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HomeMy WebLinkAbout06-09-2010 CAPE FEAR PUBLIC UTILITY AUTHORITY REGULAR MEETING JUNE 9, 2010 Members Present: Gene Renzaglia, Chairman Jim Hunter, Vice-Chairman Kathryn Johnston Breazeale, Secretary Burrows Smith, Treasurer Bobby Greer, Commissioner Bill Caster, Commissioner Ron Sparks, Councilman Charlie Rivenbark, Councilman J.C. Hearne, II John Tunstall Jim Quinn Staff Present: Matt Jordan, CEO Nancy Gallinaro, COO Karen Durso, Assistant to Mr. Jordan Frank Styers, Engineering Director Beth Eckert, Environmental and Safety Director Cheryl Spivey, CFO Tom Morgan, H.R. Director Martha Zeigler, Customer Service Director Carey Disney Ricks, PIO/PR Melinda Hoggard, Accounting Manager Julie McLawhon, Finance and Accounting Manager Steve Mongeau, Procurement Manager Joel Bing, Environmental Program Manager Jim Flechtner, Engineering Manager Bill Pinnix, Engineering Manager Mike Richardson, Drinking Water Superintendent Ken Vogt, Wastewater Treatment Superintendent Jim Craig, Utility Services Superintendent Jonathan Ham, Project Engineer Donna S. Pope, Clerk CFPUA JUNE 9, 2010 MINUTES 1 Guests Present: Linda A. Miles, the Miles Firm, PLLC, Consulting Attorney Jim Iannucci, New Hanover County Heath Clark Landon Weaver Jeremy Blair John Bailey Call to Order, Determination of a Quorum, and Opening Comments: Mr. Renzaglia called the meeting to order at 9:00 a.m. and declared a quorum present. He thanked everyone for their attendance. Adoption of the Agenda: Mr. Jordan advised that there a Budget Amendment and a closed session item to be added to the agenda. Mr. Caster moved to adopt the Agenda, and Mr. Hunter seconded the motion. The Agenda was adopted unanimously. Approval of Minutes: Ms. Breazeale presented the Minutes from the May 12, 2010, meeting for approval. Messrs. Renzaglia and Greer pointed out two typographical errors on Page 3 of the minutes. The May Minutes were approved with corrections, by consensus. Public Comments: presentation to the Clerk to include with the minutes. There were clarification questions and comments from Authority members. Mr. Smith stated that the Board would receive a history and overview at the July meeting regarding rates and the tiered structure. Consent Agenda: Mr. Renzaglia presented the Consent Agenda, as follows: 1.Budget Amendment request moving $25,845 to the Operating Fund, due to additional interest costs on City of Wilmington Bonds and additional debt service fees. CFPUA JUNE 9, 2010 MINUTES 2 2.Resolution in Support of the Cape Fear River Basin Hydrologic Model Update. 3.Authorization for the Chief Executive Officer to purchase water treatment chemicals. Mr. Mongeau answered clarification questions regarding advertisement of bids for Item 3. Mr. Tunstall moved to approve the Consent Agenda. Mr. Smith seconded the motion, and it passed unanimously. New Business, Administrative Reports. Finance Report: beginning July 1, 2010. The Operating Fund Budget of $64.06 million will maintain a debt coverage ratio of 1.20. The Budget includes $2.34 million in System Development Charges and $14.44 million in Capital Project Funds. Ms. Spivey summarized budget increases and decreases. Staff members answered clarification questions from Authority members. Mr. Smith moved to adopt the FY2011 Budget as recommended. Mr. Caster seconded the motion. Ms. Breazeale and Messrs. Renzaglia, Smith, Hunter, Hearne, Quinn, Tunstall, Caster, Sparks, and Rivenbark voted in favor of the motion. Mr. Greer voted against the motion, stating that he was opposed to spending money that the Authority has not yet borrowed. The Budget was adopted, ten to one. Engineering Report: Mr. Styers invited Authority members to attend a Masonboro Sound project informational meeting to be held on June 15 at Parsley Elementary School. Ogden Interceptor Update: Mr. Flechtner reported that Phase 1 of the Ogden Interceptor Repair Project, which consists of the southernmost 600 feet of the line, is substantially complete and expected to be in service in about a week. Phase 2, covering 8,000 feet of pipe, will be bid on June 15. Nine contractors have pre-qualified for that bid. Staff expects Notice to Proceed around July 1, with an anticipated construction period of 120 days. CFPUA JUNE 9, 2010 MINUTES 3 Staff is working closely with consulting engineering firm Black & Veatch and an independent lab to examine the design, installation, and environmental conditions of the original Ogden line. There were