The Benton Public Utilities Commission will meet at 6 p.m. Tuesday, September 8th at the Electric Utility Building, 1827 Dale Avenue. The agenda follows, as well as minutes from the previous meeting. NOTE: Social distancing will be enforced for all attendees. Staff reports may be submitted in place of required attendance. Guests must adhere to precautionary guidelines as issued by the Governor’s office and State health officials. Audio recordings of the meeting will be available upon request.
AGENDA:
1. Call to Order
2. Prayer
3. Pledge of Allegiance
4. Roll Call
5. Approval of Minutes from the Meeting of August 17, 2020.
6. Departmental Reports
A. Northshore Down Stream Sewer Improvements Nathan Schultz
B. RV Dump Stations Nathan Schultz
C. Heritage Heights Lift Station Generator (Rick Coker) Nathan Schultz
7. Old Business
A. Individual Pump Stations David Vondran
B. Master Meter @ 114 Properties Bid Jacob Gillip
8. New Business
A. Payroll Tax Deferral Brent Davis
B. Non-Profit Customer Deposits David Vondran
C. Saline Memorial billing issue David Vondran
D. Electric rate study for Interconnection Grid Charge David Vondran
9. Announcements
A. Next Commission meeting date Monday, September 21, 2020
10. Adjournment
MINUTES:
The City of Benton Utility Commissioners met in regular session Monday, August 17, 2020 at the Electric Utility Building, 1827 Dale Avenue.
In Attendance:
- Doug Stracener, Chairman
- Jim Martin, Member
- Gary Ferrell, Member
- David Vondran, General Manager
Chairman Stracener called the meeting to order with all members in attendance, with the exception of Charlie Best and Phil Miller. 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 July 20, 2020. Member Ferrell said on page 2 it references a type of light on the ADT, and the reference was to metal halide, not halo. He asked that this be corrected. Member Ferrell made a motion to approve the minutes as presented and Member Miller seconded the motion. A vote was taken and approval given.
Departmental Reports
- Employee of the Month- Tina Majors, Billing Services Brent Davis
Mr. Brent Davis, Human Resources said the Employee of the Month is Tina Majors, Billing Services was submitted. It pointed out that she has been doing her job so well and other employee’s jobs while they were out. She has stepped out of her comfort zone to take the lead in new projects, she is willing to stay late or come in early when needed to get everything done. She has received her plaque and gift card. We also posted a congratulations on our Facebook page for everyone to see.
- August Financials Karen Scott
Mrs. Scott said on the first page, for the month of July ending on the 31st, the ROE comparison of 2020 to 2019, she would like to point out that for the month you were $986,000 ROE. YTD was 3.9 million, which is just slightly better than 2020. This time last year was $214,000 difference YTD, so we are slightly better off for 2020 than last year., On page 7, Bad Debt Analysis, the total written off was $67,000 YTD, collected 40,000 which was a net more write offs in collections of $27,000, but through this time last year we were only about $1,800 better off and are running very near what we were last year, which as we have discussed many times, given the conditions of the Covid-19 and the lack of payment from some, she feels we are in pretty good shape for 2020.
On page 9, the condensed financial statements, she wants to make sure everyone understands that the contributed capital is on the condensed, and not on the concise. The YTD difference is $123,000.
On page 13, it shows the revenues and expenditures for each individual system of electric, water and wastewater. She would like to point out that we had a really strong month in electric, with ROE projection of over a million dollars. The expenditures were up as well, but for the most part it was for wholesale power sales and expenditures. Water had a $99,000 ROE and Wastewater, while it was a loss of $4,500, which is pretty good.
Chairman Stracener said he thinks he has asked this before, but looking at page 2, we have 4 departments under 35% of spending YTD, and he asked if we perceive catching up to do the work that was budgeted. Mr. Vondran asked if there are any capital numbers and Mrs. Scott said we have not done any pipebursting yet. There is $375,000 in WWC and most of that being pipebursting. We have only expended $65,000 of that. There is quite a bit of money in Electric for SCADA and computer and equipment which has not been expended. Electric’s total for those projects budgeted was is a little over 1 million, and we have spent $900,000. Water Purification has a total of $793,000 budgeted, and they have spent $143,000 on those large projects. She said Mr. Vondran is more familiar with Water Treatment than she is.
Mr. Vondran said we are getting ready to advertise and put out for bit the Pipe Gallery Project. Shortly behind that is going to be the filter upgrade, which needs to wait until October when the summer usage falls off. We are going to see some large expenditures in the last quarter Member Ferrell said on page 8, on the top 5 accounts, if she is still working on consolidating some of those. Mrs. Scott said not the top 5. Three of those are accounts that customer payments come into. The Gen Operating First Security account (130.36) is some electronic payments. The Gen Operating Bk of Oz (130.38) is all the payments we take in the office and from the mail and night drop. The Utilities Lockbox/Electronic deposits (130.40) is clearly lockbox payments. So, for right now the way those payments move through our system; she has made no move to change any of that. As for the Restricted Funds, there are utilities that do pooled cash funds where you can still account for the source of the funds to make sure the revenues for any interest funds go into the right system, and we could do that for whatever reason year after year when new accounts are set up. Now, some of the bond accounts cannot be done that way. In the middle restricted funds section moved the bulk of those to the investments at Cruise. The only place to make that happen really would be in those accounts where we are taking in customer payments.
Member Ferrell said it look like we are carrying about a million dollars more than we did a year ago in those top 5 accounts and Mrs. Scott said it is really a timing issue in some cases. When we pay for some of these large projects that are being funded with bond issue money, we pay for them out of accounts payable and then transfer the money from the bonds account. Traditionally, she gets all of that done in the same month, but there may have been times last year where some of those payments had been made and not recaptured. She is not sure if that is where we are at or not, or there may have been some large bills that were due, for example, the Constellation bill this month is a million dollars, so some of that may be timing. She would really have to look at some of the details to make a true comparison. Member Ferrell made a motion to accept the financials as reported and Member Martin seconded the motion. A vote was taken with approval given.
