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HomeMy WebLinkAboutCFPUA 10 9 2013 CAPE FEAR PUBLIC UTILITY AUTHORITY OCTOBER 9, 2013 REGULAR MEETING Authority Members Present: Jim Quinn, Chairman Pat Kusek, Vice-Chair Jim Brumit, Secretary Mike Brown, Treasurer Cindee Wolf Larry Sneeden Bill Norris Charlie Rivenbark, Councilman Neil Anderson, Councilman Woody White, Commissioner Tom Wolfe, Commissioner Staff Present: Jim Flechtner, Interim Executive Director Mike Richardson, Interim COO Cheryl Spivey, CFO Mike McGill, CCO Karen Durso, Assistant to the Executive Director John Payne, Internal Auditor Frank Styers, Engineering Director Beth Eckert, Environmental Services Director Tom Morgan, Human Resources Director Nancy Johnson, Customer Service Director Julie McLawhon, Budget and Finance Manager Christene Pyne Mitchell, Engineering Manager Julia Vosnock, Procurement Manager Donna S. Pope, Clerk Attorney Present: Linda A. Miles, the Miles Firm, PLLC Guests: Kemp Burdette, Cape Fear RiverWatch Frank Holleman, Southern Environmental Law Center John Anzivino, Springsted CFPUA 10.9.2013 MINUTES Page 1 Guests, cont.: John Elliott, Duke Energy Progress Jim Iannucci, New Hanover County H. Juanita Clemmons Walter Kusek Mike Connelly Ryan McAlister, Business Alliance for a Sound Economy Kate Queram, Wilmington,Star News Jonathan Spiers,Port City Daily Sam Wilson,Lumina News Katie O'Rielly, WHQR, National Public Radio Call to Order, Determination of a Quorum, and Opening Comments: Mr. Quinn called the meeting to order and welcomed all attendees. He declared a quorum present. Mr. Anderson arrived at 9:05 a.m. Adoption of the Agenda: Mr. Flechtner requested the addition of an Engineering Report and the removal of Item 10 from the Consent Agenda. Ms. Kusek moved to adopt the agenda with those corrections. Mr. Rivenbark seconded the motion, and the Agenda was unanimously adopted. Approval of Minutes: Mr. Brumit presented the Minutes of the September 11, 2013, Authority meeting and moved for their approval. Ms. Kusek seconded the motion, and it passed unanimously. Public Comments: Mr. Burdette spoke regarding groundwater contamination in the Flemington area due to ash ponds from the electricity plant. He expressed appreciation for the Authority's increased monitoring of its drinking water supply from Flemington wells. He referenced portions of the proposed agreement between the Authority and Duke Energy Progress to extend a waterline from the Sweeney Water Treatment Plant to Flemington. Mr. Burdette questioned the Authority's paying for any portion of water line construction to Flemington and questioned the prohibition on future well drilling on the Authority's part. He urged the Authority to request that Duke clean up the ash ponds and leakage. CFPUA 10.9.2013 MINUTES Page 2 Mr. Holleman also spoke regarding groundwater and the proposed agreement with Duke Energy Progress. He believed that Section 5 of the agreement, which prohibited the Authority from ever drilling a well in the area, was an unprecedented provision and one that he had never seen in the state of North Carolina. He stated that the provision affected 17 square miles of land and asked what impact would be felt by private property owners in the affected area. He asked the Board to reconsider Section 5 of the agreement and to reconsider the public's paying for any portion of the project. He further requested that the Authority inform the N.C. Department of Natural Resources and Duke Energy Progress that the coal ash should be removed and placed in a lined landfill to preserve the groundwater and Sutton Lake for future generations. He stated that such a project was under way in the Wateree/Catawba River area of South Carolina. Mr. Holleman thanked the Authority for the initiative to build a water line from Sweeney to serve the Flemington customers. Mr. Kusek spoke on behalf of the PRM Environmental Group, which utilizes a humification process as a new technology for the decontamination of water and soil. He suggested that the process could be considered for the coal ash ponds at the Sutton Plant. Ms. Clemmons spoke regarding the Masonboro Sound area sewer project, which is part of the 1998 Annexation area. Ms. Clemmons thanked the Authority and staff for looking into the sealing of manholes, for planning a berm around the lift station, and for the community meeting on October 3 to discuss the project with residents. Ms. Clemmons questioned the notice given for the meeting. She said that only property owners in Phase 1 of the project received letters about the