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HomeMy WebLinkAboutCFPUA 8 13 2014 Regular Meeting CAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES AUGUST 13, 2014 Lucie Harrell Conference Room Regular Meeting 9:00 AM 230 GOVERNMENT CENTER DRIVE WILMINGTON, NC 28403 CALL TO ORDER II. DETERMINATION OF A QUORUM Ms. Kusek called the meeting to order at 9:00 AM and declared a quorum present. Attendee Name Organization Title Status Arrived Patricia Kusek Cape Fear Public Utility Chair Present Authority Jim Quinn Cape Fear Public Utility Vice Chair Present Authority James Brumit Cape Fear Public Utility Secretary Present Authority Mike Brown Cape Fear Public Utility Treasurer Present Authority Cindee Wolf Cape Fear Public Utility Present Authority William Norris Cape Fear Public Utility Present Authority Larry Sneeden Cape Fear Public Utility Excused Authority Kevin O'Grady Cape Fear Public Utility Present Authority Charlie Rivenbark Cape Fear Public Utility Present Authority Woody White Cape Fear Public Utility Present Authority Thomas Wolfe Cape Fear Public Utility Present Authority Jim Flechtner Cape Fear Public Utility Executive Director Present Authority Linda Miles Cape Fear Public Utility Attorney Present Authority Karen Durso Cape Fear Public Utility Assistant to the Executive Present Authority Director Donna Pope Cape Fear Public Utility Clerk/Executive Secretary to the Present Authority Board Frank Styers Cape Fear Public Utility Chief Operations Officer Present Authority Carel Cape Fear Public Utility Director of Engineering Present Vandermeyden Authority Cheryl Spivey Cape Fear Public Utility Chief Financial Officer Present Cape Fear Public Utility Authority Page 1 Minutes Authority Board August 13, 2014 Authority Beth Eckert Cape Fear Public Utility Director of EMD Present Authority Kristine (rick Cape Fear Public Utility Customer Service Director Present Authority Tom Morgan Cape Fear Public Utility HR Director Present Authority Kent Harrell Cape Fear Public Utility Engineering Manager Present Authority Gary McSmith Cape Fear Public Utility Engineering Manager Present Authority Mike McGill Cape Fear Public Utility Chief Communications Officer Present Authority Julia Vosnock Cape Fear Public Utility Procurement Manager Present Authority Melinda Hoggard Cape Fear Public Utility Financial Systems Analyst Present Authority Jim lannucci New Hanover County Present Heidi Cox Public Water Supply Present Dianne Williams Public Water Supply Present Roy H.Warren Public Speaker Present Marci Warren Public Speaker Present Winfield Smith Public Speaker Present Walt Siebenthan Data Flight Present III. ADOPTION OF AGENDA Mr. Rivenbark moved to adopt the day's Agenda. Mr. Norris seconded the motion, and the Agenda was adopted unanimously. Mr. Rivenbark moved to excuse Mr. Sneeden. Mr. Wolfe seconded the motion, and it passed unanimously. IV. APPROVAL OF MINUTES 1. Authority Board - Regular Meeting -Jul 9, 2014 9:00 AM Mr. Brumit moved to approve the Minutes of the July 9, 2014, Regular Authority meeting, as presented in the Agenda packet. Mr. O'Grady seconded the motion, and the Minutes were unanimously approved. RESULT: ACCEPTED[UNANIMOUS] MOVER: James Brumit,Secretary SECONDER: Kevin O'Grady AYES: Kusek, Quinn, Brumit, Brown,Wolf, Norris,O'Grady, Rivenbark,White,Wolfe EXCUSED: Sneeden V. PUBLIC COMMENTS Mr. Roy Warren of Sanford spoke regarding family property on Parmele Road. His father-in- law wished to deed just under one acre of his land to the Warrens to build a home. He Cape Fear Public Utility Authority Page 2 Minutes Authority Board August 13, 2014 requested a variance from Section 1.13 (b) of the Authority Ordinance for Mandatory Connection. Mr. Warren reported that the cost of running an eight-inch water main for more than 334 feet to the property would increase the cost of construction by$30,000-40,000. Mrs. Marci Warren explained that she had been hospitalized with a serious illness, and she wished to return to the area to live near her family so they could assist her. She asked for consideration from the Board. Mrs. Warren's father, Mr. Winfield Smith, stated that his family had owned