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HomeMy WebLinkAboutCFPUA 11 10 2010 CAPE FEAR PUBLIC UTILITY AUTHORITY ANNUAL MEETING NOVEMBER 10, 2010 Members Present: Gene Renzaglia, Chairman Burrows Smith, Treasurer Michael Brown, Secretary Bill Caster, Commissioner Bobby Greer, Commissioner Ron Sparks, Councilman Charlie Rivenbark, Councilman J.C. Hearne, II Jim Quinn Staff Present: Matt Jordan, CEO Nancy Gallinaro, COO Cheryl Spivey, CFO Karen Durso, Assistant to Mr. Jordan Martha Zeigler, Customer Service Director Beth Eckert, Environmental and Safety Director Carey Disney Ricks, PR/PIO Frank Styers, Director of Engineering Tom Morgan, Human Resources Director Jim Flechtner, Engineering Manager Donna S. Pope, Clerk to the Board Attorney Present: Linda A. Miles, the Miles Firm, Consulting Attorney Guests Present: Bill Saffo, Mayor, City of Wilmington Jason Thompson, Chairman, NHC Commissioners Jonathan Barfield, Vice-Chair, NHC Commissioners Ted Davis, County Commissioner Sterling Cheatham, City Manager Brian Berger, Commissioner-Elect Rick Caitlin, Commissioner-Elect Tony Boahn, McKim & Creed CFPUA NOVEMBER 10, 2010, ANNUAL MEETING Page 1 Sam Rose, McGladrey & Pullen, LLP Janice Warren, McGladrey & Pullen, LLP Tyler Newman, Business Alliance for a Sound Economy Chris Mazzolini, Wilmington Star News Call to Order, Determination of a Quorum, and Opening Comments: Mr. Renzaglia called the meeting to order at 6:15 p.m. and declared a quorum present. Recognition of Commissioners Greer and Caster: Mr. Renzaglia recognized Mayor Bill Saffo, Commissioner Chairman Jason Thompson, Commissioner Vice-Chairman Barfield, Commissioner Ted Davis, Commissioner-Elect Rick Caitlin, Commissioner-Elect Brian Berger, and City Manager Sterling Cheatham and thanked them for attending the Annual Meeting. The Board thanked Messrs. Greer and Caster for their contributions as Authority members. Mr. Renzaglia presented them with plaques recognizing their service, and those in attendance applauded the outgoing Commissioners and Authority members. Adoption of the Agenda: Mr. Rivenbark moved to adopt the Agenda. Mr. Caster seconded the motion, and it passed unanimously. Approval of the Minutes: Mr. Brown presented the minutes of the October 13 Regular Meeting and moved to approve them, subject to a grammatical correction on Page 2. Mr. Caster seconded the motion, and it passed unanimously. Mr. Brown presented the minutes of the October 27 Special Meeting and moved to approve them. Mr. Caster seconded the motion, and it passed unanimously. CFPUA NOVEMBER 10, 2010, ANNUAL MEETING Page 2 Public Comment: n and its stance on tiered presentation is attached hereto and incorporated by reference. Consent Agenda: Mr. Renzaglia presented the Consent Agenda, as follows: (1)Authorization for the CEO to execute a construction change order with East Coast Contracting for work associated with the Northern School pump station, at a budget impact of $76,265.20. (2)Authorization for the CEO to execute a professional services contract with McKim & Creed, P.A., engineers, for the Barnards Creek pump station upgrade, at a budget impact of $344,400.00. (3)Authorization for the CEO to enter into an agreement with Robert S. Segal, CPA, P.A., to perform bill review for possible credits and refunds. Following clarification questions from Authority members, Mr. Quinn moved to approve the Consent Agenda. Mr. Caster seconded the motion, and it passed unanimously. Annual Report: Service highlights for the year included the completion of the Front Street water and sewer replacement in conjunction with the completion of the Environmental and Safety Management Building and Laboratory, the completion of the Nano-Filtration Water Treatment Plant, completion of the Northside/Loughlin Wastewater Treatment Plant expansion, sewer service expansion into the Middle Sound area, the continuation of the Sweeney Water plant expansion, Northeast Interceptor, and repairs to the Ogden Interceptor. Mr. Jordan reported that the Authority has proactively balanced operational and maintenance needs with system growth, controlling operating costs, prioritizing projects, delaying planned bond issues, and through managed rate increases. Staff continues to recognize efficiencies to hold the line on costs. Mr. Jordan stated that growth is a challenge during a recession. The Authority has entered into its first agreement wherein a developer will build infrastructure in accordance with the CFPUA NOVEMBER 10, 2010, ANNUAL MEETING Page 3 connections by other developer/users, without the Authority expending funds. Mr. Jordan thanked department heads for