VANDERBURGH COUNTY

BOARD OF COMMISSIONERS

SPECIAL MEETING

OCTOBER 14, 2008

The Vanderburgh County Board of Commissioners met in special session this 14^th day of October, 2008 at 4:10 p.m. in room 301 of the Civic Center Complex with Vice President Bill Nix presiding.

Commissioner Nix: Good afternoon. I would like to call to order the Board of Commissioners, this is a special meeting, October 14, 2008. It’s approximately 4:10. I will start with introductions to my right.

Ted C. Ziemer, Jr.: Ted Ziemer, County Attorney.

Commissioner Nix: Bill Nix, County Commissioner.

Commissioner Tornatta: Troy Tornatta, County Commissioner.

Madelyn Grayson: Madelyn Grayson, Recording Secretary.

Bill Fluty: Bill Fluty, County Auditor.

Commissioner Nix: If you would please join me in the Pledge of Allegiance.

(The Pledge of Allegiance was given.)

Commissioner Nix: Good afternoon. In this abbreviated meeting I would like to, I guess, the first action item is the salt agreement between Chemical Equipment and the City of Evansville and Vanderburgh County. Mr. Ziemer, if you could just brief us quickly on this.

Ted C. Ziemer, Jr.: Yes, as you know, I addressed an e-mail to each of the Commissioners and Mike Duckworth, and Bart Mulzer, the company that will be unloading the salt, and Debbie Spalding, the City-County Insurance, I mean, Purchasing Agent, and James Rasdon of a company that will provide inspection of the salt at the time it arrives at the dock, and Bob Rock, the City Attorney, and Ed Ziemer. But, to recap what that says is, you approved earlier the purchase of approximately 3,000 tons of salt for $118 per ton, and the unloading cost for that salt of $4.75 a ton by Mulzer Crushed Stone. Since that time–

Commissioner Tornatta: Hold on, Ted. Hold on. What’s Mulzer’s part?

Ted C. Ziemer, Jr.: They unload it.

Commissioner Tornatta: I understand. The quantity, the amount?

Ted C. Ziemer, Jr.: Yes, $5.75 a ton.

Commissioner Nix: Is it $4.75 or $5.75?

Commissioner Tornatta: You said $4.75.

Ted C. Ziemer, Jr.: $4.75, I’m sorry. Four dollars and seventy five cents a ton.

Commissioner Tornatta: Yeah, but it should be $5.75.

Ted C. Ziemer, Jr.: $4.75.

Commissioner Nix: Hold on, hold on.

Commissioner Tornatta: Hold on. No, no, no. That’s what I’m saying. It should be $5.75.

Commissioner Nix: Mr. Duckworth?

Ted C. Ziemer, Jr.: Oh, $5.75. What have I got in my e-mail? I’m sorry.

Commissioner Tornatta: $5.75.

Ted C. Ziemer, Jr.: Okay, it’s $5.75.

Commissioner Tornatta: Just to clarify. Sorry, sorry.

Ted C. Ziemer, Jr.: Thank you. We should have the record correct. $5.75, including ticketing, is what Mulzer will unload the salt for. Since October 2^nd we’ve been negotiating with Chemical Equipment Company, the company that will provide the salt, via barges. The salt will be purchased by it in Brazil and sent by barges to New Orleans, and then it will be downloaded onto barges, if that’s the correct term, onto barges that will deliver it to the Mt. Vernon port. We, an immediate problem was that they indicated that the way they deliver salt, and actually other barge deliveries is the amount of tonnage you request, plus or minus ten percent. That could have meant we would receive 6,600 tons of salt, which would add an amount of money, we only have money appropriated for really 6,000 tons of salt, plus the costs of downloading it.

Commissioner Nix: Jointly.

Ted C. Ziemer, Jr.: Hmmm?

Commissioner Nix: Jointly between Vanderburgh County and the City.