clarification questions from Board members. Mr. Rivenbark asked if the installation of the replacement pipe was being documented. Staff responded that this was being done. Wastewater Spill of June 2, 2010: Mr. Jordan reported that, during a heavy rainfall, Smith Creek overflowed its banks and inundated a manhole where the bypass pumping was in operation, causing a wastewater overflow. Staff followed Authority procedures to stop the overflow and minimize its impact. The Operators in Responsible Charge reported to the State of North Carolina, as required. State representatives began investigation the following morning, and Mr. Jordan has been in discussion with Division of Water Quality (DWQ) authorities. The required public notices have been issued, and a legal notice will be published in the Wilmington Star-News on June 10. Mr. Bing reported on testing of surface waters in the affected area. Authority Environmental laboratory staff began collecting samples the day following the overflow. Bacteria counts were very low, and ammonia levels did not register at all. At present, testing reveals normal background levels of bacteria and no ammonia. Mr. Bing believed the low counts were due to the large amount of rainwater that flooded the line, diluting bacteria. The Ogden project will continued to be monitored by Environmental staff, as requested by DWQ and the Corps of Engineers. Mr. Jordan added that staff conducts internal review of any incident, striving for continual improvement. Mr. Craig answered clarification questions from the Board regarding the location of the explanation and stated that he would like to meet with staff and visit the site. Mr. Jordan thanked staff for their hard work on the Ogden site and the response to the recent spill. System Growth Update: Mr. Jordan recommended that the Authority participate in workshops to review and prioritize capital projects in preparation for bond sales in FY 2012. The System Growth Update is a preliminary step in that process. CFPUA JUNE 9, 2010 MINUTES 4 Mr. Renzaglia added that, since the Authority was formed, unserved areas of the county, annexation areas, infrastructure failures, and future growth have been discussed. He recommended that the Board philosophy and goals should be discussed and either affirmed or revised. Mr. Flechtner provided a summary of the thought processes behind system expansion. The questions regarding expansion are why, how, when, and where the Authority grows. Mr. Flechtner broke these questions down as follows: Why? Failing septic systems, poor well water, private or public development, support of economic initiatives, and the utilization of treatment plant capacity. How? Development in new areas, acquisition of existing systems, bulk water sales, assessments, developer agreements allowing for cost recovery, developer agreements allowing for facility Program (CIP). Where and When? Plant and system capacity leading growth, development drivers, CIP ranking system, strategic and master plans; water and wastewater CIP. Engineering and Finance work closely regarding capital plans. Mr. Flechtner provided an oveanticipated CIP through FY 2018. Water CIP was summarized as follows: In Fiscal Year 2011, Porters Neck customers will be added and plans for the extension of a water rd line down 23 Street to Castle Hayne Road will begin. In Fiscal Year 2012, extensions are planned for Bald Eagle Lane, and bulk sales should be underway with Pender County and Figure 8 Island. The distribution system along Kerr Avenue North will be continued. FY2012 includes plans to extend water service down Carolina Beach Road to the South. Sweeney treatment capacity will be 33.5 mgd. In Fiscal Year 2013, Sweeney capacity will be 41 mgd. The Authority plans to expand into the Middle Sound area, where salt water intrusion is a problem. Extensions will continue in the Southern part of the County and along River Road. In Fiscal Year 2014, the Sweeney plant expansion will be completed, with a capacity of 50mgd. The Authority plans to extend service into the Bayshore area. CFPUA JUNE 9, 2010 MINUTES 5 No new growth is anticipated for Fiscal Years 2015 and 2016. In Fiscal Year 2017, additional growth is expected in the Porters Neck area and along Castle Hayne Road. In Fiscal Year 18, the Authority expects to continue building the system in the Northern part of the County. Messrs. Jordan and Flechtner answered clarification questions from Board members regarding prioritizing water projects and extensions to