their work and dedication throughout the year and in preparing the Annual Report. Authority members thanked Mr. Jordan for the report and for a job well done. The Annual Report is incorporated into these minutes by reference, and a copy is available on the Authority website. Audit for the Fiscal Year Ending June 30, 2010: Ms. Spivey introduced Mr. Rose of the accounting firm McGladrey & Pullen, LLP, the FY 2010 Audit Opinion Letter with the Board. no significant deficiencies, material weaknesses, no management letter issued, and no alternative treatments recommended by the auditors. The Audit is incorporated by reference, and a copy is available on the Authority website. At year-end, the Authority had $701,652,367 in total assets, and $342,064,095 in total liabilities, with total net assets of $359,588,272. Strong liquidity is key to bond ratings and future bond rates. Ms. Spivey recognized Ms. Warren of McGladrey & Pullen for her assistance during the Audit process. Ms. Spivey thanked Finance staff and in particular recognized Julie McMahon, Finance and Accounting Manager, for her work on the Audit. The Authority received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States for its Comprehensive Annual Chairman Comments and Recess: Mr. Renzaglia introduced Authority members to those present and explained the makeup of the Authority. The Board consists of two Commissioners, two Councilmembers, three members appointed by New Hanover County, three members appointed by the City of Wilmington, and one member agreed upon by both City and County. Mr. Renzaglia reported that the Authority currently has two openings on the Board, a City appointment and the joint appointment. He encouraged interested citizens to apply for the appointments. CFPUA NOVEMBER 10, 2010, ANNUAL MEETING Page 4 The Authority recessed at 7:10 p.m. and reconvened at 7:15 p.m. Administrative Reports. Engineering Report: Mr. Styers reported that the Ogden Interceptor repair is 65 percent complete, and the project duration had been extended by 20 days because of tropical storm rains in September. Staff expects the Ogden repairs to be completed in December. Ms. Miles reported that counsel is still in discussions with the Environmental Protection Agency, and she would have more to report in December. CEO Report: Mr. Jordan had no further report. Committee Reports. Mr. Renzaglia reported that Mr. Quinn had agreed to chair the Long Range Planning Committee. Nominating Committee: Mr. Smith nominated Mr. Hearne to serve as Vice-Chairman for the remainder of Fiscal Year 2011, and Mr. Rivenbark seconded the motion. There were no further nominations. Mr. Renzaglia called the question, and Mr. Hearne was unanimously elected Vice-Chairman. Public Relations Committee: Mr. Brown reported that the Committee had held its second meeting on October 27 and had decided to meet on a quarterly basis. The Committee discussed a Town Hall meeting in Castle Hayne that Mr. Brown and several staff members attended and received a report from staff Ms. Ricks reported that WECT-TV aired an in-depth news series about the Authority and its projects. CFPUA NOVEMBER 10, 2010, ANNUAL MEETING Page 5 The Authority has partnered with the United Way, Salvation Army, and the Food Bank in a food drive and will also participate in the Marine Corps Toys for Tots program. Employees have pledged monies for the Customer Assistance Program the United Way is administer for the Authority, and the United Way has pledged money to the program. Mr. Sparks commented that this program is important because the City can no longer provide a discount for senior citizens. He thanked Ms. Ricks and other staff members for their work on the Customer Assistance Program. Finance Committee: Mr. Smith reported that the Committee met on November 3 and asked Ms. Spivey to give the Financial Report for October 2010. As of October 31, 2010, the Authority had cash and cash equivalents of $11,000,000 in the operating funds, $32,071,673 in capital reserves, and $411,999,718 in capital assets. There were $11.6 million in accounts receivables, and $626,000 in payment plans, $27,000 less than at the end of September. There are 1,821 active payment plans. Aged receivables have significantly decreased over the past year. Ms. Spivey reported on collection efforts. The Authority voted to pursue collections through a collections agency at the October meeting. Staff is in the process of sending approximately Recipients will have until early January to pay or make payment arrangements. The Authority has $70,994,141 in total assets committed to active capital projects. Revenues are at 