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HomeMy WebLinkAboutCFPUA 3 12 2014 MEETING AND RATE HEARING CAPE FEAR PUBLIC UTILITY AUTHORITY MARCH 12, 2014 REGULAR MEETING AND RATE HEARING Members Present: Jim Quinn, Chairman Pat Kusek, Vice-Chair Jim Brumit, Secretary Mike Brown, Treasurer Tom Wolfe, Commissioner Charlie Rivenbark, Councilman Councilman Cindee Wolf Larry Sneeden Bill Norris Member Absent: Woody White, Commissioner Staff Present: Jim Flechtner, Executive Director Frank Styers, Chief Operating Officer Cheryl Spivey, Chief Financial Officer John Payne, Internal Auditor Karen Durso, Assistant to the Executive Director Mike Richardson, Water Resources Manager Ken Vogt, Wastewater Treatment Superintendent Kristi Irick, Customer Service Director Loria Potter, Billing & Collections Manager Beth Eckert, Environmental Management Director Tom Morgan, Human Resources Director Mike McGill, Chief Communications Officer Julie McLawhon, Budget & Finance Manager Melinda Hoggard, Financial Systems Analyst Kent Harrell, Engineering Manager Kevin Boyett, Centralized Maintenance Superintendent Donna S. Pope, Clerk Attorney Present: Linda A. Miles, the Miles Firm, PLLC Guests Present: Steve Thomas Jim Iannucci Diane Williams Heidi Cox Nancy Caison Donald Caison Paul Czesak Hank Thomas Jonathan Spiers, Port City Daily Ashley Withers, Wilmington Star News #&05! ’‘‘“ -).54%3 0 ¦¤ 1 Call to Order, Opening Comments, and Determination of a Quorum: Adoption of the Agenda: seconded the motion, and the Agenda was adopted unanimously. Approval of the Minutes: Mr. Brumit moved to approve the minutes of the February 19, 2014, Regular Meeting and the minutes of the February 19, 2014, Capital Improvements Workshop. Ms. Wolf seconded the motion, and it passed unanimously. Public Comments (General): Mr. Caison spoke regarding the Nano Water Treatment Plant wellfield, groundwater, and aquifers. Management Team Hires: Mr. Flechtner announced the promotion of Mr. Styers into the position of Chief Operations Officer and Deputy Executive Director. Mr. Styers Authority as Director of Engineering since 2008. He holds a Civil Engineering degree and Professional Engineer license. Mr. Flechtner announced the hiring of Ms. Irick as Customer Service Director. Prior to joining the Authority, Ms. Irick was the Chief Financial Officer and Superintendent of Business Services for the Greater Cincinnati Water Works in Cincinnati, Ohio, and the Customer Service Manager for Wichita Water Utilities, part of the city of Wichita, Kansas. Mr. Flechtner thanked Mr. Richardson for his service as the Interim Chief Operations Officer and Ms. Potter for her service as Interim Customer Service Director. Rate Review Presentation: Mr. Flechtner reported that staff is working on the budget for the fiscal year beginning July 1, 2014, and analyzing expenses to maintain costs in addition to efficiency measures already in place. only revenue, and the Authority must balance affordability for customers with system requirements. Ms. Spivey reviewed the basics of the rate model. Rates are set to cover operating expenditures, principal and interest on bonds or loans, known as debt service, and an additional 20 percent of debt service in order to issue future bonds. The water rates cover the cost of providing water, and the sewer rates cover the cost of providing sewer. The fixed charges cover the debt service on capital projects related to water or sewer. The volumetric rates cover the operating expenditures and cash-funded capital projects. Usage data from calendar year 2013 was used in the model to project rates. Ms. Spivey reviewed Authority consumption for calendar year 2013. Reduced consumption is a regional and national trend. Most variable costs are not influenced by consumption but may be tied to level of service. The largest fixed cost is debt service, and the largest variable cost is electricity. Ms. Spivey presented three potential rate models. Staff and the Finance Committee recommended a model that would assume a four percent continued decline in metered water in 2014-2015, with an increase of $0.25/1,000 gallons for water, and increase of $0.35/1,000 gallons for sewer, and no increase to the fixed charge. #&05! ’‘‘“ -).54%3 0 ¦¤ 2 Ms. Spivey and Mr. Flechtner answered clarification questions from Board members regarding the rate presentation. Public Hearing on Rates: Mr. Quinn opened the Public Hearing at 9:58 a.m. The following citizens spoke: Mr. Paul Czesak spoke and recommended operational efficiencies, bad debt collection, and stopping the use of fluoride as cost-saving measures in lieu of a rate increase. supported improvements to the water and sewer infrastructure. He stated that people would lower consumption in response to a rate increase. There were no other speakers, and Ms. Kusek moved to close the Public Hearing. Mr. Sneeden seconded the motion, and it passed unanimously. Mr. Quinn closed the Hearing at 10:07 a.m. Mr. Sneeden requested data from staff compa and sewer. Mr. Quinn reminded the Board that Mr. White would be unable to attend the meeting. Mr. Rivenbark moved to excuse Mr. White. Mr. Brown seconded the motion, and Mr. White was unanimously excused. Consent Agenda: The Board considered the Consent Agenda, as follows: 1. Resolution appointing Kristine Irick as Deputy Finance Director; 2. Advertisement and sale of surplus items on GovDeals, with donation to local non-profits if unsold; 3. Resolution and Revisions to the Surplus Personal Property Policy; 4. Contract with Public Works Equipment & Supply, Inc., for the purchase of a combination Vacuum Jetter Truck with trade-in of a 2007 Vactor 2100, at a budget impact of $313,702.65; 5. Authorization of Live Oak Bank as an Official Depository for Authority