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.