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Commission Minutes
GREENWOOD
METROPOLITAN DISTRICT
MINUTES OF THE
March 25, 2009
Regular meeting
The regular meeting of the
Greenwood Metropolitan District Commission was held
Wednesday, February 25, 2008 at 3:00 p.m., in the Training
Room of Greenwood Metropolitan District’s Technical Service
Facility, 110 Metro Drive, Greenwood, SC 29646.
In attendance:
Commissioner Bob Haynie,
Chairman
Richard Coleman
Commissioner Byron Smith,
Vice Chairman George Martin
Commissioner Gene Hancock,
Secretary
Doug Bell
Commissioner
Michael G. Monaghan Gayle Grogan
Commissioner Henry
Watts Paige Holley
Commissioner Tim
Burke
Danny Ware
Chairman Haynie left the
Board Meeting early to attend the funeral of Mr. Thornwell
Dunlap.
I.
Chairman Haynie 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 Upgrade
Mr. Danny Ware of Davis and
Floyd, Inc (D&F) noted the monthly report was emailed to all
Commissioners. He distributed a change order summary
sheet. Mr. Ware said April 13th is the tie-in
date for flow to the influent pump station and the grit
removal. The contractor’s insurance company approved
demolishing the clarifier that floated up. The process
should take 5 weeks. There were detailed talks at the
monthly construction meeting regarding different processes
that would allow the BNR #1 to be placed into operation with
the clarifier. If a new plan is not found, then replacing
the clarifier will affect the project schedule by six
months. The contractor was two to three months ahead of
schedule prior to the clarifier problem. Now that the
contractor has to demolish the clarifier and rebuild it,
according to their monthly report they are three to four
months behind the project deadline. Davis and Floyd, Metro
and the contractor are working hard to come up with a method
that will allow the contractor to proceed with the second
BNR without having to wait on clarifier #4 to get rebuilt.
Wilson Creek staff has moved to the temporary trailer
offices. Construction of the new control building has
begun. Chairman Haynie wanted to know the proper procedure
for handling the clarifier issue. He asked if there would
be a change order issued. Mr. Ware responded no, currently
there is no discussion concerning additional cost to Metro.
Chairman Haynie inquired if there would be a change order in
terms of the contract time line. Mr. Ware said as far as
D&F are concerned that issue is between the contractor and
his insurance company. Chairman Haynie and Commissioner
Watts both asked about the time. Mr. Ware said the
contractor is in control of their time line and if the
project exceeds the contract time, liquidated damages should
be enforced. Chairman Haynie noted that Mr. Ware said it
could take the contractor up to six months to build the new
clarifier. Mr. Ware said that is correct. He said six
months is the overall effect, but it is only adding a few
months to the end date because the contractor was ahead of
schedule. Chairman Haynie wanted to make sure that Mr. Ware
was stating the contractor is subject to liquidate damages.
Mr. Ware replied yes. He said August 5, 2010 is the final
completion date for this project; the schedule that the
contractor presented at the monthly meeting based on the
clarifier pushed their completion date to November, 2010.
Based on how the contract stands the contractor would be
subjected to liquidated damages from August 5, 2010 to
November, 2010. Chairman Haynie asked if the contractor’s
insurance company would pay the liquidated damages. Mr.
Ware said he does not know. Commissioner Watts asked if
Metro has the option to enforce liquidated damages. Mr.
Ware replied the Commission can choose not to enforce
liquidated damages. Commissioner Monaghan said their bid
price could include some liquidated damages. Commissioner
Burke suggested that the Commission looks at enforcing or
not enforcing the liquidated damages in June/July of 2010.
IV.
TSF Expansion
Mr. Martin gave an update on
the expansion and the move from the main office. Punch list
items will be sent to the contractor in two weeks.
V.
Commissioner Hancock made a motion to approve the
February 25, 2009 minutes as mailed; Commissioner Smith
seconded, and the motion was
unanimously approved.
VI.