Old Business
- Employee Pay Scale David Vondran
Chairman Stracener asked if there was anything to report on this and Mr. Vondran said no sir. Since we don’t have the complete data on the additional benefits, I would ask that that be tabled. Chairman Stracener asked Mr. Brent Davis, HR if he thought that they could have that by the next meeting and Mr. Davis said yes. Mr. Davis said I have information from a couple of the AMPA members now and I am just waiting on a few more.
- Commercial Account Deposits (update) David Vondran
Mr. Vondran said Mr. Chairman and Commissioners, just a quick update. The Community Services and Animal Control Committee of the City Council met this past Thursday night. It had been on their plate for a month for them to provide comment to us. At that meeting they did not have any concerns. I did reiterated that I felt that our current policy was a good policy. It protected Benton Utilities and protected the City of Benton from any business that might go out of business with a balance due. The current timing of this policy kind of hit home with everyone. We are obligated to communicating better. In our letter to these account holders rather than just referencing the ordinance we will put in the letter that they may come before this commission to request a waiver.
- Saline River Electrical Crossing Stanley Moore, P.E.
(Fisher Arnold)
Mr. Vondran said he asked the representatives from Fisher Arnold to visit with us tonight to give us an update on where we are with the concrete columns that have been installed for the Saline River Electrical Crossing Project. Mr. Moore said he is the 30,000-foot guy on the electrical. He can get down and dirty or get technical and bring Andy Maybee who did the actual structural design on the concrete piers. He thinks you all know where we are at and how we got there. The east foundation is the one that is the issue. The west foundation was in a large part installed as part of the spec required. The east foundation was not installed as per the specs that both McClelland and Fisher Arnold put together, so you all know we had issues with it, at least he assumes they all do.
The latest conference call they had with the contractor was on July 24th, he believes. There were assignments on both parts. We sent the information they requested back. We are trying to get to a point, and in his opinion, ya’ll didn’t pay us to do this, and we are trying to get the contractor to come up with some sort of revision to fix the foundation on the east side to make it work. We have not been giving suggestions or recommendations to the contractor. We are trying to get him to give us something that this team (McClelland and Arnold) can evaluate and say it will work. That was on the conference call on the 24th, like he said. Information was swapped back and forth for all parties, and he thinks they responded back, not necessarily with a recommendation to fix it, but their opinion of what the stability of the pole would be; the safety factors or something like that. In the last email sent last Thursday, we asked for something from them but they have not responded.
He would like to know what the Commission is looking for from them and how deep they want them to go. If it was a perfect world, and we had all of the time in the world he would say this is not acceptable. But, we have a time issue that everyone is aware of, we are trying to get across the interstate, trying to get across the river and trying to serve that area over there which I guess would be the northwest corner of I-30. We are trying to get it to the point where we do not want to give up anything. I do know that Mr. Vondran wants a double circuit line across there, do we need it right now, no, but in the future you will probably need it and in the future it is going to be difficult to go back and add it when the poles are up 90 foot in the air. It will be difficult to go back and put another circuit on there. We are trying to get to a point where we can come to terms on this pole that is on the east foundation and where we are at is derating the pole and accepting it at some reduced payment, that hasn’t been presented yet but I think that is a possible solution. Right now we are calculating a safety factor of about of about 1 (1.24) which is no safety factor if you put which is you put the double circuit line up there and install it as is that is kind of where we are right now.
Chairman Stracener asked Mr. Darren Prysock, Electric Manager is anything else had been installed other than the west side and Mr. Prysock said yes, we are done with the property over there, we have the wire and everything up there, now we are waiting on this and Thomas Pasture. Chairman Stracener then asked if Chain Electric has done all of their work. Mr. Prysock said no sir. Mr. Moore said he didn’t even think they had set the poles going across the interstate have they, Mr. Prysock said they have not. Mr. Moore said he can’t explain that because the last conversation they had somewhere around the later part of July they were going to be on site the next week and start installing those poles. Member Ferrell said from this commissioner’s standpoint from a 30,000 foot view it looks like a cluster. It really does and I don’t know how we got where we are at. We really needed the power out there, we are buying power from somebody else because we don’t have power out there. What a travesty this thing has been.
Mr. Moore said if the contractor had installed it in perfect lines and spec’s like he did on the west side we wouldn’t be at this point. Member Ferrell said but, he didn’t. Mr. Prysock said we are going to get a call any day for a temporary out there at that school and Member Ferrell said I know it. Member Ferrell said the problem they have not is, how do we get something that we can set a pole on and everybody feel comfortable? They may not have the ability to say, this is what we need to do. As far as I see it they probably don’t with what has taken place so far. How do we expect them to come up with a design on top of what they have already done to say this will give us a 1.5 safety factor? I don’t see that they have that ability and the whole time that this fiasco has been going on why haven’t they gone across the highway? There are other things they could have been doing.
Mr. Moore said he has been in Mr. Vondran’s presence when he has asked them that same question and they have said, we are going to be here. I know they are grossly behind on the in service date so we could exercise the in service date clause. Member Ferrell asked Mr. Moore, are they going to make it? Mr. Moore asked what do you mean and Mr. Ferrell asked are they going to make it for this project, are they going to make it? Can they survive this because we are going to have a heck of a battle at the end of this job? Mr. Moore said they are a large contractor, they are also a subsidiary of another larger organization so financially, yes. Member Martin asked if their builders risk have any involvement in this scenario. Mr. Moore said he didn’t believe so but they can hold their feet to the fire by the clause in the contract on the in service date. There is a penalty but don’t ask me how much it was per day because I don’t remember.
They have not asked for any weather delays and that would have been legitimate because there have been all kinds of weather delays on this project. Member Stracener asked so what does a safety factor of 1.25 get us? Mr. Maybee said we have all heard the term that ignorance is bliss and I think in this particular project because of the size and depth of these foundations, they are 9 foot wide and 51 foot deep on the west bank and 37 foot deep on the east bank, that is not a concrete pour that you can inspect. You cannot even observe it. These are poured underneath drilling slurry so you cannot even observe the concrete being placed. We specified a method to test the structural integrity of the shaft and it is called Thermal Integrity Profiling. I don’t know if you have seen the report on it. I am the guy that will get down into the weeds so cut me off if you have already seen it.
