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CFPUA 12 10 2014 Regular meeting CAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES DECEMBER 10, 2014 Lucie Harrell Conference Room Regular Meeting 9:00 AM 230 GOVERNMENT CENTER DRIVE WILMINGTON, NC 28403 I. CALL TO ORDER Ms. Kusek called the meeting to order at 9:00 AM. II. DETERMINATION OF A QUORUM Ms. Wolf moved to excuse Mr. Brown. Mr. Norris seconded the motion, and Mr. Brown was unanimously excused. Ms. Kusek declared a quorum present. Attendee Name Organization Title Status Arrived Patricia Kusek Cape Fear Public Utility Chair Present Authority Jim Quinn Cape Fear Public Utility Vice Chair Present Authority James Brumit Cape Fear Public Utility Secretary Present Authority Mike Brown Cape Fear Public Utility Treasurer Excused Authority Cindee Wolf Cape Fear Public Utility Present Authority William Norris Cape Fear Public Utility Present Authority Larry Sneeden Cape Fear Public Utility Present Authority Kevin O'Grady Cape Fear Public Utility Present Authority Charlie Rivenbark Cape Fear Public Utility Present Authority Woody White Cape Fear Public Utility Present Authority Thomas Wolfe Cape Fear Public Utility Present Authority Jim Flechtner Cape Fear Public Utility Executive Director Present Authority Linda Miles Cape Fear Public Utility Attorney Present Authority Karen Durso Cape Fear Public Utility Assistant to the Executive Present Authority Director Donna Pope Clerk/Executive Secretary to the Cape Fear Public Utility Present Authority Board Frank Styers Chief Operations Officer Cape Fear Public Utility Present Authority Cape Fear Public Utility Authority Page 1 Minutes Authority Board December 10, 2014 Carel Cape Fear Public Utility Director of Engineering Present Vandermeyden Authority Cheryl Spivey Cape Fear Public Utility Chief Financial Officer Present Authority Kristine Irick Cape Fear Public Utility Customer Service Director Present Authority Beth Eckert Cape Fear Public Utility Director of EMD Present Authority Julie McLawhon Cape Fear Public Utility Budget/Finance Manager Present Authority Julia Vosnock Cape Fear Public Utility Procurement Manager Present Authority John Payne Cape Fear Public Utility Internal Auditor Present Authority Ken Vogt Cape Fear Public Utility WWT Superintendent Present Authority Mike McGill Cape Fear Public Utility Chief Communications Officer Present Authority Eric Hatcher Cape Fear Public Utility Emergency Management Present Authority Coordinator Richard King City of Wilmington Present Heidi Cox Public Water Supply Present Jim Iannucci New Hanover County Present III. ADOPTION OF AGENDA Mr. Flechtner presented the Agenda and requested the addition of an Operations Report and the deletion of Item 3 under the Executive Director Report. Mr. Rivenbark moved to approve the revised Agenda. Mr. Norris seconded the motion, and the Agenda was adopted unanimously. IV. APPROVAL OF MINUTES 1. Authority Board - Annual Meeting - Nov 12, 2014 9:00 AM RESULT: ACCEPTED [UNANIMOUS] MOVER: James Brumit, Secretary SECONDER: Larry Sneeden AYES: Kusek, Quinn, Brumit, Wolf, Norris, Sneeden, O'Grady, Rivenbark, White, Wolfe EXCUSED: Brown V. PRESENTATION 1. Large Utility Disaster Preparedness Award Mr. Flechtner presented the North Carolina American Water Works Association Large Utility Disaster Preparedness Award, and Mr. Hatcher accepted on behalf of Authority staff. Mr. Flechtner thanked Mr. Hatcher for his dedication, professionalism, and leadership in guiding staff towards the award. VI. PUBLIC COMMENTS - 4 MINUTE LIMIT PER SPEAKER Cape Fear Public Utility Authority Page 2 Minutes Authority Board December 10, 2014 There were no speakers. VII. SPEAKER UPDATE FROM THE NOVEMBER 12 BOARD MEETING Mr. Flechtner reported on the two speakers from the November meeting. The Long Range Planning Committee reviewed the Platts' request for reimbursement and determined that staff had followed appropriate procedures and that the Authority should not reimburse the Platts' expenses. Ms. Miles would discuss negotiations with Mr. Coggins and his clients during the meeting's closed session. VIII. CONSENT AGENDA Mr. O'Grady requested that Item 4 be removed from the Consent Agenda for discussion. He moved to approve Consent Agenda Items 1, 2, 3, 5, and 6. Mr. Brumit seconded the motion, and it passed unanimously. 