Closure deals blow to EES
By Thomas Wilson
STAR STAFF
twilson@starhq.com
The closure of the Inland Container Corporation
will result in another six-figure loss of revenue for the
Elizabethon Electric System, according to system officials.
"We stand to lose $250,000 to $260,000 in revenues
with the bulk of that going to TVA to pay our power bill,"
EES general manager, Phil Isaacs told the system's board of
directors at Tuesday's monthly meeting.
The company announced Friday it would close their
Elizabethton plant at 1500 W. Elk Ave., as well as a second
plant in Hattiesburg, Miss. The closure will eliminate the
130 employees at the Elizabethton facility.
The closure is the second major manufacturing
customer to shut down during the past 15 months. Alcoa Extrusions
ceased operations last year, eliminating 240 jobs and a sizable
corporate customer for the electric system. That loss resulted
in an annual loss of $200,000 to the electric system, according
to EES estimates.
The system had enjoyed a spike upward in revenues
for the month of Februrary. Director of Finance Andie Talbert
reported that revenues from electricity sales exceeded $3.8
million in February - a 14 percent jump over Feb. 2002 figures.
Total operating revenues climbed to $3.9 million
for Feb. 2003, also a 14 percent increase above the month
for last year. Talbert also reported the system's cash flow
at $2.7 million and total funds of better than $4 million
for the month.
"We are actually doing pretty well against the
budget," said Isaacs.
Randy Jones, business manager of the International
Brotherhood of Electrical Workers Local 934, also questioned
the board regarding membership and financial situation of
the system. The local represents roughly 30 EES employees,
primarily electrical line workers.
Board chairman Gary Nave said the board was prepared
for the loss of Alcoa, but the announcement by Inland containers
came as a surprise. Still, he said that EES had effectively
managed to rein in budget expenditures in light of the Alcoa
closure and expected the same adjustments to accommodate the
Inland Container closure.
"I think we are prepared to make the tough decisions,"
Nave said. "We are in debt; we have a bond payment on a bond
situation that we are trying to remedy."
After the meeting, Jones said he was also concerned
about the recent decision by the board to review alternative
retirement plans for employees including the Tennessee Consolidated
Retirement System used by the Johnson City Power Board as
well as the city of Elizabethton.
"The existing plan is a defined contribution
plan," said Jones. The board approved a new three-year contract
with the IBEW in June 2002. The system's 2002-2003 budget
allows for a 2.6 percent cost of living raise for union employees
and a 2.5 percent raise for non-union EES workers.
Jones added following contract negotiation between
IBEW and the system last year, that IBEW workers now pay $20
every pay period toward health insurance premiums, a figure
he says has doubled from $10 the past three years.
The board voted 4-0 in February to enlist a new
system accounting firm of Blackburn, Childers and Steagall
to conduct an assessment of the existing retirement plan for
EES employees.
Isaacs said the retirement plan assessment remained
under review and that no decisions had been considered or
proposed for implementation in the system.
He also said the wording in the union contract
was "very vague" as to provisions of a retirement plan.
In other business, Isaacs said the system would
begin setting workshops to discuss the 2003-2004 budget at
next month's meeting. Isaacs said one item certain to make
the budget would be the refurbishment of power lines extending
across the North American Corporation property where Wal-Mart,
Inc., has plans to construct a Supercenter store.