meeting. Mr. White reported that Ms. Clemmons had emailed him regarding the meeting and requested that staff respond. Mr. Flechtner reported that the October 3 meeting was in follow-up to the September meeting, when several Masonboro residents spoke and the Board requested an additional community meeting. The Authority shares residents' concerns for sensitive ecology of the area and strives to protect the environment. Approximately 70 citizens attended the meeting and provided comments and suggestions. Staff is researching the suggestions, several of which held merit, and will include them where possible. Mr. McGill reported that the meeting was held at the Parsley Elementary School and that preparation began after the September Board meeting, with notification of the community meeting approximately two weeks before the community meeting. Letters were mailed to affected property owners and to owners in a radius around the affected area. A detailed press release went to media outlets, including the Wilmington Star News and Port City Daily. The notice was placed on the Authority website about three days before the meeting. Mr. McGill reported that the Authority has a listserve designated on the website specifically for the Masonboro project. Mr. Quinn thanked staff for keeping people informed. CFPUA 10.9.2013 MINUTES Page 3 Consent Agenda: The Board considered the Consent Agenda, as follows: 1. Agreement with Coba Dentures, LLC, to pursue building and sewer construction prior to completion of the Whiskev Creek Pump Station upgrades, with no budget impact; 2. Contract amendivent with URS Corporation North Carolina, for additional construction phase services as part of the Smith Creek Alandale Pump ,Station Removal project, with a budget impact of 527,000; 3. Promissory Note with the North Carolina Clean Water State Revolving Fund for the Smith Creek A landale Pump Station Removal project, frith no budget impact at this time; 4. Promissory Note with the North Carolina Clean Water State Revolving Fund for the 30'x' ,Street,Sewer Rehabilitation project, with no budget impact at this time; 5. Promissory Note with the North Carolina Clean Water State Revolving Fund for the Between the Creeks Puiiip Station 28 project, with no budget impact at this time; 6 Promissory Note with the North Carolina Clean Water State Revolving Fund for the Greenfield Lake Outfall project, with no budget impact at this time; 7. Promissory Note through the American Recovery & Reinvestment Act of 2009 Revolving Loan program for the Aquifer ,Storage and Recovery project, with no budget impact at this tire; 8. Resolution authorizing condemnation proceedings for an easement on property owned by 2801 Blue Clav, LLC, related to the Kerr Avenue Great Loop Water Interconnect project, at a budget impact of S8,000; 9. Construction contract with R.F. Shinn Contractor, Inc., for the River Road Force Main Replacement project, at a budget impact of 5559,14 ; 10. Revisions to the Authoritv Bvlaivs; and 11. ReS'Ohitlan changing the title Of IYlterli?? Chief LKeClltive Qfflcer to Interim Executive Director. Mr. Brown requested consideration of his being excused from Item 8. He reported that a member of the firm for which he works had consulted with the property owner. Ms. Miles stated that the law requires a board member to vote unless he or she has a direct or indirect financial interest in an item. Mr. Brown did not have a financial interest in Item 8. Mr. White moved to approve the Consent Agenda, and Ms. Kusek seconded the motion. Mr. Sneeden asked to remove Items 1 and 9 for discussion. CFPUA 10.9.2013 MINUTES Page 4 Mr. White amended his motion to approve the Consent Agenda, except for Items 1 and 9. Mr. Rivenbark seconded the amended motion, and Consent Agenda items 2 through 8, and Item 11 were approved unanimously. Agreement irith ('oba L entures, LL(', to pursue building and seiner construction prior to completion of the Whiskev('reek Pump Station upgrades, with no budget impact. Mr. Sneeden stated that he did not want the Authority to set a precedent of allowing constriction to begin before capacity and service is available. Ms. Miles responded that staff had shared the concern and that the agreement had been written so that Coba Ventures assumed all risk. She did not believe it would be considered a precedent. Mr. Flechtner explained that the agreement allowed the developer to move forward with his project while the Authority finished upgrades. The upgrades are on target and close to completion. Mr. Sneeden moved to approve the Coba Ventures agreement. Mr. Rivenbark