Community pursues ‘Project Midnight’ as industry prospect
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By: Charles Shiver
Adel to offer power rate for extremely large customer
City Manager John Flythe spoke to the Adel Mayor and Council Monday regarding a tentative industrial prospect identified as “Project Midnight” that is looking at Adel.
Flythe noted that the entire City of Adel consumes approximately 22 megawatts of power. This one customer would use 10-12 megawatts. They have an extremely high load factor and will be running an estimated 95 percent of the time. “What this means for us is they will have steady usage, with few peaks or valleys,” Flythe said. “Historically, we have tried to give incentives in that the more they use, the less the power cost. While we do have an extra-large rate class, this customer would exceed this usage.”
Flythe said he is asking for the Council’s authority to offer a rate for an XX-Large power user.
Councilman Butch Fausett made a motion to approve the city manager’s request. Councilman Greg Paige seconded. There were no opposing votes.
Also during the Monday, July 18, meeting of Adel
Mayor/Council:
Councilman Chandler Hill gave the invocation, followed by the Pledge of Allegiance.
Audit finds no compliance issues
Tony Eckler, representing Meeks CPA Firm, presented the completed FY2014-15 audit report to the Mayor and Council.
He reviewed several statements throughout the report and cited comparative changes from the previous year. He explained there are large increases due to the electric and sewer funds from the general fund, largely because of the fact that customer payments are deposited into the general fund bank account. Most expenses are also paid out of this account. These amounts will continue to grow unless they are settled, and the City needs to review these during and at the end of the year for a financial plan to decide how to settle these, Eckler said.
City Manager Flythe said he had asked the auditors to leave these balances unadjusted and “we would decide at a later date how to proceed with the settlement.”
In reviewing utility accounts and any related margins, Flythe noted two things:
• “We recently had a large power customer that we had to choose to give some credit to in order to keep them here,” and
• The City bought into a nuclear plant years ago. “We will begin paying fixed costs on that plant in 2018,” Flythe said. “We are trying not to have a rate shock in our community when this occurs; therefore, we will need remaining electric funds when that happens.”
Eckler also reported on a new section appearing on the balance sheet called deferred outflows and deferred inflows required by new accounting principles regarding the pension plan and the new standards requiring the City to book the related liability.
When questioned by Mayor Duke if any problems were found during the audit, Eckler replied that as part of their audit they check for compliance and did not detect any issues. He complimented the staff for their assistance and knowledge, and noted this was a single audit due to the amount of federal funds received. Councilman Butch Fausett made a motion to accept the audit report as presented. Councilman Greene seconded with all in favor.
Audit firm engagement
Councilman Paige made a motion to re-engage Meeks CPA Firm for next year’s audit. Councilman Fausett seconded. The decision in favor was unanimous.
Power rate – JM Manufacturing
As discussed at the last meeting, JM has changed their hours of operation. This has taken off almost 25 percent of the peak load and shifted to night time usage.
This company had done exactly what they said they would do and in exchange it has created savings for the City of Adel as well as for JM, John Flythe said. He will bring a proposed rate for them at the next meeting.
Electric shelter bids
Bids were received for a shelter for the electric department and were as follows:
* Hornet Steel Buildings, Inc. -$10,000
* Elite Structures - $11,154.75 with sales tax ($10,425 before taxes)
* Steel Building Systems, Inc. - $ 7,950
Councilman Fausett made a motion to accept the low bid. Councilman Paige seconded. All were in favor.
Verizon cell tower
Following complaints regarding cell phone service, Verizon wants to take down the old Internet tower the City used at the end of 2nd Street on the Recreation Department property, and replace with their tower at their own expense.
Verizon will then give the tower to the City and pay the City $500 per month for utilization costs. After the five years have expired (when they have recovered their fixed costs), they will begin paying the City $1,500 per year.
“We will be able to use the tower,” Flythe said. “It will provide better coverage and give us a small cash flow.”
It was the consensus of the council to proceed. Flythe noted that City of Adel Electric Superintendent Rene’ Cowart has been instrumental in negotiating with Verizon.
