The Lowcountry Regional Water System Commission (herein referred to as “LRWS” of the “Commission”) held its regularly scheduled meeting on Wednesday, February 05, 2014 at 200 Jackson Avenue East, Hampton South Carolina. The meeting was advertised as prescribed by law. Commission Present: John Rhoden, Hampton Hugh Gray, Hampton County Rocky Hudson, Brunson Henry Tuten, Varnville James Risher, Gifford Colin Moore, Yemassee Officers Present: Brian Burgess, General Manager Christine James, Finance Lead Marlene Marchyshyn, Secretary Others Present: Kari Foy, Staff Engineer Quorum Met: Yes 1. Call to Order Chairman Rhoden called the meeting to order at 4:00 pm 2. Invocation and Pledge of Allegiance Invocation- James Risher gave the invocation Pledge of Allegiance- Conducted by all. 3. FOIA Compliance Report As required by Code of Laws of South Carolina, notice of this LRWS Commission meeting was posted prominently in the offices of the Commission at least twenty-four hours in advance. In addition, the local news media and all persons requesting notifications of meetings of the LRWS Commission were notified of the time, date, and place of such meeting, and were provided with a copy of the agenda at least twentyfour hours prior to this meeting. 4. Adoption of the Agenda Moved by Hugh Gray, seconded by Colin Moore to adopt the agenda. Motion carried unanimously. 5. Approval of Minutes: November 26, 2013 Moved by Hugh Gray, seconded by James Risher to approve the minutes of the November 26, 2013. Motion carried unanimously. 6. Financial Report The financial report was presented by Christine James and is summarized below. Total Budgeted Revenue: $190,699.24 Total Actual Revenue: $196,268.80 Total Budgeted Expenditures: $190,699.24 Total Actual Expenditures: $291,669.42 Current Month System Total Expenditures: ($100,970.18 - Over) Gross Revenue Cash Account Balance: $36,359.85 Christine James noted that there were extra expenses for the month due to the freezing weather conditions and quarterly payments due. Brian and Christine are working to address the quarterly expenditures within the budget so that they can be accounted for monthly instead of once a quarter. This will provide a better and clearer picture as to actual expenditures. John Rhoden asked for the average revenue for the last few months. Christine reported $119,590 for October, $160,000 for November, and $196,000 for December. Henry Tuten asked what the expenditures were. Christine reported $141,000 for October, $199,000 for November, and $291,000 for December. Rocky Hudson questioned the increase in expenditures. It was explained that quarterly payments, tank contracts, and SMIT and SMURF insurances were included in those totals. 7. Operations Report The Operations report was presented by Brian Burgess. The total water loss reported for all systems combined was 40% with the wastewater loss at 57%. There was one workers comp issue but no lost time as a result of that. 8. Managers’ Report The Managers report was presented by Brian Burgess and included the following: Brian has been working with staff to develop a Capital Improvement Plan (CIP). He noted that this plan should be considered a “living document” as it will continue to be modified. Brian has been trying to get an update on the transfer of the USDA/RD loans but has not been able to obtain any information at this point. A conference call was held with Brian Burgess, Belton Zeigler, Bob Damron of Southwest Securities, and Daryll Parker of Utilities Advisors Network on December 10, 2014 to discuss the financial condition of LRWS and the current rate schedule. All parties of the conference discussion agreed that adjustments to the current rates are needed and advised that the adjustments be made as soon as possible. URS is working to develop and prepare bid documents to advertise the metering project for the Town of Hampton. LRWS had a 12” water main leak on Helen Street in the Town of Hampton in January. The field crew worked about 5 hours to restore services. The well pump in Gifford has been replaced and is back in operation. Brian Burgess and Kari Foy attended the Hampton County Municipal Association meeting on January 27th. A presentation was given on the creation of LRWS as well as current and future projects and plans. Nia Frazier of SCDHEC performed a Sanitary Survey for the Town of Gifford water system. A satisfactory rating is expected. A Lunch and Learn was given by American Low Control representative Mike George. Brian Burgess, Kari Foy, and Danny Padgett attended. In addition, Brian reported that LRWS had received a Waste Load Allocation notice for the Town of Brunson’s NPDES permit. It was anticipated that the new limits would be tighter than previous limits. LRWS will be looking at alternatives and options to meet those limits. Kari Foy reported that she had spoken with SCDHEC and asked them to look at future capacity issues. A.) Engineering Update Kari Foy