The idea is that when the rebar cage is set and the concrete is placed around that cage these thermal probes measure initially the temperature of the fresh concrete but then over the next 24 to 48 hours they are logging the temperature around the perimeter of the reinforcing cage for the entire shaft. If you have concrete placed around that you are going to measure the heat of hydration to see the temperature increase. Unfortunately on the east side the bottom eight feet of the shaft was identified by the Thermal Integrity Profiling that the temperature never went up, the temperature that was recorded at the initial pour never really went up so the consultant that evaluated the temperature data said the temperature never went up and wrote a report that said the shaft is questionable, you need to evaluate this shaft.
When you compare that with the field observations of what happened the day of and when you calculate the volume of concrete it should have taken to fill the shaft and compare it to what was delivered and so forth you find that it all kind of correlates, it corroborates to say that we do believe this anomaly that we can’t see, meaning that the shaft instead of being just a pure cylinder it tapers into some type of a cone at the bottom with this angular space that could most likely be unconsolidated concrete, honeycomb if you will. There could be some air voids could be some void space. When we look at that we say let’s evaluate the shaft structurally and you find that structurally it is inadequate. If you don’t have the concrete consolidated the full diameter it’s structurally inadequate. Then you say I don’t know what’s there so I can count on this lower portion so I’ll re-evaluate the 29 feet that I can account for that we do have good data on. That is just a ratio of the ability of the foundation to resist the force versus the applied force. We like to see that ratio up around 2. We like for that foundation to have a safety factor to be able to resist the force versus what’s applied. In this case it’s that 1.24. That was a big long way to answer the question but I wanted you to understand what that means.
Mr. Moore said these poles are designed to not have guy’s (wire), be self-supporting so there is nothing on the side that is off setting the tension. Mr. Maybee and I have had this conversation and I have looked at a profile that we got and this pole with literally the shape at the bottom like that will it come down? I don’t think so. Mr. Maybee said they had worked very Stephen Head at McClelland. Mr. Head is the geotechnical engineer of record and I will say a lot of this back and forth communication with the contractor from their end hasn’t been directed at solving the problem. They want to go back through our design and somehow demonstrate that the shaft only needed to be 30 feet so you ought to accept it as it is. The bottom line is they were asked to build what was in the plans and specs and they didn’t. All of this going back and forth saying can you accept this and so forth really in our opinion, that’s a side bar to the issue. The issue is you didn’t build what was in the plans and we needed what was in the plans to provide the performance that you guys need to support this river span.
The way I see it there are only two paths that you could take. You could rate the pole and foundation to carry a single circuit and it would be adequate for that. You could go out there and hang poles and run a single circuit today and penalize the contractor some way for not providing the foundation as designed or require that there be remedial measures taken. They would have to be designed by an expert in not only geotechnical issues but specifically in deep pressure grouting. You are trying to fill this void that is 37 feet underground. It is a very specialty type contractor that is going to have the equipment and the ability to access that area through drills or pressure grouting and then somehow successfully place grout in that space. That is not any run of the mill construction, its very specialty type. Could it be done? Yes, I think it’s possible but you would have to have the right team involved to successfully make sure that is happening.
Mr. Moore said there is a metal casing that goes all the way down to the shale and that makes it more difficult to get underneath it. Mr. Maybee said let me pause for a minute. The anomaly occurs below the level where the casing terminated. The casing is not entirely full depth, the casing was seated on a shale layer and pushed into place and then the drill continued into the shale below the casing level. That is where the anomaly occurred so it is not as simple as drilling through gravel. Once they reach the shale layer they will have to drill through the shale to access this anomaly. Chairman Stracener said that casing was supposed to go down the other eight feet and Mr. Maybee said no the casing could have been seated on the shale that was the intent. The casing is there to hold the granular soils back, the gravels and the sands and the alluvial material so the casing did its job. It really didn’t have anything to do with the casing, it was just poor concrete practice during the trimming placement.
They just did not place and consolidate that concrete in the bottom of the shaft. We have some examples of the thermal integrity profile in which you would see and you would expect to see when you have a well concreted shaft. That is that all of those temperature probes all of the way to the bottom of the shaft, they all come up, you see those temperatures come up because there is concrete on those probes. It’s one of the best ways to inspect the shaft and there is only one other way and it is kind of the same kind of technology where you have tubes and you do CSL testing, it’s called Crosshole Side Logging. It’s another way to see if there is concrete in those locations. There are a couple of ways to check for the integrity of the concrete and we specified one of the two ways and unfortunately the results were not as we had hoped. This contractor has got to deal with that. Member Ferrell said so I want to ask, so we don’t know if it is honeycombed or if there is no concrete there, was there any temperature at all to indicate that there was any concrete there?
Mr. Maybee said there was a slight temperature increase there and the higher up the shaft you go the temperature went higher. I actually have a copy of the report if you would like to give me your contact information I will email it to you. Mr. Vondran also has the report. I have a copy if you would like to see it now. Member Ferrell said no that’s ok. We don’t know if it is honeycombed, is there possibly debris, we don’t know. Mr. Maybee said I think it’s unlikely that it would be shale rubble simply because of the way that that material was augured and removed from the hole. McClelland from a geotechnical perspective could speak to that a little more than I could. Mr. Jacob Gillip of McClelland Engineers said he was out there when it was happening and he talked with Mr. Andrew Miller who was out there and he and Mr. Head had looked at it rock was good and competent, they had no concerns that it was sloughing off.
It was good hard shale and if it was shale material it would have fallen from somewhere so we would have seen that anomaly there would have been a profile or a hot spot where that chunk had come out of. Is that correct Mr. Maybee? That is my understanding. Mr. Maybee said that was right. Mr. Gillip said they didn’t see anything like that so there was no reason to believe that any shale was sloughing off. It may be possible that they were dropping the concrete through water or something. Member Ferrell asked if the shale was 7 to 8 feet deep. Did the auger not break through the shale or is the shale all the way to the bottom? Mr. Maybee said the shale elevation starts at about 21.5 feet from the top of the shale and the dark gray shale or the confident shale started at 24.5 feet. From 24.5 the shaft would have continued down to the 36 foot level as charted. Member Ferrell asked so is that all shale and Mr. Maybee said it was. Mr. Moore said the rebar goes all the way down to the shale too. Mr. Gillip said the shale goes down approximately 100 feet. It is quite a depth of shale.
