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HomeMy WebLinkAboutCFPUA 07 14 10 meeting CAPE FEAR PUBLIC UTILITY AUTHORITY JULY 14, 2010 REGULAR MEETING Members Present: Jim Hunter, Vice-Chairman Burrows Smith, Treasurer Ron Sparks, Councilman Charlie Rivenbark, Councilman Bobby Greer, Commissioner Bill Caster, Commissioner J.C. Hearne, II Jim Quinn Michael Brown, III Members Absent: Gene Renzaglia, Chairman John Tunstall Staff Members Present: Matt Jordan, CEO Cheryl Spivey, CFO Beth Eckert, Environment and Safety Director Karen Durso, Assistant to Mr. Jordan Carey Disney Ricks, PR/PIO Martha Zeigler, Customer Service Director Tom Morgan, H.R. Director Jim Flechtner, Engineering Manager Mike Richardson, Drinking Water Superintendent Ken Vogt, Wastewater Treatment Superintendent Chris Bowling, Project Manager Donna S. Pope, Clerk to the Board Attorney Present: Linda A. Miles, The Miles Firm, PLLC, Consulting Attorneys CFPUA JULY 14, 2010, MINUTES 1 Guests Present: Barbara Rowe, Cape Fear Museum of History and Science William J. Hart, New Hanover Soil & Water Conservation District Dru Harrison, New Hanover Soil & Water Conservation District William Burner Ray Cox, Highfill Infrastructure Eric Williams, HDR Tyler Newman, BASE Opening Comments and Determination of a Quorum: Mr. Hunter opened the meeting and declared a quorum present. Adoption of the Agenda: Mr. Caster moved to adopt the Agenda. Mr. Rivenbark seconded the motion, and the Agenda was adopted unanimously. Oaths of Office for New Appointee and Reappointed Authority Members: Ms. Pope administered the Oath of Office to Messrs. Brown, Hearne, Sparks, and Rivenbark. The Board welcomed Mr. Brown to the Authority and thanked Messrs. Hearne, Sparks, and Rivenbark for their continuing their service. Approval of Minutes: Mr. Hunter presented the minutes of the June 9, 2010, meeting for approval. Mr. Hearne requested that the year 2010 be added to two dates on Page 9 of the minutes. Mr. Caster moved to approve the minutes with that correction. Mr. Smith seconded the motion, and it passed unanimously. Cape Fear Museum of History and Science Presentation: Ms. Rowe, Curator with the Cape Fear Museum of History and Science, gave a report and slide show on a wooden pipe artifact excavated during the Front Street Improvement Project CFPUA JULY 14, 2010, MINUTES 2 undertaken by the City of Wilmington and the Authority. The pipe was initially thought to be a water pipe, but research indicated that it was a creosote-treated conduit for telephone lines. In th the late 19 century, the Bell Telephone Exchange had its headquarters at the Northwest corner of Front and Princess Streets, the area from which the artifact was recovered, and the pipe matches conduits used in that time period in other parts of the state. Ms. Rowe explained the preservation process that is being used on the conduit. This artifact will serve as an example of historic value that may be recovered during Authority projects. Public Comment: Mr. Hart, Supervisor with the New Hanover Soil & Water Conservation District, spoke on behalf near District property and its conservation easement at the intersection of Holly Tree and South College Roads. A copy of his presentation and comments is attached hereto and incorporated by reference. Mr. Burner, a general contractor, requested that the Authority reconsider its policy of requiring upfront payments for System Development Charges. Mr. Smith moved to refer the request to the Finance Committee for review. Mr. Caster seconded the motion, and it passed unanimously. lief that the Authority rate structure is discriminatory towards families. A copy of his presentation is attached hereto and incorporated by reference. a report regarding the rate structure during the Finance Committee presentation. Consent Agenda: Mr. Hunter presented the Consent Agenda, as follows: (1)Resolution authorizing the Chief Executive Officer to transfer surplus property having significant historical value to the Cape Fear Museum of History and Science; and (2)Resolution authorizing the Chief Financial Officer to write off accounts totaling $145,479.60 as uncollectible bad debts. Mr. Sparks moved to approve the Consent Agenda, as presented. Mr. Caster seconded the motion, and it passed unanimously. CFPUA JULY 14, 2010, MINUTES 3 New Business Administrative Reports. Engineering Report: Mr. Flechtner reported that Phase 1 of the Ogden Interceptor Repair has been completed and the line is in service. Phase 2 is expected to be completed within 120 days. Investigation into the cause of the line failure continues. Siemens Water Technologies Corporation to furnish hydrogen peroxide for Odor and Corrosion Control in wastewater treatment. The contract amendment would be a unit-price term contract amendment for a period not to exceed six months, at a cost of approximately $100,000.00 per month. There were clarification questions from Authority members. Mr. Smith moved to authorize the CEO to enter into the contract amendment with Siemens Water Technologies for wastewater treatment chemicals for a period not to exceed six months. Mr. Rivenbark seconded the motion, and the contract amendment was approved unanimously. Public Relations/Public Information Report: Ms. Ricks reported that the Front Street project was completed on July 9, and the ribbon cutting was held on July 13, with Authority members and staff present. There were two public outreach meetings held for Porters Neck customers on June 16, and there is information on the website for customers in the new service area. On June 15, staff held public information