The Benton Public Utilities Commission will meet at 6 p.m. Monday, June 25th at the Electric Utility Building, 1827 Dale Avenue. The agenda follows, as well as minutes from the previous meeting.
1. Call to Order
3. Pledge of Allegiance
4. Roll Call
5. Approval of Minutes from the Regular Meeting of June 4, 2017 (Scroll down for minutes)
6. Departmental Reports
A. Employee of the Month for May – Eric Manley – Billing Department
B. May Financials – Cindy Hawkins
C. Share Program – Cindy Hawkins
7. Old Business
A. Cost of Service and Rate Design Study
B. Line Extension Policy
8. New Business
A. Consideration of Next Meeting Date
10. Executive Session
A. Personnel Matters
CITY OF BENTON UTILITY COMMISSIONERS MEETING
MONDAY, JUNE 4, 2018, 6:00 p.m.,
ELECTRIC UTILITY BUILDING
1827 DALE AVENUE
The City of Benton Utility Commissioners met in regular session Monday, June 4, 2018 at the Electric Utility Building, 1827 Dale Street.
- Gary Ferrell, Chairman
- Charlie Best, Member
- Jim Martin, Member
- Doug Stracener, Vice Chairman
- Phil Miller, Member
- David Vondran, Utilities General Manager
Chairman Ferrell called the meeting to order with all members in attendance. Member Martin gave the invocation and Member Miller led the Pledge of Allegiance.
The first item of business was approval of the minutes from the regular meeting of May 21, 2018. Member Martin made a motion to approve the minutes as published and filed for future reference. Member Stracener seconded the motion. A vote was taken and approval given.
A. Wastewater Conveyance – Randy Hawkins
Mr. Randy Hawkins, Wastewater Conveyance Manager referenced a handout in their packets and said he was asked by the General Manager to give the Commission an update on some of the happenings in the Wastewater Conveyance Department. In January or early February they were having problems at Thomas Pasture, and he presented a need for a pump that was down there. He would like to mention, on the matter of the lift stations that they were looking at buying that Flygt pump for $59,667.69. He was able, by working with Evans Enterprises to get the pump repaired for $24,503.79; thus, saving $35,163.39. That does help. Pump one was not too far behind it. They had a broken shaft on pump #2 and pump number 1 had a bearing failure, but they were able to get it up and running with new bearings, seals, wear rings and an impeller for $10,396.19. He said they would have to excuse him because he just left a jungle not too long ago and has Deet all over him and guesses it is affecting his brain. Pump #3 at Thomas Pasture Lift Station is beginning to make bearing failure noise. They have all 3 ran pretty evenly but are all starting to show up with problems. He is going to be taking it to Evans Enterprises in Conway for evaluation and possible bearings and seal job. He has already bought an impeller and wear ring for this pump. He was using the aftermarket outlet through ABBA that Evans Enterprises is a dealer for which saves us about 50% on impellers and wear rings and are made to the dealers specifications or better, so we have had good success thus far. To help these pumps have a more extended life, we were talking about maybe running a water line down that far and he talked to Mr. Dewayne Hood, Water Manager about it today. It would be a pretty good challenge. We would be stuck with forcing a RPZ valve long term. We would be dealing with freezing issues on the side of the pump station going up and down in the deep dry pit. He came up with the idea of a closed loop, glycol loop, using our influent gravity easement inline and burying it about 6 feet deep and just coiling that loop with glycol in it with some circulation pumps, in through the jacket of the pumps, through the manifold, through the earth for heat exchange. He did something very similar with glycol for the GEO Thermal Heating & Air Systems at the 4-H Center. He has a little experience with that and he knows it will work. He will probably recruit some help with sizing the pumps as far as the head and all. He thinks it would be a long term solution to these sewage cool pumps presently. This should greatly extend the life of these pumps. The Hurricane Lake Main Lift Station gave them a little surprise in early April. A 150-hp, Flowserve submersible pump went down on them. If you look on the 3rd page of the handout, you will see the impeller split right down the middle from the shaft. We had never seen anything like this. Jack Tyler Engineering is the authorized low serve dealer for Arkansas, so they took it there. They had never seen anything like this either, so they contacted the Flowserve Company and shared our theory that if you look at the shaft on the bottom of those 2 pictures you will see one of the retaining bolts backed plumb out and the other one sheared. Their theory is that when that happened, the impeller dropped down from the shaft and it may have rolled on the key way and may have split it from inside out. Flowserve refused to do anything to help. Our warranty had long since expired. That