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HomeMy WebLinkAboutCFPUA 03-09-2011 CAPE FEAR PUBLIC UTILITY AUTHORITY REGULAR MEETING MARCH 9, 2011 Members Present: Gene Renzaglia, Chairman J.C. Hearne, II, Vice-Chairman Mike Brown, Secretary Ron Sparks, Councilman Charlie Rivenbark, Councilman Rick Catlin, Commissioner Cindee Wolf Jim Quinn Member Absent: Burrows Smith, Treasurer Brian Berger, Commissioner Staff Present: Mat Jordan, CEO Nancy Gallinaro, COO Cheryl Spivey, COO Beth Eckert, Safety & Environment Director Frank Styers, Engineering Director Martha Zeigler, Customer Service Director Carey Disney Ricks, PIO/PR Tom Morgan, Human Resources Director Jim Flechtner, Engineering Manager Christene Pyne Mitchell, Engineering Manager Graham Fripp, Property Acquisition Specialist Ken Vogt, Wastewater Treatment Supervisor Julia Vosnock, Procurement Manager Diane Fortune, Laboratory Technician Deloris Bradshaw, Community Compliance Supervisor Pam Ellis, Environmental Services Supervisor Craig Lundin, Project Manager Chris Bowling, Project Manager Chris Johnson, Laboratory Supervisor Donna S. Pope, Clerk CFPUA March 11, 2011, MINUTES Page 1 Attorney Present: Linda A. Miles, the Miles Firm, PLLC Guests Present: Tyler Newman, BASE J.D. Solomon, CH2MHill Tony Boahn, McKim & Creed Daryll Parker, Utility Advisors Network Rick McClung, Utility Advisors Network Kevin Mauer, Wilmington Star News Call to Order, Determination of a Quorum, and Adoption of the Agenda: Mr. Renzaglia called the meeting to order at 9:00 a.m. and declared a quorum present. Mr. Renzaglia reminded Authority members that the rate hearing would be held at 6:00 p.m. that day. Mr. Brown moved to adopt the Agenda for the meeting. Mr. Hearne seconded the motion, and it passed unanimously. Approval of Minutes: Mr. Brown presented the minutes of the February 9, 2011, meeting and asked for corrections. There being no corrections, Mr. Brown moved to approve the minutes. Ms. Wolf seconded the motion, and it passed unanimously. Public Comment: adopt a uniform rate structure. A copy of his powerpoint presentation is incorporated by reference. Consent Agenda: Mr. Renzaglia presented the Consent Agenda, as follows: 1.Authorization for the CEO to enter into a contract with PerkinElmer Health Sciences, Inc. for the purchase of an inductivity coupled plasma/mass spectrometer with a thermoelectrically-cooled spray chamber, in the amount of $129,127.75; CFPUA March 11, 2011, MINUTES Page 2 2.Authorization for the CEO to execute a construction contract with T.A. Loving Company for the Northside Wastewater Treatment Plant Effluent force main, at a cost of $3,292,875; and 3.Authorization for the CEO to execute a construction contract change order with M.B. Kahn Construction Company, Inc., as part of the Pump Station 35 expansion project, at a cost of $81,997.23. Because Authority members had questions regarding Item (1), purchase of the plasma/mass spectrometer, that Item was removed from the Consent Agenda and placed in the Environment and Safety Report. Following clarification questions on the remaining items, Mr. Rivenbark moved to approve the Consent Agenda, Items (2) and (3). Mr. Brown seconded the motion, and it passed unanimously. Administrative Reports. Engineering Report: Mr. Styers reported that progress has been made on Figure 8 water negotiations. A site for the backflow preventer has been identified, and an offer to purchase is being developed. Messrs. Jordan and Styers answered clarification questions from Authority members. Environment and Safety Report: Ms. Eckert presented the environment and safety data for January 2011. There were two accidents. One employee had a back injury, and a vehicle rear-ended an Authority truck carrying three employees. treated One sanitary sewer overflow occurred in January, when a gasket ruptured releasing effluent into Smith Creek. The Walnut Hills package plant experienced a dip in its ph levels, which was resolved by laboratory and operations staff. Plants are in compliance and performing well, which Ms. Eckert credited to good work on the part of Operations and Laboratory staff. Ms. Eckert, Ms. Ricks, and Messrs. Vogt and Styers answered clarification questions regarding the Walnut Hills package plant and inflow and infiltration concerns. The item removed from the Consent Agenda was presented for discussion, as follows: CFPUA March 11, 2011, MINUTES Page 3 Authorization for the CEO to enter into a contract with PerkinElmer Health Sciences, Inc. for the purchase of an inductivity coupled plasma/mass spectrometer with a thermoelectrically- cooled spray chamber, in the amount of $129,127.75. Ms. Eckert and Mr. Jordan had evaluated this item and identified the purchase as an efficiency and cost reduction, allowing testing to be done in-house. Following clarification questions, Mr. Renzaglia suggested delaying the item until the April meeting. was complete. Mr. Rivenbark seconded the motion for discussion purposes. Mr. Quinn stated that he understood the purchase of the spectrometer would result in costs Mr. Catlin suggested that outsourcing testing might allow for staff reductions, which could