Mr. Moore said he thought they were out there working, the last conversation he had with them they were bringing trucks in and were going to start setting poles. Chairman Stracener said he would have set them back in March or April while they were out there working on this he would have had someone out there doing it. Mr. Moore said the days have gotten away from him but the latter part of last month they were bringing the trucks in as far as he can remember and they were going to start the next week on the poles so I will take responsibility for that. Chairman Stracener said you mentioned these were self-supporting and that is obviously what we need in there but is there any way that we can add guy wires in there to support these and increase our confidence factor.
Mr. Moore said they have talked about that and that is a possibility. The problem with that might be during high water conditions we may have some sort of damming affect where something comes down there like debris, trees, limbs that may catch one of the guys (wire). We are not overly concerned with the poles themselves if they were designed with some walls or something in front of them to deflect this. Mr. Maybee said the steel poles have a pier protection plan which involves a layer of rip rap and also a nose pier if you will constructed out a triangle shape from utility poles and that is just to shed debris as it comes down river to keep it from building up on the 2 steel poles. Mr. Vondran asked, is the 1.24 safety factor based on the design criteria of the double circuit and what would that safety factor go to for a single circuit? Mr. Moore said it will change because the safety factor is based upon ice and wind.
Mr. Maybee said let me not speak relative to circuits but percentage of load if I may. This particular pole was designed for 5,064 or 5,084 foot kips of overturning moments and that is the rating for the pole. Telco rated the pole for that and we want a matching foundation. The pole manufacturer has a name plate capacity for that pole of 5,064 foot kips so we want a matching foundation for that. When we apply that load to a foundation that is shortened discounting that anomalist 8 feet at the bottom that is when we get the factor of safety against overturning of 1.24. If we reduce that value by 30%, if we take that overturning moment and reduce it down to 3,556 we get our safety we get our safety factor back up to 1.77. We have to do a 40% reduction to get it back over 2. Which is 2.06 with a 40% reduction. You get 60% of your rated capacity to get back up to a 2.06 factor. That probably doesn’t answer your question but the way I understand it from Mr. Moore it is either on circuit or two. There is no one and a half. You can’t toggle the value. With one circuit, you are going to be above the 2.
Mr. Moore said they are not going to pay them the full value of the foundation. Member Ferrell said he is just interested in them finishing the job right now. Mr. Maybee said I think what they will do right now based on the communications I have seen and what coordination I have helped the contractor on why we are saying there is a defect and having that conversation with them, the way I see it, they are going to try and demonstrate by toggling the design parameters that what they built is an industry standard. They are not arguing that they didn’t build what is in the plans, they are trying to say that it is adequate in what they see in the industry. Mr. Moore said I see it as the insurance guy as we file the claim to figure out how not to pay the claim and not get any insurance money out of the guy so we are just kind of bickering back and forth.
Member Ferrell said if we wanted it remediated they would have to stick some type of I’m guessing like a 2 inch pipe and go back through the shale at an angle in the bottom of that pier and pump concrete in. Mr. Maybee said you are right they will have to access that anomaly space and probably not just at one location but potentially multiple points around that shaft, access that through some type of deep drilling and most likely it wouldn’t be concrete it would be some type of high strength grout. A grout that would be pressure injected into that space and the idea would be to try and monitor how much grout you actually pump into this space so that we can know that it has somehow been filled. Now as a positive, the thermal probes are still in place unless the wires have been cut.
My understanding is if they are in place they will work forever unless the wires have been cut at the surface but if the wires are still there a data logger can still be connected to those and you would hope to be able to record some temperature, if you pump 95 degree grout into this angular space you would hope to see a temperature increase. Member Ferrell said so we are confident of the integrity of the temperature probe at the bottom? Mr. Maybee said if the wires have not been cut, we know that they will record temperature. Chairman Stracener asked if those were thermocouples, RTD’s or what? Mr. Maybee said they are thermocouples. Mr. Moore said you can see on the graph where they are located and where there is a lack of reading where it never came up and it’s like 70 degrees or so at the bottom.
Mr. Maybee said Commissioner Ferrell the point is that they did record a temperature. They just didn’t record any increase in temperature because there was no concrete there. Member Ferrell said so you are pumping concrete 37 feet down a 9 foot diameter hole what would keep the concrete just from gravity and the pressure on top of it from setting it off to go all the way to the bottom? Mr. Maybee said when you make that type of a placement of course, ACI (American Concrete Institute) has guidelines for contractors on how to do this type of construction and we specified that of course with our plans. Generally, it is done under a drilling slurry so your shaft is full of a thickened material. It is water, but polymer slurry has been added to it, so it is very thick.
A trimming pipe would be installed to the bottom of that shaft, so just a hard-trimming pipe to the very bottom of the shaft. A pig is inserted, or a plug if you will, in that pipe and concrete is right behind that pig, and then it begins to be pumped all the way to the very bottom. Once the pig comes out, it comes all the way to the top and floats then you now know you have concrete in the bottom of the shaft. You monitor the volume of concrete that is being pumped or placed, and you keep the trimming coming up at the same rate; always keeping that trimming pipe inserted in the concrete so that there could be no intermixing of slurry and concrete. You never want to draw concrete through. It is always coming out of the pipe into the concrete, except for when you first start. They clearly did not accommodate that. They clearly were not able to exercise those best practices while they were doing this.
We later learned, and correct me if I am wrong Stan, that this particular contractor had never done a shaft of this size or scope. Mr. Moore said not in this area that is for sure. Mr. Maybee said they are from Louisiana, so the shale may have presented some challenges for them. Mr. Moore said well, they didn’t follow the guidelines that everybody set forth; they did on the west, but unfortunately it was a bad learn for them on the east. They didn’t follow what was recommended, although there were representatives on site watching this. We found out about a week later what had happened… all of us did. Member Ferrell said so if somebody came in to remediate and they drove into the side of the shale, and he is assuming at an angle, and pumped some type of grout or whatever into that, into multiple holes, he asked if that would bother the integrity of the shale. Mr. Maybee said he thinks these would be very small drills of 2 to 3 inch in diameter, and he thinks that has been done before.