seconded the motion, and it passed unanimously. Construction contract with R.F. Shinn Contractor, Inc., for the River Road Force Main Replacement project, at a budget impact of S5 9Y 145; Mr. Sneeden asked for clarification of notes on the bid certification regarding illegible unit prices, calculation of the unit prices, and verification by staff. Mr. Styers explained that the bid form had been handwritten and that staff had "back-calculated" the unit prices from the total. Staff then provided the prices to the contract with a statement that the prices were Authority staff's understanding of the bid. The contractor submitted a statement agreeing to the prices as calculated by staff. Mr. Sneeden moved to approve the R.F. Shinn contract. Mr. Anderson seconded the motion, and it passed unanimously. Ms. McLawhon, Ms. Vosnock, and Ms. Johnson left the meeting after the Consent Agenda was approved. New Business: Attorney's Report. Ms. Miles had no items to report and recommended no closed session unless the meeting discussion dictated the need to enter closed session. Executive Director's Report. Mr. Flechtner referred the Board to the Environmental Performance Report in the Agenda packet. CFPUA 10.9.2013 MINUTES Page 5 Mr. Morgan presented the Safety Management Report and updated the Board on revised OSHA Recordable and DART (Days Away, Restricted, or Transferred) rates for the Authority. He reported that the Authority had applied for the North Carolina Department of Labor's Safety & Health Achievement Recognition Program (SHARP). During consultation with Department of Labor representatives, staff learned that the Authority had received the wrong standard industry code when it began reporting to the Department. The benchmarks that should have been used are higher than the ones the Authority had used. The correct Recordable rate is 7.04 instead of the 5.2 rate we had been using, and the correct DART rate is 4.21 instead of the rate of 3.1. The rates have been corrected, and the Authority's safety record has improved as a result. The Authority's Recordable rate for August 2013 was 3.12, and the DART was 2.73. Mr. Morgan thanked employees for their dedication and commitment to safety and stated that the safety record is a tribute to employees. Mr. Morgan answered clarification questions from Board members. Mr. Brumit asked if the improved safety figures had a cost correlation. Mr. Morgan reported that, since the Authority is self-insured for workers' compensation, fewer accidents meant lower workers' compensation costs. The safety record can also be reflected by a lower re-insurance rate. Mr. Wolfe asked to be excused from the meeting. Mr. Rivenbark moved to excuse him. Mr. Anderson seconded the motion, and it passed unanimously. Mr. Wolfe left the meeting at 9:50 a.m. Engineering Report. Mr. Styers reported that legislation recently passed which affected the regulations of the Mini-Brooks Act covering qualification-based selection of engineers, surveyors, and architects. The prior requirements allowed for projects costing less than $30,000 to be exempted from the Act without a reason being given and projects costing over $30,000 to be exempted by listing the reasons for exemption and having them adopted by a public body. Effective September 23, 2013, House Bill 857 change the exemption level to projects costing $50,001 or more, without requiring reasons for the exemption. Ms. Miles reminded the Board that the Authority exempted two projects at its September 11, 2013, meeting. The projects had not yet been contracted for, and staff was going to use the new guidelines in the qualification process. Ms. Miles reported that a local preference bill had been presented in the legislature but not voted upon and that it might return in the short session this winter. Mr. Flechtner reported that response time and local knowledge and expertise can be included in consideration of qualifications. CFPUA 10.9.2013 MINUTES Page 6 Executive Committee. The Executive Committee met on October 2, 2013, and reviewed several items. Mr. Flechtner presented one recommended by the Committee item for Board discussion and action, as follows: Water 1VIain CoYlnectlon Reif?bur. P,1?ment Agreement irith Duke Energy ProgreSS, Inc., in the amount of S2,250,000. Mr. Flechtner presented a proposed cost-sharing agreement between the Authority and Duke Energy Progress, Inc. (hereinafter Duke). The Authority owns and operates a groundwater system in the Flemington area located off Highway 421 in the Northwestern portion of New Hanover County. The system