37.9 percent of budget, with 33 percent of the year lapsed. Expenditures are at 23.95 percent. Customer Service received 10,074 calls in October, with an average answer time of one minute, 19 seconds. Ms. Spivey requested direction from the Board regarding sewer-only delinquencies. Because the Authority does not provide water to those accounts, it does not have the leverage of turning off water service when an account is not paid sewer on delinquent accounts. Mr. Smith moved to send sewer-only accounts of $500 or more to the collection agency. Mr. Sparks seconded the motion. CFPUA NOVEMBER 10, 2010, ANNUAL MEETING Page 6 Following clarification questions, Mr. Renzaglia called the question, and the motion passed unanimously. Rate Model Consultant: Ms. Spivey reported that the request for proposals for a Rate Model Consultant had been published, with a deadline of November 22 for responses. The study will analyze operating rates and structure, System Development Charges, extra-strength sewer charges, and a business -s. Interviews are tentatively scheduled for December 6. Mr. Brown stated that it is important to understand the correlation between rates and consumption. Ms. Spivey responded that employing a consultant who had worked with many utilities would be beneficial in that regard. Mr. Renzaglia observed that he had received feedback and questions regarding the use of consultants. By hiring a consultant, the Authority should learn what other utilities are doing, and the use of a consultant removes any suggestion of bias on the part of Authority members or staff. Mr. Jordan added that the Authority is at a point, a little over two years into operations, when it is beneficial to review rates. Mr. Brown stated that it is important for the public to understand that the Authority has no ability to tax and rates are the only source of revenue. System Development Charge Policy for Shell Buildings Update: based upon meter size, and the charges and impact fees previously used by the New Hanover County Water & Sewer District and the City of Wilmington. Under the County District rules, water meters were installed during construction of shell buildings, but impact fees were collected when upfit permits were obtained. The County had a formula for impact fees based upon the use of the shell building units. Concerns have arisen from owners of shell buildings that were built before July 1, 2008, but not completely upfitted. In its November 3 meeting, the Finance Committee requested that staff offer owners the option of the County District rates in effect on June 30, 2008, or the Authority SDC rate in effect at the time upfit permits are obtained, with credit for any impact fees previously paid. The option would be irrevocable and would run with the property so that a subsequent owner could not change to a different method of rate determination. Once a building was completely upfitted or CFPUA NOVEMBER 10, 2010, ANNUAL MEETING Page 7 fees paid equal to the Authority SDC, no further fees would be charged. If a meter size is adjusted, a credit for the amount previously paid would be applied to the new meter SDC. There were questions from Authority members. Mr. Sparks requested further information regarding the potential financial impact upon the Authority. Mr. Jordan stated that staff needed more time to research and formulate the policy, and he anticipated the item returning to the Finance Committee in December. The current report was for informational purposes to update the Board. Old Business: There was no old business. Closing Comments: Mr. Brown urged customers with delinquencies to contact customer service to development a payment plan and avoid collection efforts. Messrs. Greer and Caster thanked Authority members, employees, and the Advisory Committee that preceded the Authority for their work and dedication. They continue to support the consolidation of water and sewer services. Mr. Renzaglia thanked Messrs. Caster and Greer for their comments and their work for the Authority and wished them the best on behalf of the Board and staff. There being no further business to come before the Authority, Mr. Rivenbark moved to adjourn. Mr. Caster seconded the motion, and it passed unanimously. The Annual Meeting of the Cape Fear Public Authority adjourned at 8:00 p.m. The next regular meeting of the Authority will be Wednesday, December 8, 2010, at 9:00 a.m. The meeting will be held in the Lucie Harrell Conference Room of the New Hanover County Administration Building, located at 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Authority CFPUA NOVEMBER 10, 2010, ANNUAL MEETING Page 8