Thursday, May 10, 2012
Board supports mayor on bill dispute
By SUE WATSON
The Holly Springs Board of Aldermen stood behind the mayor in a dispute over collection of a delinquent gas bill from Acme Brick.
Ed Watson with Acme argued with the mayor and board at a recent meeting that his company had been treated wrongly over a natural gas bill dispute.
Acme bought the brick plant in 2001 and tried to negotiate a better price for gas with Holly Springs Utility Department, he said. The company closed the plant in 2008 after terminating most of its employees, except four who remain to operate the facility as a sales and distribution center, primarily to supply brick to the Memphis market, Watson said.
He said Acme had an issue with HSUD about additional charges for natural gas which his company believed were outside the contract it had with the city and refused to pay it. Acme paid its bill except for about $26,000 but is still being billed for it. Recently HSUD tried to collect the unpaid balance for gas by transferring the natural gas charges to the electric side of the bill, Watson said, and repeatedly disconnecting the electricity.
Mayor Andre’ DeBerry said he got calls from Acme on each occasion the electricity was disconnected and ordered the service turned back on.
The $26,000 billed for gas was transferred to the electric side in November 2011, Watson said, and the bill that usually ran at $400 for electricity contained the charges for the disputed gas bill.
Watson said DeBerry intervened in January this year when HSUD threatened to pull the electricity and that the same thing happened in February this year and the mayor intervened again. Then in April HSUD pulled the meter and Acme operated off a generator until DeBerry restored power.
Watson said Acme wonders if it is welcome in the city. It closed 10 plants, which included the brick manufacturing operations in Holly Springs, when the housing construction market collapsed in the late 2000s. Watson said when the economy recovers it will reopen some of the closed facilities but questions whether it will include starting production back in Holly Springs.
He said Acme does not want to litigate but will not pay the gas charges and does not want to be “harassed continually.”
DeBerry replied that about 60 percent of the current board was not elected when the dispute over the gas charges began. He said he believes HSUD should resolve disputes in “ways professional and treat business and industries with a degree of respect.”
“We try to do that,” he said.
DeBerry said that transfer of unpaid balances from one department to the other within HSUD should be authorized by the board of aldermen. He said the point of contention came since 2001.
“To put industry in jeopardy – industries come in and create jobs, it’s a little different than a residential customer,” he said.
He said Acme may come back online with production and the city needs jobs.
“At some point this needs to be dealt with,” he said. “I think it is disrespect to the executive officer (himself) to keep having to do it (order HSUD to turn power back on).
“It puts us in a bad light. This thing needs to be resolved. A shell game is not a good way to do business. The board needs to move. Eleven years and we still have this issue. At some point in time, we need to get off square one.”
He said the mayor has no authority to relieve debt or transfer debt; the board has the authority.
Alderman Johnnie Bagley-Johnson asked who made the contract with Acme.
Watson said the contract with the city was transferred with the purchase of the plant.
Board attorney Ki Jones advised that the board may need to take the matter under advisement while past involvements with ACME’s attorneys are looked at.
He said the dispute needs to be resolved.
“The transfer of debt is what we are trying to resolve,” said DeBerry. “The board needs to address this point of transfer of debt.”
Alderman Russell Johnson motioned to remove the gas debt from the electric bill.
Alderman Calvin James asked how long it had been since gas supply had been turned off. Watson said it had been cut off three years then the city transferred the debt to the electric side.
HSUD general manager Don Hollingsworth said the reason the account was transferred to the electric side is that all accounts are worked through the electric department. He cited PURPA (Public Utility Regulatory Policies Act) laws.
“If I have (HSUD has) an account with you, I cannot write off $26,000 and keep power going,” he said. “It’s a TVA law.”
Hollingsworth said the utility found it was not charging the transportation fee from Tennessee Gas to Acme and added that to the bill after the fact and Acme disagreed with that.
“You were getting 40 cents charged when 51 cents was what Tennessee was charging us to meter from the station to the city. So the city was losing 11 cents,” Hollingsworth said.
He said the contract with Acme allows the city to collect the transportation cost.
“That is all there is to it,” Hollingsworth said.
Watson said the contract stated they would be charged 40 cents per unit for transportation.
“That’s inside the city,” Hollingsworth said. “We saw our misgiving and made an effort to abide by it.”
DeBerry argued that transferring the bill for gas to the electric side was bad accounting.
Dee Miller, in accounting with HSUD, said the electric department collects all the utility bills and then pays each department its portion.
“We have to collect it because the electric department has already charged it to the gas department,” she said.
Johnson restated his motion to discontinue to allow debt in one utility department side to be transferred to another. James seconded the motion and it passed by a unanimous vote of the board.
Afterward Watson and the board agreed to settle the gas bill dispute without litigation at a later meeting with city leaders.
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