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HomeMy WebLinkAboutCFPUA 06 13 2012 Regular Meeting CAPE FEAR PUBLIC UTILITY AUTHORITY REGULAR MEETING JUNE 13, 2012 Members Present: Jim Quinn, Chairman Patricia Kusek, Vice-Chair Gene Renzaglia, Secretary Mike Brown, Treasurer Cindee Wolf Jim Brumit Larry Sneeden Neil Anderson, Councilman Charlie Rivenbark, Councilman Rick Catlin, Commissioner Jason Thompson, Commissioner Staff Present: Matt Jordan, CEO Jim Flechtner, COO Cheryl Spivey, CFO Karen Durso, Assistant to the CEO Carey Disney Ricks, CCO Beth Eckert, Environment & Safety Director Frank Styers, Engineering Director Tom Morgan, H.R. Director Nancy Johnson, Customer Service Director Christene Mitchell, Engineering Manager Kent Harrell, Engineering Manager Gary McSmith, Engineering Manager Jim Craig, Utility Services Superintendent Mike Richardson, Water Treatment Superintendent Ken Vogt, Wastewater Treatment Superintendent Julie McLawhon, Finance & Accounting Manager Melinda Hoggard, Accounting Manager Julie Vosnock, Procurement Manager Tymekia Askew, Administrative Assistant Carol Davis, Payroll Specialist Pam Ellis, Environmental Services Superintendent Chris Bowling, Project Manager CFPUA June 13, 2012 Regular Meeting Page 1 Jamison Fair, Project Manager Tige Brubaker, Project Manager Steve Mongeau, Program Manager Donna S. Pope, Clerk Attorney Present: Linda A. Miles, the Miles Firm, PLLC Guests Present: Donald Caison Mike Ferguson Bob Simpson, Town Manager, Wrightsville Beach Mike Vucalich, Public Works Director, Wrightsville Beach Ray Cox, Highfill Infrastructure Carter Hubert, W.K. Dickson Eric Williams, HDR Tony Boahn, McKim & Creed Kristen McSwain, U.S. Geological Service, Dept. of Interior Kate Queram, Wilmington Star News Call to Order, Determination of a Quorum, and Opening Comments. Mr. Quinn called the meeting to order at 9:00 a.m. and declared a quorum present. Mr. Anderson arrived at 9:08 a.m. Mr. Quinn thanked Authority members for their time and commitment and reminded them that there was a lot to cover in the Agenda, including the Fiscal Year 2013 Budget. Adoption of the Agenda. unanimously. Approval of Minutes. Mr. Renzaglia presented the minutes of the May 9, 2012, Authority meeting and moved for approval. Ms. Kusek seconded the motion, and the minutes were approved unanimously. Presentation of the Certificate of Achievement for Excellence in Financial Reporting for the Fiscal Year Ending June 30, 2011. CFPUA June 13, 2012 Regular Meeting Page 2 Mr. Brown, Authority Treasurer, recognized Ms. Spivey and Finance Department staff for their work in receiving the Certificate of Achievement for Excellence in Financial Reporting (CAFR) for Fiscal Year 2010 from the Government Finance Officers Association of the United States and Canada. Mr. Brown reported that this was the third year in a row that the Authority had received the Award. The CAFR is the highest form of recognition in the area of governmental accounting and financial reporting, representing a significant accomplishment by a governmental body and its management. Ms. Spivey introduced Finance staff members, thanked them for their hard work, and stated that all the credit for the award should go to the Finance team. Public Comments. Mr. Caison addressed the Board concerning the status of wetlands in the Country Haven area -filtration water plant. He provided photographs in a powerpoint presentation. Mr. Catlin reported that he had met with Messrs. Caison and Ferguson, shared their concerns, and requested that the Long Range Planning Committee consider the topic. Ms. Wolf agreed that the topic could be reviewed by the committee and requested staff assistance. at the Authority meetings, tiered rates, and employee raises. Mr. Renzaglia responded that a flat rate structure would increase rates for 85 percent of the Authority customers. Consent Agenda. Staff presented the Consent Agenda, as follows: 1.Resolution to write off certain uncollectible utility accounts, in the amount of $213,406.95; 2.Ordinance making supplemental appropriations and recognizing revenue to the operating and system development sub-funds for the fiscal year ending June 30, 2012, in the amount of $1,189,699; 3.Authorization for the CEO to enter into contracts with certain laboratories for testing for Fiscal Year 2013, projected budget impact of $45,000, provided in the ESMD budget; 4.Authorization for the CEO to execute a contract amendment with Paramount Engineering, Inc., for additional immediate survey work in the 900 block of Dock Street, at a cost of $2,750, provided in the CIP; 5.Authorization for the CEO to execute a contract with Norris & Tunstall Consulting th Engineers for design services and construction phase services for the 30 Street Sewer Replacement Project, at a budget impact of $115,250, provided in