meetings in the Masonboro Sound/1998 Annexation area. The Nano-Filtration Plant will receive fluoride treatment beginning the first week of August. Information regarding fluoride is available on the Authority website. The Authority will request voluntary conservation on July 22, when there will be decreased water flow from the Sweeney plant due to plant construction. There are construction-related road closures on Wrightsville Avenue, Greenville Ave, Princess th Place, Barclay Avenue, and North 30 Street. The closings have been advertised and are posted on the website. CFPUA JULY 14, 2010, MINUTES 4 In response to customer feedback, the Authority website will soon have notices and forms in Supervisor, was recently interviewed on a local Hispanic radio station. There are current bills in the North Carolina Legislature that address infrastructure, asset management, and new in-ground irrigation meters. Ms. Miles advised that the items she had to report to the Board required a closed session. CEO Report: Mr. Jordan reported that water production increased by 1.75 million gallons per day in June. Staff members were involved in four accidents in June, those being a dog bite, chemical s eye, and a heat-related incident. Staff continues to examine each accident and review with employees. The Authority received two Notices of Violation from the State of North Carolina in June. The first Notice was for the Ogden spill after a rain event, and the second at a wet well in a lift station where 700 gallons was released. Neither violation will be the object of any enforcement action by the State of North Carolina. Committee Reports. Nominating Committee: On behalf of the Nominating Committee, Mr. Rivenbark moved to approve the following slate of Officers for Fiscal Year 2011: Gene Renzaglia, Chairman Jim Hunter, Vice-Chairman Mike Brown, Secretary Burrows Smith, Treasurer Mr. Hearne seconded the motion, and it passed unanimously. CFPUA JULY 14, 2010, MINUTES 5 Long Range Planning Committee: Mr. Hunter asked Mr. Flechtner to give this report. Mr. Flechtner reported that the Long Range Planning Committee met on July 7 and reviewed nine items, as follows: Capital Improvement Plan Workshops. The Authority has an eight-year CIP. Staff will identify all known planning needs and bring recommendations to the Board at the workshops. rection and agree on priorities for the next ten years. The minimum CIP mandated by the Interlocal Agreement will be identified. Those projects could only be altered by the agreement of all three parties to the Interlocal Agreement (City of Wilmington, New Hanover County, and the Authority). The fourth Wednesday morning of each month from August through October had been suggested as a time for the workshops, as this was a day the charter Board members had reserved for additional meetings. After a discussion of the time needed for Authority business during each month and the constraints of Board member schedules, the Board agreed by consensus to hold the CIP workshops after each Board meeting, immediately following a lunch break. Pender County Bulk Water Sales. The Long Range Committee received an update from staff on development of an Interlocal Agreement with Pender County for bulk water sales in the Scotts for 75,000 gallons and two tiers for additional use. The SDC and bi-monthly fixed rate would be based on the meter sized. Pender County Wastewater Treatment Plant. The Committee received an update from staff regarding the 421 wastewater treatment facility with Pender County. Design is 60 percent complete, and comments from the State of North Carolina on the Environmental Assessment are being addressed. An Interlocal Agreement with Pender County is under legal review. Southside Wastewater Treatment Plant. The Committee received a report from Mr. Lundin on this expansion project. The Department of Environment and Natural Resources has issued a Speculative Limits Letter to the Authority for 24 MGD without nutrient removal. The contract for Southside is being amended to accommodate 24 MGD, with some tasks delayed to fit currently approved funding. Ogden Interceptor Update. The Committee received a report on the Ogden Interceptor repairs. Mr. Flechtner had already provided that information to the Board during the Engineering Report. Phase 1 is complete and the line in service. CFPUA JULY 14, 2010, MINUTES 6 Porters Neck. The Porters Neck purchase is complete and residents are receiving Authority water. One interconnect is left to construct and is ready to bid. Carolina Beach Aqua North Carolina. The Town of Carolina Beach is considering aquifer storage and recovery. Staff continues to work with Carolina Beach staff to coordinate long term plans. Figure Eight Island. Figure 8 Island will design and permit the water line beneath the Intracoastal Waterway. Pump Station Upgrades. The Committee reviewed pump station capacity and flow tracking. Pump station capacity relates to capital planning. The Authority recessed at 10:25 a.m. and reconvened at 10:30 a.m. Finance Committee Report: June 2010 Financial Statements. Mr. Smith asked Ms. Spivey to present the Committee report. Ms. Spivey presented June financial statements, which also represented the FY2010 year-end statement on a modified cash budgetary basis. The final year-end statement will be produced in November or December after all accrual entries are made and the audit finished. Cash and cash equivalents increased by $4.5 million over May, reflecting increased revenues in June. Aged receivables have decreased. The Committee r efforts, which consist primarily of water cut-offs and using