Ted C. Ziemer, Jr.: Between the city and the county, 3,000 for the city and 3,000 for the county. So, we finally negotiated with Chemical Equipment Company that they would have the barges loaded with as close as possible to 6,000 tons of salt, but not in excess of 6,000 tons of salt. So, in no event will we have to pay for more than 6,000 tons of salt. The down side of that, the way they load these barges, it could end up that we receive 5,000 tons of salt, and we’re not going to know until the barges get here, but they are going to try to get as close to 6,000 as they can. The purchase price will $118 per ton for however many tons are on the barges when they arrive. It will be delivered sometime between November the 8^th and November 25^th. If it doesn’t arrive by November 25^th, we’re not required to accept delivery. There’s a provision for inspection of the salt on arrival. If we decide that it’s unacceptable, that is to Ed Ziemer for the city and Mike Duckworth for the county, then we have provided in the contract for bringing in a third party, Polkcare Company, who will, no that’s not their name. It’s not important. They will come in, if called, and inspect the salt. If they find that, if their opinion is that this is good road salt, then we must accept it. If they agree, if we thought it was not, and they agree with that, then we do not have to accept it. They wanted the purchase price paid in advance. There’s no provision in Indiana law for us to pay in advance for products that we’re going to receive. They then wanted the purchase price to be paid into escrow. The problem with that would be, if you’re going to have payment by escrow, they don’t want us to determine when it gets paid out of the escrow, they would want standards established, and if those standards are met, the escrow agent would automatically pay the purchase price. That’s a very difficult thing setting those standards. We finally got them to agree that they would accept a wire transfer of the purchase price. That’s been agreed to by the County Auditor, the County Treasurer and by the City Controller. We’ll inspect the salt when it arrives, the title remains in the seller until we inspect it. Once we inspect it, if it’s satisfactory, the money gets wire transferred. We will call Chemical Equipment Company immediately and say the wire transfer number to your bank is so and so. Immediately upon advising them of that they will have their $708,000 or whatever lesser amount it is, if the amount of salt is less than 6,000 tons. At that time the title to the salt will vest in the county and the city and Mulzer Crushed Stone will begin unloading the salt. There’s another possibility of additional costs to the county, and that’s for demurrage. What that means is this, when the barge arrives the seller has arranged that the barges will remain at the dock for three full days after it arrives. The rule on that is if the salt arrives at the dock before 6:00 a.m. on a given morning, say today, then the three days begin at 6:00 a.m. today, and run through the end of the day three days from now. However, if the salt arrives after 6:00 a.m., like today, then the three days begin at 6:00 a.m. tomorrow. All that is spelled out in the contract. During that three day period it will be unloaded by Mulzer. It’s possible to meet the 6,000 dollar load that we want, they actually carry about 1,500 tons per barge, but we may have four barges. Mulzer is going to do it’s best to unload the barges within the three day period. It’s possible that it may run to a fourth day. If it does run to a fourth day, there will be a demurrage charge of about $800 per day, which will be split between the city and the county. That does fall within the appropriation that we have, both by the city and the county for the purchase of the salt.

Commissioner Nix: Excuse me, before you go on, that $800 a day is for four barges then?

Ted C. Ziemer, Jr.: It’s for–

Commissioner Nix: No matter how–

Ted C. Ziemer, Jr.: –that is if it takes Mulzer more than three days to unload the salt. Then the fourth day will cost $800. If it takes a fifth day, it will be another $800. That amount is, I’m saying “about”, because I don’t have that in front of me, but that’s roughly–

Commissioner Nix: It usually runs $200 a barge a day, is what it usually runs.

Ted C. Ziemer, Jr.: I’ve already talked to you about delivery. I think those are the terms, we have a contract. The way we propose to handle this is if you, the Board of Works did approve the city contract at 3:00 this afternoon, if the County Commissioners approve this contract at this meeting, once it’s signed we’re going to scan copies of the city and the county contract and e-mail it to Chemical Equipment Company yet this afternoon. Then, also this afternoon we will Fed Ex to Chemical Equipment the two signed copies by the Board of Works and two signed copies by the County Commissioners, those will arrive before noon tomorrow in Pennsylvania, and Chemical Equipment will then sign those documents and get them in the mail by Fed Ex no later than the close of business tomorrow, and we will have one fully executed copy of each, the city contract and the county contract, by Thursday morning. I believe that’s it.

Commissioner Nix: Commissioner, do you have anything? You know, as much as I hate to see us pay this amount of money, I think it’s very, very important that commerce keeps running this winter and on into next spring. I think without this action today by the Commissioners and the City Council, or, excuse me, the Board of Public Works?

Ted C. Ziemer, Jr.: The Board of Public Works.

Commissioner Nix: The Board of Public Works, we could end up with some serious problems this winter and on into next spring. So, once again, I hate to spend the money, it’s a heck of a lot of money, but it’s something I feel like we need to do. If you don’t have any other questions.

Commissioner Tornatta: No, I, just kind of the same type of sentiment, it’s from $45 it’s a long way. I know that there is a crisis in a lot of different areas, and salt is one of them, from last year. In talking to a lot of the different vendors, I know that Mike Duckworth has talked to them, Ted has talked to them, it seems like there’s no end until next year of what could be a tough year for salt. It’s all over the country, it’s not just in our region. So, it’s an action that needs to be taken. It’s a hard pill to swallow, but it’s one that if we want to keep doors open that we’re going to have to do.

Commissioner Nix: I would like to thank Mike and Ted, I know you guys have worked feverishly since Friday, or, I guess, the last couple of weeks, but actually getting the contract together at the 11^th hour, coming up with a plan that would work, so that we could keep this thing moving. So, I will entertain a motion at this time.