save more money. The efficiency study could identify staffing reductions. Mr. Rivenbark asked when the efficiency study would be complete, and Mr. Jordan responded that it would be about four months. Mr. Renzaglia called the question. Messrs. Rivenbark, Brown, Hearne, and Catlin voted to defer the purchase of a spectrometer until after the efficiency study was complete. Ms. Wolf and Messrs. Renzaglia, Quinn, and Sparks voted against the motion, resulting in a tie. The motion failed. Mr. Brown moved to defer the decision on the purchase of the spectrometer until the April Authority meeting. Mr. Rivenbark seconded the motion. Ms. Wolf and Messrs. Renzaglia, Brown, Hearne, Rivenbark, Catlin, and Sparks voted in favor of the motion. Mr. Quinn was opposed. The motion carried, seven to one. Ms. Vosnock, Procurement Manager, was instructed to ask PerkinElmer Health Sciences if it could hold the price until the matter was reconsidered in April. Public Information/Public Relations Report: Ms. Ricks reported that, with a vote pending later in the meeting on the Capital Improvement Program, staff has planned meetings with stakeholder groups to gather information and identify CFPUA March 11, 2011, MINUTES Page 4 key pieces for future Capital Projects and growth. Stakeholders include the County, City, environmental and development interests. Ms. Ricks reported that the City has a contract with Fairway Advertising for free public service announcements on digital billboards. She is working with City staff so that the Authority can take advantage public service announcements. Ms. Miles stated that she had items to discuss in closed session. Mr. Jordan stated that he had a bittersweet announcement of three retirements from the Authority. Mr. Jordan recognized Martha Zeigler, Customer Service Director, for her work in helping create the Authority as part of its initial management team. Mr. Jordan stated that, in more than 25 years of public service, he had not known anyone who worked harder that Ms. Zeigler. Mr. Jordan presented Ms. Zeigler with a plaque of appreciation. Mr. Jordan and Ms. Eckert introduced Dolores Bradshaw and Diane Fortune, who retired with a combined 71 years of experience with the City and the Authority. Ms. Bradshaw served as the -treatment in North Carolina since the early 1980s. Ms. Fortune served as a Laboratory Technician with the Authority. She began her career in 1970 with the City of Wilmington and has worked at the Sweeney Water Treatment Plant since 1980. All three ladies received standing ovations in appreciation of their dedication to the Authority. The Authority recessed at 10:15 a.m. and reconvened at 10:27 a.m. Committee Reports. Human Resources Committee: Mr. Hearne reported that the Committee met on March 2. The Committee had recommendations regarding benefits for Fiscal Year 2012 but desired input from the full Board. A summary of CFPUA March 11, 2011, MINUTES Page 5 insurance information was distributed to Authority members showing renewal costs for health insurance plans. Other documentation was presented in the Committee report in the Agenda package. Mr. Morgan explained that the Authority is self-insured for medical benefits, with administration from Blue Cross, Blue Shield, and stop/loss reimbursement after $85,000. The Committee recommended an 80/20 cost split, with no reduction in benefits, which would result in an Authority increase of 13.61 percent and an average employee funding increase of 16.12 percent over the current fiscal year. Mr. Morgan answered clarification questions regarding deductibles, copays, and consumer- driven plans. Mr. Sparks did not favor a consumer-driven option, stating that it kept people from seeking medical attention in early stages of illnesses that would cost more later if untreated. Mr. Renzaglia recommended that the material the Committee had reviewed be distributed to other Board members and the issue of benefits be re-visited in April. Mr. Hearne advised that the Committee reviewed many items that would impact employees and suggested that the Board review the entire report. Staff was directed to provide to all Authority members the detailed research on health insurance that the Committee had reviewed. Authority members expressed interest in lower-cost health insurance options, including the Authority insuring employees only, with employees paying for dependent coverage. Mr. Catlin suggested due diligence to compare Authority insurance benefits to private-sector plans. The Committee recommended a change in life insurance carrier which will provide the same coverage but reduce costs. The life insurance savings would offset an increase in dental premiums, which the Committee recommended continue at a 50-50 cost split. As set forth in the Employee Personnel Policy and Procedures Manual, the Committee reviewed mmittee did not recommend either annual pay (cost of living) adjustments or performance (merit) adjustments for Fiscal Year 2012. Messrs. Sparks and Catlin stated that they did not think the City or County would have raises for employees in the coming fiscal year. consider employee morale. He stated that trust must be