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CFPUA 11 14 2012 Cape Fear Public Utility Authority Annual Meeting November 14, 2012 Authority Members Present: Jim Quinn, Chairman Pat Kusek, Vice-Chair Jim Brumit, Secretary Mike Brown, Treasurer Cindee Wolf Larry Sneeden Keith Betts Charlie Rivenbark, Councilman Neil Anderson, Councilman Rick Catlin, Commissioner Jason Thompson, Commissioner Staff Present: Matt Jordan, CEO Jim Flechtner, COO Cheryl Spivey, CFO Karen Durso, Assistant to CEO Mike McGill, CCO Frank Styers, Engineering Director Beth Eckert, Environment & Safety Director Tom Morgan, H.R. Director Nancy Johnson, Customer Service Director Betty Redmond, Customer Service Center Manager Mike Richardson, Water Resources Superintendent Milton Vann, Wastewater Treatment Supervisor Jonathan Ham, Project Engineer Christene Mitchell, Engineering Manager Kent Harrell, Engineering Manager Julie McLawhon, Budget & Finance Manager Teresa Horsboll, Buyer Steve Mongeau, Senior Program Manager Donna S. Pope, Clerk Attorney Present: Linda A. Miles, the Miles Firm, PLLC CFPUA ANNUAL MEETING NOVEMBER 14, 2012 Page 1 Guests Present: Cindy Williams Jackie Hooks Donald Caison Alan Shultz Tyler Newman Eric Williams Ray Cox Jeremy Blair Tony Boahn Call to Order, Opening Comments, and Determination of a Quorum: Mr. Quinn called the meeting to order at 9:00 a.m. and declared a quorum present. Mr. Quinn recognized Messrs. Catlin and Thompson for their service to the Authority. Adoption of the Agenda: conded the motion, and the Agenda was adopted unanimously. Opening Comments, continued: Mr. Thompson announced that he had stepped down from the Committees and Boards upon which he served as a Commissioner, effective November 13, 2012. The Commissioners appointed Mr. Berger to The Board and staff thanked Mr. Thompson for his work for the Authority, and Mr. Thompson left the meeting. Adoption of the Agenda, continued: Mr. Jordan reported that staff had two items to add to the Agenda, as follows: Request from New Hanover County regarding Engineering reports and Environmental for Clean Water State Revolving Fund Loans. Recommended placement, Item 3(c), Engineering Report. Rejection of Bids for Sanitary Sewer Rehabilitation, Wilmington ILM Airport Project. Recommended placement Item 4(c)(i), Finance Committee Report. Ms. Kusek moved to adopt the Agenda with the recommended additions. Mr. Rivenbark seconded the motion, and the Amended Agenda was unanimously adopted. CFPUA ANNUAL MEETING NOVEMBER 14, 2012 Page 2 Approval of Minutes: Mr. Brumit moved to approve the Minutes of the October 10, 2012, Regular Meeting, as presented in the Agenda. Mr. Betts seconded the motion, and it passed unanimously. Public Comments: Mr. Caison and Mr. Shultz spoke regarding Country Haven Pond and the aquifers in the area surrounding the Nano Plant. Consent Agenda: The Board considered the Consent Agenda, as follows: 1. Approval allowing New Hanover County to make periodic payments to the Authority for the Bald Eagle Lane Water Project based upon actual expenditures rather than one upfront payment; 2. Resolution Designating Bank of America as an Official Depository; 3. Ordinance to move funds from Operating Contingency to Operating Expenditures in the Operating Fund ending June 30, 2013, due to a North Carolina law canceling permanent license plates, at a budget impact of $45,000; 4. Authorization for Procurement to advertise and sell items on GovDeals and donate the unsold items to local non-profits; 5. Approval establishng an internal lockbox for payments and add one staff person to the Customer Service Department, beginning with the FY2014 budget; 6. Disposal of the Kings Grant Elevated Water Storage tank; 7. Purchase of Sartell-Dezurik butterfly valves with Auma electric actuators for filters 1 4 at the Sweeney Water Treatment Plant, at a budget impact of $300,000; 8. Authorization for the CEO to execute a contract amendment with Highfill Infrastructure Engineering, P.C., for additional design services for the Pump Station 10 project, at a budget impact of $59,800; 9. Authorization for the CEO to execute a contract amendment with Highfill Infrastructure Engineering, P.C. for professional design and construction phase services for the Force Main Condition Assessment, Phase II, at a budget impact of $903,700; 10. Authorization for the CEO to execute a contract with Kimley-Horn and Associates, Inc., for professional design and construction phase services for air release valve (AVR) replacement, at a budget impact of $291,800; 11. Authorization for the CEO to execute a contract amendment with McKim & Creed, Inc. for professional design and construction phase services for River Road Force Main replacement, at a budget impact of $197,395; and 12. Authorization for the CEO to execute a contract amendment with McKim & Creed, Inc., for pump station interim upgrades, at a budget impact of $37,900. CFPUA ANNUAL MEETING NOVEMBER 14, 2012 Page 3 Mr. Anderson stated that he had questions regarding Items 3, 5, 8, 9, 11, and 12 and moved to approve the Consent Agenda with those specified items removed for discussion. Mr. Rivenbark seconded the motion, and Items 1, 2, 4, 6, 7, and 10 of the Consent Agenda were approved unanimously. Staff answered clarification questions for Items 3, 5, 8, 9, 11, and 12. Mr. Anderson moved to approve the remainder of the Consent Agenda, Items 3, 