CFPUA 2 19 2014 Regular meeting
CAPE FEAR PUBLIC UTILITY AUTHORITY
FEBRUARY 19, 2014
REGULAR MEETING
Authority Members Present:
Jim Quinn, Chairman
Pat Kusek, Vice-Chair
Jim Brumit, Secretary
Cindee Wolf
Bill Norris
Charlie Rivenbark, Councilman
Tom Wolfe, Commissioner
Woody White, Commissioner
Authority Members Absent:
Mike Brown, Treasurer
Larry Sneeden
Staff Present:
Jim Flechtner, Executive Director
Mike Richardson, Interim Chief Operations Officer
Beth Eckert, Environmental Management Director
Cheryl Spivey, Chief Financial Officer
Frank Styers, Engineering Director
Tom Morgan, H.R. Director
Ken Vogt, Wastewater Treatment Superintendent
Mike McGill, Chief Communications Officer
Karen Durso, Assistant to the Executive Director
John Payne, Internal Auditor
Loria Potter, Interim Customer Service Director
Phil Brower, Engineering Manager
Julie McLawhon, Budget & Finance Manager
Melinda Hoggard, Financial Systems Analyst
Julia Vosnock, Procurement Manager
Donna S. Pope, Clerk
Attorney Present:
Linda A. Miles, the Miles Firm, PLLC
Guests Present:
Diane Williams, Assistant Regional Engineer, N.C. Public Water Supply
Tony Boahn, McKim & Creed
Dan Dawson, W.K. Dickson
Media representatives
Opening Comments and Determination of a Quorum:
Mr. Quinn welcomed attendees and declared a quorum present. Mr. Rivenbark moved to excuse Messrs. Brown and
Sneeden. Mr. White seconded the motion, and it passed unanimously.
Adoption of the Agenda:
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motion, and the Agenda was
unanimously adopted.
Approval of Minutes:
Mr. Brumit moved to approve the Minutes of the January 8, 2014, Regular meeting. Ms. Kusek seconded the
motion, and the Minutes were approved unanimously.
Distinguished Budget Presentation Award:
On behalf of the Finance Committee and the full Board, Ms. Kusek presented the Distinguished Budget Presentation
Award to Ms. Spivey, Ms. McLawhon, and Ms. Durso. Finance and Administration staff received the recognition
and award from the Government Finance Officers Association. The award reflects a commitment to the highest
principles in government accounting. This is the second year that the Authority has received the award.
Public Comment:
There were no public speakers.
Consent Agenda:
Mr. Quinn presented the Consent Agenda, as follows:
1. Contract amendment with ASR Systems, LLC, for the Aquifer Storage and Recovery Well project, not to
exceed $135,000;
2. Budget Calendar for FY2014-2015;
3. Revision to the standard operating procedure for post-issuance monitoring of compliance for tax-exempt
debt;
4. Approval of a cash-flow based investment program and designation of Park Sterling Bank as an Official
Depository for Authority funds;
5. Sole source ITRON transmitters for meter reading, at an estimated cost of $77,100;
6. Sole source SENSUS water meter purchase, at an estimated cost of $172,970;
7. Two-year contract with Municipal Sales, Inc., for root control services, at a cost of $47,495 annually;
8. Contract amendment with McKim &
upgrades, to be billed hourly, not to exceed a total of $114,600;
9. Change order with State Utility Contractors, Inc. to adjust the final contract quantities for the Burnt Mill
Creek Phase 2 sewer improvements, at a budget impact of $36,533.22.
from the Consent Agenda.
Mr. Rivenbark moved to approve Consent Agenda Items 1 through 6, 8, and 9. Ms. Wolf seconded the motion, and
the Consent Agenda was approved with the exception of Items 1 and 7.
Contract amendment with ASR Systems, LLC, for the Aquifer Storage and Recovery Well project, not to exceed
$135,000. reported that he ha
Storage and Recovery site. Mr. Styers reported that staff has been working with property owners in the area and has
developed a plan to address concerns depending on whether the well is an irrigation well or a geothermal well. Mr.
