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Inaccurate Report by McKinney

November 7, 2013

An Aug. 22 meeting of the Benton Public Utilities Commission meeting with Southwest Water Users on Aug. 22 is generating some controversy.
Commissioners in attendance were Phil Miller and Jim Martin as well as Terry McKinney, general manager of Benton Utilities. However, the information found in the official meeting minutes of the Aug. 22 meeting differs from a report provided by McKinney to the PUC on Sep. 16.
During the Aug. 22 meeting, Paul Shepard, a board member for Southwest Water Users, said that Benton's cost of the 16-inch Southwest line that would provide water to the Exit 114 properties would be $303,000 plus interest. He said the bond interest would be calculated by Michael Storey and was estimated to be about $50,000, bringing the total amount that Benton would owe Southwest Water Users to $353,000.
To pay off this amount, Benton would discount all water sold to Southwest Water Users by $0.25/1,000 gallons until the $353,000 would be paid off. Additionally, Southwest Water Users would add a "wheeling charge" of $0.25/1,000 gallons on all water Benton purchased from Southwest.
This information is not included in the Sept. 16 meeting of the Benton Utilities Commission. The official meeting minutes from that session state: "When they (Southwest Water Users) put that water line across the river several years ago, and they asked us to participate in it, but at that time there was no reason for Benton to participate. He (Shepard of Southwest Water Users) said it cost them about $1,000,000, they said, and Mr. Shepard indicated to us they wanted us to pay for that water line across the river and Mr. McKinney said depreciated value and Mr. Shepard said no, appreciated value. They (Southwest Water Users) want us to pay for the total cost of whatever it cost them to put that water line in plus interest, and then they came back and said the way they wanted to work that was for us to reduce the cost of water by $0.25 per thousand (gallons) until that is paid off. That is really going out a long time.
"Mr. Shepard also said we have to pay them an additional $0.25 for any water we take from the master meter. If they are paying $1.925, they will add $0.25 on to that and they will sell us the water back in return we would have in five years or whatever time we decide to run the water line across the river the $0.25 adder would go away but the $0.25 reduction would still be there until the $1,000,000 gets paid off which is really going out into the future. It wasn't a very productive meeting."
When asked if McKinney missed anything in his report, Martin and Miller responded that he did not.
This statement does not match the information found in the minutes from the Aug. 22 meeting.
According to the minutes, Paul Shepard stated in the Aug. 22 meeting, "I use calculated at $0.25/1000 gal and it would take about 6 years. What you are talking about is your share of that line which was about $303,000 and I think we would require you to pay interest that we paid on that money also." Shepard also said that the entire cost to Southwest to put in the line was "almost $1,000,000." But never in the meeting was Benton Utilities Commission told they would be required to pay the full cost, plus interest, of what Southwest paid to put in the line. Benton would be required to pay only its one-third share.
Though the commission members disagree, Southwest Water Users and Shepard claim there was an agreement in principle that Benton, Haskell, and Southwest Water Users would share the cost of the $1,000,000 line. This agreement is mentioned many times in the Aug. 22 meeting, but in the Nov. 4 commission meeting it was stated that no agreement could have been made because the commission never voted on it. Shepard confirmed on Nov. 4 that indeed the offer was for Benton to pay the $303,000 plus interest, not the full cost of the line.
Alderman Brad Moore stated in an email that "Mr. McKinney's report of the Aug. 22 meeting to the commission, which is affirmed by Commissioners Martin and Miller on Sept. 16, is a complete contradiction of this transcript (the transcript from the Aug. 22 meeting)." Additionally in a recent Freedom of Information request asking for any notes taken at the Aug. 22 meeting, McKinney did not provide any, saying he did not take notes at the meeting. However, the minutes from the Aug. 22 meeting include a statement noting that McKinney stated, "Sorry, I am so slow writing this down, but I cut my thumb."
McKinney was unavailable for comment.
The PUC voted to table discussion of the water line for the Exit 114 properties until more information has been provided by Southwest Water Users. Specifically the commission wants an official written offer and confirmation that selling a portion of the line is legal.

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