Financial Report
Manager Coleman said based on
the periodic review from Standard and Poor’s Metro was
upgraded one tick; that information should be received in
writing by the end of the week. The collections are still
behind. Chairman Haynie asked if there was any discussion
regarding the resolution of collecting tax money at the
County Council meeting. Manager Coleman said this was not
discussed. Commissioner Monaghan said County Council does
not discuss anything in public session. Commissioner
Monaghan said based on the comments the collections are
down. He said the sewer service income is $252,000 better
than this time last year; the operating revenue is over
$652,000 better than this time last year. He said it is
note worthy that Metro has $3.1 million (not including
depreciation) to fund capital projects and debt retirement.
Commissioner Monaghan said the debt principle for the
balance of the year is $769,000, but $470,000 is going for
GO Bond debt and that amount comes from the County property
tax account. He said Metro is in pretty good shape even
though they are under budget. Commissioner Monaghan said if
the budget is correct, Metro is behind. He said just
looking atlast year compared to this year Metro is ahead.
Commissioner Monaghan wanted to know why budgeted
depreciation is so much less than actual. He asked if that
was from adding new projects. Mrs. Grogan said three
projects (Lander, Bailey and Cambridge) have been added this
year. Commissioner Monaghan asked why those projects were
not included in the budgeted amount. Mr. Martin said the
reason why Lander was not included is Metro only adds them
once the final payment has been made. Commissioner Monaghan
said when Metro does the budget they must anticipate adding
these assets. Commissioner Burke said Lander and Bailey
were supposed to be in last year’s budget but since the
final payment was not made until this fiscal year they were
not included in this year’s budget. Commissioner Monaghan
asked if during the budget process does Metro look at what
projects will be finished and tries to estimate the
depreciation for budget. Mr. Martin said the Lander project
has been three year of waiting for the final punch list
items to be completed; Bailey Circle was added after the
mediation was finished. Commissioner Monaghan said he would
like to know the procedure for doing the depreciation part
of the budget. Commissioner Monaghan asked if the GO Bond
money could be used for the Turner Branch Project. Manager
Coleman said Metro could spend GO Bond revenues but not tax
revenues. Commissioner Monaghan wanted to know where Metro
was going to spend the $25,000. Mrs. Grogan said the money
is the 06 GO Bond Proceeds account has been used on Turner
Branch; that account now has a zero balance. She said the
only bond money left is the 2008 Revenue Bond Proceed
Account. Commissioner Monaghan said the bottom line of the
millage account is $1,893,208. He noted that Metro will pay
$470,000 for bond principle and $126,000 on interest by the
end of this fiscal year; that leaves $1,279,000 left in the
account without any additional tax revenue. Chairman Haynie
stated Metro is moving forward on issuing a new bond for
using the tax revenue. Commissioner Monaghan asked if Metro
was going to spend all of the money. Chairman Haynie said
Metro will spend that plus the amount that Metro plans to
borrow. Commissioner Monaghan said the tax revenue money
can only be used for bond principle and interest. Chairman
Haynie said that is correct. Commissioner Monaghan asked if
Metro was going to spend $1.279 million in bond principle
and interest by the end of the fiscal year. Commissioner
Burke said that is why there will be an expedited payment.
Manager Coleman said there will still be an October payment
before Metro collects again. He said Metro is on a fiscal
year that ends June 30th and the County tax
income comes in December-February (estimated 85% of tax
money is received). Commissioner Monaghan wanted to know
how much more Metro anticipates collecting. Manager Coleman
said about 1% comes in each month from March – November. He
said the amount of money that is in the account when Metro
sends the resolution over for the next year’s debt amount;
the County will calculate the millage amount. Chairman
Haynie said Metro was calculating this balance in addition
to the bond issuance so that Metro could use as much of that
money as possible. Manager Coleman said Metro does not have
the schedule for the new bond issuance payment. Metro is
going to have an escalated first payment. Commissioner
Monaghan said Metro is looking at $1,279,000 and including
normal tax collections Metro will have another $400,000
coming in before the end of the fiscal year. Chairman
Haynie said the collected amount will drop off.
