City Begins Budget Process and Reluctantly Awards Bid for Collins Hill/Highway 316 Project

WORK SESSION---Item 3: The City’s FY 2011-2012 Budget:City Clerk Bob Baroni officially presented the city’s proposed budget during a continued City Council Work Session on Thursday evening. Baroni said this was a simple budget based on last year’s expenditures. No city employees’ raises were included in the budget. But a 6.5 percent wholesale water rate increase, paid to the county, which goes into effect in December is included. This wholesale rate increase is mandated by an ordinance and the county gave prior notice to the city that it would take place.

A budget memo given to the council before the meeting contained an outline of how the budget was calculated. The memo included an explanation of how the millage rate (2.16 mills) was determined. Not included in the proposed budget is the pension provision that ended in January of this year. This memo included requested items that were not in the budget.

The following is the Budget Summary for FY 2010-2011 and FY 2011-2012 provided by the city.

BUDGET SUMMARIES:

       FY 2010-2011

          FY 2011-2012

DEPARTMENTS    

REVENUES

EXPENDITURES

    REVENUES

EXPENDITURES

Administration

6,594,960.00

3,420,550.00

6,468,671.00

   3,646,603.00

Data Processing

0

1,188,638.00

 0

  1,228,387.00

Meter

0

976,455.00

 0

   917,833.00

Risk Management

0

213,475.00

 0

   122,513.00

Garage

10,000

699,114.00

10,000.00

   678,983.00

Street

1,200.00

2,095,323.00

122,000.00

   1,646,144.00

Police

75,000

8,760,866.00

83,000.00

   9,116,284.00

Planning & Zoning

94,700.00

327,578.00

101,300.00

   378,296.00

Court Services

3,350,544.00

1,987,280.00

2,298,089.00

   1,536,882.00

Performing Arts Theater

2,000.00

1,000.00

800.00

            0

GENERAL FUND

10,128,404.00

19,670,279.00

9,083,860.00

   19,271,925.00

Police

0

           0

CONFISCATED ASSETS

500,000.00

500,000.00

0

           0

Administration

0

             0

HOTEL/MOTEL TAX

242,700.00

242,700.00

225,100.00

   225,100.00

Administration

RENTAL MOTOR VEHICLE EXCISE TAX

119,520.00

119,520.00

143,500.00

  143,500.00

Water

4,080,325.00

3,399,163.00

4,610,807.00

 3,256,760.00

Water Treatment Plant

4,840,677.00

6,216,020.00

0

 1,940,093.00

WATER FUND

8,921,002.00

9,615,183.00

4,610,807.00

5,196,853.00

ELECTRIC FUND

26,832,076.00

24,550,736.00

29,751,758.00

25,837,628.00

Gas

42,084,766.00

32,936,944.00

39,180,462.00

31,256,654.00

Locate

0

507,827.00

0

366,835.00

GAS FUND

42,084,766.00

33,444,771.00

39,180,462.00

31,623,489.00

SOLID WASTE FUND

1,087,482.00

1,772,761.00

1,023,800.00

1,720,792.00

STORMWATER UTILITY

689,678.00

689,678.00

673,227.00

673,227.00

TOTAL

90,605,628.00

 90,605,628.00

 84,692,514.00

 84,692,514.00

Copies of the entire budget are available in , said Mayor Judy Jordan Johnson.

The public will have an opportunity to weigh in on the city’s proposed budget during the 7:00 p.m. City Council Meeting on Monday, August 1, 2011 during a Public Hearing.

Baroni said the budget must be approved by the middle of August 2011.

Councilman Tony Powell in response to an inquiry by Baroni, said that he wants the council to continue to hear requests for capital outlay items. Powell said he wants it all to come back to the council to (over) see the bid process and be a part of the approving (of expenditures for these items).

SPECIAL CALL MEETING---(Old Business) Item 1:  Award Bid of Collins Hill/Highway 316 Project:  Mickey Watts, Asst. Superintendent of Gas Utilities, appeared before the council, again, seeking council’s approval to award the to Steel & Associates with Hodge (Construction) listed as a subcontractor.  Steel submitted the lowest bid at $21,633.00, with second lowest bid was $68,675.00.

City Council in a previous meeting had instructed Mr. Watts to re-bid this project and to examine the certifications and bonding of Hodge Construction. Watts told the council that Steel & Associates, due to their long standing relationship with Hodge would not accept the bid if Hodge was not allowed to subcontract on this project.  

Mayor Judy Jordan Johnson asked Watts if Hodge was bonded. Watts responded that due to the death of original owner, Mr. Hodge, the current owner, Mrs. Hodge would have to get bonding in her name; so Hodge is not bonded at this time.

Councilwoman Katie Hart Smith asked how long had it been since Mr. Hodge passed, Watts responded two years ago. Councilwoman Smith then asked how long it takes to get bonded, Watts said he wasn’t sure.

Councilman Peter Martin said it takes two weeks for completion of bonding process.  He said it has more to do with cash; if you have the cash you can get bonded. Councilman Martin said that Steel & Associates are bonded; therefore the city would be protected.

Questioning Watts about Hodge’s certifications, Councilman Tony Powell said the Public Service Commission will look to the city to validate and approve certifications. Powell said in talking with the PSC, that regulates safety issues; there is a whole list of other requirements for licensed utility contractors; in additional to what is required by the state and city.

“It just doesn’t line up,” said Powell. “Twenty five years of doing business with the same company. There is low pricing associated with it. There is an unusual relationship, in terms of the integration of an outside contractor with our own city department. It is my understanding that we have them using our (the city’s) equipment; having keys to our equipment. A go to lunch, go play golf kind of relationship, very close. And it troubles me.”   

Powell said Steel bidding in the front while Hodge can’t get a bond in the back, just doesn’t “set up right”. He said he was trying to reconcile their (Hodge’s) competency.  Powell said that the sharing of equipment is only happening with Hodge. 

And bids are, possibly, being submitted with city provided equipment factored into the price; which could explain lowest bid pricing.

Councilman Powell said he wants someone to take a look at this issue and straighten it out. He said it is not his job to investigate credentials and the relationship between a contractor and city staff, but he has. But he wants someone else to do that (as part of their job). He said his job is to judge this contract; but it does not feel right and he doesn’t have a good feeling about it.

Watts said since he has been in the position everything has been on the up and up; and no city equipment has been shared. He also said that the deadline for this project to start is next week. If this project does not start on time, Watts said the city will default and might have to pay a large sum of money to the other contractors on the project due to this delay.

Councilwoman Smith asked Watts for his expert opinion and comfort level with the bid, the background check, and quality of work to allow Hodge to do the work on this project.

Watts said, “Yes.  I have seen their work and I’ve been on the job with them. We check on their work to make sure they are doing what they are supposed to be doing. To answer your question, yes I think they do a good job and I think they are qualified. ”    

The motion, made by Councilwoman Marie Beiser, to award the contract to Steel & Associates to meet the Department of Transportation deadline of August 1, 2011, passed 3-2; due to a split councils vote, Beiser and Smith voting in favor with Powell and Martin voting against, Mayor Johnson cast the deciding  vote in favor of the motion. After voting Mayor Johnson said she voted in favor due to the fast approaching deadline.

Mayor Johnson also instructed Watts to respond to every one of Councilman Powell’s list of written inquiries and concerns about Hodge and this project.