Opp amends SEAGD charter

Published 12:00 am Wednesday, September 3, 2003

A resolution passed by the Opp City Council Monday night may save the city some money, according to Mayor Jerry Boothe. The resolution amends the Certification of Incorporation of the Southeast Alabama Gas District and changes the definitions of "Required Capital Reserve" and "Required Operating Reserve." According to the resolution, the District is required to have a "reasonable reserve"

for future capital additions which has, until now, been based on gross income. The amendment changes the definition of "Reasonable Reserve" to be calculated

"as a multiple of prior capital expenditure" instead.

The resolution stated that SEAGD had recently purchased coalbed methane wells, and that the gross income from the initial first sale of gas at the wellhead would be reflected in the gross revenues of the district. In other words, the addition of the wells would require a larger reserve.

"As a result," the resolution stated, "the current formula for calculation of the Required Capital Reserve…. would not be reflective of the District's future capital requirements."

Because expenditures vary from year to year, it was recommended that the Board adopt a standard based on a five-year average and suggest 1.25 times that average as a minimum reserve fund.

It was also determined that the new formula for calculating the operating reserve would be 50 percent of the estimated expenses of operating, maintaining and repairing the gas systems of the district, not including the purchase of gas.

The changes will benefit all of the cities that are members of the district, including Andalusia, but all of the members have to pass the resolution, said Boothe.

"Everybody's got to adopt the resolution," he said. "We now share in the profits - they are distributed to the member cities."

According to the definitions in the old version of the charter, the cities would have had to contribute significantly to increase the reserves the meet those definitions. By amending the resolution, the cities will not have to contribute as much, not only saving that money, but increasing the profits as well.

The resolution passed unanimously.

Like Andalusia, Opp iss considering the possibility of raising the cigarette tax, concerned that the state will raise those taxes and place a ceiling on the amount of revenue the city can raise on cigarette sales. Boothe said that there could be a special called meeting sometime soon to consider the issue.

Terry Powell of Shaw Industries, who is this year's fundraising chairman for the recently combined Covington County United Fund was on hand to explain the purpose of uniting the Opp and Andalusia agencies to better serve everyone in the county.

Dr. Timothy Lull, superintendent of Opp City Schools, also attended

the meeting to give a 15-minute presentation on Amendment 1 and what it means to the welfare of the Opp City School system.

In other council business, the council passed unanimously five demolition abatements and two weed abatements.