being said they had to put in a large bypass pump that was rented through Xylem Dewatering. They have a pump that will handle that station and the head, which is enormous. We have spent $16,235.79 so far on that bypass pump. It costs about $7,000 a month to rent. It was a good thing we had it in place though, because they have had several occasions where the other pump had issues whether the soft start would trip out or we had one ragging problem where they had to pull the pump to clear some rags, so it is a good thing we had it in place. Concerning the pump that is down, Jack Tyler said it would take up to 14 weeks to get parts and it would cost about $35,000 to repair. Spending that kind of money on a by-pass pump…we just couldn’t do that for 14 weeks. They offered to get a Flygt replacement pump in 6 weeks, but when you consider taxes and airfreight from Europe, it was up to $82,225.00 for 1 pump. Again, he recruited the help of Evans Enterprises and used aftermarket parts from ABBA to repair the pump with a new impeller and wear ring. They had to buy some parts through Flowserve and were able to get them a little sooner. To make a long storey short, that pump will be repaired for $25,027.43 and they hope to get that pump back in the wet well sometime this week. While we have the by-pass pump there though, and since there is a little doubt as to whether there may still be something in that wet well that is moving around and could get back in these impellers and do something similar, they going to try set up the by-pass pump in such a way that they can clean out that wet well all the way, and hopefully be in good shape there. On the top of the first page on the Manhole Rehab, he meant to also comment that the Corgill Company is back on the job and plan to have the manholes finished at Congo Road and Scott-Salem and southwesterly across Dr. Wayne Stout’s property and into The Woodlands. They should finish this work this week, and afterward, they will rehab the 10 manholes off Military on Cody Lane that are part of the overall project. Regarding the odor issues, Mr. Byron Hicks has been exploring some options, researching and further testing may be needed. He asked if that was correct and Mr. Hicks said all except the testing. He has basically been doing an overall search on what might be possible out there. The solutions range from scrubbers that might fit over a manhole and require 110 or 220 volt to power a blower to help run air through it. Other options include injecting oxygen to super saturate the wet well to keep it from going septic as it travels and sits in the force main, to injecting oxygen into the force main. The solutions for equipment costs range from $15,000 to $500,000. The super saturating is the most expensive route. The scrubbers range from $15,000 to $100,000. If we feel like we want to move forward with controlling odor, we need to either purchase or rent a data logger so we know exactly what we are dealing with over a 1 or 2 week time. The amount of hydrogen sulfite that we are dealing with really drives the cost of or helps direct the decision to solve that problem. He thinks all we have available is a onetime sampling of a snapshot in time, and we need a better idea of what is going on over a period of time to come up with a good solution. He has driven by a few times and hasn’t been able to detect an odor. It could just be the time of day. He knows Mr. Hawkins drives by every day and sometimes he senses a little bit and sometimes he doesn’t. He knows Mr. Hawkins has tried several things in the background over the last few months that Mr. Hawkins thinks has helped control the odor He doesn’t think it is what it used to be, but he thinks in order to find out it needs to be monitored for at least a week. Mr. Hawkins said before we go too far he has one other option he would like to try with the equipment he has on hand. He has 2 used blower units for air induction that are quite a bit larger than what is on there now. He has some diffusers and needs to make a manifold and plumbing to let in that wet well and really put the oxygen in the water and see what that will do. He would like to raise the water level as far as the drawdown where we can have more detention time and more oxygen in the water through this. He would like to at least give that a try before we go too far with it. He would like to exhaust that first. Mr. Hicks said in the next couple of days he will learn a little bit more about data loggers and the cost of renting or purchasing one. It would not have to be manned all the time. You could leave it out there and have someone go once a day. Mr. Hawkins said that would be good information to have. Chairman Ferrell asked if it tests the air quality and Mr. Hicks said yes, it would be a gas monitor that would probably test for maybe 3 different gasses. Chairman Ferrell asked if it would be digital and Mr. Hicks said yes. Mr. Randy Hawkins said he would like to keep them abreast of some capacity requests that have come in around the Scott-Salem