He is not an expert in that. We would definitely want to involve someone like Haywood Baker or other company that is involved in deep pressure grouting. Mr. Moore said it wasn’t in our scope of work to do this, and ya’ll didn’t hire us to do that, but we recommended these people to Chain Electric that they contacted. Mr. Maybee said he thinks Chain Electric, in a meeting they had not long after these TIP reports came out, and of course they challenged the validity of those. They are actually ASTM recommended test methods, so it is not some innovative thing. TIP testing has been around for a long time, so long as it has an ASTM designation. When the reports came out, and Chain was challenging and discussing some of that, they said in this very room and Mr. Vondran was there, they said they would be willing to drill down through the shaft to access this this anomaly, but if the anomaly is not there then you guys will have to pay for that drilling.
So, their plan, and it was never submitted or flushed out, was not to drill externally but in through the shaft, which he thinks has some merit, but it also presents some challenges because we have a shaft, and now we are going to chew holes into it and how many times are we going to drill around the shaft? That was never flushed out and they never submitted a plan on that, but he thinks they were posturing, so to speak, meaning that if you did such drilling you would not find it at all. Mr. Moore said he believes they were talking about putting a buttress in front of a pole or a couple of pole keys, if that means anything to you, but that has not been formally submitted either. Chairman Stracener said as high as that flow can get on that river in the delta, he is not sure that would work.
Mr. Moore said these would be below grade and Chairman Stracener said yes, but that grade changes. Mr. Moore said there is one thing that hasn’t been done yet on either one of them, and some would like to say a donut, but the top 10 or 15 feet of soil has to be excavated around all the foundation, backfilled and impacted with something because it is just silty soil there on top, and the elevation may change next spring by a couple of feet. Mr. Maybee said and that was actually a part of our design with McClelland. We called it a part of the Pier Protection Plan, and it involved a cone of improved material around the top of the shaft, along with riprap and fender piles, so that was always a part of our design. They have a temporary casing that they used at the surface that needs to be removed before they can complete that.
There is a 12-foot-tall casing, not a permanent casing, but an external, oversized casing that will come out when they complete that pier protection plan. That is still in place on both the east and the west. Member Martin asked if they have not done anything in the 2nd phase waiting on the poles and Mr. Maybee said yes sir. Member Martin said so, the major part of the contract had to do with the installation of the cables and all of that, and so if we push one resolution or the other, and they walked away on the whole contract, what would be our recourse? Mr. Maybee said as far as he knows, they haven’t even requested the first payment yet. Member Martin said they put in a $600,000 change order and Mr. Vondran said no, Chain Electric is who our contract is with. Their sub-contractor is Platinum. Platinum was to do all of the drilling, foundation and the piers, and Chain would come in and install the poles on top of the piers and also do the poles for the Interstate Crossing. Member Ferrell said so, Chain sub-contracted, but are owned by the same company.
Mr. Vondran said Platinum and Chain are both owned by the same parents. Member Ferrell asked if they are individual companies and Mr. Maybee said they are, and when he referred to the contractor, he was referring to Platinum Foundation; not Chain. Chain has done many power line type projects, but he was referring to the general shaft. Member Ferrell said so a remediation like that with the grout down there would be $250,000 or $500,000. Mr. Maybee said it is clearly a 6 figure number, but he has no experience to base even a guess on. Member Ferrell asked if it could be a million and Mr. Maybee said he could not imagine that. Member Ferrell asked if it would be between 250 and 500 and Mr. Maybee said probably up there, yes. Member Martin asked if the east side was where we had to move and Mr. Vondran said, no sir, the west side is where we had to move. West side #1 was a complete failure, then they moved over and poured the east side, which we thought was a good pour.
Then they moved back over and poured what we call West side #2. Member Ferrell asked how long they have NOT been onsite. Mr. Maybee said at least a month. Mr. Prysock said it has probably been longer than that. Member Ferrell asked if they could say they have abandoned the job and Mr. Maybee said he would think you would have to go back to Gene. Member Martin said we were just waiting on a 28-day break, wasn’t it? Mr. Maybee said that is some truth, but here again as David pointed out, in front of the contractor, and we all heard him the last time we were here, that there was nothing that would stop him from installing the poles going across the interstate. They could have been doing that while they were waiting. Member Ferrell said yeah, that is just one part of the job. Mr. Prysock said they were asked that question in the meeting and their answer was they didn’t want to bring anything down here until they do it all.
Mr. Maybee said to answer your question on the foundation test cylinders were before the 28 days. Mr. Gillip said the last pour was done on May 29th, which would have been West Side #2. Member Ferrell asked if they have their own equipment and tools there and Mr. Prysock said Chain has their material there for the poles and wire. Mr. Maybee asked if their truck is still down there and Mr. Prysock said he doesn’t think it was there this morning, but the dump truck sat down there for 3 weeks. Mr. Vondran said their crews are operating for the Coops in the state of Arkansas, so their Benton crew may actually be doing another Arkansas job for another client. Chairman Stracener asked if that is Chain or Platinum and Mr. Maybee said Chain. As far as Platinum is concerned, they are finished, unless they have to come back. Member Ferrell said our contract is with Chain, so our communication line goes to Chain. We have nothing to do with Platinum as far as a contract because it is through Chain. Mr. Moore said Jerry King, who is the President of Chain.
Member Ferrell said he wouldn’t even mention the sub-contractor. He would just say you guys are not here. What is up? Have you abandoned the job? Chairman Stracener said maybe it is time to call the in service date failure and put them on notice, because they may think we are not concerned. Mr. Moore said he would call tomorrow and say we are going to implement liquidated damages. Chairman Stracener said if that doesn’t get their attention, then they have abandoned it and have moved on. Mr. Moore said at that point in time, he guesses, is where you call their bond. Mr. Moore said he is not trying to back Chain in any way. They are a reputable contractor and have worked in Mississippi and Arkansas. They are good line contractors, whether or not you or I see this as a small job.
