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HomeMy WebLinkAbout12-08-2010 CAPE FEAR PUBLIC UTILITY AUTHORITY DECEMBER 8, 2010 REGULAR MEETING Members Present: Gene Renzaglia, Chairman J.C. Hearne, II, Vice-Chairman Michael Brown, Secretary Burrows Smith, Treasurer Ronald Sparks, Councilman Charlie Rivenbark, Councilman Jim Quinn Staff Present: Matt Jordan, Chief Executive Officer Nancy Gallinaro, Chief Operating Officer Cheryl Spivey, Chief Financial Officer Karen Durso, Assistant to the CEO Beth Eckert, Environment and Safety Director Martha Zeigler, Customer Service Director Frank Styers, Director of Engineering Tom Morgan, Human Resources Director Carey Disney Ricks, Public Information Officer/Public Relations Bill Pinnix, Engineering Manager Jim Flechtner, Engineering Manager Michael Richardson, Water Treatment Superintendent Ken Vogt, Wastewater Treatment Superintendent Steve Nichols, Construction Inspector Julia Vosnock, Procurement Manager Christene Mitchell, Project Manager Bernice Johnson, Project Engineer Kent Harrell, Senior Project Manager Tige Brubaker, Project Manager Jonathan Ham, Project Manager Eric Hatcher, Emergency Management Coordinator Attorney Present: Linda A. Miles, the Miles Firm, PLLC, Consulting Attorneys CFPUA December 8, 2010, Minutes Page 1 Guests Present: C Stephanie Bell Cindee Wolf, City of Wilmington Appointee to CFPUA Eric Williams, HDR Engineering, Inc. of the Carolinas Tony Boahn, McKim & Creed Engineers Melanie Cook, Coastal Carolina Tomorrow Tyler Newman, Business Alliance for a Sound Economy Jim Iannucci, New Hanover County Opening Comments and Determination of a Quorum: Mr. Renzaglia called the meeting to order at 9:00 a.m. and declared a quorum present. Adoption of the Agenda: Mr. Renzaglia presented the Agenda, with the addition of Item (f) to the Finance Committee report, a rate consultant recommendation. Mr. Rivenbark moved to adopt the agenda. Mr. Sparks seconded the motion, and it passed unanimously. Public Comment: Ms. Bell spoke regarding billing issues. Staff was directed to continue working with Ms. Bell to resolve her concerns. Mr. Newman spoke in support of an ordinance change for System Development Charges on shell buildings. incorporated by reference. Consent Agenda: Mr. Renzaglia presented the Consent Agenda, as follows: 1.Authorization for the CEO to execute a professional services contract with HDR Engineering, Inc., of the Carolinas for the Country Haven Pump Station Force Main. Budget impact not to exceed $191,800, as provided in the CIP. CFPUA December 8, 2010, Minutes Page 2 2.Authorization for the CEO to execute a multi-year uniform rental contract with Unifirst Corporation. Budget impact $45,616.48 per year, a savings of $14,699.99 compared to last year. 3.Authorization for the CEO to enter into a unit price contract with suppliers for the procurement of water treatment chemicals for a period of 12 months. Mr. Smith requested that Item 1 be moved to the Engineering Report for discussion. Mr. Sparks moved to approve the Consent Agenda as amended. Mr. Rivenbark seconded the motion, and Items 2 and 3 of the Consent Agenda were approved unanimously. Engineering Report: Independence Boulevard Utility Relocation. Mr. Flechtner reported that the widening of Independence Boulevard by the City of Wilmington would require utilities to be moved in three places. The project expense of $122,535 was not budgeted, but there are funds in the CIP for utility relocation in Department of Transportation rights of way that can be used. Mr. Sparks moved to approve staf Independence Boulevard utility adjustments. Mr. Hearne seconded the motion. Following clarification questions from Authority members, Mr. Renzaglia called the question. The motion passed unanimously. Country Haven Pump Station. Staff recommended the award of a contract to HDR Engineering for professional services for design the Country Haven Pump Station and a 12-inch force main, at a cost of $191,800.00. Professional services include design, permitting, bidding, and award and construction phase services. Funding is provided in the CIP. Several Authority members questioned if the Country Haven project could be designed, supervised, and inspected by Authority staff. Mr. Smith wanted local firms to be considered for Authority work. Messrs. Jordan and Styers stated that staff designs and completes small jobs and projects. Doing Country Haven in-house would mean that smaller projects would need to be outsourced. Due to the complexity of the Country Haven pump station and force main, the length of pipe involved, and the congested area surrounding Country Haven, staff supported an engineering firm handling the project. that liability was also