Commissioner Tornatta: So moved.

Commissioner Nix: I second. All in favor?

Commissioner Tornatta: Aye.

Commissioner Nix: Aye. Opposed same sign. Thank you. We do have one other item on the agenda.

Ted C. Ziemer, Jr.: I know, maybe, if we could go ahead and get those signed now, we could get them over there to the office and they can start scanning them so that they can e-mail them and then get them in the Fed Ex envelope to get mailed today.

Ted C. Ziemer, Jr.: While you’re doing that I’ll start with the other contract before us today. It is an AT&T agreement to replace copper T-1 infrastructure that we now have for city and county off-site phone systems with fiber optics. There are two contracts, the first one AT&T calls their stand alone contract. It’s actually a contract that we sign with them that sets the terms and conditions of any future pricing schedule for work that we might enter into with them. It did have one provision in it that concerned us, which had the county indemnifying AT&T for certain things. I required that they limit our liability under that indemnity to the limits provided by Indiana law, since we’re a public subdivision, or a political subdivision of the State of Indiana. The second document is the more important one, then, which will fall under the stand alone agreement, and that is a pricing schedule, which covers eight years, or 96 months, and it’s to provide the various service components that are described in the contract for that period of eight years. The monthly charges under the contract are $20,937 per month. As you know, a contract that extends beyond one year is required to be subject to appropriation by the County Council. There was no provision in this contract to require that, and that’s why it really wasn’t on the agenda at the October 7^th meeting. I required them to add a provision for non-appropriation, that the county could terminate this contract if County Council ever fails to appropriate funds to pay for future years, or, even if they did and the State of Indiana did not authorize the expenditure of those funds. That clause is now in the contract as it’s before you here today, and it’s also satisfactory for approval from a legal perspective. Matt Arvay is here, who can much better explain for you just exactly what’s going to be done under this contract.

Matt Arvay: Good afternoon, Matt Arvay, CIO. Out of the $20,937, the county’s portion would be $7,312 a month. Basically, these are for a joint contract for off-site communications to our LAN locations, which the county has approximately 18 locations, which includes; the jail, the Health Department, and several other locations. Through some elimination of old contracts with AT&T, we were able to achieve a cost savings that pretty much offsets the new contracts, but provides us fiber optics versus T-1, so that’s increased speeds, as well as it’s going to help us continue to centralize the management of IT. When we have all these off-site LAN locations, the Sheriff had a portion in his budget, the Health Department has a portion in their budget, several of these other departments have a cost. So, for 2009 we had talked to like the Sheriff and the Health Department, we would bill them from the IT Department for 2009, because they’ve already had the money budgeted to help pay for the 2009 costs, budget it in the IT budget for 2010, removing it from the other departments budget, to continue with the centralization, so, you know, Council can understand where the IT dollars are really flowing from at the county. Again, it allows us the faster speeds, more scalable, if departments need new technology that need more than the current copper infrastructure, it’s already a pre-determined cost within the contract, for at least the first three years, that they can increase the speeds as long as they can get the budget from the County Council. So, that’s pretty much it in a nutshell.

President Korb: Did you say it was $70,000 a month, or $7,000?

Matt Arvay: $7,312 out of the $20,000 a month.

President Korb: Great, and the rest of that then is paid by the city?

Matt Arvay: The city. They have a lot more off-site locations.

President Korb: Okay, thanks.

Matt Arvay: Uh-huh.

President Korb: Any further discussion? I need a motion.

Commissioner Nix: Move approval.

Commissioner Tornatta: Second.

President Korb: Discussion? Hearing none, all those in favor say aye?

All Commissioners: Aye.

President Korb: Opposed same sign. The motion passes.

Matt Arvay: Thank you.

President Korb: Yep. You’re welcome.

Commissioner Nix: Is there any other business?

President Korb: Any other business? Any comments from the public? Hearing none, seeing none, I need a motion for adjournment.

Commissioner Nix: So moved.

Commissioner Tornatta: Second.

President Korb: All those in favor say aye.

All Commissioners: Aye.

President Korb: Opposed same sign. The motion passes.

(The meeting was adjourned at 4:25 p.m.)

Those in Attendance:

Jeff Korb*                                  Bill Nix                                      Troy Tornatta

Bill Fluty                                    Ted C. Ziemer, Jr.          Madelyn Grayson

Matt Arvay                                Others Unidentified                   Members of Media

* Commissioner Korb arrived at 4:22 p.m.

VANDERBURGH COUNTY

BOARD OF COMMISSIONERS

Jeff Korb, President

Bill Nix, Vice President

Troy Tornatta, Member

(Recorded and transcribed by Madelyn Grayson.)