Road area. He mentioned part of this in the last meeting. David Chapman is requesting capacity for about 64 lots north of The Maples off Scott-Salem Road. His plan is to buy this 20-acre tract for these lots from the Kirkpatrick Estate. He hopes to buy up to 180 acres from this estate which would translate into about 500 lots total. That is in the County now. That is the direction he is hoping to go. Lee Pengelly wants to add 32 more homes now to the 32 already built at the Del Rey Subdivision on the south side of Scott-Salem, about a quarter of a mile east of Congo Road. His concern is the 15 inch gravity that the 16 inch force main dumps into, travels SW across Dr. Stout’s property, through the Woodlands and eventually goes to Gabby Lane and graduates up in size. That line has a certain amount of flow on it now without the force main. Chip Bosley plans to build 250 more homes in The Woodlands. That is in the City Limits and that is a commitment we have made. Dr. Stout mentioned his 67 acres of prime subdivision land that he hopes to sell someday and it would develop someday. It would naturally tie into what he has given easements for, so we are looking at 400 more homes to be added in the gravity flow of that 15 inch Then when we get that 16 inch force main surging with those big pumps, his concern is how that will affect those man holes; if they will surcharge and will they backup and overflow down there somewhere. He is hesitant to give these developers any kind of green light as far as capacity until we know we have it and it is a safe go. We are probably going to have to have some professional help there. That is just an FYI. A real concern that they are working on is a possible reroute. If you will look on the CAD drawing on the back of the handout, you will find Edison Street, and if you look at the sewer network you have East Street and its main, which reaches beyond Military. You have Pearson to the right and it turns into Lillian Street and reaches all the way up to Ferguson Drive and Wal-Mart, then you have First and Second Streets. This might have gotten cut off a little bit, but Main Street is west of East Street. It also comes in to where all of these lines flow together. They are in the curve of the south end of East Street where Hazel joins. There are 2 little manholes and 213 square feet of 8 inch line that goes under the Union Pacific train tracks, so we have (5) 8-inch lines that go into one 8 inch under the RR tracks. That happened way back when and really showed up in the February’s heavy rains. We have the manhole behind ADHC flowing pretty good. What they are researching right now is the best option. Mr. Gillip spent this afternoon doing work in the field and some elevations. He is going to yield the floor to him to report what he found as far as possibilities. Mr. Jacob Gillip, McClelland Engineer said in talking with Randy, one of the things he was hoping would be viable is when you look over to the east side of 2nd Street, there is a green line there that comes west and turns south, and right at that intersection is P1257 where there is a 24 inch line under the RR. We have looked to see if that 8 inch line, the blue one over to the west gets a pretty good flow down to P12-6. They confirmed today that it has grate where we could reroute a line eastward to that larger line and not have to go under the RR track with the bore. There would have to be a bore under 2nd Street, but he believes it is a City Street. It would be shorter and require less permitting that the RR bore. It would be about 900 feet of gravity line. It would be fairly flat but we have enough pull to make it work. Mr. Randy Hawkins said we would have to pipe burst behind that manhole he cited behind the old Lewis Lumber Company up to Edison and increase that to a 12 inch, and probably the new main that he is speaking of; the open trench with at least a 12 inch. Mr. Gillip said yes, we would have to do a house count and some modeling to say for sure, but he can confirm at P12-6 there are some substantial roots and the walls inside look furry. Mr. Hawkins said that is the jungle he was talking about. Chairman Ferrell asked what “furry” is and Mr. Hicks said it is a technical term. Mr. Hawkins said we propose to leave the Main Street line as it connects into P12-1 at Hazel and East Streets. We would leave that in place with an 8 inch under the RR tracks. We would, theoretically, be moving East Street, Pearson, First and Second Street lines over to 24 on the other side of Second Street. We wanted to make you aware of that development that came out of the heavy rains. It is a jungle and has been for years, and is something we are going to have to fix. Mr. Hawkins said he also must mention Mr. Heller’s crew has been hard at work between Conrad, South and Sevier Streets. They will soon be finishing and go to Terry Street. Member Martin asked if he had any other good news and Mr. Randy Hawkins said he thought that would be enough for this session. He will make a report when it gets further along.