a concern. CFPUA December 8, 2010, Minutes Page 3 Mr. Brown asked if fees could be negotiated with the recommended firm. Ms. Miles reminded the Authority that engineering consultants must be selected based on qualifications and fees cannot be the determining factor for the award of an engineering contract. She stated that the next qualified firm which submitted a bid could be considered. Mr. Smith moved to delay the award of the contract for one month and to bring the item back to the Finance Committee in January. He stated he would like to review the next qualified firm. There was no second to his motion, and he withdrew the motion. Mr. Quinn stated that, based on Authority members to move to bring the Country Haven award to the Finance Committee in January for consideration by the full Board at the January meeting. Mr. Brown seconded the motion, and it passed unanimously. The Authority recessed at 10:00 a.m. and reconvened at 10:17 a.m. Recognition of Engineering Employees. Mr. Styers introduced Steve Nichols, Construction Inspector, who is retiring from the Authority. Mr. Nichols went to work with the City of Wilmington in 1989, later worked with New Hanover County, and transferred to the Authority in 2008. Mr. Styers introduced Bill Pinnix, Engineering Manager. Mr. Pinnix began work with New Hanover County in 2006 and transferred to the Authority in 2008. He has accepted a position as Director of Engineering for Brunswick County, North Carolina. Messrs. Renzaglia and Jordan thanked Messrs. Nichols and Pinnix for their hard work and wished them well in future endeavors. Introduction of new Authority member. Mr. Renzaglia introduced Cindee Wolf. Ms. Wolf is an appointee from the City of Wilmington and will take her oath as an Authority member at the January meeting. Safety and Environment Report: Ms. Eckert presented the Safety and Environment Report and referred the Board to the applicable charts in the Agenda package. There were four accidents in October and two in November. The Safety Committee continues to review accidents and recommend corrective measures when staff strives for improvement. The goal is to have no accidents. CFPUA December 8, 2010, Minutes Page 4 All treatment plants are performing well. There were two violations at the Walnut Hills plant in October. Ms. Eckert and Mr. Vogt answered clarification questions from Authority members. Public Information/Public Relations Report: Ms. Ricks reported that the A program is progressing, and the program should be available in the near future. approximately 300 pounds so far. The Authority also supports the Toys for Tots program. Ms. Ricks recognized Jonathan Ham of the Engineering Department for coordinating that effort. Staff is conducting a comprehensive cleaning of lines, which will continue until April 2011, and An Authority external newsletter is being designed. Ms. Miles stated that she did not have a report at this time but had several items to discuss in closed session. Mr. Jordan recognized Richardson represents the years of talent and knowledge and the dedication of Authority staff. In November, Mr. Richardson received the George Warren Fuller Award from the North Carolina Chapter of the American Water Works and Water Environment Association. Mr. Richardson is well known and very well respected throughout North Carolina, the region, and the nation. Those present applauded Mr. Richardson. Mr. Richardson thanked the Authority, Mr. Jordan, and Ms. Gallinaro for their support and said that he was humbled to receive the award, as past recipients were people he had admired for years. Mr. Renzaglia thanked Mr. Richardson for his dedication and contributions to the Authority. CFPUA December 8, 2010, Minutes Page 5 Mr. Jordan presented Messrs. Richardson and Hatcher with a Disaster Preparedness Award from the North Carolina Chapter of the American Water Works and Water Environment Association. Mr. Jordan recognized Ken Vogt, Wastewater Treatment Superintendent. In November, the Loughlin Wastewater Treatment Plant (Northside) received the Wastewater Treatment Plant Operations and Excellence Award from the North Carolina Chapter of the American Water Works and Water Environment Association. Mr. Vogt accepted the award on behalf of the plant and staff, and those present applauded him. Mr. Renzaglia thanked Mr. Vogt for his hard work and dedication. Committee Reports: Long Range Planning Committee . Mr. Quinn requested that Mr. Styers present the report. Ordinance Revisions: Mr. Styers reviewed recommended revisions to the Mandatory He explained the circumstances under which the Authority would require connection. Mandatory connection would be required for the following properties: (1) Development