McGill reported to the Board regarding outreach, mailings and additional communications with area residents,
property owners, and the Department of Environment and Natural Resources. The Authority supplies all domestic
water for use in the area, and none of the wells are used for drinking water or other inside household use. Staff is
moving forward with the second stage of the ASR project.
to the Board when all concerns are
Rivenbark seconded the motion. The contract amendment passed unanimously.
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Two-year contract with Municipal Sales, Inc., for root control services, at a cost of $47,495 annually. Mr.
Flechtner reported that staff is confident with the choice of chemicals and root control services. Mr. Rivenbark
moved to approve the contract. Mr. Brumit seconded the motion, and it passed unanimously.
New Business, Administrative Reports:
Engineering Report - Effluent Force Main Project Update and recommendation for a construction contract change
order with T.A. Loving Company for the Northside Wastewater Treatment Plant Effluent Force Main project, at a
budget impact of $1,606,300.65.
Mr. Styers presented the item and answered questions from Board members. An additional 30-inch force main is
necessary to carry treated wastewater from the Northside plant to its discharge on the river. When the Martin Luther
King Parkway was constructed, two 42-inch casings were constructed by the DOT contractor for later use when the
force mains were built. One of the casings is no longer suitable for use due to poor soils and settling of fill beneath
the casing. The recommended change order includes the cost of a 520 linear foot horizontal directional drill at a
deeper level to install the force main beneath the highway. Once the force main is completed, the Northside plant
will be re-certified by the State to treat and convey 16 million gallons of effluent per day. Following clarification
questions, Mr. Brumit moved to approve the change order with T.A. Loving. Ms. Kusek seconded the motion, and
it passed unanimously.
Ms. Miles had no report for open session and requested a closed session at the end of the
meeting to discuss a personnel item.
Mr. Flechtner referred Board members to the Environmental and Safety Reports in the
Agenda packet. He then reported on the impacts of winter weather events on Authority operations in the last month.
There were 22 water main breaks over an 11-day period, caused by extreme temperature fluctuations over a short
time period. During the most recent ice storm and power outages, 35 pump stations operated on generator power.
Crews worked through the night to maintain power at the pump stations. Approximately 1,200 employee work
hours were expended between the two weather events. Mr. Flechtner praised employees for their dedication,
expertise, and hard work in difficult circumstances. Ms. Kusek commended staff and suggested that the Authority
do something in appreciation for those who worked during the storms.
New Business, Committee Reports:
Executive Committee. Mr. Quinn reported that the Executive Committee met on February 5. The Committee agreed
upon assignments to various Board Committees and had notified Authority members of their new assignments.
Mr. Quinn further reported that the Executive Committee considered the Executive Director contract and voted
unanimously to endorse the contract, which would be considered by the Board in closed session.
Human Resources Committee. Ms. Kusek reported that the Committee would report in the closed session. She
reminded Authority members that the Committee needed evaluation feedback for the Clerk and for the legal services
contract review.
Communications Committee. Mr. McGill reported that the Committee met on January 9 and would meet in the
future on an as-needed basis, with updates to the full Board
which stands for strengths, weaknesses, opportunities, and thr
Committee. Mr. McGill has expanded outreach and has received recommendations from staff and from Board
members for groups which would be amenable to receiving a presentation on the Authority. the
as a cover for a grease holder. The caps are cost effective and are printed with the Authority name, logo, and
instructions for use. Mr.
emergency notification system and that approximately 2,500 residents received boil water notices through the
County system.
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Mr. McGill thanked Jim Tayson and Bob Mazzeo for agreeing to be interviewed by television reporters to discuss
water main breaks and pump stations.
Messrs. Flechtner, Richardson, and McGill attended a community meeting in the Flemington area to explain the
Flemington water line project and answer questions from residents.
information about services as well as advisories through Twitter.