A. Hurricane Lake Substation – David Vondran
Mr. Vondran said the next 2 items can be considered at the same time. He asked the Commissioners to look at the Shermco package on the 2nd page. He believes there are some edits in his hand writing. The morning after the PUC meeting where Shermco was present, they came in and met with us. They had agreed to modify downward the $86,422.51 change order request to $60,748.29. The subsequent pages are line items of their costs that they came up with, and after those pages is the response of our electrical engineer from Hestco who also responded to each one of those items. You can see that some of those items did require modification at the engineering level and those modifications were passed on to the contractor, so some of those can be checked off as applicable expenses during the course of testing and commissioning. We are at a point where we can go through this list and check yes they qualify or no they don’t. After we make that determination, the subsequent page after that is the change order itself, which will be modified. The last page is the rate schedule they submitted to us. The contract said that all of these out of scope charges would be charged based on T&M according to the hourly rate subject to a certain profit margin and that is what the last page is. We are looking at taking the list and creating the list of qualifying expenses and applying those rates to the list of approved hourly rate schedule. Each of these line items have an arbitrary dollar figure assigned to them rather than: employee 1 had 1 ½ hours of overtime and employee #2 had 2 hours of overtime. He asked Shermco to quantify a worksheet that will justify how many hours each employee spent per task rather than applying a dollar amount to one of those items was to quantify a worksheet to include the work. That should be how he arrived at these numbers, so that information should be available, and once he presents that to us we will proceed with giving those numbers to you. He asked the Commissioners to set the Shermco information aside and move to the Hestco Engineering invoice. The original contract for engineering was $150,000 (on the second page), and of that $150,000, there is a remaining payment due of $25,000. That remaining payment would include any retainage and is the last of the skin in the game, so to speak. Hestco has submitted this invoice and requested payment. His question for the Commission’s guidance is how the payment of this invoice relates to any outstanding balance that may be due to Shermco. The answer may be none; pay the invoice. Member Stracener asked if Hestco has punch list items and if they have completed everything and Mr. Vondran said yes they have. Member Stracener asked if anything is outstanding and Mr. Vondran said nothing is outstanding. Member Best asked what money they are talking about if nothing is outstanding and if it is something from Shermco. Mr. Vondran said if we pay this final $25,000 invoice from Hestco we will be on the hook for the full amount of whatever the last payment to Shermco ends up being, and that technically would be an overage Member Best asked if he is saying we need to settle Shermco first and come back and settle Hestco and Mr. Vondran said that is what he is asking the Commission. Member Best and Member Miller both said he should do that. Chairman Ferrell said if he remembers right on Shermco, there were some issues that Hestco said should have been included. Shermco is saying there are some additional that they did that Hestco did not inform them about that were over and above. Mr. Vondran said yes, there are some charges from Shermco that they are saying are due to error and omissions from Hestco. Hestco has acknowledged those and provided the necessary modifications to the field in order to correct the problems, but there was still a charge from Shermco associated to those modifications. Our task will be to go through that list and say, of this $60,000 or so, X is contributable to error and omissions, X is not and hope the X contributable to error and omissions is less than $25,000. Member Martin said he is confused in the sense of this billing being for engineering and not construction services and Mr. Vondran said you are correct. Member Martin said we had a contract for $150,000 and paid them when they got the specs and drawings together for $130,000. Normally, and maybe he is missing something here, retainage is not held on engineering services. We owe them $25,000 for engineering services once they give us as-built drawings and so forth. Mr. Vondran said the engineering contract did not differentiate between design engineering and construction engineering; it was lump sum engineering. Member Martin said we owe them $25,000 on a $150,000 contract and Mr. Vondran said yes, it could be interpreted that way. Member Martin said but they are asking for $25,000 for actual construction and Mr. Vondran said no, Sir, the $25,000 they are asking for is the last $25,000 of the $150,000. Member Martin said in fact, we owe them $25,000, notwithstanding Shermco or anything else; it’s the cross to bear. We owe them, truthfully, $25,000 on our contract for engineering services. Mr. Vondran said yes, that is Hestco’s belief and Member Martin said they are billing us $25,000 and calling it engineering. Chairman Ferrell said that is the balance of the $150,000 and Member Best said it is the balance. We have paid them $125,000 of the $150,000… Member Martin said according to the contract we should have paid them $130,000. Mr. Vondran said the $130,000 was billed in progress payments. The total contract was $150,000 and we have paid $125,000 to date. The paperwork says we should owe them $20,000, but in actuality, we have a remaining balance of $25,000. Member Martin asked if Mr. Vondran’s question is if we want to back charge them and capture some of the Shermco errors in regards to the $25,000 we still owe them and Chairman Ferrell said exactly. Member Martin said okay, he is clear now. He asked why they don’t wait until the Shermco thing taken care of and then access whether or not we feel justified in back charging Hestco Engineering against that $25,000. Mr. Vondran said that is the direction he needs. Member Martin asked if he needs a motion and Mr. Vondran said no. Member Stracener said if you look at the first 2 pages there is only 2 line items that are not attributing to the engineering. In his rough math, we are up$12,000 to $13,000 just attributing to the engineering. Chairman Ferrell asked Mr. Vondran if he had been through these with Shermco in detail and Mr. Vondran said he has been through them all but has not decided which ones are in and which ones are out. Chairman Ferrell asked if they need a work session and Mr. Vondran said the line item further down the agenda included any of these items that may have come up. Chairman Ferrell said we will just take it line item by line item. We need a work session. The Commission agreed.