the State of North Carolina debt setoff program. The Committee will discuss additional potential collection methods at its August meeting. There were clarification questions from Authority members regarding receivables. Year-end operating revenues were 97 percent of the FY2010 budget, and operating expenditures 79 percent. With estimated encumbrances added, expenditures ended the year at 82 percent of FY2010 budget. The Authority met its 1.0 debt coverage ratio for FY2010, and Ms. Spivey has reported that to the Bond Trustees. The Finance report included the CIP fund balance sheet and project list, with $87 million Rate Structure Presentation Tiered v. Uniform. Mr. Jordan introduced the presentation by stating that the basic premise in establishing an adequate rate structure is to make sure there is an equitable system in which rates reflect the cost of providing service. There are many methods to determine potential impact on customers. The current tiered rate model was approved by the CFPUA JULY 14, 2010, MINUTES 7 Board based on the philosophy of encouraging conservation while keeping essential use more affordable. Tiered rates support that philosophy. The Authority Board selected its rate structure after several months of rate analysis. One rate esses the cost of providing services to customers with a larger than normal peaking factor in usage. Since the water needs vary among customers due to peaks, the cost of providing also varies. The other rate structure considered by the Authority was a uniform rate for volume usage. A uniform rate would be an average cost. Average cost would be determined by figuring how much water the Authority anticipates selling over a year and deciding how much money it needs from that particular component of the charges. Some revenue would come from the fixed charge, and some from the volume charge. The revenue from volume sales would be divided by the numbers of thousands of gallons sold to determine the average. The Authority Board adopted the approach of the Base Extra Capacity Method. However, the Authority did not choose full cost recovery in its rates, which would assign costs to customers based on their usage and peaking factors. Authority rates fall between the method of averaging and full cost recovery. Mr. Jordan continued by stating that a change of rate models results in changes in customer behavior and that it is normal, after a couple of years in use, to look at the model and analyze it to see if it is accomplishing its goal and also to determine if the philosophy of the Board remains the same. Rate analysis occurs as part of the budget planning for each fiscal year, unless the Board chose to review it earlier in the year. exhibit in the Agenda packet. A copy of the exhibit is attached hereto and incorporated by reference. If the Authority used a uniform volume rate, residential customers using less than 20,650 gallons in a bi-monthly period would see an increase in their bill, and any residential customer using more than 20,650 gallons in the same period would have a decrease. Using residential customer numbers from last fiscal year from December and January, when most use could be assumed to be essential, 97 percent of customers would have a larger bill with a uniform rate. Three percent of customers would realize a decrease during the winter months. Mr. Smith referred to Exhibit Page 5-22, a water bill analysis between the City and the Authority. He observed that if the amount of a bill is divided by the number of family members, a single person pays more than others. The Board discussed the report and rate models. CFPUA JULY 14, 2010, MINUTES 8 Porters Neck. Ms. Spivey reported that Authority staff read meters the date of closing so that customers could be billed for their Porters Neck Company water use up to closing. The Authority will receive approximately $200,000 annually in revenue from the Porters Neck customer base. The Finance Committee had reviewed and approved letters to Porters Neck customers, customers in the Middle Sound mandatory connection area, and letters regarding delinquencies in water and sewer connection fee and impact fee loans. Ms. Zeigler provided a customer service update, which was included in the Finance Committee report. Staff answered clarification questions from the Board. Old Business. There was no old business. Closed Session. Mr. Rivenbark moved to enter closed session to discuss EPA enforcement, an Authority legal claim, and a personnel issue. Mr. Sparks seconded the motion, and it passed unanimously. The Authority entered closed session at 11:25 a.m. All staff members left the meeting except for also remained in the meeting. The Board received updates from staff and Ms. Miles on the EPA and a claim. Mr. Flechtner left the meeting, and the Board discussed a personnel issue. Open Session. Mr. Smith moved to return to open session, and Mr. Sparks seconded the motion. The motion passed unanimously, and the Authority returned to open session at 11:54 a.m. Mr. Smith moved to adjourn. Mr. Hearne seconded the motion, and it passed unanimously. The Authority adjourned at 11:55 a.m. The next meeting of the Cape Fear Public Utility Authority will be Wednesday, August 11, 2010, beginning at 9:00 a.m. The meeting will be held in the Lucie Harrell Conference Room of the New Hanover County Administration Building, 235 Government Center Drive, Wilmington, CFPUA JULY 14, 2010, MINUTES 9 North Carolina. Following the regular meeting, the Board will hold a Capital Improvement Project workshop. Respectfully submitted, Donna S. Pope, Clerk CFPUA JULY 14, 2010, MINUTES 10