existing homes. Mr. Greer stated that customers would expe development to help pay for service. The Wastewater CIP was summarized as follows: In Fiscal Year 2011, wastewater treatment capacity will be 28 mgd. In FY 2011 2013, the Authority will address pump station upgrades, beginning with Pump Station 35. Capacity upgrades allow for growth. In Fiscal Year 2014, the Authority expects to work closely with the New Hanover County Health Department to address failing septic systems in the Southern part of the County. No new expansion is anticipated for Fiscal Years 2015 and 2016. In Fiscal Year 2017, treatment capacity will have increased to 32 mgd with upgrades to the Southside Plant. The Authority will also continue to increase pump station capacity. In Fiscal Year 2018, the Authority expects to extend wastewater services in the Heritage Park, Wrightsboro and Prince George Estates areas. There were clarification questions and comments from Board members. Mr. Rivenbark asked about line cleaning and intrusions into the sewer lines. Mr. Flechtner responded that rehabilitation programs were not included in the presentation but that those programs were well- funded in the CIP. Mr. Greer observed that growth will occur in areas where water and sewer are available and stated that the County had been successful in letting developers pay for expansion. He favored the cost-sharing approach to expansion. Mr. Jordan thanked Authority members for their comments and thanked Mr. Flechtner for the overview. More information will be presented to the Board in future workshops, and staff is presentation. CFPUA JUNE 9, 2010 MINUTES 6 Continuation of Public Comment. Mr. Renzaglia re-opened the Public Comment portion of the meeting and introduced John Bailey. Mr. Bailey had signed up to speak before the meeting and had been unavoidably detained by his job. He spoke regarding a billing issue. Mr. Renzaglia asked Mr. Jordan to meet with Mr. Bailey. The Authority recessed at 10:45 a.m. and reconvened at 11:00 a.m. Operations Report: 2009 Water Quality Presentation. Report is mandated by Federal law and will be mailed to every customer. The Report provided a comprehensive review of water quality for calendar year 2009 and included information about standards. Mr. Richardson recognized Jacqueline Major for her work on the Report. PIO Report: Ms. Ricks reported that there are two community meetings scheduled for June 16 at the Porters Neck Country Club, one at 4:00 p.m. and a second at 7:00 p.m. The meetings will provide around 200 people at each session. On June 15, at 6:00 p.m., there will be a meeting at Parsley Elementary regarding Masonboro Sound sewer extensions. Residents have received letters and door hanger announcements. Staff has done a press release and has information on the Authority website. Ms. Ricks reported that Authority staff is working with the City of Wilmington and its Parks Division to coordinate the Christmas tree lighting and access for the 2010 Holiday season. On June 8, the North Carolina Department of Labor held an awards program. The Authority received 12 safety awards, and the Environmental Laboratory received a plaque. CFPUA JUNE 9, 2010 MINUTES 7 Ms. Ricks further reported that there is pending N.C. legislation that would give priority funding to utilities with Asset Management plans in place. Mr. Quinn stated that he had heard criticism regarding the length of time before media received information regarding the June 2 Ogden overflow. As a veteran of spills during his time on Council, he was sensitive to that concern and suggested that notification be made immediately, with follow-up as needed. Ms. Ricks and Mr. Jordan advised that Authority staff had made notification to the State and to the community well within the statutory requirements. Mr. Jordan added that staff wanted the information in the notices to be correct and had followed the State guidelines. He assured the Board that staff would follow Board directives. Ms. Ricks added that door hangers had been distributed in the communities surrounding the Ogden Interceptor project advising residents of construction, closure of the area for recreation, and the increased use of easements. After some Board discussion, Mr. Renzaglia recommended that Board members give some thought to how they want staff to proceed in going beyond the required notifications. Mr. Renzaglia reported that he had asked the Homebuilders Association and the Business Alliance for a Sound Economy to clarify statements