the CIP, Clean Water State Revolving Fund Loan funding; 6.Authorization for the CEO to execute a contract with Highfill Infrastructure Engineering, for design services and construction phase services for the replacement of the Between CFPUA June 13, 2012 Regular Meeting Page 3 the Creeks pump station, at a budget impact of $103,800, provided in the CIP, Clean Water State Revolving Fund Loan funding; 7.Authorization for the CEO to execute a contract with Criser Troutman Tanner Consulting Outfall Rehabilitation, at a budget impact of $159,765, provided in the CIP, Clean Water State Revolving Loan Fund; 8.Authorization for the CEO to execute a contract with W.K. Dickson & Company, Inc., for engineering design and construction services for the Greenfield Lake Outfall Rehabilitation, at a budget impact of $195,300, provided in the CIP, Clean Water State Revolving Fund Loan funding; 9.Authorization for the CEO to execute a contract with URS Corporation for engineering design and construction phase services for the Alandale Pump Station Removal project, at a budget impact of $242,950, provided in the CIP, Clean Water State Revolving Fund Loan funding; 10.Authorization for the CEO to execute an amendment to the Interlocal Agreement with the City of Wilmington for the North Third Street Improvement Project, at a budget impact of $180,000; 11.Authorization for Procurement staff to advertise and sell surplus items on GovDeals and donate items to local non-profits if not sold on GovDeals; and 12.Authorization for staff to adjust subtract meter calculation for cooling towers, with an estimated annual increase of $17,000. Staff answered clarification questions on Item 3, laboratory testing. Mr. Renzaglia moved to adopt the Consent Agenda. Mr. Rivenbark seconded the motion, and the Consent Agenda was approved unanimously. New Business: Ordinance Making Appropriations for the Fiscal Year beginning July 1, 2012. Mr. Jordan presented the Budget Ordinance and reported that Ms. Spivey and other staff members were available to answer questions from the Board. Mr. Quinn asked for a motion and second, to be followed by Board discussion of the Budget. Ms. Kusek moved to approve the Budget as presented, and Mr. Renzaglia seconded the motion. Mr. Quinn opened the floor for discussion. Mr. Catlin expressed concern regarding the employee compensation package recommended in the budget and the fact that the Board did not have a work session on the issue. He stated that he found it difficult as a County Commissioner to give Authority employees more than the 1 percent County employees would receive. Mr. Catlin offered a substitute motion to approve the CFPUA June 13, 2012 Regular Meeting Page 4 reclassification recommendations from the Class and Compensation Study and provide a 1 percent merit increase. Mr. Thompson seconded the motion. Mr. Catlin answered questions from other Board members regarding his motion and clarified that his recommendation included the reclassification recommendations but no market adjustments. Mr. Jordan reported that, using the substitute motion recommendation, 20 percent of employees would be affected by the reclassifications alone, and 80 percent of the employees would receive merit only. He clarified that the average employee increase with the 2 percent market adjustment would be 3.83 percent. Finance staff calculated the cost of the substitute motion recommendation, as follows: $169,358 1.1% reclassification 157,176 1.0% merit $326,534 2.1% total Ms. Wolf, Ms. Kusek, and Messrs. Renzaglia and Sneeden spoke in favor of the compensation proposal as recommended in the Budget. original pay plan and the reclassifications, which are recommended to pay employees appropriate for the work they are the reclassification to address inequities, market adjustments, and merit increases. The market adjustment is based on tenure, and the merit on performance. Mr. Jordan asked Mr. Morgan the effect of not expanding the pay plan as recommended through the market adjustments. Mr. Morgan explained that could result in wage compression, where a new hire would receive a salary close to that of existing workers, with potential morale issues created as a result. The ent below market at its maximum pay and recommended stretching the pay plan by 2 percent, as well as recommending market adjustments based on tenure. Mr. Thompson stated that he had wanted to offer a solution and asked Mr. Catlin if he would agree to amend his substitute motion to raise the merit increase to 2 percent. Mr. Catlin declined, stating that he had given his motion much consideration. Mr. Thompson withdrew his second of the substitute motion. Mr. Quinn asked if anyone else would second the substitute motion. There was no second, and the motion died. Mr. Thompson offered a substitute motion to utilize the reclassification portion