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January 21, 2010

Co-Op Members Voice Support For New Facility, Concerns About Price Tag at Memphis Meeting

The first of three scheduled public meetings to discuss a new facility being proposed by Tri-County Electric Cooperative filled the commons of the Scotland County High School on Monday night. Somewhere between 50 and 100 cooperative members, employees or interested parties got the first word on the proposal being considered by the cooperative’s governing board to build a new consolidated base office.

Board President John Eggleston narrated a slide show demonstrating the timeline of the decision process, that began nearly 18 months ago due to deteriorating conditions at the co-op’s business office and three truck storage and warehouse sites.

Viewers also saw illustrations of the structural flaws at all four sites that the cooperative indicated would cost more than $1 million to repair.

“The more we dug into this, the more things we found that needed to be repaired,” Eggleston reported. “At this point in the thought process a new building wasn’t even being considered.”

But as the price tag for repairs on the office building, which was built in 1917, and the other three sites mounted, the board turned its attention to other alternatives.

Several board members traveled across the Midwest to review other cooperative facilities to learn about building costs as well as improved efficiencies offered at newer sites.

Eggleston pointed out that during this 18-month period, the board’s discussion of the current facilities, was mentioned on no fewer than eight separate occasions in the cooperative newsletter, seemingly contradicting complaints that the public was not informed of the problems and possible solutions.

The process was ultimately kicked into overdrive after temporary repairs were made to the office building’s north wall.

“We were told it wasn’t a matter of if the wall was going to fall, but when was it going to fall,” Eggleston told the crowd.

A functional analysis of the facilities performed by an independent engineer revealed just how bad the co-ops buildings really are. The analysis scale rates anything at 18 or above as in good shape, while requiring a score of 12 or better to even pass as poor condition. The co-ops office building scored a 3 while the east truck storage building built in 1946 scored a 4. The north building that dates back to the 80s, scored an 8 while the newest facility, the pole yard, which was rebuilt in 1997, scored a 15.

The board presentation highlighted functional efficiency improvements that the cooperative would gain by consolidating all of its services into one facility. Air quality concerns at the old buildings would be eliminated while adequate indoor parking would be created for the entire fleet of co-op service vehicles in the combined 29,125 square foot proposed building.

The vast majority of those at the meeting appeared to agree that the cooperative was making a wise decision to move forward with the construction of a new facility instead of repairing the existing building.

The biggest complaints came regarding the proposed $3.2 million price tag.

Eggleston stressed that the cooperative had no hard price estimates to offer, and that the dollar figure being attached to the project, was a “not-to-exceed” figure at which the board had capped the proposal.

Board members indicated they fully expect the bids to come in below that figure.

Cooperative member Marty Lewis questioned if the new facility was going to be as elaborate as the new cooperative headquarters built near Bloomfield, IA.

“We don’t need one like that,” Eggleston said. “We plan to do everything we can to keep the costs down while still providing a facility that will serve our needs for the next 50 years or more.”

That thought pattern was reiterated by several of the meeting attendees, who seemed to echo similar sentiments, noting the cooperative obviously needs a new facility, but does it need one that costs $3.2 million.

The board presentation offered financing information for the project, estimating a 2% price increase for co-op members to fund the construction. Eggleston stated the cooperative likely could secure financing at 4.5% interest for 35 years. At that rate, the co-op would pay approximately $170,000 annually to retire the cost of the project as well as approximately $30,000 in increased real estate taxes.

With 6,324 active meters, the new building would cost $2.70 a month per meter, if the board chooses to pass on the cost in that fashion. Eggleston said the board will consider that option, or simply raising the electric rate 2% across the board, allowing the expense to be distributed based on consumption, not equally across all meters.

The board also announced that four possible sites are being considered for the new facility. One option would include a land trade with the city of Lancaster offering property for the new building in trade for the co-op’s best truck storage facility that would be utilized by the local fire department.


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