Mr. Maybee said one thing he has been thinking about is if the proposed remediation measure were submitted by Chain that involved repairing this anomaly from the inside of the shaft, then he would see if it is acceptable to set the poles and put one circuit across the river on tension, until such time that you have this repair completed. He doesn’t know if that solves some of your operational issues, problems and challenges, because these poles are going to be on either side of the river, and are going to be pulling in towards each other until all of this back up stuff is constructed. It will be like this, so if you just do one circuit, the foundation we have there today is good. Now that may present some challenges where you have to come back later and pull the other circuit and so on.
That would have to be done after whatever repair takes place. He is just throwing that out there for consideration. Member Martin said that is up to Chain to make that proposal and Mr. Maybee said that is correct. Member Ferrell said it would be up to them to come back and do the second circuit. It would be their problem. Mr. Moore said it could be something that could be reached from a bucket truck, and that might be something ya’ll could do in the future. He would obviously take that out of the contract. Member Ferrell asked if we could reach those poles and Mr. Prysock said we might have to rent something. He said he is personally all for the single circuit himself right now, because he doesn’t know if any of us will ever see that much development in a while out there, so if we could get across with one circuit right now, he’d say let’s go for it. If we go another 4 or 5 months with all of this drilling, there is going to be a real good pickle out there. They’ve got walls out there on that school. Member Martin said that would be leverage if you built the circuit and moved it into the mediation.
Mr. Maybee said keep in mind that setting the pole and doing that eliminates any option of accessing that anomaly by drilling through the top of the shaft. It cancels that out. You can’t do it. Member Martin said you would have to drill multiple holes in that if you want to hook it up. Mr. Moore said it is going to be difficult. He doesn’t know if they have seen the top of the pole and the foundation. He asked if they have been out there. He said he heard someone say they could do it, but my goodness, he doesn’t know. Another band aid he thought of was, and it is a pure band aid, to stand across the river is not that long to him, and he thinks you have a line on the east side and a line to some degree on the west. He knows there is nothing across the interstate yet and that is the stickler, but the band aid could be to build a one-aught line across the river. Mr. Prysock said a one-aught won’t be near big enough.
Chairman Stracener said he thinks if we went with the one-aught circuit that the language about the remediation would have to be very concrete. Member Ferrell said it is going to be remediated because we want 2 circuits. He is not disagreeing with them, because it is for the future and that was the whole reason for it, even if it is 20 years down the road. Mr. Prysock said that was the idea behind all of it, so we wouldn’t have to do it again. Mr. Maybee said that is a great point. When we are all dead and gone and our successors are sitting in this room, they are going to look at that pole and it will have a nameplate capacity on it. They will look at the drawing and it will have a capacity on it, and they are going to assume that foundation is good for that, right? The foundation won’t have a plate on it. They will look at the pole.
We need to fix it or permanently downgrade that nameplate or there will be a potential for that being overloaded if nobody knew. He has seen it happen when somebody buys a pole on surplus and didn’t really need a surplus pole, but it was adequate for what they’ve got. Then someone sees the nameplate down the road. It can happen. Mr. Moore said we just want to hear them working. We want our job fixed. We’ve got a problem. We’ve got an issue and we’ve got to fix it. It is simple. The fix might not be simple. Member Martin said it’s all about shifting blame. Chairman Stracener asked who our spokesman is for Chain.
Mr. Vondran said it is the group. If it is GEOTECH it is McClelland. If it is structural or electrical it is Fisher Arnold. Onsite it is our guy Shawn Jackson, but it is all coordinated through Mr. Jerrod King, President of Chain, and with Fisher Arnold being the engineer that wrote the contract, we have routed everything through Fisher Arnold, because they are listed as the contact in this contract. Member Martin asked if the contract calls for arbitration on issues, and Member Ferrell said or is it a call for the bond. Mr. Moore said if we don’t hear anything on liquidated damages, then the next thing to do is threaten to call the bond. That would pretty much ruin a contractor to do that, so he doesn’t think it would get to that. Member Martin said we have to get them off center and do something. Member Ferrell said they probably don’t know Platinum is bonded to Chain. Mr. Maybee said here again, we really don’t care, because our contract is with Chain.
Mr. Gillip said as Darren stated, Chain and Platinum have the same parent company, so we don’t care. Mr. Moore said his direction is to get in touch with Jeremy tomorrow via email, and copy you that we are going to implement liquidated damages. Member Ferrell said we want the project finished. Chairman Stracener said we will definitely entertain options that they might come back with on the single span or otherwise, but that language has to be very concrete that they are not getting out of completing the work. Mr. Stanley said the acceptance of it will point to ya’ll. If you want to accept it “as is”, that is an option. You’ve got a 60% foundation here, then we will pay your 60% of it. That is not his recommendation. He would be looking to the Commissioners for direction on what to do. Here again, it is surprising that nobody has asked for any money. There is a lot of money out there already. There’s about 9 yards of concrete give or take and 120 on the other.
Mr. Maybee said it is over a half a million dollars. Member Martin said plus the $650,000. Mr. Gillip said that may be another subsidiary of the primal. Member Ferrell asked what the amount of concrete used on this was and Mr. Maybee said theoretical was 92 yards. Actual delivered to the job site was 89. Member Ferrell said it is 300 short. Mr. Maybee said there could have been some residual in the last truck, but nobody knows. When they topped it out, nobody looked in the truck to see how much was left. Nobody dumped that truck out, so 3 plus, but really, we don’t really know. Mr. Moore said this is a lot of concrete. Chairman Stracener said thank you that is not the news that we wanted to hear but we appreciate your work that you are doing. Mr. Maybee told Mr. Vondran if he had any more technical questions feel free to get in touch with them. We will be glad to answer any questions related to the foundations.