earned, and the Authority is a young organization without a track record for employees to rely upon. Mr. Jordan stated that he meets CFPUA March 11, 2011, MINUTES Page 6 with employees regularly, believes the Authority has great employees who are passionate about their work and are grateful to be employed. Mr. Jordan stated that he hears anxiety and concern expressed by employees. Mr. Sparks stated that he receives calls from City and Authority employees expressing their concerns. He did not believe that employees expected raises but needed to be kept engaged as a valuable asset to the Authority. The Committee reviewed a staff recommendation to seek proposals for a classification, compensation and benefits study for Fiscal Year 2012. The Committee instructed Messrs. Jordan and Morgan to take the request into consideration for the FY2012 budget. The Committee instructed Mr. Jordan to consider funding for an education and tuition reimbursement program for the coming year. The Committee endorsed continued funding for the employee service awards and employee appreciation picnic. The Committee rejected a staff request to eliminate administrative closure pay for inclement weather and area emergencies. Finance Committee: provided the Committee report. Messrs. McClung and Parker from Utility Advisors Network were present to review potential developed four possible scenarios for review, those being: (1)Keep the same tier structure that the Authority currently uses; (2)Uniform rate; (3)Add a tier for excessive use; and (4)Expand the tiers to 12,000 and 24,000 gallons. Mr. Renzaglia suggested another workshop on rates prior to the April Authority meeting or dedicating the April regular meeting to a rate discussion. It was the Board consensus to hold a workshop, preferably in morning hours. Board members were encouraged to provide additional rate scenarios they would like to explore to Messrs. McClung and Parker. Mr. Parker reported that System Development Charges (SDCs) are on target and did not recommend big adjustments to those charges. Mr. Parker did recommend an increase to the CFPUA March 11, 2011, MINUTES Page 7 industrial wastewater surcharge. The Authority has four large customers which incur the surcharge. Ms. Spivey introduced two budget amendments, as follows: Budget Amendments #11-002 and 11-0003, Supplemental Appropriations Ordinance to the Operating Fund and Capital Projects Funds for the Fiscal Year ending June 30, 2011. Ms. Spivey explained that the New Hanover County Series 2003 Certificates of Participation (COPS) have excess funds available above the budget capital project expenditures. The County bond counsel recommended that the excess funds be used to pay the interest portion of the annual debt service on the COPS in the amount of $456,672 until all of the funds have been spent. Budget Amendment 11-002 will transfer funds from the Sewer Capital Project Fund to the Operating Fund to pay the interest on the debt service, thereby reducing the requirement on the Appropriated Fund Balance. Budget Amendment 11-003 will transfer funds from the Operating Fund to the Capital Projects Fund to cover the money transferred via Budget Amendment 11-002. The two budget amendments create a clear paper trail for accounting purposes. The payment of the interest will result in a decrease of 1.6 percent in projected rate increases for Fiscal Year 2012. Mr. Sparks moved to approve Budget Amendment 11-002, a transfer of $456,672 from the Appropriated Fund Balance, Capital Reserve, to the Operating Fund. Mr. Hearne seconded the motion, and it passed unanimously. Mr. Hearne moved to approve Budget Amendment 11-003, a transfer of $456,672 from the Operating Fund to the Capital Projects Fund. Mr. Sparks seconded the motion, and it passed unanimously. The Finance Committee reviewed mandatory connection and the impacts of voluntary connection. The Committee endorsed mandatory connection and directed staff to refine the Board members received the February financial statements in their Agenda packets. Mr. Sparks requested that the monthly financial data be added to the Authority website. Mr. Renzaglia asked how budget savings could be used to lower rate increases. Ms. Spivey explained that current year debt and expenses are required to be covered by current year CFPUA March 11, 2011, MINUTES Page 8 revenues. Savings can be used towards capital programs, resulting in less money being borrowed in the future. The Board instructed Ms. Spivey to show the customer service call log at quarterly intervals, showing a snapshot of one month each quarter. Ms. Spivey reported that Customer Service and Information Technology divisions had implemented technology to ensure accurate field meter readings, resulting in a big drop in re- reads. Operations Center Location: River Road will expire June 30. It will automatically extend unless the Authority notifies the City by April 1 of its intent to move. Finance staff had advertised Requests for Proposals for alternative space for Operations, and staff members had visited the proposed properties. Three properties were considered, two on rd North Kerr Avenue and one at North 23 