was constricted by New Hanover County in the 1980s. Duke operates the Sutton Plant to produce electricity in the same area. Sutton is being converted from coal production to the use of natural gas. Coal ash is a byproduct of the coal plant, and it has been placed in impoundment areas on the Duke property, known as "ash ponds." Duke's monitoring program has shown that groundwater within the ash pond compliance boundary has elevated levels of constituents. The Authority has two groundwater wells approximately 2,100 feet from Duke's compliance boundary. The Authority wells have continued to produce potable water in compliance with all North Carolina public water supply requirements. The Flemington system produces 100,000 gallons per day and serves residents and Duke's Sutton Plant. While not a large part of the water system, it is an important part of the Authority's service system. The Authority's Integrated Water Resources Master Plan shows the Flemington/421 area eventually being served by surface water from the Sweeney Water Treatment Plant. Duke agrees with the Authority that it is critical to ensure that Flemington residents have a sustainable, safe water supply. Authority staff and legal counsel have had discussions with Duke representatives and have developed a plan of action for the Flemington area which they believe would be beneficial to both parties. The agreement has both short-term and long-term components. The short-term plan will be the installation of two monitoring wells between Duke's ash ponds and the Authority wells. Regular monitoring will allow Duke and Authority staff to know if constituents migrate toward the Authority wells and to respond before constituents can reach the wells. The cost would be shared equally between Duke and the Authority, with Duke staff conducting the testing, as the monitoring wells would be on Duke property. CFPUA 10.9.2013 MINUTES Page 7 The long-term plan is the constriction of a water transmission main from the Sweeney plant to the Flemington distribution system, with the Flemington wells taken out of service. The project would involve a directional drill through rock beneath the river bed and a route along U.S. 421. To serve Flemington, the project would require an eight-inch waterline. The Authority's Master Plan shows a twelve-inch line to serve Flemington and the 421 corridor, and Authority staff recommends upsizing the line to 12 inches. The Authority would be responsible for the upsize costs. Duke would pay the first $1.5 million of project costs, and the Authority and Duke would equally share the additional costs up to $2.25 million, which is the estimated cost for installing an eight-inch line. The Authority would manage the design and constriction and be reimbursed by Duke for its share of project-related expenses. Staff anticipates the project will take a little more than two years to design and constrict to completion. The Authority's estimated cost would be: • 50 percent of the cost of installing the monitoring wells .................. $ 12,000 • 50 percent of costs exceeding $1.5 million .................................. 375,000 • 100 percent of the cost of upsizing the water main......................... 85,000 Total Authority estimate $472,000 The Capital Improvement Program has sufficient funds in water developer agreement projects to fund the upsize of the line and in water emergency repair projects to fund temporary wells. Mr. Flechtner and the Executive Committee recommended approval of the cost-sharing agreement with Duke Energy Progress, Inc. Mr. Flechtner answered questions from Board members. He clarified that Section 5 of the agreement prohibited the Authority from installing wells in the future but did not apply to other property owners in the area. The Authority has always planned to serve the 421 corridor with surface water for future use and does not anticipate a need to dig wells for groundwater in the area. Ms. Miles reported that the Authority's sharing in the cost of the monitoring wells provided a guarantee that staff can see the monitored results. Ms. Miles further reported that the Authority has no power to enforce cleanup of the ash ponds or groundwater but that she has contacted the Attorney General counsel who is handling the matter for the Department of Natural Resources. There are some legal actions against Duke in other parts of the state. Board members asked questions regarding the monitoring wells, the allocation of cost sharing, the possibility of filing a future claim against Duke, and the contract clause prohibiting the