of the Class and Compensation study, remove the market adjustment component, and provide a 2 percent merit increase. Mr. Brown seconded the motion. CFPUA June 13, 2012 Regular Meeting Page 5 Finance staff calculated the cost of the substitute motion recommendation, as follows: $169,358 1.1% reclassification 314,352 2.0% merit $483,710 3.1% total Messrs. Rivenbark, Anderson and Renzaglia expressed concern about wage compression. Mr. Renzaglia suggested that the Board consider making half of the market adjustment in FY 2013 and half in FY2014. He suggested that money could be saved in the Operating Budget by eliminating the Internal Auditor position and the Board member stipend. Mr. Jordan reported that making the 2 percent market adjustment effective at mid-year would accomplish the same result. Mr. Thompson called for a vote on his substitute motion. Messrs. Thompson, Brumit, Anderson, Rivenbark, and Brown voted in favor of the motion. Ms. Wolf, Ms. Kusek, and Messrs. Sneeden, Catlin, Quinn, and Renzaglia were opposed. Motion failed. Ms. Kusek amended her original motion to approve the salary portion of the budget as recommended. Mr. Renzaglia agreed to the amendment. Ms. Kusek, Ms. Wolf, and Messrs. Renzaglia, Quinn, and Sneeden voted for the amended motion. Messrs. Brown, Catlin, Thompson, Anderson, Rivenbark, and Brumit were opposed. Motion failed. The Authority recessed at 10:30 a.m. and reconvened at 10:45 a.m. The budget discussion continued. Mr. Morgan answered clarification questions from Board members regarding the market adjustments and the pay plan recommended in the Class and Compensation Study. He reported that the Board could adopt the new pay plan without funding the additional amount, could fund it partially, or could fund it fully. Mr. Morgan recommended that the Board adopt the pay plan even if the market adjustments were not funded. Mr. Thompson move to adopt the reclassification portion of the study, the merit increases as recommended at 2 percent, and to adopt the pay plan but not to fund the additional FY2013 liability. Mr. Brumit seconded the motion. Ms. Kusek offered a substitute motion to fund the reclassification as recommended, fund the market adjustments at .9 percent, or one half of the original recommendation, and to fund the merit increases as recommended at 2 percent. Ms. Wolf seconded the motion. Finance staff calculated the cost of the substitute motion, as follows: CFPUA June 13, 2012 Regular Meeting Page 6 $169,358 1.1% reclassification 136,726 .9% market adjustments 314,352 2.0% merit $620,436 4.0% total Ms. Kusek, Ms. Wolf, and Messrs. Quinn, Renzaglia, Sneeden, Rivenbark, and Sneeden voted for the substitute motion. Messrs. Brown, Brumit, Catlin, and Thompson were opposed. Motion carried, seven to four. The Board continued to discuss the remainder of the recommended FY2013 Budget. Mr. Renzaglia moved to remove the position of Internal Auditor from the budget. Mr. Rivenbark seconded the motion. Messrs. Brown and Thompson spoke in support of the Internal Auditor position. Ms. Spivey clarified that the amount budgeted included salary and benefits and was an entry level position of $58,909. Mr. Quinn asked for a vote. Mr. Renzaglia was in favor of the motion to remove the Internal Auditor position from the budget. Ms. Kusek, Ms. Wolf, and Messrs. Quinn, Thompson, Catlin, Rivenbark, Anderson, Brumit, Brown, and Sneeden were opposed. Motion failed, ten to one. Ms. Wolf moved to approve the Budget, with the appropriate reductions to the Operating Budget resulting from the decision on compensation. Ms. Kusek seconded the motion. Ms. Spivey reminded the Board that the Budget must be balanced and recommended that the reduction to the Operating Budget be made in the System Development Charges. Ms. Wolf amended her motion , and Ms. Kusek agreed to the amendment. Ms. Wolf, Ms. Kusek, and Messrs. Quinn, Renzaglia, Sneeden, Thompson, Anderson, Rivenbark, Brumit, and Brown voted in favor of the motion. Mr. Catlin was opposed. Motion carried, ten to one. Operations Report. Mr. Flechtner reported on a leak discovered on May 17 at the Pump Station 10 force main near Smith Creek. Approximately 600 gallons were released from the line. A deteriorated joint clamp on the 45 year old force main caused overflow, and the overflow was quickly isolated and stopped. Approximately 200 linear feet of pipe will be replaced. Mr. Flechtner recognized Authority staff, regulatory agencies, and City staff for their work related to the leak. CFPUA June 13, 2012 Regular Meeting Page 7 Mr. Flechtner presented a staff recommendation to authorize a construction contract for repairs to Pump Station 10, which would include bypass lines, pipe installation, and traffic control. The bid for the contract will open on June 20, and the contract is estimated at $275,000, which is