New Business
- Saline County Solar Project David Vondran
Mr. Vondran said he and Mr. Jason Carter have been working with Judge Arey and Clay Ford, the county attorney. They have met with us on a couple of phone conversations and zoom meetings with their contractor, Johnson Controls. Johnson Controls came in and did an energy efficiency study on all of the county facilities, county owned offices and facilities. The Court House, the Saline County Health Unit, the jail, the fairgrounds and so forth and put together a scope of work for the county to save money. Part of that study included incorporating sealed solar with providing solar panels on all of the fixed mount, most of the roof top in order to offset some of the consumption of the county buildings. There are about 5 locations and two of those five were going to be 500 kW arrangements.
Our current ordinance has an arrangement of up to 300 kW so two of their installations would require waiving the ordinance. Another big part of the project is, a lot of the roof top panels would go on the county barn and one of the livestock facilities which generates more energy than is consumed on site so they would like that credited to another facility, of they want to aggregate meters. That is a request of a variable that is required in our ordinance. They would be seeking those two variances, two installations greater than 300 kW and meter aggregation. In running the numbers, any residential solar installation gets credited back at avoided cost, meaning, what we pay Constellation and Miso to deliver the energy to Benton. We credit the residential solar back at around 4.02 a kW. Any account holder (this is state law) that is a demand meter customer, the get credited back 1 for 1. There is a caveat where we could include what is called a grid charge.
We have not calculated that because this is the first installation that would fit that criteria. As it stands what the county is proposing would cost Benton Utilities about $50,000 annually in revenue. We calculated it with the numbers they provided us and it would save them about $10,000 annually in electric costs. With those numbers, it doesn’t work for Benton Utilities so we are trying to work with the County to come up with a solution. We would entertain finding a piece of property that we might could lease to the county as part of their project. They are looking to fund and install solar panels so that could be done on leased property and the terms of the lease on the property could coincide with the Power Purchase Agreement that they have with sealed solar. For instance if that is a 20 or 25 year PPA for solar energy that they are paying on the build out of a solar facility we would also want to exercise a first right of refusal to purchase that from them and we would set the terms of our lease to expire at the same time that their purchase agreement expired.
We would then look to purchasing that for a depreciated price. So, we are currently working with the county administration to find a solution. We just wanted to present it to you and let you start asking questions so that you will be prepared to answer phone calls. Member Ferrell said so the expenditure of $50,000 by us and a savings of $10,000 by them I am assuming that it includes their payment for the solar, right? Mr. Vondran said yes sir, if you will look at page 8 of your handout and the title of that slide is called calculating value. Member Ferrell asked is this by Johnson Controls and Mr. Vondran said this presentation is by Mr. Jason Carter using numbers provided by Johnson Controls and sealed solar. Member Ferrell asked, Jason Carter is working for who? Mr. Vondran said Benton Utilities. When calculating value of the solar, if you look at calculating the potential loss for Benton Utilities, the value of the generation minus the avoided cost times the quantity of generation equals our potential loss.
The value of generation minus their levelized cost of electricity times the quantity is their potential gain. For this example, the value of the generation is $.07 per kW. The levelized cost of electricity is the number they gave us. The $.06 per kWh. The avoided cost that is our avoided cost the $0.4.4 and the quantity of generation they are looking at is 1.9 Mw of generation of MWh annually of generation. If you see the potential loss the $49,500 per year because we would be paying them $0.7 per kWh not taking into account our avoided costs. That’s how much we would be losing. Their potential gain is $.07 kWh, which is their current rate from us minus their levelized cost of electricity which is Seals proposal to them times 1.9 MWh per year so $9,500 a year. They did not disagree with these numbers as far as the levelized cost of electricity or of course the number we provided them, the value of generation.
The figure that they do and all solar companies disagree with is the avoided cost number. They are saying that does not take into account any distribution benefit so, they would like to see that number higher because they are saving us wear and tear on the distribution system which they still use. Especially when the solar facilities are producing in an area that has to go through distribution to get to their load. Now, they have mentioned that Benton Utilities is getting in the way of saving the county residents money and we relayed our sentiments to protect the Benton Utilities customers who are losing $50,000 so the entire county gains $10,000 and the Benton Utilities customers are a subset of the county citizens and we are all part of a bigger group. It is the typical industry concern of non-solar customers subsidizing the solar customers. That is the 5 year argument that to this day is still before the Public Service Commission.
Mrs. Scott said it is not like they are going to cut taxes when they save $10,000 on a utility bill. It’s not like if they don’t do this the county residents missed an opportunity to save money, they are not going to save money. Mr. Vondran said we believe that if we could pull, if we could find a way to work with the county to pull the solar component out of their energy efficiency study, there is no question that the energy efficiency study will reap the county rewards. Let’s say that the energy efficiency study might have a payback of 10 years but if you add in all of the capital of this solar it runs that payback period out to 20 years at the expense of Benton Utilities $49,500 annually. Member Ferrell said the value of generation of $.07 per kWh that is what we charge and Mr. Vondran said yes sir.
That is our kWh charge for our small general service Class 300 demand metered customers. Member Ferrell said that is the county facilities and Mr. Vondran said yes and Member Ferrell said so we would be losing $49,500 in revenue. Mr. Vondran said we would be over crediting because we would be crediting them at $0.7 kWh when we should only be crediting them $.04.4 per kWh. Chairman Stracener said because they get the full one for one and Mr. Vondran said they get the full one for one. Chairman Stracener said he is assuming the same would apply to the hospital and Mr. Vondran said and the school district. It is very important to get this right on the first go. Chairman Stracener said the hospital is our second largest user and if you consolidated the meters at the schools they might beat the hospital. Mr. Vondran said the potential property for a potential solar partnership with the county we could provide 7 to 8 acres that would potentially be available for 2 Mw, one Mw for the county and one Mw for the public school district for the future, it will be located right next to this substation which will providing the power for that load at the 114. As it stands, their request requires a deviation from ordinance. Chairman Stracener said the question is do we stand with the ordinance or not. Mr. Vondran said it may probably proceed to the point where the PUC needs to make a recommendation to the council sooner than later to accept or deny. Member Martin said if you agree you are opening the door for one, right?
