Aldermen discuss next steps on HSUD
A special called meeting Thursday, Feb. 15, by the Holly Springs Board of Aldermen to discuss matters in the Holly Springs Utility Department ended with no plan of action.
Four aldermen, Ward 1 alderman Bernita Fountain, Ward 3 alderman Colter Teel, Ward 4 alderman Patricia Merriweather, and alderman-at-large Dexter Shipp, were present. Mayor Sharon Gipson was not present and the meeting was not streamed on the city’s Facebook page.
Merriweather outlined the topics to be covered: discuss the next steps by the local delegation in Jackson; discuss concerns of regulatory compliance for a Tennessee Valley Authority – hired accountant to work with HSUD to reconcile financial reports; and discuss the creation of a board of commissioners to be over HSUD.
SB2453 filed by the Mississippi Senate would give the Mississippi Public Service Commission authority to perform an investigation of HSUD, Merriweather said.
She outlined some of the concerns that the bill would give the authority over municipally owned electric power companies. She said the meeting was called to give permission for TVA to send in an accountant, to discuss the need for a general manager, and to hear from state representative John Faulkner.
Merriweather said she and Ward 2 alderman Andre Jones have met with TVA. The Authority wants permission from the City to allow TVA to send an accountant to reconcile reports it received from HSUD.
Board attorney Garret Estes, present at the meeting by telephone, said he spoke with board attorney John Keith Perry, who said nothing has been shown to be illegal to allow a TVA – assigned accountant in. Perry’s recommendation was to hire a general manager and let the general manager work with TVA to let the accountant in to look over the books.
State Rep. John Faulkner joined the meeting by telephone.
“Rep. Faulkner, we were discussing in terms of a meeting the Public Service Commission had to discuss HSUD. The meeting was cancelled Tuesday,” Merriweather said.
The meeting was designed to provide the city with updates on legislation being
introduced, “so we can make an intelligent decision on our next move,” Merriweather said.
Faulkner said he wants to see what the bill looks like, the language in it and “of anything I need to do to that will make that bill better.”
“I want to do nothing in this bill to hurt Holly Springs, that Holly Springs comes out on the other side,” Faulkner said.
Merriweather told Faulkner that Sen. Neil Whaley had shared that the bill would give the Public Service Commission authority to investigate HSUD in terms of irregularities at HSUD, that a board of commissioners could be established to direct the decisions of HSUD, and that the commissioners would be selected from inside the city of Holly Springs and from outside the city in the counties.
The counties - Marshall and Benton - have no representation, she said.
“What would be the duties of the board of commissioners?” Fountain asked.
Faulkner said the board of commissioners would be over the hiring of a general manager to run the day-to-day operation of HSUD and the local board of aldermen would no longer control the utility. A board of directors would be appointed from board members from the municipalities. The board of aldermen would have authority to appoint commissioners who live within the city limits, he said.
resolution to set up a board of commissioners is needed from the City of Holly Springs. Then two commissioners would be selected from each county served and be appointed to serve by the boards of supervisors.
“Is there a certain number of representatives for each of these counties?” Merriweather asked.
Faulkner said the setting up of a board of commissioners is not being discussed as a part of the bill being developed in the House by Rep. Bill Kinkade and by Sen. Whaley.
He said members of the board of commissioners would consist of five members selected from the City of Holly Springs and then two commissioners selected by the board of supervisors from each county.
Teel asked how the board of commissioners would be financed.
“Because Holly Springs owns the utility department,” Merriweather added.
“I’m speaking of when it comes to the utility department budget,” Teel said. “Would the board of aldermen or commissioners be involved. For years, the city has been getting money (from HSUD). Could that be redone?”
Faulkner said the city owns the utility department so the money going to the city that is collected by HSUD doesn’t change under the plan to establish a commission.
Merriweather asked what leverage would Faulkner use in his fight to keep the budget in the city’s purvey.
“If there’s a fight that needs to take place, say if it comes out of the Senate and Kinkade introduced the same bill…Rep. Kinkade knows how I feel about it,” Faulkner said. “If some changes need to be made, we are going to make those changes or we’re going to have a problem.”
He said he believes there will be an opportunity, a good shot, at making amendments to the bill.
“I wanted you guys to see it, what you think about it, the good, bad and ugly,” Faulkner said, “to see what you could live with.”
Fountain asked if the bill passes could Holly Springs lose some of its HSUD customers.
Faulkner said the current bill under consideration has nothing to do with his proposal to set up a board of commissioners.
“When I see it, maybe we can make amendments,” he said. “You have authority now, but no authority for anyone that lives outside Holly Springs. I want to be able to see - what do I say - I have no defense if you guys don’t take this action on something. It needs to happen yesterday.”
He said the board needs to write a resolution if it wants to establish a board of commissioners over HSUD. He said he would defend the board if it passes a resolution.
“If it hits the floor, without this, to give us time, you don’t have a chance,” Faulkner said. “I’ll keep you guys in the loop as we start working through the process.”