1. Authorization for the Executive Director to Execute a Sewer Capacity Reservation Agreement with SEL Property Investors, LLC RESULT: APPROVED [UNANIMOUS] MOVER: Kevin O'Grady SECONDER: James Brumit, Secretary AYES: Kusek, Quinn, Brumit, Wolf, Norris, Sneeden, O'Grady, Rivenbark, White, Wolfe EXCUSED: Brown 2. Authorization for the Executive Director to Execute Contract Amendment with McKim & Creed, Inc. for the PS 9/11 Improvements and Water Street Infrastructure Project RESULT: APPROVED [UNANIMOUS] MOVER: Kevin O'Grady SECONDER: James Brumit, Secretary AYES: Kusek, Quinn, Brumit, Wolf, Norris, Sneeden, O'Grady, Rivenbark, White, Wolfe EXCUSED: Brown 3. Authorization for the Executive Director to Enter into an Interlocal Agreement (ILA) with the City of Wilmington for the Water Street Infrastructure Project. Cape Fear Public Utility Authority Page 3 Minutes Authority Board December 10, 2014 RESULT: APPROVED [UNANIMOUS] MOVER: Kevin O'Grady SECONDER: James Brumit, Secretary AYES: Kusek, Quinn, Brumit, Wolf, Norris, Sneeden, O'Grady, Rivenbark, White, Wolfe EXCUSED: Brown 4. Authorization for the Executive Director to Execute a $500,000 Construction Change Order with Cajenn Construction & Rehabilitation Services, Inc. for the Waltmoor Sewer Rehab Phase II Project and to Extend the Contract Duration by 365 Days. Mr. Vandermeyden answered clarification questions regarding the Find It Fix It program and the contract amendment. Ms. Miles reported that Find It Fix It was an integral part of the EPA Consent Decree. Mr. O'Grady moved to approve Item 4. Mr. Rivenbark seconded the motion, and the change order was approved unanimously. RESULT: APPROVED [UNANIMOUS] MOVER: Kevin O'Grady SECONDER: Charlie Rivenbark AYES: Kusek, Quinn, Brumit, Wolf, Norris, Sneeden, O'Grady, Rivenbark, White, Wolfe EXCUSED: Brown 5. Award of Water & Wastewater Treatment Chemical Contracts RESULT: APPROVED [UNANIMOUS] MOVER: Kevin O'Grady SECONDER: James Brumit, Secretary AYES: Kusek, Quinn, Brumit, Wolf, Norris, Sneeden, O'Grady, Rivenbark, White, Wolfe EXCUSED: Brown 6. Authorization for Sole Source Purchase of Mec Floc Coagulation Emulsion Polymer For the Sweeney Water Treatment Plant RESULT: APPROVED [UNANIMOUS] MOVER: Kevin O'Grady SECONDER: James Brumit, Secretary AYES: Kusek, Quinn, Brumit, Wolf, Norris, Sneeden, O'Grady, Rivenbark, White, Wolfe EXCUSED: Brown IX. NEW BUSINESS A. Administrative Reports i. Attorney's Report Ms. Miles had nothing to report in open session. She requested a closed session to discuss a legal claim and reported that Mr. Brumit required a closed session to discuss a personnel item. Cape Fear Public Utility Authority Page 4 Minutes Authority Board December 10, 2014 ii. Executive Director's Report Mr. Flechtner referred the Board to the Environmental and Safety reports in the Agenda packet. Mr. Sneeden complimented staff on the safety record. 1. Environmental Report 2. Safety Performance Report 3. Utility Infrastructure Agreement for Proposed School RESULT: WITHDRAWN iii. iii. Operations Report Mr. Styers presented a staff recommendation for a sole source award of purchase and repair contracts with Gregory Poole Power Systems and Lancaster Electric. The contracts would not exceed $200,000. Staff recommended the use of $200,000 in operating contingency funds to fund the contracts, and the supporting Supplemental Appropriations Ordinance was presented. Mr. Styers answered questions from Board members regarding the cause of generator failure, the Gregory Poole equipment warranty, and the specialized knowledge of Lancaster Electric. Ms. Miles answered questions regarding the sole source award. Following discussion, Mr. Rivenbark moved to approve both the sole source award on the purchase and repair contracts with Gregory Poole Power Systems and Lancaster Electric and the Supplemental Appropriations Ordinance transferring $200,000 from the Operating Contingency to the Operating Expenditure budget. Mr. Norris seconded the motion, and it passed unanimously. Messrs. Quinn and Wolfe reported that the Lower Cape Fear Water & Sewer Authority had realized electrical cost savings through a Duke Energy Progress program which provided credits for generator use. B. Committee Reports i. Executive Committee Ms. Kusek referred the Board to the Committee minutes in the Agenda packet. 