Commissioner Monaghan said the total for December – February
is $749,464. Chairman Haynie said that is when the majority
of the money is collected. He said the Treasurer noted that
they were expecting to collect less than budgeted this year,
because of people not paying their taxes. Commissioner
Monaghan said instead of $400,000 say $300,000; Metro is
still looking at $1.6 million. He asked if Metro was going
to spend $1.6 million in bond principle and interest before
Metro receives more tax money. Commissioner Monaghan wants
Metro to look at the numbers very carefully to make sure
they take out all the money available. Chairman Haynie said
that is the whole idea. He said it is difficult because the
bond cannot exceed the 8% cap amount. Manager Coleman said
Metro is trying to maximize the amount of money Metro can
use. He said the account will never have a true zero
balance. Commissioner Monaghan said he is afraid that the
residual amount of money may affect the amount of taxes the
County will let Metro collect. Manager Coleman said it
will. Commissioner Monaghan wants to minimize the residual
money as much as possible. Manager Coleman said if any
money is leftover at the end of the year it is suppose to be
taken into account for how much money is needed for the
following year. Chairman Haynie said Metro does not want to
be put back in the position where the County is using
Metro’s reserves to lower the tax to mask County Councils
tax increases. Commissioner Monaghan wanted to know how the
inventory numbers are calculated for each area (Supply
House, West Alexander, Wilson Creek, etc.). Mrs. Grogan
said the inventory for the supply house is done every month
and the other areas are done on a quarterly basis.
Commissioner Monaghan asked if the supply house takes an
inventory and provide the numbers every month. Mrs. Grogan
said that is the distribution from the warehouse.
Commissioner Monaghan asked if a physical inventory is done
by hand or is it a computer generated report. Mrs. Grogan
said it is a computer generated report. Commissioner
Monaghan asked if a periodic count is done to account for
lost items. Mrs. Grogan said the physical inventory is done
on a quarterly basis. Commissioner Monaghan wanted to know
if something is given to Mrs. Grogan so she can adjust the
inventory balance. Mrs. Grogan said she is not sure if Mr.
Woody Smith sends paperwork saying what amount to adjust the
inventory by. Mr. Martin said he will make sure that
information is accounted for in the inventory reports.
Commissioner Monaghan inquired if the other areas are
physical inventories or computer generated. Mrs. Grogan
responded the other areas are all physical inventories.
Commissioner Monaghan wanted to know what the abbreviations
mean (i.e. G-2 Master Plan). Mrs. Grogan replied that is
the Master Plan that Manager Coleman had drawn up.
Commissioner Monaghan noted the value is $124,240.10. He
wanted to know why that is considered an asset. Manager
Coleman said it was a large expense to be depreciated
instead of expensed in a given year. Commissioner Monaghan
asked for more detailed information on the Master Plan.
Manager Coleman said he will ask the auditors. Commissioner
Monaghan asked for a description on what the numbers mean
that are with some projects i.e. T-11, T-12, S-1, etc. Mrs.
Grogan said those project numbers were assigned in the Long
Range Plan. Commissioner Monaghan wanted to know who
assigned the numbers. Mrs. Grogan said she does not know
who assigned the numbers. Commissioner Monaghan said he
would like to understand the balance sheet better. Manager
Coleman said those letters (T, G, S, & W) came from the
financial plan. The letters stand for transmission,
general; sludge and wastewater treatment plant).
Commissioner Monaghan said those abbreviations are not used
anymore. Commissioner Monaghan wanted to know what
equipment is listed under miscellaneous equipment. Mrs.
Grogan said miscellaneous equipment is anything that is not
already accounted for. Commissioner Monaghan said he is
worried about all the items that are received as
miscellaneous supplies. He wanted to know if that is a part
of the miscellaneous equipment. Mrs. Grogan replied no,
Metro does not have a miscellaneous supply expensed item.
She said this account is for tools and equipment items. Mr.
Martin said this account is for pumps and equipment. Mrs.
Grogan said these are big items. Commissioner Monaghan
asked when a purchasing report is received that said
miscellaneous supply and invoice what is done with it. Mrs.
Grogan said there is no expense account for miscellaneous
supplies. Commissioner Monaghan said he has copies of the
received purchase order reports where the item is listed as
miscellaneous supplies; that is why he is questioning it.