Mr. Vondran said yes sir. Member Martin said you are setting a precedence from here on out because of state law. Chairman Stracener said you have to do the one for one regardless. The one goes. Mr. Vondran said the one goes, it just without the meter aggregation, it will not benefit them to produce more at a sight than the sight will consume. Member Martin said that wouldn’t make that much difference. Mr. Vondran said it would make enough difference to them that it would kill their project if they can’t meter aggregate. Chairman Stracener said if I’m the school board, after that I am consolidating. The counter offer that will be presented for your consideration is, well, the new load that CTE will be providing Benton Utilities should more than offset this $50,000 loss. That will be an argument that we will need to defend and answer. Mr. Jacob Gillip said not including the cost to get your infrastructure out there and Member Ferrell said yes, in 25 years we might make money out there. Chairman Stracener asked who is going to own that building out there, the county? Mr. Vondran said the county. Chairman Stracener said unless it is aggregated and they get the benefit of the one for one. Member Martin asked if they was just and FYI and Mr. Vondran said yes sir, and FYI no action required.
- Custodial Services Bid Review/Approval Madeline Wilson/Linda McAdoo
Mrs. Wilson said our custodian retired and we ran an ad in the newspaper trying to find a custodian and I don’t know if people are just not wanting to work or what but we didn’t get very many applicants. Mr. Vondran and I talked and we decided to see if we could go out and find a custodial company to come in at night and clean when we weren’t here. We did that and one of the requirements was that they had to come and walk through before they gave the quotes. We had 4 walkthrough but only 2 gave us bids. Of those two bids, Best Janitorial came in at $28,800 per year and KT&S came in at 37,000 per year. I asked Mr. Davis to run some numbers on what we paid a custodian individual and with benefits and everything we were paying $35,100. It saves us a little money to go with a janitorial service. I am just asking for approval to move ahead with that. Chairman Stracener asked what buildings that covers and Mrs. Wilson told him all of them, electric, billing, 2 at water and 2 at wastewater. Mr. Vondran said most of those are 2 nights a week.
Member Ferrell asked if references had been checked and Mrs. Wilson said she had. He had given me 4 and I have talked to 2 of the four. One of them the number had been disconnected and the other one I am waiting for a response on. They just said that you had to stay on them like with any outside company that they did what you wanted them to do. One of them they had worked for them for 7 years and the other one was like 4 and they were satisfied with them. Member Martin asked if they waxed floors, was that an option? Mrs. Wilson said we have a different company that does the waxing and the buffing. I know that both of these do that and I told them that there may come a point where we go out for that again and they may want to see about doing that also. They are aware of that. This is with us supplying the cleaning supplies because on these tile floors there are certain things you can’t use because it will strip the wax. Member Martin made a motion to accept the recommendation and Member Ferrell seconded the motion. A vote was taken and approval given. Member Ferrell said he would recommend that if you haven’t already to put a 30 day cancellation clause in there. Mrs. Wilson said she is pretty sure that was in the bid spec’s that we sent out and this is a one year contract and if we are happy with them then they have the right to go out two more years before we bid again if we agree on the price at that time.
- Change Order for Hurricane Lake Pump Station Jacob Gillip
Mr. Gillip said this isn’t a real big one. When we got out there and went to digging
There was some material that needed to be dug out and hauled away so there was a little bit more material that needed to be brought in. It ended up raising the site 6 inches to adjust to recent flood plain changes out there at Hurricane Lake. There was an increase of dirt work of 59 cubic yards removed and 76 cubic yards brought into the site. Member Ferrell asked if they didn’t approve a change order for them before and Mr. Gillip said yes sir they added some sod to the project as opposed to seeding. Member Ferrell asked where we are with this project and Mr. Gillip said they are pouring the slab tomorrow probably. Mr. Dewayne Hood, Water Distribution Manager said they poured the slab today. Member Ferrell asked if this is a pre-engineered system and everything. Mr. Gillip said yes the pump package and the building are being fabricated right now but I don’t know how long that is going to take. They are almost to a point on the site where they stop.
Member Ferrell asked where it being fabricated at and Mr. Gillip I’m not sure, Clay Greene is the company. Their local sales contact is Jack Collier and we have done several with them and they have done quite a few around the state. Back when we started the project there would be an 8 week lead time but they said because of Covid it could be longer. The other thing on here is gravel. We have increased the area of gravel paving on the site. That last change order that we did for sod, that number should go down some because we are not installing sod on the entire site. Member Ferrell asked Mr. Gillip if he thinks this will do it and Mr. Gillip said he thought so. We are about to have a slab and then putting the pump package on and putting the building on other than hooking it up I don’t see anything else. Member Ferrell asked if the pipe was in and Mr. Gillip said yes sir, they got that all in and it is sticking up through the slab. It should be sticking up it up a little high. They will bring the skid in and then measure it cut it and install the megaphones device then hook it up, then hook up the wiring then we should be good to go. Member Ferrell made a motion to accept change order 2 on Hurricane Lake Pump Station and Member Martin seconded the motion. A vote was taken and approval given.
Next Commission meeting date; Monday, September 7, 2020 instead of Labor Day.
Chairman Stracener our next meeting date is September 7th which is Labor Day. Do you want to move it up to the first or another day that week? I will say if you move it back a week you are going to have to find someone for Mr. Martin and me because someone says we are going on vacation. Member Martin said move it to the first. Mrs. Scott said if you move it up a week earlier that will be August 31st. Chairman Stracener said we could meet one day later that week. Member Ferrell said he is pretty open and Member Martin said he was too. The meeting was set for tentatively for the 1st unless one isn’t needed.
Chairman Stracener said one additional thing to the agenda we need to go into executive session and I need a motion to adjourn to executive session. Member Martin made a motion to adjourn to executive session at 7:39 p.m. and Member Ferrell seconded the motion. A vote was taken and approval given.
Executive Session
Personnel Matters
The meeting was called back to order at 8:23 p.m. with no action taken.
Member Ferrell made a motion to adjourn the meeting and Member Martin 2nd the motion. A vote was taken with unanimous approval given.
Meeting adjourned at 8:24 p.m.
Doug Stracener, Chairman
Madeline Wilson, Recording Secretary