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HomeMy WebLinkAboutCFPUA 11 9 2011 CAPE FEAR PUBLIC UTILITY AUTHORITY ANNUAL MEETING NOVEMBER 9, 2011 Authority Members Present: James Quinn, Chairman Mike Brown, Vice-Chairman Patricia Kusek, Secretary Cynthia Wolf Gene Renzaglia J.C. Hearne, II Ron Sparks, Councilman Charlie Rivenbark, Councilman Brian Berger, Commissioner Rick Catlin, Commissioner Authority Member Absent: Burrows Smith, Treasurer Staff Present: Matthew Jordan, CEO Jim Flechtner, COO Cheryl Spivey, CFO Karen Durso, Assistant to CEO Frank Styers, Engineering Director Beth Eckert, Environment & Safety Director Carey Disney Ricks, CCO and Public Relations Tom Morgan, H.R. Director Nancy Johnson, Customer Service Director Cord Ellison, I.T. Manager Mike Richardson, Water Treatment Superintendent Ken Vogt, Wastewater Treatment Superintendent Jim Craig, Utility Services Superintendent Julia Vosnock, Procurement Manager Steve Mongeau, Program Manager Christene Mitchell, Engineering Manager Kipp Glazier, Community Compliance Assistant Superintendent Donna S. Pope, Clerk to the Board Attorney Present: Linda A. Miles, the Miles Firm, PLLC Guests Present: Lou Cannon, McGladrey & Pullen Diana Page, McGladrey & Pullen CFPUA ANNUAL MEETING 11.9.2011 Page 1 Eric Williams, HDR Lawless Bean, Cit of Wilmington Tyler Newman, Business Alliance for a Sound Economy Arthur and Erin Bullock Monique Halyard Kevin Maurer, Wilmington Star News Call to Order, Determination of a Quorum, and Opening Comments. The Cape Fear Public Utility Authority held its Annual Meeting on Wednesday, November 9, Street, Wilmington, North Carolina. Chairman Jim Quinn called the meeting to order at 6 p.m., and declared a quorum present. Mr. Quinn wished to dispel that the Authority bought all new motor vehicles when it assumed operations in July 2008. He stated that 70 percent of Authority vehicles transferred from the City and County. Some larger vehicles were purchased for efficiency so that one vehicle could carry several workers to a job site, and vactor trucks were added to facilitate the cleaning of sewer lines, as required by the Environmental Protection Agency. Sewer line cleaning has been successful and continues to be done. Adoption of the Agenda. Mr. Rivenbark moved to adopt the Agenda. Ms. Kusek seconded the motion, and the Agenda was adopted unanimously. Approval of Minutes. Ms. Kusek presented the minutes of the October 12 meeting for correction. Mr. Rivenbark requested that the date of the November meeting be corrected to reflect November 9. Mr. Rivenbark moved to approve the October Minutes with the noted correction. Mr. Renzaglia seconded the motion, and it passed unanimously. Public Comment. Mr. Quinn reminded speakers to limit their comments to four minutes or less and reminded the Board that clarification questions were permitted but that staff would have to address issues or problems presented during public comment. account. Mr. Bullock had provided information Board members in advance of the meeting and was appearing before the Board as directed by Authority staff. He asked that the retroactive amount be removed from his bill and stated his belief that the retroactive billing policy was wrong and placed an undue burden on customers and taxpayers. He thanked the Board for their time and any assistance that could be provided. CFPUA ANNUAL MEETING 11.9.2011 Page 2 permission was needed to discuss his billing issue. Mr. Quinn stated that he had checked with the Authority attorney. A Resolution regarding account information was presented at the last Authority meeting but not voted upon. Mr. Quinn stated that Mr. Bullock had contacted Authority members, City Council, and County Commissioners time, preferably in a closed session, if appropriate, . He further stated that it would serve the purpose of clarification for the Customer Service Director, Ms. Johnson, to give a complete summary of salient facts to the Board. The Board would need to vote to permit staff to report on Mr. Sparks moved to allow staff to release account information to the Board. He stated that Mr. Bullock had spent a lot of time and effort preparing his report. Mr. Sparks stated that the Board was developing an Ordinance for an appeals process but he did not want Mr. Bullock to have to wait. Ms. Kusek seconded the motion. Ms. Miles asked Mr. Sparks if he were moving to authorize staff to release account information to the Board and to the public at this meeting. Mr. Sparks asked if the information was available at this time, and Ms. Miles stated that it was.Ms. Miles asked Mr. Bullock if he had any other