funds; and 6. Audit Contract for Fiscal Year 2014 with the firm of Thompson, Price, Scott, Adams & Company, at a budget impact of $31,720. Mr. Rivenbark asked for discussion on Items 2 and 6. He moved to approve Items 1, 3, 4, and 5. Mr. Brown seconded the motion, and it passed unanimously. Advertisement and sale of surplus items on GovDeals, with donation to local non-profits if unsold. Mr. Rivenbark asked about the procedure if large items such as vehicles do not sale. Ms. Vosnock reported that staff re-advertises such large items until sold. Mr. Rivenbark moved to approve the item. Mr. Brown seconded the motion, and it passed unanimously. Audit Contract for Fiscal Year 2014 with the firm of Thompson, Price, Scott, Adams & Company, at a budget impact of $31,720. Ms. Spivey and Mr. Payne answered clarification questions on the audit contract and the process mandated by the Local Government Commission for audits. Mr. Rivenbark moved to approve the item. Mr. Wolfe seconded the motion, and it passed unanimously. Ms. Vosnock and Mr. Boyett left the meeting. #&05! ’‘‘“ -).54%3 0 ¦¤ 3 New Business, Administrative Reports: Operations Report. Disinfection Byproducts Update. Mr. Richardson treatment facilities, the Sweeney surface water plant and the Nano groundwater plant, as required by the U.S. EPA and the N.C. Division of Environment and Natural Resources. Two disinfection byproducts that are regularly monitored are total trihalomethanes (TTHM) and haloacetic acid (HAA). TTHM is a byproduct of chlorine use, and HAA is a byproduct of cholorination, ozonation, or chloramination. Disinfection Byproduct levels vary with seasonal changes in source water, seasonal temperature changes, and plant and system operation. Water produced by the Sweeney plant has experienced elevated TTHM since 2009 and received a compliance waiver during the construction of the expanded plant. Compliance will begin in April 2015. The Authority contracted with Hazen & Sawyer to evaluate and study alternatives to reduce disinfection byproduct formation through treatment changes and distribution modification. The Authority will address disinfection byproducts through clearwell and tank aereation. Additional strategies that may be used are the blending of surface and groundwater, increased flushing, blending the water with water from the Aquifer Storage & Recovery system, and addition of powdered activated carbon (PAC) to the raw water entering the Sweeney system. The use of powder activated carbon would require a bulk facility, and there are two location options for the facility at Sweeney. Mr. Styers responded to a question at the February Board meeting regarding the use of alternate fuel sources on generators. He reported that the Authority has some generators that run on natural gas where natural gas in available and some small generators that will run on propane. Mr. Quinn recessed the meeting at 10:35 a.m. and reconvened at 10:50 a.m. Ms. Mies requested a closed session at the end of the meeting to discuss three lawsuits. Mr. Flechtner referred the Board to the Environmental and Safety reports in the Agenda packet and reported that staff was available to answer any questions. New Business, Committee Reports: Executive Committee. Mr. Quinn referred the Board to the Executive Committee minutes in the Agenda. Long Range Planning Committee. Ms. Wolf reported that the Committee did not meet in February because the CIP review had been completed. Mr. Styers presented the Capital Improvements Plan and budget for FY2015. Ms. Kusek moved to adopt the CIP. Mr. Rivenbark seconded the motion. Ms. Wolf commended staff in the use of Asset Management as an analytical tool in the CIP, and Mr. Quinn commended staff on the streamlined CIP. The motion passed unanimously. Finance Committee. Ms. Spivey referred the Board to the February financial records in the Agenda packet. The Finance report also included an analysis of the five largest active delinquent accounts. Ms. Spivey and Ms. Irick were available to answer questions. Old Business. There was no old business. Questions and Answers and Closing Comments. Mr. Rivenbark commented that the Authority rates are lower than what the City or County would have had to charge if they had kept water and sewer operations. Mr. Wolfe asked about subsidies the County had provided for water and sewer. Mr. Brumit asked Mr. McGill to explain the promotional grease can lids the Board had received. Mr. McGill explained that cooking grease can be poured into an empty can and the lid placed atop it and reused with another can after the first was filled and disposed of properly. The lids are an inexpensive educational tool, and 3,000 have been distributed to customers. #&05! ’‘‘“ -).54%3 0 ¦¤ 4 Ms. Kusek and Messrs. Norris and Brown thanked Ms. Spivey and Finance staff for an informative, easy to understand rate presentation. Closed Session. Mr. Rivenbark moved to enter closed session to discuss three cases: Point South Properties, LLC Telfair Summit LLC, and CB Snows Cut Landing, LLC v. CFPUA and New Hanover County; and Tommy Davis Construction Inc. v. CFPUA. Ms. Kusek seconded the motion, and it passed unanimously. The Board moved into closed session at 11:05 a.m. and received a report from Ms. Miles. Open Session and Adjournment. Ms. Wolf moved to return to open session. Mr. Rivenbark seconded the motion, and it passed unanimously. The Board returned to open session at 11:20 a.m. Mr. Rivenbark moved to adjourn. Ms. Kusek seconded the motion, and it passed unanimously. The Board adjourned at 11:21 a.m. The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, April 9, 2014, at 9:00 a.m. The Board will meet in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope, Clerk to the Board #&05! ’‘‘“ -).54%3 0 ¦¤ 5