“I do need time,” Fountain said.
Estes advised that the board get a general manager in place before writing a resolution for a board of commissioners.
“You need to get a general manager to report back to the board of aldermen, even if you do establish a board of commissioners,” Estes said. “You need a general manager in place. Get that person hired and make an assessment.”
Fountain said the city does not have a large enough pool of applicants for the position of general manager to draw from.
“Just three candidates before us,” she said. “It will also take time to get applicants and get them vetted.”
Estes suggested the board of aldermen could hire an interim general manager, someone to report back to the board.
“Right now, you are just circling around,” he said.
“This position has been vacant for almost three years,” Fountain said. “We can extend our search beyond local advertising. I’m not looking for a general manger to put a bandaid on it. This person needs to know how to do this (true qualifications needed).
Shipp asked how the position is being advertised.
Faulkner said part of the reason “no one is walking through that door” is due to the reputation of HSUD, which he said is known all over the state.
“Nobody wants to touch that situation,” he said. “During that hearing (at the PSC) that room was full of people from all around the state. I was angry and embarrassed. And these people are going back to their hamlets and villages. One general manager said he had to tell her (the mayor) no (to assisting HSUD recover from a storm) and had to think about the safety of his men. That’s what’s going on now. Nobody is going to come and do that.”
“You may not find that ideal candidate,” Estes said.
Teel said he does not disagree with Estes.
“Finding that perfect candidate, this is very important position,” Teel said. “I’m not saying they’ve got to be the best. There are two sides to this monster. How are we going to tell our guys working there for years?”
“What we are looking for is someone with strong leadership capabilities because TVA and TVPPA (Tennessee Valley Public Power Association) have done an assessment to say let’s look at where our issues are,” Merriweather said. “An engineer. Let’s create a plan. We are not looking for someone to go out on a pole. You know my recommendation was Mr. Ricky Jones to manage that. Looking at an assistant superintendent and strength to bring someone in under them. At this point, when the legislature gets ready to vote, the PSC asks where’s the mayor, where’s the board of aldermen (at the meeting)?”
“We weren’t informed,” Fountain said. “Lack of communication.”
Shipp suggested the board seek someone, like a retired general manager, to come in and hire a consultant to help.
“I want to add this,” said Faulkner. “One of the biggest complaints outside (the city) are not having reliable power. It’s these folks in the county who feel like they don’t have a voice. My colleagues are determined to have someone in the county. They are not going to be ok. They don’t have a voice. There is no way we can get around that, even though this is 2024 now. Taxation without representation.”
Fountain asked what people living outside — say Starkville — say.
“They (Starkville) do not serve outside the city limit,” Faulkner said. “You have more customers in the county than in the city.”
Merriweather said Sen. Whaley said the ratepayers are not being heard and that was why the bill is being introduced.
“So what would help fight this case?” she asked.
Faulkner said the bill likely gives the PSC power to make an assessment.
“All that has been done and there is nothing new to find out,” he said. “You need the right-of-way cleared. Is that going to tell you anymore than we know now. The ratepayer deserves reliable power.”
Fountain said she thinks the right-of-way clearing approved by the board of aldermen has helped reduce outages.
“With the budget for poles and cutting the right-of-ways, I’m not saying the lights have not gone out. But it has improved greatly,” she said.
Faulkner said he would love the commissioners to hear about the positive things that have been done.
“But, how do we address the county?” he asked. “What have we offered the folks in the county who say “we want a voice?”
Teel said the city will not ever be able to manage the system as it is now, but over time, that’s going to take a long time,” he said.
“No system can be overhauled with one swipe,” Faulkner said. “Keep the old system functioning. But you got to maintain. If this bill is passed, what then? We are going to take 8,000 customers and give it to the co-ops. How do we make sure Holly Springs is stable for the foreseeable future?”
Fountain said if a lot of shares are sold to the co-ops the city’s money is going to run out (to support the city’s budget).
“Eventually, the money allotted to Holly Springs will run out,” she said.
Faulkner said if the city got $30 million for the utility, it would support the city for 30 years. He added that the $1.2 million (actually $1.7 million) the city is supposed to get yearly from HSUD is not being paid now.
He said with that kind of money —$30 million—“you could overhaul the city of Holly Springs.
Actually, the city receives $3.3 million a year from the utility department, which is drawn from the electric, gas, and water revenues, according to city clerk Jerrica Jones.
Teel wondered if there are some examples to go by in forming a commission.
“I’m sure we don’t have to invent the wheel,” Fountain said. “Maybe we could research that (how to establish a board of commissioners).”
Merriweather said a general manager would help.
“So, what are we deciding about the general manager?” Fountain asked. “Are we taking applicants? Some more people applied, we just haven’t seen the applications. We have to request them from the mayor. She said there were a few more (applications) down there.”
“I so applaud our linemen,” Shipp added, “for taking the initiative to work on the substation to make it flow more smoothly — to thank our linemen for keeping up the good work.”