information to share. Mr. Bullock did not have further information but was available for clarification questions. Ms. Miles advised that Mr. Bullock could give permission to discuss his account or the Board could vote on the motion to release the information publicly. Mr. Rivenbark stated that he must have misunderstood the motion and whether the account would be discussed tonight or at a later date. Mr. Quinn stated that Mr. Brown had brought up the potential for action this evening, which had caught him by surprise. Mr. Quinn stated that he would prefer not to vote tonight and would like a closed session at some future point, consult with staff, and make the decision. Ms. Miles advised that the Board could discuss a claim with her as legal counsel in closed session but that a hearing would be a matter of public record, unless the Board adopted a different procedure or had a sub-committee hear this type of hearing. Mr. Sparks stated that his motion was to have staff generate a report. He stated that the Authority is working on a formal appeals process but he did not want Mr. Bullock to wait. He recommended a short term process of permission. Mr. Berger seconded the motion as clarified, provided Mr. Bullock was content with it. Mr. Bullock stated that he had no issue with the account information being released. He believed that he had provided all pertinent information in the report he had provided to the Board. Ms. Miles stated that, by saying that he had no issue with the account information being released, Mr. Bullock was giving permission. Mr. Bullock said that he present to ask for help and he could not receive help without giving permission to look at his records. Mr. Brown asked Mr. Bullock if CFPUA ANNUAL MEETING 11.9.2011 Page 3 he was okay with taking the information he had provided to the Board and making it a part of the public record. Mr. Bullock said he did not see any way around that if the appeal was to be done in this manner. He stated that, if there was another way to make the appeal, he was at the Boaat - committee meeting, such as the Finance Committee. The Finance Committee could consider the appeal and make a recommendation to the full Board next month. Mr. Sparks amended his motion to have the staff report go to the Finance Committee, with a recommendation to the full Board that could be voted on in open session at the next meeting. Mr. Bullock confirmed that he was giving permission to release his account information. He stated that he was not trying to push for a resolution tonight but was pushing for a resolution in his favor. He added that he was required to make payments on the retroactive billing he disputes or his water would be turned off, even if he were paying his current bill. He stated that he had no problem with the Board taking the issue into whatever type of session they needed but asked that they do so in a timely manner. Ms. Miles informed Mr. Bullock that he could attend the Finance Committee meeting. Mr. Berger asked if it would be acceptable and legal process had run its course. Ms. Miles advised that the Board could decide to hold the back charges in abeyance until the decision was made. public information session. Mr. Quinn stated that he wanted everyone to understand that he was attempting to keep public information as public information and to not have debates and to not make decisions from the bench. He stated that it was a bad practice to get into, and he did not think that anything would happen between now and the time the Board would make a decision that would change that need. He asked that the Board not make any motions but stated that he would have to entertain Mr. its business done. Mr. Berger stated that, as a point of information, his understanding was that Mr. Bullock was continuing to be assessed late charges and fees while the balance of the payment remained outstanding. He stated that, if that were the case, he would gladly withdraw his motion, but if Mr. Bullock was being charged late charges and fees while the process was ongoing, at some point, whether now or later in the meeting, he would like to make the motion. Mr. Quinn stated that he did not believe the Board had all the information needed to make the decision. He asked if there was a s Ms. Miles clarified that Mr. Bullock was on a payment plan for the back amounts owed but was motion or Mr. Sparks could amend his motion. Mr. Sparks said he could amend his motion. Mr. Berger said he would withdraw his motion if no late fees were being assessed. Ms. Miles stated that Mr. Bullock was not being assessed late fees but was on a payment plan for arrearages