HSUD budget approved by board of aldermen
A 2024-2025 proposed budget for the Holly Springs Utility Department was approved at the eleventh hour, Friday, Sept. 13.
The board of aldermen asked questions of general manager Wayne Jones and accounting manager Annie Mason concerning the finances of the utility and when and how the utility expects to be able to resume payment-in-lieu-of taxes to the City of Holly Springs.
Alderman-at-large Dexter Shipp presided at the meeting and aldermen Bernita Fountain, Patricia Merriweather, and Colter Teel were present.
Merriweather asked about overtime expenses because a number of City departments have been logging a lot of overtime to get work done.
Mason said the salaries and overtime are not separated out, but she is going to report monthly to the board of aldermen and overtime will be separated from salaries then.
Merriweather said open positions should be filled rather than run up $750,000 in overtime at the HSUD.
Right-of-way clearing is a high priority expense in order to keep the lights on.
Merriweather said the ROW budget request is $1.4 million. Mason said the $430,000 budgeted by the legislature and other funds bring the ROW budget to more like $1.9 million.
Merriweather asked about the total money in the bank as of the day.
Jones said the balance was $1.3 million.
“We will pay TVA (Tennessee Valley Authority) $1 million on Monday and pay some more bills,” he said.
The utility has 13 bank accounts but Mason said she has not been able to find out the reason for having the number of accounts.
“Maybe it is a requirement of a utility company to have certain funds in separate accounts,” she said.
She provided the following data:
• there is $306,000 in the Bank of Holly Springs revenue fund where automatic bank drafts from customers are deposited.
• a $1.5 million certificate of deposit is held at the Bank of Holly Springs.
• a $3.6 million certificate of deposit is held at Unity Bank.
• $1.4 million in cash is in the account at Unity Bank.
• the projected net income for the budgeted year of 2025 is at $1,190,237, according to city clerk Jerrica Jones.
Mason said remedies to get cash flowing in to the HSUD include: • completing over 200 service orders.
“If we could get all of that done, we have a general manager to work with the guys on getting things done, that’s what we are projecting,” Mason said.
• getting meter readings caught up in order to get customer billing back on time.
“We desperately need a new meter system with everything that has occurred this year with the current meters,” Mason said. “GE (General Electric) is already threatening to shut us completely out, if somebody doesn’t talk to them about some of their bills.”
Jones said the contract with GE will expire in about 8 months. He said the utility has a certain amount GE expects to be paid. The HSUD is leasing GE’s equipment, he said.
• a new meter reading system is estimated to cost $3.5 to $4 million, Jones said.
• HSUD will have to raise its rates in order to make PILOT payments to the City of Holly Springs, Jones said.
• TVA is raising wholesale power rates again by 5.25 percent, Mason said. Decreasing the amount of over time will improve the bottom line, which can possibly be done by hiring more employees, she said.
• a $3.6 million certificate of deposit is held at Unity Bank.
• $1.4 million in cash is in the account at Unity Bank.
• the projected net income for the budgeted year of 2025 is at $1,190,237, according to city clerk Jerrica Jones.
Mason said remedies to get cash flowing in to the HSUD include: • completing over 200 service orders.
“If we could get all of that done, we have a general manager to work with the guys on getting things done, that’s what we are projecting,” Mason said.
• getting meter readings caught up in order to get customer billing back on time.
“We desperately need a new meter system with everything that has occurred this year with the current meters,” Mason said. “GE (General Electric) is already threatening to shut us completely out, if somebody doesn’t talk to them about some of their bills.”
Jones said the contract with GE will expire in about 8 months. He said the utility has a certain amount GE expects to be paid. The HSUD is leasing GE’s equipment, he said.
• a new meter reading system is estimated to cost $3.5 to $4 million, Jones said.
• HSUD will have to raise its rates in order to make PILOT payments to the City of Holly Springs, Jones said.
• TVA is raising wholesale power rates again by 5.25 percent, Mason said. Decreasing the amount of over time will improve the bottom line, which can possibly be done by hiring more employees, she said.
• the proposed new HSUD budget is around $30 million, Mason said. Some 75 percent to 80 percent of that figure goes to pay TVA for wholesale power, she said.
• managing time better in completing tasks will help fill new service requests, Mason said.
“If we don’t get these service orders and other projects completed for our customers, it’s going to work against us,” Mason said. “We get tons of complaints to the Public Service Commission every day.”
• Southern Electric is being used to make repairs caused by storms and help install poles, change out transformers and do other electrical work, work that HSUD crews cannot complete, Jones said.
“SEC is a contract company that we pay quite a bit of money to help with electrical repair of the network, putting in transformers, putting up poles, and maintenance on three phase lines,” Jones said. “These are one, two and threephase transformers that require significant electrical engineering knowledge as far as them being installed and turned up,” he said.
• Sept. 16 HSUD was to begin cutting off customers with over 30, 60 and 90 days past due, Jones said. One crew member will cut off and another employee will turn power back on after the bill is paid.
“We got 93 people that are 90 days past due,” he said.
• HSUD is short-staffed.
Three line crews and two service crews are needed,” Jones said. HSUD has one and a half line crews and one service crew, he said.
• Fountain said the board does not know how many employees are still working at HSUD and who’s quit. Hiring was frozen because of instability of the money at HSUD, she said.
Mason said there is a lot of absenteeism at HSUD, “quite a few crew members are out two or three times a week.”
• billing issues have been a problem in terms of revenue. Jones said he will soon have double the number of meter readers – a total of 8 – and he expects bills will get caught up by Christmas.
• right-of-way maintenance will improve service. Jones said HSUD has paid $600,000 to C&M Bush Hogging. He has asked TVA for the $430,000 in ROW maintenance and has three crews ready to go to work. Jones asked for $500,000 in ARPA (American Rescue Plan Act) money to cut the ROW.
• capital budget. Jones proposed a capital budget of $2.1 million for fiscal year 2025. He suggested the improved reading of the meters and increased rates will pay for the capital budget.
• Mason said she anticipates a revenue of $1 million when all service orders are filled which actually exceeds the 200 previously discussed.
Discussions concluded, the aldermen voted to go with Mason’s proposed budget for the HSUD by 3-0, with Teel, Merriweather and Fountain approving the motion. Alderman Andre Jones was not in attendance. Alderman Shipp could not vote because he was presiding.