HSUD short on paying TVA's full bill

The Holly Springs Board of Aldermen are concerned that the Holly Springs Utility Department failed to pay last months full bill owed to the Tennessee Valley Authority.

Ward 4 alderman Patricia Merriweather, at the Aug. 6 meeting of the board, expressed concern about the financial status of the HSUD, when asked by general manager Wayne Jones to OK funds for right-of-way clearing and other measures.

She said she is concerned about the financial state of the utility department and she would like more clarity on this work to be done.

“Even with the email we received today not being able to pay TVA all their money, but here we have bids in front of us,” Merriweather said, referring to a bid to move water lines for an Mississippi Department of Transportation project the city will have to pay for.

“Five hundred and something thousand dollars for MDOT we will not reimbursed for. So, in the back of my mind, I’m struggling. I want to be cognizant of our financial status, taking care and what we are doing.”

“I am cognizant of the financial status,” Jones said. “Today was the result of, how can I put this, the Holly Springs Utility Department is in the position it is in because of what has been done in the past. It was inevitable something was going to eventually break. And when you put in the fact that we have an ice storm, we had COVID, you add the fact in that we have inexperienced people (employees).”

Attorney Garrett Estes tried to silence Jones from going further saying he recommended the discussion take place in executive session.

Mayor Sharon Gipson said she wants people listening at home who are ratepayers and taxpayers that the current situation (insufficient funds to pay TVA’s entire bill) is due to HSUD’s billing situation.

“The funds are there but because billing is late, as Mr. Jim Smith talked about his bill being overdue (arrived late after the due date), that is what caused it,” she said. “So, I think that, as we paint a picture, that it is important that we tell it all. This is the first time we had this experience (insufficient funds to pay TVA it’s entire bill) in our three years at the City of Holly Springs. However, we are working on that. The main issue is billing affects everything. That’s what I tell everybody when they come in. If the billing doesn’t work, it affects everything.”

She said HSUD had looked at what it approximates will be coming in and, “so next week everything should be fine based on what we projected. So, I think it’s important to share that the billing was the issue, not the finances. Not that the city, HSUD, is broke, but until we get the billing corrected, that affects how much we receive and how much we recover.”

Estes apologized for interrupting but said he advised caution about what is said in open meeting because of ongoing litigation involving the utility department.

Jones continued. “These issues, as far as billing, are issues at the utility department in general, are complicated, they are technical and if they could have been solved easily, by now they would have been solved easily by now.

“It is going to take a considerable amount of effort and time to solve the problem. I’m working on them and I have solutions, but I don’t want to say too much.”

Jones then said the water system is operating at 75 percent efficiency and Eddie Jefferson had recommended a quote of $57,000 from Donald Smith to make well repairs.

Merriweather said she was questioning the financial situation relating to the well repair only because of “the financial situation that we were made aware of in the email today in terms of the inability to pay TVA all of its money.”

“So, I just simply asked because we have these quotes in front of us. Are we cognizant of our financial situation?”

She wanted to know if money was available to pay for the well repair.

“Yes,” said Jones. The board then passed a motion to hire Donald Smith to repair the well at a price of $58,055.

Jones recommended TVA’s accountant, Melissa Bledsoe, be given permission to come to the utility to look at the records HSUD sent to TVA in financial reports.

“It also helps me, because I can look at the books and I can learn from what she’s doing,” Jones said.

Gipson asked the matter be tabled.

Merriweather responded. “This form (to allow TVA to confer with accountants) should have been signed a long time ago, so that the accountancy of the HSUD can be transparent, can be solidified, can be verified and clear,” Merriweather said. “I make the motion that we allow Central Service Association to give Mr. Jones permission to sign this form.” He then asked that a balance of $430,000 the Mississippi Legislature set aside to pay for right-of-way clearing under the power lines be approved. The legislature funneled $500,000 through TVA to pay for an assessment of the electric side of the utility and the remainder was specified to clear vegetation away from the power lines. Vegetation overgrowth on the power line rightof-ways was determined to be a major cause of power outages, especially during storms. Jones said C & M Bush Hogging has already been paid $400,000. “We’ve spent that money because as far as ROW cutting is concerned, that’s a drop in the bucket,” Jones said. Merriweather’s motion to apply for the $430,000 set aside for ROW cutting by the legislature was approved by unanimous vote. Jones asked for permission to present the application to TVA for the money, saying it will take between $8 million and $12 million “to cut the right-of-way correctly.” Currently a bush hogging company out of Oxford has been contacted to remove trees and vegetation under power lines. The company uses chain saws and drops and limbs the debris under the lines on the right-of-way.

“C & M is cutting hot spots,” Jones said. “We are seeing improvements. I am told by right-of-way experts, these are the worst they have seen. We have those funds set aside and we need to show good faith.”

Jones said in some areas it appears that the utility poles are growing out of the tops of trees.

Next, Jones asked that $500,000 be set aside from ARPA (American Rescue Plan Act) funds be used to pay for clearing the right-of-ways. He said 20 percent of local power company budgets go to rightof-way cutting.

“We only have a matter of months before it gets cold again,” he said. “I’ve been told by ROW folks that this the worst they have ever seen. We have to show good faith that we are very serious about cutting this ROW. I’ve been told there are people who are willing to help us and help the HSUD.”

Gipson asked for a motion to hire Blackmon & Blackmon to defend the city at the Public Service Commission.

Merriweather said if the city and board of aldermen had been doing what it should have been doing, the matter of HSUD would never have gone before the PSC.

“Everybody is just looking for improvements, goals, in terms of service,” she said, adding that she wants to make sure the problems at HSUD are resolved so that services are improved for the ratepayers and that ratepayers are satisfied.

“When the time comes, if the times comes, I’m sure the board would be happy to move on that (Blackmon & Blackmon),” Merriweather said.

Gipson said there is liability from a legal aspect and from a legal standpoint.

“We are in trouble with TVA, with the Public Service Commission as well as TVPPA (Tennessee Valley Public Power Association),” the mayor said.