CFPUA 10.9.2013 MINUTES Page 8 Authority from digging wells in the Flemington area or anywhere along the 421 corridor. Ms. Miles advised that the Board could enter into a closed session to discuss negotiations. Mr. White stated that transparency of the Authority's decisions and a full understanding of the issue were overriding concerns, and the Board remained in open session. Ms. Wolf reminded the Board that the Authority does not have funding for the full project, and the line from Sweeney to Flemington is not identified on the ten-year capital plan. Messrs. Rivenbark and Brumit asked about the movement of the constituent plume and emergency plans if contamination reached the wells before the new line is completed. Mr. Flechtner explained that the monitoring wells would provide data about the constituent plume and that staff has emergency contingencies to protect public health and safety. Mr. Quinn recessed the meeting at 10:25 a.m. and reconvened the meeting at 10:40 a.m. Mr. Norris asked Ms. Miles for clarification of Section 11 of the contract. Ms. Miles advised that the Authority was not waiving its right to file an action but any action would be heard by a trial judge instead of a jury. Ms. Miles was comfortable with Section 11. She reminded the Board that the Authority does not have a lawsuit at this time but could have a potential claim in the future. Entering into the agreement with Duke could allow the Authority to advance a project it might otherwise be unable to do. Mr. Rivenbark stated that he had confidence in Authority staff and that water was needed along 421. He supported an agreement. Mr. White asked staff if capacity would be a concern for the Authority in future years if it was unable to drill wells in the area. Mr. Flechtner reported that the Sweeney plant has a current capacity of 35 million gallons per day and could be increased to 44 million gallons a day without any capital investment. Making the capacity available along 421 would be a good use of the Authority's investment in Sweeney, would advance Authority long-range plans for system growth, and, most importantly, provide water to 421 customers and protect public health. Mr. Quinn asked about the possibility of building a sewer line under the river, and Mr. Flechtner reported that there is capacity at the Northside Wastewater Treatment Plant and that it might be possible to place a wastewater line under the river at some savings, once a drilling location had been identified. Staff can research and develop a plan for wastewater service in the area. Mr. White moved to approve the contract conceptually with some exceptions. He expressed concern about the last sentence of Section 5 and also Section 12 regarding collaboration on press release and public statements. Ms. Miles reported that she had talked to Duke's attorney CFPUA 10.9.2013 MINUTES Page 9 regarding Section 12 and that Duke understood that the Authority is a public entity and state law will override Section 12. Mr. White moved to approve the agreement conceptually with the understanding that staff would continue discussions with Duke about Section 5. Mr. Sneeden seconded the motion. Ms. Miles reported that Mr. Sneeden had suggested language to be added to Section 5 stating that the Authority would not drill wells unless technology was created that allowed the wells to exist. Mr. White was very uncomfortable with the word "forever" in Section 5 of the agreement. He added that he appreciated Duke's stepping forward. He also appreciated the comments of Mr. Burdette of the Cape Fear River Watch and Mr. Holleman of the Southern Environmental Law Center. The Board discussed reviewing the agreement again in November. Ms. Miles reported that Duke might counter on Section 5 with a smaller geographic area or a number of years during which Authority wells would be prohibited. Mr. Sneeden stated that the State of North Carolina could order Duke to clean up the ash ponds in a way that would remove concerns for groundwater in the future. Mr. White amended his motion to authorize the Interim Executive Director to negotiate within the parameters of the Board's discussion and consensus regarding Section 5 and to execute the agreement. Mr. Sneeden agreed to the amended motion, and it passed unanimously. Human Resources Committee. Ms. Kusek introduced Mr. Anzivino of Springsted, and Mr. Anzivino updated the Board on the status of the Executive Director search. He had gathered information from Board members and key staff and met with the H.R. Committee in September to gain understanding of the