Street, across from the Northside Wastewater rd Treatment Plant. Staff recommended a five-year lease for property at 2406 North 23 Street, at a cost of $105,000 for Fiscal Year 2012 and an approximate initial cost of $38,000 to upfit and miscellaneous annual expenses. The property contains a 10,500 square foot warehouse and a 5,000 square foot office space. Staff answered clarification questions regarding the RFP process and the nature of the facilities at each location. - rd year lease with United Management Group for 2406 North 23 Street. Mr. Rivenbark seconded for purposes of discussion. Authority members debated the merits of relocation versus remaining in the River Road facility. Mr. Renzaglia called the question, and Ms. Pope repeated the motion. Ms. Wolf and Messrs. Renzaglia, Brown, Hearne, and Catlin voted in support of the motion. Messrs. Rivenbark, Quinn, and Sparks were opposed. The motion carried, five to three. Mr. Catlin requested that he be excused. Mr. Sparks moved to excuse Mr. Catlin. Ms. Wolf seconded the motion, and it passed unanimously. Mr. Catlin left the meeting at approximately 12:10 p.m. A quorum remained. CFPUA March 11, 2011, MINUTES Page 9 Downtown Customer Service Center: Ms. Spivey stated that she believed there would be cost savings and efficiencies in consolidating all of customer Service in one location but recognized that the level of service would be diminished by eliminating the downtown customer service center. The Authority utilizes lobby space in the City of Wilmington building at 305 Chestnut Street in exchange for billing and collecting stormwater and solid waste. Per the billing and collection agreement, should the Authority choose to move out of the City building, the City Manager must provides that, should the Authority not use the space at 305 Chestnut Street, the City would pay Spivey estimated the Officer, Ms. Mack, estimates the incremental costs at $45,000 annually. Ms. Spivey stated that she and Ms. Mack may differ in their expectations regarding the level of service the Authority provides. Staff had advertised Requests for Proposals and received three responses, one on Third Street and two on Front Street. Staff had visited two of the locations. The Finance Committee had directed staff to investigate the possibility of contracting with Western Union to use its facility downtown. Mr. Fripp met with the manager of that facility, and Ms. S consider placing an Authority employee in its space. Payments could be made at any Western Union location. It has not been determined if the Authority meets the minimum number of customers for Western Union to agree to process payments. The Finance Committee had directed staff to continue negotiations with the City for the space downtown. Ms. Spivey had asked Ms. Mack if the City could collect payments for the Authority at 305 Chestnut Street in consideration of the incremental costs, and Ms. Mack did not believe that was equal or a good alternative. Ms. Spivey outlined options for customer service, as follows: (1)Continue to use the City space at 305 Chestnut for a downtown customer service center; (2) continue negotiations with the City, Western Union, or some other entity to find someone to collect payments for the Authority downtown, if desired by the Board; or CFPUA March 11, 2011, MINUTES Page 10 (3)If the Authority chooses to move to one of the proposed locations downtown, Ms. Spivey recommended that the Bank of America building on North Third Street. She cited safety and security for customers and employees as the primary consideration in that recommendation. The Bank would be a secure location. Mr. Quinn expressed two concerns, the first being that the Board had received the information some 30 days before a decision needed to be made, and he did not feel it was enough time. Secondly, Mr. Quinn stated that the decision to form the Authority included the consideration that the Authority would continue to collect stormwater and trash and the City not have to incur that expense. Mr. Sparks expressed concern about t estimation of incremental costs. He said nothing needed to be done until the numbers were right and he needed a higher confidence level before making a decision to leave. He further noted that the City building had a drive-through window for customers. It was his understanding that the Bank of America space was on the third floor. He and Mr. Rivenbark were concerned about the impact on customers who regularly pay downtown, particularly elderly citizens. Mr. Rivenbark offered to meet with the City and Authority financial representatives and mediate an agreement regarding the incremental costs. He said that this was not the first time the issue had been discussed, and it needed to be resolved. Mr. Renzaglia suggested advising the City that the Authority would stay at 305 Chestnut Street for the next two years and determine the value of incremental costs assistance. Mr. Rivenbark responded that the Authority might not need to stay in the City location but that the costs needed to be determined before a decision could be made to stay or leave. Authority members were concerned about the April 1 