their representatives had made in the Wilmington Business Journal regarding irrigation meters and the Authority. The article could have been interpreted to state that the Authority had asked BASE and the Homebuilders Association to represent its interest. Mr. Renzaglia read the following excerpt from the September 2009 Authority minutes: Mr. Renzaglia asked Mr. Newman if his organization would be willing to take the lead in challenging the irrigation law. Mr. Newman replied that the lobbyists for the Homebuilders Asssociation had worked on the issue, and he believed there was an opportunity for cooperation with the Authority. Mr. Jordan and Ms. Miles advised that Ms. Miles had spoken with Department of Natural ground, but that the state would not grandfather all water systems in the ground. Mr. Renzaglia wanted to clarify that the Authority did not, in any way, ask the Homebuilders Association to represent the Authority. Mr. Renzaglia congratulated staff on the Safety Awards from the Department of Labor. CFPUA JUNE 9, 2010 MINUTES 8 Ms. Miles had nothing to report in open session and advised that she recommended a closed the City. CEO Report: Environmental & Safety Report. Mr. Jordan reported that there were no accidents in the month of May. There was one Sanitary Sewer Overflow of 75 gallons. Mr. Jordan introduced Mr. Morgan, who presented a recommended protocol for the settlement of above $100,000 would require authorization and approval by the Board. compensation claims as recommended by staff. Mr. Hunter seconded the motion, and the protocol was approved and adopted unanimously. Porters Neck Water Rates. Mr. Jordan presented a graph showing the differences between Porters Neck Company water provided at the Porters Neck community meetings. Long Range Planning Committee: Mr. Hunter asked Mr. Styers to present the Committee report. The Long Range Planning Committee met on June 2, 2010. The Committee received updates on several items. The design of the Wastewater Treatment facility on Highway 421 with Pender County is 30 percent complete, and permitting applications are expected to be complete in June. The purchase of the Porters Neck water system will close on June 23, 2010. CFPUA JUNE 9, 2010 MINUTES 9 Ms. Spivey and Messrs. Smith and Jordan continue negotiations with Figure 8 Island regarding bulk water sales. Chair Road Associates, LLC. Mr. Pinnix presented the Preliminary Engineering Report for Chair Road Associates, LLC, for water and sewer infrastructure. Engineering staff has reviewed the report and determined that project is needed for expansion of the system to serve the public good and fits into the Wastewater Master Plan. Mr. Pinnix thanked Jonathan Ham for developing a plan that would take the Walnut Hills package plant offline. The Long Range Committee recommended that the Board approve the Preliminary Engineering Report for Chair Road Associates, LLC. Mr. Renzaglia reminded the Board that two Authority members were involved in projects that would be served by the Chair Road Associates infrastructure. Mr. Caster moved to recuse Messrs. Tunstall and Smith. Mr. Rivenbark seconded the motion, and it passed unanimously. Mr. Sparks moved to approve the Preliminary Engineering Report for Chair Road Associates, LLC, for water and sewer infrastructure. Mr. Rivenbark seconded the motion, and it passed nine to zero, with Messrs. Tunstall and Smith not voting. Hanover Lakes. -Sharing Agreement with Bill Clark Homes. The proposed amendment would install a shallower gravity sewer than originally designed. The gravity sewer will serve Hanover Lakes and existing and future residential areas to the north and south of Hanover Lakes. A pump station site would be deeded to the Authority for future use to serve the remainder of the basin. There would be no changes to the water cost- sharing portions of the agreement. The amendment would result in a reduction of $166,880 in at the full Board approve the amendment. Mr. Rivenbark moved to approve the Amendment to the Cost-Sharing Agreement with Bill Clark Homes. Mr. Smith seconded the motion, and it passed unanimously. Finance Committee Report: Mr. Smith asked Ms. Spivey to present the Committee report, following its meeting on June 2, 2010. CFPUA JUNE 9, 2010 MINUTES 10 Ms. Spivey presented the financial statements for May 2010. With 95 percent of the year lapsed, the Authority has earned 86 percent of revenues, and expenditures are at 78.5 percent. June is usually a high-use month, which should bring