or new construction within 500 feet of infrastructure must connect; (2) An existing structure adjacent to or having access to an easement to infrastructure; and (3) An existing structure within 500 feet of infrastructure with a failing well or septic system. A customer who did not connect would be subject to an availability charge equaling the bi- monthly base charge. Following clarification questions, Mr. Smith moved to approve the recommended ordinance revisions. Mr. Hearne seconded the motion, and it passed unanimously. Deferral Policy for Mandatory Connections: Mr. Styers presented a system-wide connection deferral policy, which was recommended by staff and endorsed by the Long Range Planning Committee. The policy mirrors the way connection deferrals were handled for the Middle Sound area and would apply to sewer only. Deferral could be granted in the following situations: CFPUA December 8, 2010, Minutes Page 6 (1)Financial hardship if the cost of connection for a residential structure is greater than $15,000, or greater than $25,000 for the owner of a commercial structure. Authority System Development Charges would not be included in the determining the cost threshold of $15,000 or $25,000; (2) Topography, including recent repairs and improvements to a septic system; and (3)A livable/habitable structure without electrical power. Deferrals would be valid for up to five years. Owners would be required to pay or finance the System Development Charge and tap fee(s), pay the bimonthly availability fee, and execute a connection deferral approval agreement. A deferral would be voided if a septic system fails or is determined by the County Health Department to need repair, and connection would be required at that time. Board members discussed the $15,000 threshold for financial hardship, the need for surveys and engineering reports to determine elevation, potential difficulties for property owners, the appeals procedure for deferrals, and the environmental impact of septic systems in the coastal area. After a lengthy discussion, Mr. Smith withdrew his motion, and the Board elected to send the deferral policy back to the Long Range Planning and Finance Committees to further define financial hardship and reasons for deferral. Mr. Renzaglia reminded the Board that the availability charge should be voted upon. Mr. Sparks moved to approve the bimonthly availability charge at an amount equal to the bimonthly base charge. Mr. Smith seconded the motion. Mr. Rivenbark asked if the charge would be analyzed as part of the rate structure, and was assured that it would be. The availability charge was approved unanimously. Policies for Reimbursement for Water and/or Sewer Facilities and Lines Built Solely by a Developer. Messrs. Styers and Ham presented language to be added to the policies that would include reimbursement for water infrastructure. Mr. Smith asked to be recused from the discussion and vote of the policy language, as he has a development that could be affected by an infrastructure reimbursement agreement. Mr. CFPUA December 8, 2010, Minutes Page 7 Rivenbark moved to recuse Mr. Smith. Mr. Sparks seconded the motion, and Mr. Smith was recused by unanimous vote. Mr. Quinn moved to approve the addition of language for water infrastructure reimbursement to the Policies. Mr. Sparks seconded the motion, and it passed unanimously. Mr. Sparks asked if Mr. Smith had been recused from previous discussion of the proposed language. Ms. Miles and Ms. Pope responded that Mr. Smith had not attended the December Long Range Planning Committee meeting where the item had been presented and discussed. Mr. Styers reported that the Long Range Committee had also received an update on River Road force main repairs and system development charges for shell buildings. Mr. Jordan has a meeting scheduled with Carolina Beach officials to discuss bulk water sales. The Authority is in discussions with Pender County officials regarding bulk water sales to Pender County. Pump Station 10, which serves much of the City of Wilmington, is at 83 percent capacity, allowing for connections to the system. Middle Sound paving will be completed in spring 2011. Finance Committee. Mr. Smith asked Ms. Spivey to present the Finance report. The Committee met on December 3 and reviewed the following items: Figure 8 Island Bulk Water Sales: A meeting with representatives of Figure 8 is scheduled for the afternoon of December 8. Shell Building System Development Charges: Mr. Styers reported that staff had obtained building permit data from New Hanover County. Out of 40 shell building permits issued prior to July 1, 2008, 11 buildings were serviced by New Hanover County. It is difficult for staff to