Mrs. Grogan said miscellaneous equipment is for capital
items; this is not an expense account. Commissioner Burke
said it should be in the O&M account for small tools and
equipment. Mrs. Grogan said the 1900 accounts are capital
accounts. Commissioner Monaghan said he did not see an
account on the O&M. Mrs. Grogan said the O&M does not have
a miscellaneous expense account. Commissioner Monaghan
asked if the receiving report is ignored and the invoice
used. Mrs. Grogan said there is nothing coded to
miscellaneous equipment. She said Metro has tools and
equipment but there is not a line item for miscellaneous
equipment. Commissioner Monaghan said he will show Mrs.
Grogan what he is talking about after the meeting.
Commissioner Monaghan wanted to know when the new GO Bond
will be issued. Manager Coleman said the County had the
first reading and it will take a total of three reading from
the County before the bond can be issued. Commissioner
Burke said the entire process from reading to issuances is
120 days. Metro is just in the first few weeks of it.
Manager Coleman said he has a schedule from the bond
attorney that he will forward to the Board. He said the
bond will be issued in this fiscal year. Commissioner
Monaghan asked if the CPW system listed on the balance sheet
is the City’s sewer lines. Manager Coleman said that amount
is what was taken from the CPW’s books; Metro could only add
the amount of value that was given. Commissioner Burke
suggested the values of the systems should be re-evaluate.
He said the items are depreciated; how long have the lines
been there and are all the lines fully depreciated.
Commissioner Monaghan said there is $450,000 depreciated
out. Commissioner Burke said those are much older lines;
similar to that of Gatewood. He asked if the lines have
already reached their depreciated end. Commissioner Burke
said it would still be a good thing to re-evaluate the
lines. Commissioner Monaghan said it would help with
bonds. Commissioner Burke agreed with Commissioner
Monaghan’s statement. Commissioner Monaghan said the goal
of Metro should be to be as realistic as possible. Manager
Coleman said Metro cannot accept something from CPW’s books
that says they have a depreciated valve of $1.5 million and
add it to Metro’s book for $15 million. Commissioner Burke
wanted to know what would happen when Metro replaces the
inner working parts of a pump station. He asked if a new
depreciation schedule would be started for the pump
station. Manager Coleman said if the pump station is not
depreciated out, Metro will write the balance off and start
back depreciating the new amount. He said it is the same
thing that is done for sewer lines that have been
rehabilitated. Commissioner Burke said when the City system
is rehabed it comes on as a new system. Manager Coleman
said Metro does not keep up with in the city or out of the
city. Commissioner Monaghan wanted to know how much money
is determined to be deprecated each month. Commissioner
Burke said the auditors have that schedule. Manager Coleman
said different items have different life value.
Commissioner Monaghan wanted to know who is calculates the
values. Manager Coleman said the auditors. Commissioner
Monaghan wanted to know what steps are taken if a vehicle is
sold and some of the vehicle has been depreciated.
Commissioner Burke said if the vehicle is sold for more than
the depreciated value the vehicle is added back on then
Metro would dispose of the asset. Commissioner Monaghan
wanted to know what Commissioner Burke meant by adding it
back on. Commissioner Monaghan said Metro would add it into
the depreciation. Commissioner Burke said as a plus
amount. Commissioner Monaghan wanted to know why he would
do that. Commissioner Burke said because Metro is taking
advantage of the depreciation of an asset that has now been
disposed. Commissioner Monaghan wanted to know who is
responsible for making that calculation. Commissioner Burke
replied the federal government. Mrs. Grogan said the
auditors help her to make some of the calculations.
Commissioner Burke said there are federal guidelines for
depreciation schedules. Mrs. Grogan said especially if the
item has not been fully depreciated. Commissioner Monaghan
said the only reason he is talking about this at all is that
the higher Metro’s assets are the more favorable Metro is to
bond issuers. He said that is his understanding. Manager
Coleman said he does not know if that is true. Commissioner
Monaghan asked for Manager Coleman to find out. Manager
Coleman explained to the Commission the way he understands
the bond issuers look at Metro’s finances. He said for
Revenue Bonds the issuer look at the ability for Metro to
pay based on the revenues minus expenses and current debt;
depreciation is not calculated in those numbers.
Commissioner Monaghan said he is talking about assets.
Manager Coleman said assets are not the number calculated in
there; it is cash flow. Commissioner Monaghan asked if
assets were calculated it the ratings. Manager Coleman said
how Metro is rated takes into account all of that; the
higher the rating the lower the interest rate. He said for
GO Bonds they look at taxing authority. Commissioner
Hancock said it is based on the amount of money Metro has
and the ability of the customers to pay their utility bill.