gave a short PowerPoint presentation of ongoing project updates. Maps, photos, and project summaries were highlighted. Project updates included the following: The Brunson Elevated Tank and Well Rehab: Bids were received on the Wellhead Division of the project on January 14, 2014. Bids ranged from $92,850 to $194,656. The lowest bid received was from Brunson Construction of Hampton. The Elevated Tank Division is expected to be advertised for bids in March. The Zahler Street Elevated Tank of Yemassee: Field painting is wrapping up. Remaining work includes yard piping, well demolition, electrical, and tank demolition. Gifford Well Pump Replacement: The pump installation has been completed. The well was disinfected on January 21, 2014 and placed into operation last week. Hampton Sewer Rehab: The cleaning and TV work is 80% complete. Smoke testing began on January 21, 2014. LRWS has been using their website and the local radio stations for weekly schedule updates. 9. Old Business A.) Residential Fire Sprinkler Meter and Irrigation Meter Policy The Residential Fire Sprinkler Meter and Irrigation meter Policy was incomplete and/or deferred. 10. New Business A. Holiday Schedule for 2014 The proposed Holiday Schedule for 2014 was presented to the Board. The proposed Holiday schedule includes 12 days; New Year’s Day, Martin Luther King Day, Good Friday, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, Day After Thanksgiving, Christmas Eve, Christmas Day, and Day After Christmas. Moved by Henry Tuten, seconded by Hugh Gray to approve the Holiday Schedule. Motion carried unanimously. B. Capital Improvement Plan A Capital Improvement Plan (CIP) was presented by Brian Burgess. As previously noted, the Capital Improvement Plan should be considered a “living” document as it will continue to be modified. LRWS will be looking for CDBG and RA funding for these improvements. LRWS does not qualify to be a recipient of CDBG funding and would need to be able to work with the towns as a sub-recipient. Moved by Hugh Gray, seconded by Colin Moore to accept the CIP as information. Motion carried unanimously. C. Alternate Logo A one-block logo was viewed as an alternate logo for the water tanks. Moved by Hugh Gray, seconded by Colin Moore to approve the alternate logo for tanks. Motion carried unanimously. D. Aphis Agreement for Vulture Control at Elevated Tanks An agreement with APHIS (Animal and Plant Health Inspection Services) for Vulture Control at Elevated Tanks was discussed. APHIS will harvest 9 birds (3 per tank). The total cost would be $843.62 and would include the hardware and birds but would not include a tank climber. The agreement includes the tanks of Yemassee, Gifford, and Brunson. Moved by Henry Tuten, seconded by James Risher to approve the agreement. Motion was carried unanimously. E. 1st Reading of Proposed Water & Sewer Rate Adjustments The Proposed Water and Wastewater Rates for 2014/2015 was presented to the Board along with the debt service payment schedule, needed equipment list, and customer consumption information. Total debt service payments for the combined system is 35,039.90 monthly and 420,478.75 annually. LRWS has not assumed these payments in their entirety yet as the loans have not yet been transferred. Total estimated cost for equipment needed is $315,000.00. Brian stated that the information provided and used to complete the viability study may have been inaccurate information. According to the viability study, Yemsssee had about 800 customer but there are only about 400 on LRWS’ system. The viability study also used an average household consumption of 6,000 gallons per month, but according to the billing information of LRWS since it began operations, 70% of households are using 4,000 gallons or less per month. Brian discussed the General Financial Review (Draft Two). He said that he and Daryl Parker of Utility Advisors had reviewed this information several times and that based on information from June 2013 to November 2013, the combined revenue shortfall was $231,558.00 with the total overage of expenditures being $122,776.00. The monthly average amount under on revenues is $38,593.00 with the average expenditure overage at $20,463.00. Based on this information over a one year period, LRWS would have a $708,669 shortfall. This information along with the current rates of each town was studied and used in determining what the new rates should be. The new proposed rates would have everyone on the same rate schedule with the exception of Yemassee. Their volumetric rate on sewer would be $4.00 per 1000 gallons and is $2.00 less than the other town’s involved. Brian explained that the reason for the lesser rate was because Yemassee would be seeing the highest increases and that it would be too much on those citizens if done all at one time. A typical bill comparison showed the following differences for a monthly bill based on 4,000 gallons usage: Monthly Water-Residential: Town: Difference: Brunson $5.42 Gifford $5.60 Hampton $6.10 Varnville $11.60 Yemassee $11.60 Monthly Wastewater-Residential: Town: Difference: Brunson $4.18 Gifford $5.50 Hampton $7.50 Varnville $5.50 Yemassee $6.50 Information was also provided to show what the differences in monthly billing would be based on 0 (zero) to 7,000 gallons consumed. Mr. Wayne Ezell voiced his concerns over raising rates. He said that the Board should first look internally at the expenditures and why it is losing money. “We have to be able to justify our expenditures before we start asking for more money” said Mr. Ezell. The Board then discussed having these increases gradually phased in over a period of time verses all at one time. Moved by James Risher, seconded by Colin Moore to approve the proposed rates with the increases being phased in over a six (6) month period. Motion carried and approved with Rocky Hudson opposing the phasing in of rates over a six (6) month period. Rocky Hudson asked that a report with more information of actual revenue and expenditures be provided at the next meeting. A second reading and Public Hearing will be required to adopt these rates. F. Cleaning Account Policies The current cleaning account policies were discussed. The current policy charges $30.00 and allows seven days for cleaning. After the seven days, the water is turned off and the customer is final billed for the water used. LRWS has had some complaints with this policy as some customers feel that seven days does not allow enough time and; they don’t feel that they should have to pay $30.00 for each location every time that they need to clean. The Board agreed that the $30.00 charge per location would remain as is and; the number of days allowed for the cleaning will be changed from seven days to fifteen days. G. Appointment of Alternate to the Board-Yemassee The town of Yemassee submitted a letter to the Board to appoint Mr. Wayne Ezell to serve as an alternate to Mr. Colin Moore. Moved by Hugh Gray, seconded by Henry Tuten to approve and accept the appointment of Mr. Wayne Ezell to serve as an alternate to Mr. Colin Moore. Motion carried unanimously. H. Approval of Agreement with Katawba Environmental Inc. for Acceptance of Wastewater A letter of agreement with Katawba Environmental Inc. was discussed by the Board. The location for cleanup is 905 Elm Street East. The agreement is to ensure that all discharges from Katawba Environmental, Inc. will not cause the Hampton wastewater Treatment Plant (WWTP) to violate its limits under its current NPDES permit. Katawba Environmental, Inc. will discharge petroleum contaminated wastewater following treatment and removal from the site into LRWS’s wastewater system. The wastewater will be hauled by Katawba’s tanker truck during normal business hours. Katawba will pay a non-refundable application fee of $100.00 and $150.00 per truck load not to exceed 1,500 gallons per load. If the truck holds in excess of 1,500 gallons, the volume will be prorated per 1,500 gallons. Moved by Hugh Gray, seconded by Rocky Hudson to approve the agreement with Katawba Environmental, Inc for acceptance of Wastewater. Motion carried unanimously. I. Acceptance of Division 2 Low Bid Contract for Town of Brunson Well Rehab The Board discussed bids received for Division 2 of the Town of Brunson’s Well Rehab. Bids received were as follows: Brunson Construction (Hampton SC) $92,850 Mitchell Brothers (Beaufort SC) $109,388 JR Wilson (Hampton SC) $126,750 Layne Christensen (Savannah GA) $194,656 Moved by Henry Tuten, seconded by Rocky Hudson to accept the bid submitted by Brunson Construction in the amount of $92,850. Motion carried unanimously. 11. Comments or Questions Hugh Gray reported that a ribbon cutting was held at the newly renovated Library in Estill. This was one of the projects involved in the one cent sales tax referendum. Brunson Construction was awarded Construction Manager to over-see the construction of other projects and soliciting of bids. Upcoming projects include the following: (3) Hampton County Health Department (4) Hampton County Recreation Center and (5) Hampton County Library. Brian Burgess spoke with Mr. Tony Jarrell concerning the property surrounding the Gifford water tank. Mr. Jarrell was allowed by Mayor Mitchell to cut timber at that location however, Mayor Mitchell did not realize that this property was owned by LRWS. Mr. Jarrell agreed to pay LRWS $900 for that timber. Mr. Jarrell owns 2 acres in this same area and is interested in purchasing part of the property that is owned by LRWS as well. Board members agreed that the property should not be sold but that Brian Burgess could negotiate an agreement with him allowing him to pay a fee to use it instead. 12. Executive Session – none. 13. Adjournment Moved by James Risher, seconded by Colin Moore to adjourn. Motion carried unanimously. Meeting then adjourned at 6:15pm. Respectfully Submitted By: Marlene Marchyshyn