5, 8, 9, 11, and 12. Mr. Rivenbark seconded the motion, and it passed unanimously. New Business: FY2012 Annual Report. Mr. Jordan presented the Report for Fiscal Year 2012. The Authority began the fiscal year with net assets of $360,000,000 and ended the fiscal year with net assets of $376,000,000. Staff continued to reduce expenditures while absorbing increased operating costs, consistently balancing needs and costs. The expansion of the Sweeney Water Treatment Plant was substantially completed during the fiscal year, increasing treatment capacity to 35 million gallons per day at the surface water plant. Both water treatment plants achieved 100 percent compliance with State and Federal regulations, and the three wastewater treatment plants operated were at 99.88 percent compliance with National Pollutant Discharge Elimination Systems. The Compliance division conducted over 1500 inspections and produced videos for restaurant training and a public service announcement to educate users about the hazards of releasing food, oils, and grease into wastewater lines. 188.7 miles of sewer lines were cleaned, representing 22 percent of the wastewater system lines. Approximately 29 miles of gravity mains were inspected by closed circuit cameras. Progress on major projects included design of the Northeast Interceptor, Northside Force Main, The Kerr Avenue Greater Loop water delivery design, and the Burnt Mill Creek sewer outfall. The Authority commissioned a pay study and instituted a more competitive pay plan. sincere appreciation to all employees for their daily contributions and dedication to stewardship, sustainability, and service. FY 2012 Audit. The Audit revealed no material errors or significant deficiencies in internal control. Assets exceeded liabilities by $376,000,000 in net assets, the majority of which is in infrastructure. Ms. Spivey reported that cash, cash equivalents, and investments totaled $129,800,000. Funds in the amount $40,000,000 are designated for capital projects, and the Authority has $42,700,000 in undesignated funds that can be used for non- at 93 percent of the FY2012 Budget. The Authority ended the year with a debt coverage ratio of 1.53. CFPUA ANNUAL MEETING NOVEMBER 14, 2012 Page 4 Ms. Miles reported that the Authority had received an $80,000 settlement in a third-party subrogation CEO Report. Mr. Jordan referred the Board to the Environmental and Safety Performance Report, Exhibit 14 in the Agenda. There were two sanitary sewer overflows in September. Contractor error caused a spill of Street resulted in a spill of 1,377 gallons. The Authority received a notice of violation from the City for ng to file an erosion rd control plan on the 23 Street project. Treatment plants operated with no violations during the report period. There were three accidents in September: an employee bitten by a venomous snake; an employee back strain; and a vehicle hitting a mailbox. The Authority accident rate is well below the industry average. Staff continues to improve the safety culture of the organization with a goal of zero accidents each month. Mr. Jordan presented the Level of Service Report on Key Performance Indicators for FY2012. The report is an initiative created by staff in connection with the enterprise-wide Asset Management Program and was designed to keep performance in line with the Strategic Plan. Mr. Jordan asked Authority members to review the report and provide feedback on additional performance indicators they would like to see in future reports. thanked Ms. Kusek for serving on the search and interview committe Engineering Report. Authorization to contract for Engineering Reports and Environmental Information Documents (ER/EID) for the Heritage Park and Marquis Hills Subdivisions as required by the Clean Water State Revolving Fund program guidelines, as requested by New Hanover Manager Coudriet. New Hanover County is eligible for Clean Water State Revolving loans to replace failing septic in the Heritage Park and Marquis Hills communities. Environmental information and engineering reports are expected by the North Carolina Department of Environment and Natural Resources by January 2, 2013. County staff requested that the Authority contract for the engineering reports and environmental information, with New Hanover County paying the full costs for the reported, estimated at $80,000. Mr. Iannuci, County Engineering Director, reported that County staff made the request because they believed that Authority staff to be well-versed and knowledgeable about the required components of the CFPUA ANNUAL MEETING NOVEMBER 14, 2012 Page 5 documentation. Mr. Styers reported that Authority staff had proposals from two engineering groups that could complete the work by the January 2, 2013, deadline. ew but did not vote upon the item. The cost of $80,000 is well below the contract authorization limits for the County Manager. Staff recommended authorization of the item. Should the projects advance with State loans, an Interlocal Agreement will be developed by staff and legal counsel and presented to both Boards for approval. Messrs. Styers and Iannucci answered clarification questions from Board members. Authority members expressed concern that the Commissioners had not voted upon the item before it was presented to the Authority. Mr. Catlin strongly endorsed the partnership with the County and assured the Board that he