ed that Mr. Jordan be authorized to execute the construction contract if it exceeds $300,000. Mr. Rivenbark moved to authorize the CEO to execute the construction contract for Pump Station 10 force main, as recommended by Operations staff. Ms. Kusek seconded the motion, and it passed unanimously. Engineering Report. Engineering staff presented several items for consideration by the Board: 1.Authorization for the CEO to execute a contract amendment with CDM Smith for construction Phase Services related to the Burnt Mill Creek Phase II Sewer Improvements additional sanitary sewer rehabilitation, not to exceed $60,000, provided in the CIP. The Burnt Mill Creek Phase II project includes replacing a portion of a 24-inch outfall, connecting to a new junction box. Inspections have identified failing manholes and deteriorated concrete gravity pipe, and staff has prioritized the replacement of the pipe and manholes. Mr. Styers and Ms. Mitchell answered questions from Board members. Mr. Brown moved to approv with CDM, not to exceed $60,000. Mr. Thompson seconded the motion, and it passed unanimously. 2.Authorization for the CEO to execute a change order with State Utility Contractors, Inc. for the Burnt Mill Creek Phase II Sewer Improvements to repair additional failing sewer, at a budget impact of $820,000, provided in the CIP. Utility Contractors, Inc. in the amount of $820,000. Mr. Rivenbark seconded the motion, and it passed unanimously. 3.Authorization for the CEO to execute a contract with Kimley-Horn and Associates, Inc. for engineering design and construction phase services for the Northeast Interceptor Rehabilitation Phase 2 project, at a budget impact of $340,900, provided in the CIP. CFPUA June 13, 2012 Regular Meeting Page 8 Ms. Mitchell explained the scope of the contract as part of the NEI project and answered recommendation and authorize the contract with Kimley-Horn and Associates, Inc. in the amount of $340,900. Ms. Kusek seconded the motion, and it passed unanimously. 4.Authorization for the CEO to execute a contract amendment with Black & Veatch for additional Construction Phase Services for the Sweeney Water Treatment Plant update and expansion, at a budget impact of $195,000. Ms. Mitchell explained that the Sweeney update and expansion is a critical and complicated infrastructure project working with above and below ground infrastructure, as well as existing and new facilities. Staff has maintained water production and capacity during the project and must continue to do so. Ms. Mitchell reported that the Sweeney project has $1.8 million remaining in its budget. Board members expressed concerns regarding additional costs, the causes of construction delays, and the possibility of liquidated damages because of delays. Mr. Brown reported that the Finance Committee had discussed the contract amendment at great length and shared the concerns of other board members. Staff answered clarification questions regarding construction delays and explained that delays were not caused by Black & Veatch. Staff explained the services to be provided by Black & Veatch to take the project to its completion in July. Ms. Wolf moved to authorize the contract amendment with Black & Veatch in the amount of $195,000. Mr. Renzaglia seconded the motion. Ms. Wolf, Ms. Kusek, and Messrs. Quinn, Catlin, Rivenbark, Sneeden, Renzaglia, Anderson and Brumit voted in favor of the motion. Messrs. Brown and Thompson were opposed. Motion carried, nine to two. Public Relations Report. Ms. Ricks distributed a letter that has been mailed to 627 account holders with a one-inch meter going to a residential service. This initiative was in direct response to a customer comment 5/8 inch meter with a lower fixed charged and the costs associated therewith. The letter encouraged customers to speak to their own plumbers before switching to the smaller meter to make sure it would be sufficient for their household needs. Operations and Customer Service staff will be working together to handle meter change requests. Mr. Brown asked if it would be possible to waive the $50 site visit fee associated with changing a meter. Ms. Miles advised that it was possible to do so by setting up a separate category of service. Mr. Brown moved to waive the $50 site fee when changing one-inch meters to 5/8 inch CFPUA June 13, 2012 Regular Meeting Page 9 meters. Mr. Catlin seconded the motion. Mr. Quinn said it was a good suggestion but suggested that staff investigate and make a recommendation before the Board voted on the change. Mr. Brown amended his motion to direct staff to investigate and consider waiver of the $50 site fee when changing one-inch meters to 5/8 inch meters, and Mr. Catlin agreed to the amendment. The motion passed unanimously. Ms. Ricks and Ms. Johnson explained a bill insert regarding the availability of subtraction