quantify financial exposure to the Authority, although minimal financial impact would be expected from revising the ordinance for shell building SDCs in order to allow an option of using the County method of fee calculation. Mr. Styers read the proposed revision to the Authority ordinance regarding system development charges, as follows: Any owner of a shell building that was built with a New Hanover County building permit issued prior to July 1, 2008, and existing in the unincorporated area, shall have the option of having the water and sewer System Development Charge calculated per the Authority ordinance for any upfits after December 8, 2010, or by using the water and sewer impact fee rates in effect at the County on June 30, 2008. This option shall only be offered to buildings that either have not begun any interior upfits or have been partially CFPUA December 8, 2010, Minutes Page 8 upfitted. Once all interior units have been upfitted, or for any shell building with a Schedule shall be used to calculate System Development Charges. The election, once made, is irrevocable and binding upon any successive owners. In the event an owner who has elected to have System Development Charges calculated using the water and sewer impact fee rates in effect at the County on June 30, 2008, desires to change the size of the installed meter prior to the building being completed upfitted, the owner shall pay or receive a refund, as applicable, for the difference between the then-current System Development Charges for such size meters. Item 6-30 in the Agenda package outlined the applicable fee schedule changes associated with revising the System Development Charge for shell buildings. Ms. Miles advised that there were legal concerns related to allowing the option to choose between the Authority SDC and the method of determining fees previously used by New Hanover County. Her concerns were: (1) There are customers in the unincorporated areas who have already paid the (2)The Authority could be setting a precedent because July 1, 2008, has previously been used as the cutoff date between Authority and County or City policies and fees; (3)The Interlocal Agreement maintains that all fees should be the same for City and County customers. The City and County Attorneys who drafted the Interlocal Agreement have told Ms. Miles that the language regarding equal fees pertained to the bimonthly charges, but that is not specified in the Interlocal Agreement. A literal urt and would not allow the unstated intent of the Agreement drafters to be used. Ms. Miles stated that she needed to make the Authority aware of potential legal risk. Her concerns might not come to fruition, but it was her duty to advise the Board of her concerns and the possibilities for conflict. the proposed revision. Ms. Miles advised that the unincorporated area of the County constituted a separate class of customer because those builders did not pay all of their fees when they applied for a building permit. Builders in the incorporated areas (City) paid all fees upfront. CFPUA December 8, 2010, Minutes Page 9 Mr. Brown stated that the revision as read into the record was unfair to builders who had already paid the System Development Charges and that they should be able to have the same option retroactively. Mr. Brown questioned the insertion of December 8, 2010, into the revision. Mr. Brown requested that the Chair recognize Tyler Newman to comment on the revision. Mr. Renzaglia recognized Mr. Newman. Mr. Newman expressed concern that new language had been added into the revision immediately prior to a vote and recommended the adoption of the revision as previously provided to Committees and to the full Board. the date of December 8, 2010, was intended to address the legal concern regarding the option becoming retroactive. Should the Board wish the option to be retroactive, the December date could be omitted. Mr. Smith stated that the Finance Committee voted to bring the revision to the Board as presented in the Agenda packet. The revision had been recommended by the Finance Committee in November, but Mr. Sparks had asked for information on the financial impact. Mr. Smith moved to adopt the revision to System Development Charges for shell buildings as presented in the Agenda packet. Mr. Brown seconded the motion. Mr. Sparks wanted to know how much the financial impact would be. Ms. Miles and Mr. Styers explained that the financial impact could not be determined exactly. Ms. Miles added that the customers who had not paid all of the SDCs and fees. Mr. Brown questioned the insertion of the date of December 8, 2010. Mr. Jordan advised that staff had tried to make sure that all relevant information was brought to