deadline. Mr. Jordan stated that he had spoken with Mr. Cheatham and believed he would be able to extend the deadline. Messrs. Sparks and Rivenbark offered to present a resolution for an extension on the deadline at the next Council meeting. Mr. Jordan asked that, if the Authority needed to move, the City allow the Authority to stay in the building until upfit on a new location was complete. Mr. Rivenbark assured him that the City would not kick the Authority out of the City building. Ms. Wolf asked for clarification as to whether the Authority paid rent to the City or the City paid money to the Authority for services. Ms. Spivey verified that the Authority does not pay rent to the City or the City pay the Authority for services. Ms. Wolf said she saw no reason to move. CFPUA March 11, 2011, MINUTES Page 11 It was the Authority consensus that Messrs. Rivenbark and Sparks would request an extension on the April 1 deadline and that Mr. Rivenbark would mediate a discussion between Ms. Spivey and Ms. Mack to attempt to resolve the question of incremental costs. Mr. Jordan and Ms. Pope were directed to provide a date to Messrs. Sparks and Rivenbark for the extension. Engineering Selection Process: The Finance Committee reviewed the engineering selection process, and Mr. Flechtner, Engineering Manager, presented a list of projects that Engineering had identified as potential projects that could be exempted from Mini-Brooks qualifications- bases selection, based on cost factors. Ms. Miles recommended that each project being considered for exemption be brought to the Board for an individual vote. Budget Calendar: Ms. Spivey reminded Authority members of the Budget calendar, which was in their Agenda packets. Mr. Jordan added that, following the current calendar, the Board will vote on rates at its April regular meeting and the FY2012 Budget at the June regular meeting. The Authority recessed at 12:35 p.m. and reconvened at 12:50 p.m. Long-Range Planning Committee: Mr. Styers reported that the Committee met on March 2 and reviewed the following items: Fiscal Year 2012 Capital Improvement Program: The Committee endorsed the revised FY2012 CIP to be approved and used during the budget development process for the next fiscal year. Adjustments to the CIP budget since CIP worksessions included the addition of funds for permitting for Pump Station 10 and for flow monitoring for the Capacity Management Program. After adjustments, the CIP budget remains less than the budget initially presented at the CIP worksessions. The Capital Improvement Program had been distributed to Authority members with the Agendas packets. The recommended Capital Improvement budget was $27,143,000 for both water and sewer for FY2012. This budget figure was endorsed by the Long Range Planning Committee for use in the development of the FY2012 budget. Following clarification questions, Mr. Rivenbark moved to approve the $27,143,000 CIP for use in developing the FY2012 Budget. Mr. Sparks seconded the motion, and it passed unanimously. Bulk Water Sales: The Committee recommended that a rate for bulk water sales needed to be developed. Mr. Renzaglia requested a timeline for that determination. CFPUA March 11, 2011, MINUTES Page 12 LRP Objectives: Mr. Quinn, Committee Chairman, reported that he had requested each Committee member to list his or her ten most important topics for discussion. Growth policies and monthly billing have surfaced as two important issues. Mr. Quinn welcomed input from other Authority members and encouraged other members to join the Committee if they desired to do so. In other business, the Committee decided not to receive reports on ongoing projects. Mr. Quinn suggested that the Executive Committee could serve as the appropriate forum to review ongoing projects. Mr. Renzaglia thanked the Committee and thanked all employees for their work on the Capital Improvement Program. Old Business: There was no old business. Closed Session: Mr. Rivenbark moved to enter into closed session to discuss claims, provide instructions to the consulting attorney regarding claims, and to discuss contract negotiations. Mr. Hearne seconded the motion, and it passed unanimously. The Authority entered into closed session at 1:20 p.m. Mr. Jordan, Ms. Miles, and Ms. Pope remained in the meeting. Authority members received reports from the attorney and Mr. Jordan regarding two claims. Ms. Miles left the closed session, and Mr. Morgan joined the meeting. The Authority considered renewal of its contract with the Miles Firm, PLLC. Open Session: Mr. Sparks moved to return to open session. Mr. Rivenbark seconded the motion, and it passed unanimously. Mr. Rivenbark voted to renew the contract with the Miles Firm, PLLC, for a period of two years. Mr. Hearne seconded the motion, and it passed unanimously. Mr. Renzaglia adjourned the meeting at 1:40 p.m. CFPUA March 11, 2011, MINUTES Page 13 The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, April 13, 2011, at 9:00 a.m., in the Harrell Conference Room, New Hanover County Administration Building, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board CFPUA March 11, 2011, MINUTES Page 14