meters for irrigation purposes. Ms. Ricks reported on assistance provided through the CFPUA Assist program administered by the United Way and Salvation Army. In May, 15 applications were approved, and 51 people, including households with 35 children, had their water restored through the program. Ms. Ricks thanked employees, Board members, and the City and County for their contributions and reminded everyone that the Authority website contains a link with information about CFPUA Assist. Ms. Miles reported on Senate Bill 231, which contained a clause that could have prohibited the ability to extend water and sewer lines. The clause has been removed from the bill. Mr. Catlin thanked Ms. Miles for advising him on House Bill 955, which could have adversely affected the proposed reservoir project in Bladen County. CEO Report. Mr. Jordan referred Board members to the Environmental and Safety Performance Report in their agenda packet. He reported there were five accidents in May. Safety staff continues to work diligently with staff in all areas by performing safety audits, inspections, training, and accident review. Committee Reports. Human Resources: Ms. Kusek reported that the Human Resources Committee met on June 1 and discussed personnel matters in closed session. Long Range Planning: Ms. Wolf reported that the Long Range Planning Committee met on May 24 and received updates from staff. The Committee will add dewatering to its discussion topics. CFPUA June 13, 2012 Regular Meeting Page 10 Finance: Mr. Brown reported that the Finance Committee met on June 6 and that many of the items discussed had already been covered during the Bord meeting. He added that staff is closely monitoring water distribution. Ms. Spivey provided the monthly financial reports and summary of revenues and expenditures. With 92 percent of the year lapsed, total operations revenues are at 91.37 percent. Water and wastewater revenues are lower than expected, with water at 88 percent of budget and wastewater at 90 percent. System Development Charges are higher than projected, at 148 percent of budget. Expenditures are at 75 percent of budget. Ms. Spivey anticipates the Authority to end the year in a strong position. Ms. Johnson reported on the data scrub initiative. Data scrub has resulted in 293 locations being back billed for up to three years of unbilled services, per Ordinance 5.2(d), in the amount of $225,097.48. The project will be complete by June 30, 2012, and should realize an additional $100,000-200,000 in billing. Ordinance Making Supplemental Appropriations and Recognizing Revenue to the Capital Projects Sub-Funds for the Fiscal Year ending June 30, 2012, for the Kirkland Capacity Expansion Project in the amount of $650,000. Ms. Kusek moved to adopt the Ordinance, as recommended by staff. Mr. Quinn seconded the motion, and it passed unanimously. Resolution to exempt the Kirkland Capacity Expansion Project from the provisions of G.S. 143- 64.31 143-64.34 (Mini Brooks Act). Mr. Brown moved to exempt the Kirkland Capacity Expansion Project from the provisions of G.S. 143-64.31 143.64.34. Mr. Catlin seconded the motion, and it passed unanimously. Resolution to give award preference for the Kirkland Capacity Expansion Project to local firms. Mr. Brown moved to give award preference to local firms for the Kirkland Capacity Expansion Project. Mr. Renzaglia seconded the motion, and it passed unanimously. Mr. Quinn thanked Mr. Catlin for his work on the Kirkland agreement and the involvement of New Hanover County, which would result in economic growth for the area. Miscellaneous Finance Business: Mr. Jordan reported that he is in discussion with representatives of the owners of 235 Government Center Drive regarding lease negotiations for the Authority office building. CFPUA June 13, 2012 Regular Meeting Page 11 Old Business. There was no old business. Closing Comments. Mr. Renzaglia wanted to clarify for the public that the 4 percent total budget impact of employee wage increases did not mean that employees received a 4 percent raise. It included the payroll costs of the increase. Board members and staff thanked Mr. Renzaglia for his service to the Authority as a Board member since its incorporation in 2007. Mr. Renzaglia stated that it had been his honor and privilege to serve on the Board. Mr. Renzaglia received a standing ovation from those present. Mr. Quinn thanked Mr. Renzaglia for his service and for agreeing to continue to serve until a replacement is appointed by the City of Wilmington. Mr. Renzaglia moved to adjourn. Ms. Wolf seconded the motion, and it passed unanimously. The Authority adjourned at 12:20 p.m. The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, July 11, 2012, at 9:00 a.m. 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 CFPUA June 13, 2012 Regular Meeting Page 12