was based on a cutoff date of December 8, 2010, and the 11 buildings that are unfinished. Mr. Styers added that the County impact fees depended on the use of a building. He stated that the Authority had collected SDCs from 40 commercial builders since July 1, 2008; 13 of those buildings were in the unincorporated area of the County and account for approximately $200,000 in SDCs. The remaining 27 buildings are in the incorporated area (City) and account for approximately $500,000 in SDCs. Customers would only ask for a fee to be recalculated if the fee would be lowered by doing so. Staff cannot determine which customers might approach the Authority to have fees recalculated if the option is retroactive. Mr. Renzaglia suggested that the 13 buildings in the unincorporated area could be affected and that, since the County fee CFPUA December 8, 2010, Minutes Page 10 but not to include the December 8, 2010, cutoff date. Mr. Sparks seconded the motion. Mr. Jordan stated that the proposed language revisions had been suggested to clarify the Finance Committee and intent to address properties in the unincorporated areas and to determine the regarding whether or not the option should be retroactive. He acknowledged that staff should have explained the reason for the language changes. Mr. Brown stated his belief that staff had inserted language when they should have called for discussion but said that he believed the question had been resolved. Mr. Renzaglia called the question, and the motion passed unanimously. Mr. Sparks moved to approve the Ordinance as amended. Mr. Rivenbark seconded the motion, and the Ordinance was revised unanimously. Monthly Finance Statements. Ms. Spivey referred to the financial reports in the Agenda packet. The Authority has $43.9 million in unrestricted cash. There is $582,000 in payment plans, which is $44,000 less than last month. Collection letters have been sent to non-active accounts one year or older, giving those former customers until early January to make payment arrangements. Revenues are at 45 percent of budget and expenses at 32 percent of budget. The balance sheet shows $5.7 million in revenues over expenditures. The Finance Committee directed staff to investigate diversification of investments and to bring options to the Committee in January. Rate Model Consultant. Mr. Smith reported that the Finance Committee interviewed five firms for The Board discussed the scope of the rate model study and the value of having an unbiased Mr. Smith moved to authorize Mr. Jordan to enter into a contract with Utility Advisors Network. Mr. Hearne seconded the motion, and it passed unanimously. Health Claims Audit. Mr. Morgan presented this item. The Finance Committee had endorsed ultants to conduct a health claims CFPUA December 8, 2010, Minutes Page 11 audit. Mr. Brown moved to authorize Mr. Jordan to enter into a contract with Health Care Consultants. Mr. Rivenbark seconded the motion, and it passed unanimously. Old Business : There was no old business. Other Business: Mr. Renzaglia reminded the Authority that the fee schedule revision which supported the Shell Building SDC ordinance had not been approved. Mr. Smith moved to adopt the fee schedule revision. Mr. Hearne seconded the motion, and it passed unanimously. Mr. Sparks reported that he had recently visited the Denver Water Authority in Denver, Colorado. The Denver Authority serves seven counties under one system, and its members are appointed by the Mayor of Denver. Mr. Sparks stated that the Denver Authority had experienced challenges similar to those faced by CFPUA. Ms. Pope distributed a calendar showing days of the month the Harrell Room would be available for meetings. Mr. Renzaglia asked Authority members for their thoughts on moving the regular Authority meeting to a later time in the month, in order to accommodate agenda and meeting preparation and allow Board members more time to review the Agenda packet and supporting documentation. Closed Session :Mr. Rivenbark moved to enter into closed session to discuss four claims and an Environmental Protection Agency enforcement action. Mr. Hearne seconded the motion; it passed unanimously, and the Authority entered into closed session at 12:40 p.m. The Authority received reports from legal counsel Miles, Ms. Spivey, and Messrs. Jordan and Morgan. Open Session: Mr. Rivenbark moved to return to open session. Mr. Hearne seconded the motion, and it passed unanimously. Mr. Renzaglia adjourned the meeting at 1:45 p.m. The next meeting of the Cape Fear Public Utility Authority will be held on Wednesday, January 12, 2010, at 9:00 a.m. in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board CFPUA December 8, 2010, Minutes Page 12