1. Executive Committee Minutes ii. Long Range Planning Committee Mr. Sneeden asked Mr. Vandermeyden to report to the Board. The Committee met on November 20, and recommended an item that had been approved on the Consent Agenda, reviewed the preliminary FY2016 Capital Improvement Project budget, and reviewed the Platts' request for reimbursement. There were no questions for Mr. Vandermeyden. Cape Fear Public Utility Authority Page 5 Minutes Authority Board December 10, 2014 1. Long Range Planning Committee - Regular - Nov 20, 2014 3:00 PM 2. 7510 Mason Landing Road Sewer Service Update iii. Finance Committee Mr. Flechtner introduced the Preliminary Budget for FY2016. No rate change is anticipated for the new year. Water consumption has increasd slightly. Excluding salaries and benefits, the goal for expenditures is no greater than two percent over the current budget. Ms. Spivey presented the preliminary budget information. Debt service represents the largest part of the Authority's budget and the primary rate driver. Debt service for FY2016 will be $23,600,000, which is $4,400,000 less than FY2015. Debt service will increase in FY2017. Ms. Spivey presented a debt comparison chart analyzing City, County, and Authority debt. Much of the debt in the early years of operation was transferred from the County or City. Most of the $317 million in current debt has been incurred by the Authority, some of it through re-funding of earlier bonds. The next step of Board budget considerations will be a Capital Improvements workshop scheduled for January 14. Following the regular Authority meeting, the Board will reconvene in the Authority administration building at 235 Government Center and consider capital projects for FY2016. Detailed expenditure information will be available in January for the purpose of modeling rates. Ms. Spivey referred the Board to the November financial reports in the Agenda packet. Ms. Wolf asked for information on an email from a customer regarding his account. Mr. Flechtner reported that the problem occurred due to an anomaly and that staff had worked out the issue with the customer and taken steps to ensure it did not re-occur. Ms. Spivey reported that staff was reviewing the Duke Energy Progress initiative mentioned by Messrs. Quinn and Wolfe. 1. Finance Committee - Regular Meeting - Dec 3, 2014 9:00 AM 2. FY16 Preliminary Budget Review 3. Monthly Financials and Customer Service Report X. OLD BUSINESS There was no old business. XI. AUTHORITY Q&A / CLOSING COMMENTS Cape Fear Public Utility Authority Page 6 Minutes Authority Board December 10, 2014 There were no questions and no further closing comments. XII. CLOSED SESSION Mr. Rivenbark moved to enter into closed session to discuss a claim and a personnel matter. Mr. Wolfe seconded the motion, and it passed unanimously. The Board entered closed session at 9:30 AM, with Ms. Miles, Messrs. Flechtner and Styers, and Ms. Pope in attendance. The Board received a report from Ms. Miles. Messrs. Flechtner and Styers left the meeting at 9:40 AM. The Board discussed a personnel item. Mr. Rivenbark moved to return to open session. Ms. Wolf seconded the motion, and the Board returned to open session at 10:00 AM. XIII. ADJOURNMENT Mr. Norris moved to adjourn. Ms. Wolf seconded the motion, and the Authority adjourned at 10:01 AM. The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, January 14. The Board will convene at 9:00 AM and will meet in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington, North Carolina. Immediately following the regular Authority meeting, the Board will reconvene at the Authority offices, 235 Government Center Drive, for a Capital Improvements workshop. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority Page 7