A. RFP for Rate Study – David Vondran
Mr. Vondran said the next item before you is the Request for Proposal for a Cost of Service & Rate Design Study. The top page is a memo from him to them outlining a proposed timetable. By state law, the advertising rate for those professional services have been placed in the newspaper with state wide circulation on 5/27, 6/3 and another one this coming Sunday on 6/10, with the RFP due by 3:00 PM on Monday, June 18th. The following day, we proposed getting copies to the Commissioners and on 6/25, the staff recommendation is to move the 6/18 PUC meeting to the 25th. The staff recommendation is to cancel the regularly-scheduled 7/02 meeting. We would be moving from the 3rd week of June to the 4th week of June and there would be no reason to have back to back PUC meetings 2 weeks in a row. We could actually cancel the meeting the week of the 7/4 holiday. 6/26 is dated as Notice to Proceed. The time period from the Notice to Proceed to October, 15th is the time they will be putting their report together. They will be visiting with staff and getting information from us for their report. They will deliver their report to the staff on 10/15. Our recommendation is to move the 10/15 meeting to the 22nd so that the FIRM can be present at that meeting to present their report to the Commission. Chairman Ferrell asked if this is just for the Commission’s information and Mr. Vondran said yes, the only action would be later tonight when we consider announcements. The next regularly scheduled meeting would be June 18th, which would be one of the ones we propose to move. Chairman Ferrell said when the proposals come back in we would vote to approve and Mr. Vondran said yes. Member Martin asked if this seeks analysis on all 3 entities Mr. Vondran said yes sir, it would. Based on our wholesale water contracts we are required to have the rate study for wholesale water. The cost of that portion of the study will be broken out and will be split 3 ways between Benton Utilities, Salem Water Association and Southwest Water Association. We are also requesting an electric system studies and wastewater system studies that will be borne 100% by us, but we think we can get a good deal since we are giving them all 3 at once. Member Martin said if you don’t submit a proposal on all 3 it’s not discounted and Mr. Vondran said with the way we wrote the request for proposal they can submit a request on any individually or all 3. There may be firms that specialize in electric but not wastewater, so each will stand on its own merit. Chairman Ferrell asked if he has any idea of the length of time it will take to do that study and Mr. Vondran said yes sir, it would be from the Notice to Proceed date of June 26th with the delivery date of October 15th. Chairman Ferrell asked if that is the delivery date and Mr. Vondran said yes sir. It is approximately 4 months.
A. Work Session on Line Extension – David Vondran
Mr. Vondran said that could be better described at this point as a work session for capacity or as a work session for substation fees. It is a request to work with the Commission on setting a date for a potential work session on those matters. Chairman Ferrell said any other time other than next week because he will not be here. Mr. Vondran said he and Mrs. Madeline Wilson can coordinate that with them individually. Member Stracener said he is out the week of June 25th. Chairman Ferrell asked if they were changing it from the 18th to the 25th, and canceling June 2nd Mr. Vondran said yes. Chairman Ferrell said they could go ahead and meet on the 18th and just have a work session. Mr. Vondran said he would verify that with each of them.
B. Next Meeting –Request to Change the Meeting Date from June 18th to June 25th and Cancel the July 2nd Meeting – David Vondran
Mr. Vondran said he would like to change the next meeting date from June 18th to June 25th and cancel the July 2nd meeting. We would move the meeting from the first week of June and cancel the one before the holiday.
A. Personnel Matter
The meeting reconvened at 7:35 PM with no action taken. Member Miller made a motion adjourn at 7:36 PM and Member Best seconded the motion. A vote was taken and unanimous approval given.
Gary Ferrell, Chairman Madeline Wilson, Recording Secretary