Authority's needs. The job description and other pertinent information was posted on September 28, and the job posting will close on October 27. Springsted has received 20 applications and is networking with professionals in the utility field. Mr. Anzivino expects to have a short list of five or six applicants for the H.R. Committee to review in early to mid-November. He asked that Board members check their calendars for their availability to interview candidates. A stakeholders' meeting to provide feedback to Mr. Anzivino was scheduled for the afternoon of October 9, following the Board meeting. Mr. Anzivino reported that citizens could send comments to the Springsted website regarding qualifications. Mr. Quinn encouraged Board members to attend the afternoon session at the Authority offices. Long Range Planning Committee. Ms. Wolf and Mr. Styers reported on the Committee meeting of September 26, 2013. The Committee reviewed four items, as follows: CFPUA 10.9.2013 MINUTES Page 10 • Debt Recovery Allowance(DRA); • SerentiyPoint/Coba Ventures LLC, developer agreement, which had been approved on the Consent Agenda; • Alandale Pump Station and Upper Smith Creek Outfall removal project. The project may be scaled back because of the proximity of wells to the force main; and • Update on the Authority Fraud Hotline. The Committee report and minutes were available in the Agenda packet. Finance Committee. Mr. Brown reported that the monthly financial reports were in the Agenda packet, along with the minutes of the Committee meeting, and that he and Ms. Spivey were available to answer any questions. Old Business: There was no old business. Closing Comments: Mr. Rivenbark advised that he would be unable to attend the afternoon session. Recess of Regular Meeting: Mr. Brown moved to recess the meeting and to reconvene at 1:00 p.m. in the Authority offices at 235 Government Center Drive. Mr. Anderson seconded the motion, and it passed unanimously. The Authority recessed at 11:25 a.m. Continuation of Authority Meeting: Mr. Quinn reconvened the meeting and called the Authority to order at 1:02 p.m. in the Authority offices. Ms. Kusek, Ms. Wolf, and Messrs. Quinn, Brown, Brumit, White, Sneeden, and Anderson were in attendance, and Mr. Quinn declared a quorum present. Other attendees were: Burrows Smith, Business Alliance for a Sound Economy, Wilmington Cape Fear Homebuilders Kemp Burdette, Cape Fear Riverkeeper/Cape River Watch Sterling Cheatham, Wilmington City Manager Carey Disney Ricks, New Hanover County Public&Legislative Affairs Manager Chris Livengood Wilmington Regional Asso. Of Realtors Jim Gregson, N.C. Division of Water Resources Julie Wilsey, Wilmington International Airport CFPUA 10.9.2013 MINUTES Page 11 Tim Owens, Wrightsville Beach Town Manager Jonathan Spiers,Port City Daily Ryan McAlister, Business Alliance for a Sound Economy John Anzivino, Springsted, Inc. Linda Miles, the Miles Firm, Consulting Attorneys Staff Members: Tom Morgan, H.R. Director; Mike McGill, CCO; Donna S. Pope, Clerk Ms. Kusek introduced Mr. Anzivino, who explained his strong ties to North Carolina and his background in public sector management prior to becoming a consultant. Mr. Anzivino repeated the report he had provided to the full Board and sought input from those stakeholders present. Stakeholders expressed appreciation for the Authority's pro-active maintenance of infrastructure, concern for the environment, and good working relationships with other governmental units and regulatory agencies. Characteristics stakeholders believed were important for the Executive Director included good communication skills, a focus on system growth and increasing the customer base, knowledge of regulatory issues and the sensitive nature of running a utility in a low-lying coastal area, and having a balance of public and private sector knowledge. Mr. Anzivino asked clarification questions of stakeholders to fully understand their comments. He assured those present that their feedback would be beneficial in the Authority's search for an Executive Director. Ms. Kusek thanked those in attendance and assured them they could contact Board members with further thoughts. Adjournment: Ms. Wolf moved to adjourn. Mr. Anderson seconded the motion, and the Authority adjourned at 2:10 p.m. The next Board meeting will be the Annual meeting of the Authority and will be held on November 13, 2013, in the Lucie Harrell Conference Room, New Hanover County's Bruce Shell Administration Building, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board CFPUA 10.9.2013 MINUTES Page 12