would continue to work towards regional environmental solutions when he assumed his new role in the State legislature. Mr. Iannuci reported that the Marquis Hills project is estimated to cost $11,000,000 and Heritage Park is estimated at $6,000,000. Potential grants could reduce the amounts that would need to be paid by property owners in the affected areas. Mr. Rivenbark moved to authorize engineering services required for Engineering Reports and January 2, 2013, deadline, with reimbursement from New Hanover County for the services. Mr. Catlin seconded the motion. reimbursement to the Authority for the required reports. Mr. Catlin assured the Board that the $80,000 estimated cost wa authorize payment. Ms. Wolf and Messrs. Betts, Catlin, Quinn, Brown, Brumit, Sneeden, and Anderson voted in favor of the motion. Ms. Kusek and Mr. Rivenbark were opposed. Motion carried, eight to two. Committee Reports. Executive Committee: Mr. Quinn reported that the Committee had appointed Mr. Betts to the Finance Committee at its November meeting. Long Range Planning Committee: Ms. Wolf asked Mr. Styers to provide the Committee Report. The Committee met on October 25 and reviewed the following items: Capacity for Kirkland and Country Haven force mains and pump stations and needs in the area. Mandatory connection update for the 1995 city annexation. Plan review policy. Aquifer sustainability update. CFPUA ANNUAL MEETING NOVEMBER 14, 2012 Page 6 Mr. Catlin added that he has also been monitoring water levels in the Country Haven ponds. The next meeting of the Long Range Planning Committee is scheduled for Thursday, November 15, 2012, at 3:30 p.m. in the Authority offices. Finance Committee: Mr. Brown asked Ms. Spivey to provide the report. Ms. Spivey asked Mr. Styers to present the first item, Rejection of Bids for the Sanitary Sewer Rehabilitation, Wilmington ILM Airport Project. Mr. Styers reported that four bids were received on November 7, 2012, for the airport project. The minimum contractor qualifications were established as follows: Contractor shall demonstrate that a minimum of 20,000 feet has been successfully performed by the rehabilitation process shall be proven technology, which is defined as a minimum of 100,000 linear feet of successful sanitary sewer and/or stormwater collection installations in the United States, documented to the satisfaction of the owner. None of the bidders met the required minimum qualifications. Staff recommended the rejection of all bids. Staff will revise the minimum contractor qualifications and rebid the project. Following clarification questions, Mr. Rivenbark moved to reject the bids as recommended by staff. Mr. Anderson seconded the motion, and it passed unanimously. Ms. Spivey continued with the Committee Report. Most items reviewed by the Committee had been reviewed and approved during the Consent Agenda discussion. Ms. Spivey presented the revised Page 66 of the Comprehensive Annual Financial Report listing the top ten water use customers for FY2009 and for FY2012. The 2009 report included the North Carolina State Ports Authority. The Ports had a large leak, and its bills were adjusted according to CFPUA Ordinance. After the leak was repaired and bills adjusted, the Ports fell out of the top user category. Ms. Spivey reported that the reduction in water consumption was steady at 3.5 percent with no further decline and that consumption and revenues appear to have stabilized. Ms. Spivey reported that Customer Service data and October financials were in the Agenda and that she and Ms. Johnson were available to answer questions. Old Business. There was no old business. Closing Comments. CFPUA ANNUAL MEETING NOVEMBER 14, 2012 Page 7 Mr. Catlin reported that he had asked Ms. Wolf and staff to place a Lower Cape Fear Water and Sewer Authority item on the November 15 Long Range Planning committee agenda. Mr. Quinn thanked Mr. Catlin for his leadership in forging partnerships between the County and Authority to address environmental and health concerns. Mr. Jordan added his appreciation to Mr. Catlin for his contributions to the Authority. Board members, Mr. Jordan, and Ms. Miles thanked Messrs. Thompson and Catlin for their service as Authority members. Mr. Brumit thanked Mr. Jordan for a recent speech he gave to the Military Officers Association of America. Mr. Quinn reported that Mr. Jordan had joined the Rotary Club to represent the Authority with that group and suggested that Mr. McGill also join an area service organization. Mr. Brown thanked employees who would be working through Thanksgiving and Christmas to ensure that customers receive quality water and sewer services through the holidays. Ms. Kusek reminded Authority members that the Human Resources Committee would be revise the There being no further business to come before the Board, Mr. Betts moved to adjourn. Ms. Kusek seconded the motion, and it passed unanimously. The Annual Meeting adjourned at 11:30 a.m. The next meeting of the Cape Fear Public Utility Authority will be Wednesday, December 12, 2012. The meeting will be held in the Lucie Harrell Conference Room, Bruce Shell New Hanover County Administration Building, 230 Government Center Drive, Wilmington, North Carolina, and will commence at 9:00 a.m. Respectfully submitted, Donna S. Pope Clerk to the Board CAPE FEAR PUBLIC UTILITY AUTHORITY CFPUA ANNUAL MEETING NOVEMBER 14, 2012 Page 8