Long Range Planning Committee. Ms. Wolf and Mr. Styers reported that the Committee met on January 23 and
reviewed the ASR Systems change order that was approved on the Consent Agenda. The Committee reviewed the
ten-year Capital Improvement Program, which would be the subject of the workshop following the Authority
meeting. Mr. Styers reported that staff has added a capital project to address disinfection byproducts since the
Committee met.
Finance Committee. Ms. Spivey reported that the Committee met on February 5 and held a preliminary rate
discussion. The Committee will meet to discuss rates at 9:00 a.m. on February 27 and anticipates bringing rates to
the Board for consideration in March, with an April vote for bills on or after May 1.
Ms. Spivey referred the Board to an analysis of the five largest accounts written off in January and the January
financial data in the Agenda packet.
Personal Guarantee on Customer Accounts. Ms. Miles presented the item, which had been recommended by the
Finance Committee and discussed by the Executive Committe
ability to require personal guarantees for accounts of limited liability companies and other business entities. Ms.
Miles reported that there is no case law on the topic but that two conflicting theories exist. The first theory would
allow the Authority to require a personal guarantee as part of its contract and in support of the solvency of a public
agency. The second theory holds that one of the legal purposes of a limited liability company or a corporation is to
avoid personal liability. The second school of thought further holds that the Authority has a monopoly, creating
have no other option for water and sewer service for customers.
Ms. Miles reported that she and Ms. Potter had surveyed regional utilities, and no other utility requires a personal
guarantee. She further reported that, in the current fiscal year, the Authority increased its deposit for commercial
entities to an amount equal to 90 days, with the goal of addressing losses from commercial accounts. She reported
that another possibility would be to allow the option of a either a personal guarantee or a larger deposit to an LLC or
corporation.
Ms. Spivey and Ms. Miles answered clarification questions. The Board discussed the concept of revisiting a
commercial account some months after its creation to analyze usage and adjust the deposit requirements. Board
members agreed that staff did not yet have enough data from the new deposit policy to analyze its effectiveness.
Mr. Quinn believed that the new Customer Service Director should review the question and provide insight.
After discussion, Mr. Rivenbark moved not to require personal guarantees for limited liability companies and
corporations at present but to revisit accounts, review the deposit policy, and review the personal guarantee concept
in six months. Ms. Kusek seconded the motion, and it passed unanimously.
Recess and Closed Session:
Mr. Wolfe moved to enter closed session to discuss a personnel matter. Mr. Rivenbark seconded the motion, and it
passed unanimously. Mr. Quinn recessed he meeting at 9:55 a.m., and the Board reconvened in a closed session at
10:03 a.m. Ms. Miles, Mr. Morgan, and Ms. Pope remained in the meeting. The Board received a report from legal
counsel.
Open Session:
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Ms. Kusek moved to return to open session. Mr. Rivenbark seconded the motion, and it passed unanimously. The
Authority returned to open session at 10:10 a.m., and Mr. Flechtner, other staff members, and visitors rejoined the
meeting.
Ms. Kusek moved to approve the employment contract with Mr. Flechtner as Executive Director, with an annual
salary of $152,000 effective December 10, 2013. Mr. Wolfe seconded the motion, and the contract was approved
unanimously. Mr. Quinn thanked the Human Resources Committee members for their work on the contract and
during the interview process.
Adjournment:
Mr. Rivenbark moved to adjourn. Ms. Kusek seconded the motion, and it passed unanimously. The Authority
adjourned at 10:12 a.m.
The next regular meeting of the Cape Fear Public Utility Authority will be held on Wednesday, March 12, 2014.
The meeting will be held in the Lucie Harrell Conference Room, New Hanover County Administration Building,
230 Government Center Drive, Wilmington, North Carolina.
Respectfully submitted,
Donna S. Pope
Clerk to the Board
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