on his account, which he was disputing. Mr. Rivenbark asked if the arrearages would be kept in abeyance. CFPUA ANNUAL MEETING 11.9.2011 Page 4 Mr. Sparks stated that his original motion had been seconded. Ms. Miles advised that Mr. Sparks had moved to have the matter heard by the Finance amended motion. ing settlement of his issue. Mr. Sparks agreed to amend his motion to have staff report to the Finance Committee, the past account be held in abeyance until a decision was rendered. Mr. Brown seconded and repeated Mr. Quinn asked if there was further discussion. Mr. Renzaglia asked Ms. Miles if it was correct ported by State Statute. Ms. Miles confirmed that was correct. Mr. Quinn called the question, and the amended motion passed unanimously. Mr. Bullock asked to be informed of the meeting time and date, and the Clerk assured him she would notify him. Mr. Bullock added that he understood the Authority was within its legal rights in collecting the money but that having the right to do something did not mean one was obligated to do it and that legality did not necessarily make it the right thing to do. He stated that was why he was asking for the help and thanked Board members for their time. Ms. Monique Halyard spoke regarding two matters, the first being the cost of water and sewer service at her home. Secondly, she stated she owned a vacant house but had to pay the base charges or availability. Ms. Halyard stated that she worked at the hospital, and they were not allowed to charge people because hospital care was available to them. She did not believe customers should have to pay for something they did not use. Ms. Halyard answered clarification questions from Board members. Mr. Quinn reminded Board members of his initial request to refrain from debate. There were no more public comments. Consent Agenda. Mr. Quinn presented the Consent Agenda, as follows: 1.Authorization for the CEO to execute Contract Amendment No. 1 to ah Highfill Engineering, P.C. contract for the Pump Station 12 and Pump Station 10 Upgrade Project, not to exceed $100,000 and provided for in the CIP. 2.Adoption of a Resolution appointing Nancy Johnson as the Deputy Finance Officer. 3.Authorization for the CEO to repair one 300 horsepower pump for use at Pump Station 34 using a sole source vendor, at a budget impact of $36,750.00. CFPUA ANNUAL MEETING 11.9.2011 Page 5 Mr. Renzaglia moved to approve the Consent Agenda. Mr. Sparks seconded the motion, and all items on the Consent Agenda passed unanimously. New Business. Annual Report: Mr. Jordan presented an overview of the Fiscal Year Annual Report. The full report had been provided to Authority members with their Agendas. Department managers were available for clarification questions and to provide additional information. Mr. Jordan reported that the Authority has completed its third successful year of operations. He credited the hard work and dedication of employees in providing essential services, the support County, and the community it serves. One goal of the consolidation of City and County water and sewer services was to realize economies of scale, addressing water and sewer needs at low cost. Mr. Jordan was pleased to report that the Authority has continued to find efficiencies. In its first year of operations, the Authority had a projected operating budget of $38,173,055. By comparison, the Fiscal Year 2011 actual operating expenditures were $32,091,428. The operating budget reflects the costs of running the systems and does not include debt service. The operating budget has maintained efficiencies even though the Authority has opened a new water treatment plant, expanded facilities and increased production, and expanded proactive maintenance programs. The Authority has achieved staffing efficiencies equal to 18 full time employees. Mr. Jordan reviewed components and tools associated with managing costs to customers. Capital projects to upgrade and improve the water and sewer systems have driven rate increases. Capital improvement projects have been and continue to be analyzed and prioritized so that only essential projects are funded. Project prioritization included work sessions with the full Board to review, vet, and approve capital projects, resulting in a revised ten-year capital improvement plan. Capital projects highlighted in FY2011 included the Northeast Interceptor (sewer), Pump Station 34 and 35 upgrades in the Bradley Creek area, emergency repairs to the Ogden Interceptor, Sweeney water treatment plant expansion, raw water line rehabilitation, cooperation with Pender and New Hanover Counties regarding a Highway 421 wastewater