Commissioner Monaghan suggested have a procedure book on how
Metro handles depreciation, inventory, purchasing,
receiving, fixed assets, etc. Commissioner Burke inquired
if the auditor could provide Metro with how many years are
left on each assets life. Mrs. Grogan said she can look
that up in the depreciation software. Mr. Martin asked if
the Commission would like for staff to re-evaluate the value
of the City lines. Commissioner Burke said it is not worth
it, because the lines have no liquid value.
VII.
Action Items
a.
Ratify emergency repair expenditure
Commissioner Hancock made a
motion to approve the emergency repair expenditure on Bond
Avenue for $18,750; Commissioner Watts seconded, and the
motion was unanimously approved.
VIII.
Other/Old Business
a.
GASB 45
Manager Coleman said the GASB
45 information in the commission packet is for information
only. Metro is working on gathering all information for
GASB 45. They are working together with CPW. Manager
Coleman said the report is giving the actuary tabulation of
how much money Metro needs for the commitment for retiree
health benefits based on the current number of employees.
The number is $3,255,000. This can be funded by a $421,000
flat annual contribution or $348,000 increasing 3% every
year. This number will be re-evaluated every two to three
years. Commissioner Hancock said if Metro had to fund it
right now these are the numbers that it would have to be,
but right now Metro does not have to fund it. Commissioner
Monaghan said he does not understand. He said the CPW
Commissioners were told that GASB 45 has been delayed.
Manager Coleman said Mrs. Laurie Smith of Elliot Davis has
told Metro it is due at the end of fiscal year 2009. He
said nothing has changed on that for Metro. Commissioner
Monaghan will check with CPW to see if there is a delay.
Chairman Haynie said Metro has budgeted $200,000 this year.
He asked if Metro would need to make up the difference.
Manager Coleman said if nothing else was to change, Metro
will need to make up the difference. He has not received
any confirmation that the numbers have changed. Chairman
Haynie said Metro will need to budget for that each year.
Commissioner Monaghan wants something in writing. Manager
Coleman said this is the first thing Metro has received.
Chairman Haynie said Commissioner Monaghan is talking with
respect to the delay or not. Commissioner Hancock said that
Mr. Michael Nix and Mrs. Denise Ogletree have said that it
has been delayed.
b.
Grants
Commissioner Monaghan asked
if Mr. Tony Williamson has spoken to Mr. Steve Reeves.
Manager Coleman said he has talked to Mr. Reeves. He said
there are other grant areas that may not apply to Metro.
Manager Coleman said he heard that Metro would not qualify
for any principle forgiveness through SRF. Half of the
money that Metro would borrow would not have any interest on
it so the effective interest rate would be 1.84%. Metro
would not have any grant money through the $40 million from
the government. Manager Coleman has not received anything
in writing. Commissioner Monaghan said if Metro borrows the
money at 1.84% they would not have to sell as many revenue
bonds. Manager Coleman said Metro could get the projects
that have qualified and are ranked for an interest rate of
1.84%.
c.
Seaboard Avenue Project
Commissioner Watts asked for
a status update on the Seaboard Avenue Project. Mr. Martin
said the project should be ready to go to bid in two weeks.
Commissioner Monaghan wanted to make sure there would be a
pre-bid meeting. Mr. Martin said there would be.
IX.
Miscellaneous Administrative Matter
a.
Report from Partnership
Commissioner Monaghan noted
Mr. Mark Warner is out of town today and could not attend
the meeting. Commissioner Watts asked for an update on the
City Pond Project. Commissioner Monaghan said Mr. Reeves
has been talking to Duke Energy about it. It looks like
Duke is very favorable; it is just a matter of time.
Commissioner Monaghan stated nothing is concrete. Several
different options are being explored.
X.
Commissioner Monaghan made a motion to go into
Executive Session to discuss a legal matter;
Commissioner Hancock
seconded, and the motion was unanimously approved.
XI.
The meeting returned to open session. No action was
taken following the executive session.
XII.
With no further business, the meeting was adjourned. |