revenues closer to 100 percent. Ms. Spivey anticipated 80- Ms. Spivey reported that the Finance Committee had recommended the CEO to enter into payment arrangements for System Development Charges on shell buildings for up to one year. Following clarification questions from the Board, Mr. Caster moved to authorize the CEO to enter into payment arrangements for System Development Charges on shell buildings over a period not to exceed one year. Mr. Sparks seconded the motion, and it passed unanimously. increased to 25 percent of the original contract approval limits, with any change order which would cause the aggregate to exceed 50 percent of the original contract to go to the full Board for approval. Mr. Smith moved to approve the contract change order recommendation, and Mr. Tunstall seconded the motion. Mr. Rivenbark asked a clarification question regarding the percentage. There were no further questions, and the motion passed unanimously. The Committee reviewed a request for an impact fee refund for fees paid to New Hanover County from 2005 through 2006 for property served by a private water provider. Ms. Miles advised that the statute of limitations for a claim had run out. Staff and legal counsel did not recommend a refund, and the Committee agreed with that recommendation. The Board discussed the previous collection of impact fees and how fees were allocated to water, sewer, parks, and schools by New Hanover County. Mr. Greer believed most of the impact fee monies went to water and sewer. Mr. Rivenbark supported refunding impact fees in areas not served by the water and sewer system and stated that the recommendation was wrong. Mr. Rivenbark moved to send the request for a refund of impact fees back to the Finance Committee for review. Mr. Hearne seconded the motion for discussion. Ms. Breazeale reminded the Board that legal counsel advised the statute of limitations had run out for this claim. Mr. Rivenbark called the question. Messrs. Renzaglia and Rivenbark voted to send the request for an impact fee refund back to the Finance Committee for further review. Ms. Breazeale and Messrs. Smith, Hunter, Greer, Caster, Sparks, Quinn, Tunstall, and Hearne voted against the motion. The motion was defeated, nine to two. The Committee had briefly reviewed the process for capital project and bond sale planning. Ms. Spivey and Mr. Jordan had recommended that the Authority retain a financial advisor to assist in the structuring and issuance of bonds. The Committee endorsed that recommendation. CFPUA JUNE 9, 2010 MINUTES 11 Recognition of Outgoing Authority Member, Kathryn Johnston Breazeale: Messrs. Greer and Caster presented Ms. Breazeale with a plaque commemorating her service on the Authority Board and the City- County Water and Sewer Advisory Committee which preceded the Authority. Mr. Renzaglia thanked Ms. Breazeale for her contributions, and the assembly recognized her with applause. Ms. Breazeale thanked the County and the Authority for giving her the opportunity to serve and reminded the Board to appreciate staff and to be proud of reminded the Authority members that they serve as ambassadors for the Authority. The Authority recessed at 12:25 p.m. and reconvened at 12:40 p.m. Mr. Hearne moved to enter closed session to discuss two personnel items, a potential claim against the Authority, EPA enforcement actions, and the CEO performance evaluation. Mr. Hunter seconded the motion, and it passed unanimously. Everyone left the meeting except for Authority members. The Authority entered into closed session at 12:41 p.m. Closed Session: Ms. Miles, Spivey, and Pope and Messrs. Jordan and Morgan joined the meeting to continue the closed session. The Authority reviewed information provided by staff regarding the EPA enforcement status, a claims. Open Session: Mr. Greer moved to return to open session. Mr. Caster seconded the motion. Mr. Renzaglia presented a Budget Amendment appropriating $77,000 to the Non-Departmental the Budget Amendment. Mr. Hearne seconded the motion, and it passed unanimously. Mr. Rivenbark moved to adjourn. Mr. Caster seconded the motion, and it passed unanimously. The Authority adjourned at 1:05 p.m. CFPUA JUNE 9, 2010 MINUTES 12 The next meeting of the Cape Fear Public Utility Authority will be Wednesday, July 14, 2010, at 9:00 a.m. in the Harrell Conference Room of the New Hanover County Administration Building, 230 Government Center Drive. Respectfully submitted, Donna S. Pope, Clerk to the Board CFPUA JUNE 9, 2010 MINUTES 13