plant, working with the City of Wilmington on the Third Street enhancement project, and an expanded Odor and Corrosion Control Program. In the first two years of operations, Authority staff identified opportunities for efficiencies and economies of scale. In Fiscal Year 2011, the Authority was evaluated by a third-party efficiency highest of 80 similar agencies evaluated by the consultant. Pro-active maintenance has been an important goal for Authority staff. In FY2011, 155 miles of sewer lines were cleaned, and 23 miles were videotaped. Sixteen miles of water and sewer easements were cleared and inspected. The entire water system is routinely flushed, and 15,318 feet of new water mains were installed in FY2011. Meter testing and replacement continues. CFPUA ANNUAL MEETING 11.9.2011 Page 6 The Authority oversees pro-active environmental stewardship. All three wastewater treatment plants achieved 99.82 percent compliance on permitting. Both water treatment plants achieved 100 percent compliance with water quality standards. The Authority received ISO 14001 third- party certification for its Environmental Management System. The pretreatment program was audited by the North Carolina Department of Environment and Natural Resources and was in compliance with all EPA and North Carolina regulations. The Environmental staff conducts educational activities for customers, school children, and food service facilities. The Authority received 11 safety awards from the North Carolina Department of Labor in FY2011. Staff performs safety training audits throughout the workforce and reviewed and updated 18 sections of the Authority safety and health policy manual. A computerized maintenance management system was implemented for maintenance and repairs, and Asset Management will expand into other departments. All of the 141 pump stations for wastewater have been analyzed using a risk assessment process defined by the Asset Management program. The Customer Service Department has developed and implemented an in-house training program for Customer Service Representatives to ensure fair, professional, and consistent customer interaction. The average wait time for customer phone calls was 1.5 minutes, with 95.3 percent of all calls answered within five minutes. The number of customers using online payment options doubled. Internal and external communications improved through the production of a service information pamphlet for customers, the employee newsletter, and a series of public workshops to review and establish the rate structure. The Authority continues to explore regional partnerships with other governmental entities, the Lower Cape Fear Water & Sewer Authority, businesses, developers and potential new customers. In summary, Mr. Jordan reported that the Authority maintains a stable financial position, keeping rates as low as possible while investing appropriately in its infrastructure and continuing to focus on the guiding principles of Stewardship, Sustainability, and Service. Mr. Jordan and Mr. Flechtner answered clarification questions from Authority members. Fiscal Year 2011 Audit: Ms. Spivey reported that Board members had received copies of the Comprehensive Annual Financial Report prepared by Finance Department staff and audited by RSM McGladrey, Inc. She introduced Lou Cannon of McGladrey to provide the official Audit results. Mr. Cannon briefly explained the applicable requirements used for the Authority Audit. In addition to generally accepted audit standards, McGladrey used government auditing standards, Office of Management and Budget standards, and the North Carolina Single Audit Implementation Act. CFPUA ANNUAL MEETING 11.9.2011 Page 7 Mr. Cannon reported that the Authority received an unqualified, clean, Audit Opinion on the Financial Audit. A clean opinion is the highest level of assurance on an audit. The Authority also received an unqualified, clean, Opinion on its Compliance Audit. Communication to the Authority, neither of which impacted user rates or caused any compliance issues with the bond covenants. The two items were (1) a correction of prior interst computation, and (2) a correction of a prior year error by a financial institution. Mr. Cannon added that the Authority has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada. The certificate reflects the best reporting practices and is held in high regard by -end financial data for FY2011. The overall financial condition remained stable, with net assets being almost the same as FY2010, at $359,585,605. Unrestricted net assets increased by $7,800,000. Cash, cash equivalents, and investments were $106,600.000, including $35.5 million in restricted bond proceeds, $4.3 million for retiree healthcare, $24.2 million for capital projects, and $42.6 million undesignated. The undesignated cash increased $6.5 million from FY2010 and may be used for capital expenditures. Water usage was 5.3 percent higher than FY2010 usage. Sewer usage based on metered water was 5.5 percent more than FY2010 and higher than FY2009 levels. The total operating expenditures ended the fiscal year at 91 percent of budget. The Authority has a 1.6 debt coverage ratio, which enabled it to keep its AA bond rating and thus receive a low interest rate on bonds. The minimum debt coverage ratio required is 1.2. Public Relations Report: reformatted bill. The new format a message box which contains pertinent information. Phone numbers are listed for customers to ask questions and receive further information, which can be mailed to them. Ms. Ricks reported that CFPUA Assist, a partnership with the United Way and Salvation Army, assisted 58 individuals, representing 23 families. Authority employees contributed $3,000 of the $6,000 in the fund in FY2011. Ms. Ricks answered clarification questions from Board members. Ms. Miles had no report. Mr. Jordan asked if there were questions regarding the Environment and Safety Report in the Agenda. There were no questions, and Mr. Jordan had no further report. Committee Reports. Finance Committee: The Finance Committee met on November 2, 2011. absence, Ms. Spivey presented the Finance Committee report, and two items reviewed by the Committee required Board action, as follows: CFPUA ANNUAL MEETING 11.9.2011 Page 8 1.Ordinance making Supplemental Appropriations to the Operating Fund and Capital Projects Funds for the Fiscal Year ending June 30, 2012, budget amendment 12-001. Five projects budgeted for FY2011 were not included in the 2011 bond sale. The Committee recommended the transfer of $2,796,683 from the Operating Fund to the Capital Projects Fund. Mr. Renzaglia moved to approve the supplemental appropriations, and Mr. Rivenbark seconded the motion. Following clarification questions, Mr. Quinn called the question, and the supplemental appropriation ordinance passed unanimously. 2.Country Haven Pump Station Upgrade. Ms. Spivey reported that the Finance Committee had recommended delaying the second phase of the Country Haven Pump Station upgrade. Recent information had come to light, causing Mr. Smith, Committee Chairman, had requested that the Country Haven return to the Finance Committee for further consideration in December. Mr. Brown moved to delay action on the Country Haven Pump Station upgrade. Mr. Sparks seconded the motion, and it passed unanimously. Ms. Spivey reported that the Committee had recommended no action on the Raw Water Pump Station until the pump station study is completed. There were no questions from Board members on the October financial reports, which were in the Agenda package. The financials will be posted to the website. The next meeting of the Finance Committee is December 7, 2011. Long Range Planning Committee: Ms. Wolf asked Mr. Styers to update the Board on Long Range Planning. The Committee met on October 27, 2011. The Committee reviewed the following items: Strategic Plan update process; raw water supply update; Fats, Oils, and Grease policy revision recommendations from Environment & Safety Compliance staff; Senate Bill 676 Ms. Miles clarified that Senate Bill 676 does not restrict mandatory connection. The next meeting of the Long Range Planning Committee will be November 17, 2011. The agenda includes discussions on growth, FY13 CIP, raw water supply, and rain harvesting. Old Business: There was no old business. Closing Comments: Mr. Sparks requested that the Board review the base charges when developing the budget and rates for FY2013. Mr. Catlin thanked Mr. Sparks for his service on the Board and encouraged him to apply for future appointments to the Authority. Mr. Quinn agreed with Mr. Catlin and thanked Mr. Sparks on behalf of the Authority. Mr. Jordan stated that it had been a pleasure to work with Mr. Sparks. CFPUA ANNUAL MEETING 11.9.2011 Page 9 There was no further business to come before the Authority, and Mr. Rivenbark moved to adjourn. Mr. Sparks seconded the motion, and it passed unanimously. The Authority adjourned at 7:30 p.m. The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, December 14, 2011, at 9:00 a.m., in the Lucie Harrell Conference Room, New Hanover County Administration Building, 230 Government Center Drive. Respectfully submitted, Donna S. Pope Clerk to the Board CFPUA ANNUAL MEETING 11.9.2011 Page 10