Utility District looks toward an uncertain future

Some businesses may not open this summer
Fri, 05/01/2020 - 9:30am

The Block Island Utility District Board of Commissioners held its second meeting by Zoom on Saturday, April 25. In some ways it was business as usual, with the commissioners approving the draft audit report first presented last month by the auditors from Marcum, and continuing their ongoing discussion of building a house for the president of the Block Island Power Company, Jeffery Wright. But underlying it all was a deep river of uncertainty about the immediate and future effects the Coronavirus pandemic would have on the economy of Block Island, and how that might negatively impact the power company.

Wright reported that the first week of May is when the demand for power “goes way up,” and he is able to follow the “load profile” on a daily basis. If necessary, he said, he would call for an emergency meeting of the Board of Commissioners.

Wright also said he had participated in a remote meeting of the National Rural Electric Cooperative Association and the subject of whether electric cooperatives would, or should be included in the national bail-out programs, such as the Paycheck Protection Program in response to the pandemic. While, he said, R.I Senators Jack Reed and Sheldon Whitehouse had submitted a letter of support for co-ops to be included, representatives from 46 states participating were “split down the middle.”

So far, BIPCo has not applied for the program, as it has not had to lay off any employees. Board of Commissioners Chair Barbara MacMullan said the purpose of the Paycheck Protection Program is to help people maintain payrolls, and that there were other loan programs that might fill BIPCo’s needs, specifically Economic Disaster loans.

Commissioner Mary Jane Balser, who is a co-owner of MACLAC Enterprises, which owns the Block Island Grocery and Seaside Market, and also runs the Block Island Boat Basin store, said she had applied for the PPE program and been approved. But despite that, she said she wouldn’t be able to open either the Seaside Market or the Boat Basin this year, in part because there were no employees available – especially the foreign workers the island depends on each summer. She didn’t see how other businesses could open either. Except for a “blip” in business when second home owners started arriving from New York and Connecticut, her “numbers” are now lower than last year, she said.

“How do you open hotels and restaurants” while maintaining social distancing? asked Balser. “It’s a real problem.” For small shops she said: “It’s better to not open than to take a loss.” As for those coming by private boat and renting vacation homes, she said: “Gas is cheap, but will they come? I wish I knew.”

“It’s on the top of everybody’s mind,” said MacMullan.

Commissioner Elliot Taubman said the commissioners should authorize Wright to pursue any grants or loans he thought necessary, but the others weren’t keen on taking that extra step — yet.

“If we get to that point,” said Wright, “we’ll have a lot of discussions.” Turning towards the audit — the first for BIPCo under its new not-for-profit corporate structure — the Commissioners reviewed changes to the financial statements and accompanying notes as presented by auditors Kyle Conners and John Healy from Marcum, LLC. The changes had all been discussed at the Board of Commissioners meeting on April 4.

The first year of an audit is almost always more time consuming and Wright said he really appreciated the “hard work put into it.” He noted that due to the virus, it was a “99 percent remote audit,” and he was “glad it’s done before the CFC deadline.” (CFC is the lender that has provided financing for BIPCo.)

At the meeting on April 4, the commissioners appointed Balser to work with Treasurer Bill Penn on the building of a house on BIPCo property that will be rented by Wright, who now resides in a small apartment above the company’s offices. Formerly, it was Wright working with Penn, but the Commissioners wanted to make sure there were no conflicts of interest in the process.

On April 25, Penn said he had had architect Glen Fontecchio do renderings of the home, with elevations, for the Historic District Commission, of which he is chairman.

“It’s a classic two-story Block Island Cottage” said Penn, which would face Ocean Avenue, and have a door in the center. In the back, there is space for solar panels, and a deck with a partial roof.

MacMullan asked about the HDC process and the distinction between preliminary versus final approval.

While it often is a two-step process, with the first presentation on “siting and massing, ” Balser was adamant that they not go to the HDC until the house plans and cost estimates were complete. “Don’t go before any committee without final plans that we know we can build with the money on hand,” she said. “We have the cart before the horse.”

Since the last meeting, Balser said she has given the drawings to a modular builder, the cost for which will be included in the construction if that particular company gets the job. The cost estimates will provide details, and Balser hopes, “options” if the initial plans come in over the budgeted amount for the project. The goal, she said was to have a construction cost of $500,000 to $550,000 with another $50,000 in contingency funds.

There was some discussion on whether the drawings would be sufficient for a “stickbuilt” contractor to bid on the project or whether complete architectural drawings would be needed, adding $60,000 to $80,000 to the cost.

Balser said they were currently looking at a “medium to high level finish on the interior” but certain details could be changed if the estimate exceeds $550,000. She said the drawings should be available within the next two weeks.

It is business as usual for the ospreys living on the grounds of the power company, Wright reported before the start of the meeting. The mother has been sitting on her eggs for the past week while the father goes out to catch fish to bring back to the nest.