increase this year and a
moderate rate increase next year. Chairman Monaghan asked
if 10% was a moderate rate increase. Commissioner Burke
said no. Manager Coleman said it might look moderate.
Commissioner Burke said if Metro misses the 4.1% decrease it
is anticipating this creates a smaller amount of sales and
that creates a larger loss of revenue. Chairman Monaghan
said his only concern with increasing the Base Rate is
because it disproportionately impacts the seniors and the
low and moderate income customers. Commissioner Burke said
he agrees with Chairman Monaghan, but it is a gamble.
Commissioner Hancock said if the usage increases next year
Metro may want to have a rate increase on the volumetric
side. He said the Base Rate could remain static if the
volumetric sales increased. Manager Coleman said the rate
increase will need to be passed by the Commission by
September 1, 2009 for an October 1, 2009 effective date.
Chairman Monaghan said Metro will need a have a presentation
ready for the public hearing to explain the need for a rate
increase.
Commissioner Burke made a
motion to advertise a 9.9% across the board proposed rate
increase; Commissioner Hancock seconded, and the motion was
approved. Chairman Monaghan voted no.
b.
Information Concerning Security and Keyless Needs at
Wilson Creek
Ken Davis presented
information to the Commission regarding the security and
keyless entry needs at the Wilson Creek Plant. Mr. Peeler
has asked Mr. Davis to provide cost information on a keyless
system at both treatment plants and the biosolids facility
beginning with Wilson Creek Administration Building. Mr.
Davis said Metro would like to extend its current systems to
include Wilson Creek and Biosolids. Fire and intruder
alarms will be in the administrative building at Wilson
Creek. There will be a card access and control system
within the building. Card access would be installed on the
gates. Mr. Davis provided some of the benefits to having a
keyless system at the plants. Mr. Peeler wants to add
buildings to the security system each year. Video
surveillance will be added; the camera will be at the both
gates (Wilson Creek and Biosolids). Mr. Davis said this
will be very similar to the way CPW did the water plant and
operations center. Commissioner Watts asked if the monthly
charges were fixed for a year. Mr. Davis said the charges
are for monitoring the system and are fix each year.
Chairman Monaghan asked if anyone was at Wilson Creek at
night. Mr. Martin said no one is there at night. Chairman
Monaghan wanted to know if there have ever been any
robberies, intruders, or vandalism at Wilson Creek. Mr.
Martin said not that he is aware of. Manager Coleman said
it would be more of keeping people out that do not need to
be there from a liability standpoint. Mr. Davis said Mr.
Peeler noted he has seen people drive through the plants
without stopping to notify anyone they are there.
Commissioner Hancock wanted to know if Metro could receive
any grants from the Homeland Security Act. Mr. Williamson
said he will check to see what grants are available through
Homeland Security. Mr. Martin said there are requirements
from Homeland Security for security at wastewater treatment
plants.
Commissioner Burke made a
motion to table this proposal until further information is
gather concerning the availability of grants through
Homeland Security; Commissioner Smith seconded, and the
motion was unanimously approved.
c.
Sewer Lines at Lander Sports Complex
Chairman Monaghan said that
Mr. Jeff Mayes of Lander University contacted him to ask if
Metro could install sewer lines for the sports complex. Mr.
Brian Waldrep explained the amount of work that would be
involved to the Commission. He said the estimated cost for
Metro would be $14,000. Chairman Monaghan said the City is
giving Lander $1 million to go toward their facilities. He
said this should be a community effort. Commissioner Haynie
wanted to know the proper way Metro needs to handle this
request. Mr. Hemphill recommended discussing this in
executive session.
VIII.
Miscellaneous Administrative Matters
a.
Safety Luncheon
The annual safety luncheon
will be on Thursday, August 27th at 1:00 pm at
the EFBF. The purpose for this lunch is to recognize
employee achievement in safety, certification advancement
and the employee of the year.
b.
Seaboard Phase II
Mr. Williamson explained the
Seaboard Ave Phase II Project. Metro received notification
yesterday that they will be awarded a $500,000 CDBG for this
phase. Mr. Williamson explained Seaboard Ave Phase 1A and
Phase 1B to the Commissioners. He said Seaboard Ave Phase
II is a sewer line replacement project and the budget
estimate is $620,000 for the total project.
c.
Spring Street Project
Mr. Williamson updated the
Commission on the available of funds for this project. At
the last Commission Meeting there was $270,000 available to
Metro at zero interest rate from the State Revolving Loan
Fund. Metro has now learned that $412,500 is available to
Metro at the zero interest rate.
d.
Report from Partnership
Chairman Monaghan said the
budget for the Partnership has been approved and copies were
distributed to the Commissioners.
Commissioner Burke made a
motion to appoint Commissioner Haynie as Metro’s
representative on the Partnership Board; Commissioner Watts
seconded, and the motion was unanimously approved.
e.
Accounts Payable Electronic Signatures on Checks
Chairman Monaghan said he
wanted a backup system to sign the accounts payable checks.
Commissioner Haynie said the Chairman is the backup person.
Manager Coleman explained the current process for signing
all accounts payable checks which is two people must sign
each check. The Manager and the Commission secretary both
sign checks. He said the cost for software to allow for
electronic signatures is around $1,200. Commissioner
Hancock was okay with having electronic signatures of the
Account Payable checks. Currently the Payroll checks are
signed electronically. Chairman Monaghan suggested rotating
the name of the Commissioner on the checks monthly. Manager
Coleman said a new policy will be written for check writing
to cover electronic signatures.
IX.
Commissioner Hancock made a motion for Metro to
purchase software that allows for electronic signatures;
Commissioner Smith seconded, and the motion was unanimously
approved.
X.
Commissioner Hancock made a motion to go into
Executive Session to receive legal advice; Commissioner
Smith seconded, and the motion was unanimously approved.
XI.
The meeting returned to open session. No action was
taken during the executive session.
XII.
With no further business, the meeting was adjourned.
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