EES board of directors approve vehicle purchases during workshop

By Bob Robinson
Star Staff
brobinson@starhq.com

   The Elizabethton Electric System (EES) board of directors, meeting in a workshop format yesterday, authorized Phil Isaacs, general manager, to purchase two new vehicles and sell five others at public sale.
   TVA was the apparent low bidder, at $48,654, for the new vehicles, a GMC 2500 4X4 and GMC 4X4, both of which are to be used by the EES line crew.
   The other bidders were Grindstaff Chevrolet, $56,936, and Carter County Motor Company, $54,957.
   Vehicles to be sold are a 1994 3/4 ton GMC pickup with 111,445 miles, 1994 1/2 ton GMC pickup with 104,600 miles, 1993 1/2 ton Ford pickup with 123,272 miles, 1994 Ford Crown Victoria with 115,100 miles and 1994 Chevy Astro Van with 89,807 miles, all of which are estimated to bring in $15,000 in revenue.
   The workshop opened with John Banks, board attorney, reviewing an "information packet" for the board, as well as the TVA contract signed with EES in 1985.
   "EES, a non-profit organization, is owned by the City of Elizabethton and governed by a board of directors appointed by City Council. The board sets policy and has oversight over the general manager. All employees answer to the general manager," Banks said.
   Banks also told the board:
   * The TVA contract requires EES to purchase power from TVA, exclusively.
   * EES can offer telecommunications, cable television and Internet services.
   * All EES board meetings are open to the public under the Tennessee Sunshine Law. Banks said the only time board meetings could be closed to the public was when the board's attorney was discussing pending litigation.
   In other action, Isaacs told the board:
   * Distributed a list of 38 vehicles assigned to various EES departments and used by 57 employees. One vehicle, an electric-powered truck that gets 60 to 70 miles on one charge, is used in parades;
   * The last TVA rate increase was in 1997;
   * TVA is "hard to beat" in the wake of deregulation;
   * In February 1998, EES entered into a five-year contract with TVA. 2002 is the earliest EES could give notice to TVA;
   * On June 30, 2002, the EES contract with the union representing 34 of its employees expires;
   * In 1990, EES purchased substations and 17 miles of transmission lines from TVA. As a result, EES built two substations, refurbished another, and provided new transmission lines as part of the 10-year capital improvement plan; and,
   * EES purchases fuel from TVA for the EES fleet.
   In the forthcoming budget preparation process, Richard Sammons suggested the board look at capital ratios used by "for profit" electric utilities, like Kingsport Electric.
   Board Chairman Gary Nave introduced David J. Cronshaw, management consultant from Johnson City, who had been invited to attend the meeting.
   In the coming weeks, the board is expected to decide whether or not to employ a management consultant to review the EES operation and develop a plan to combat "expense creep."
   The board is hoping to identify cost-savings measures which could be taken now to offset the necessity for a rate increase in the coming months.
   "In the last 50 years, EES has been going through major change. Phil grew up in the company. I think he has done a good job serving as general manager," Nave said.