the subject property since 1948 and that he had no plans to develop the entire 9.8 acre parcel, only to provide his daughter with a homesite. Mr. Walt Siebenthal, of Data Flight, informed the Board about aerial automated meter reading, which he believed could provide efficiencies to the Authority. VI. JULY 9, 2014 SPEAKER UPDATE Mr. Flechtner updated the Board on speaker concerns from the July 9, 2014, Authority meeting, as follows: 1. Mr. Cameron Moore of the Business Alliance for a Sound Economy spoke regarding capacity allocation ordinance revisions. Staff has met several times with Mr. Moore and will bring additional capacity allocation revisions to the Board through the Long Range Planning Committee. 2. Ms. Valura Ellison spoke regarding the Authority's base charges. Staff met with Ms. Ellison and explained the fees. Ms. Ellison understood the fees and appreciated staff taking the time to meet with her. 3. Mr. Daniel DeVane spoke to the Board regarding base charges and concerns on several accounts. Staff met with Mr. DeVane on several occasions and made sure that all of the Authority charges on the accounts were calculated correctly. Some of the charges were from the City for solid waste and stormwater. Most of the accounts are current. Staff continues to work with Mr. DeVane on one account. VII. CONSENT AGENDA Mr. Brown moved to approve all of the times on the Consent Agenda. Mr. Norris seconded the motion. There were no questions regarding any Consent item, and the Consent Agenda was unanimously approved. 1. Authorization for First South Bank to Become an Official Depository for CFPUA Funds Cape Fear Public Utility Authority Page 3 Minutes Authority Board August 13, 2014 RESULT: APPROVED[UNANIMOUS] MOVER: Mike Brown,Treasurer SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown,Wolf, Norris,O'Grady, Rivenbark,White,Wolfe EXCUSED: Sneeden 2. Authorization for the Executive Director to Execute a Contingency Based Contract with Utility Management Services, Inc. for Bill Review Services RESULT: APPROVED[UNANIMOUS] MOVER: Mike Brown,Treasurer SECONDER: William Norris AYES: Kusek, Quinn,Brumit, Brown,Wolf, Norris,O'Grady, Rivenbark,White,Wolfe EXCUSED: Sneeden 3. Conversion Account RESULT: APPROVED[UNANIMOUS] MOVER: Mike Brown,Treasurer SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown,Wolf, Norris,Sneeden,O'Grady, Rivenbark,White, Wolfe 4. Kerr Avenue Greater Loop Contract Amendment 5 RESULT: APPROVED[UNANIMOUS] MOVER: Mike Brown,Treasurer SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown,Wolf, Norris,O'Grady, Rivenbark,White,Wolfe EXCUSED: Sneeden 5. Hach Service Agreement Sole Source Service Agreement for 37 Hach Instruments at Sweeney Water Plant and Nano Water Plant RESULT: APPROVED[UNANIMOUS] MOVER: Mike Brown,Treasurer SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown,Wolf, Norris, O'Grady, Rivenbark,White,Wolfe EXCUSED: Sneeden 6. Personnel Policy Revisions - Inclement Weather or Area Emergencies Cape Fear Public Utility Authority Page 4 Minutes Authority Board August 13, 2014 RESULT: APPROVED[UNANIMOUS] MOVER: Mike Brown,Treasurer SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown,Wolf, Norris,O'Grady, Rivenbark,White,Wolfe EXCUSED: Sneeden 7. Personnel Policy Revisions - Section 2. Vacation Leave RESULT: APPROVED[UNANIMOUS] MOVER: Mike Brown,Treasurer SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown,Wolf, Norris, O'Grady, Rivenbark,White,Wolfe EXCUSED: Sneeden VIII.NEW BUSINESS A. Administrative Reports i. Attorney's Report Ms. Miles had no report and did not require a closed session discussion. ii. Executive Director's Report Mr. Flechtner referred the Board to the Environment and Safety reports in the Agenda. There were no questions regarding the reports. 1. Environmental Report 2. Safety Performance Report B. Committee Reports i. Executive Committee Ms. Kusek reported that the Committee met on August 6. The meeting time for the Committee has been moved from 2:00 PM to 11 AM on the first Wednesday of each month, following the Finance Committee meeting. 1. August 6, 2014 Executive Committee Minutes ii. Human Resources Committee Mr. Brumit reported that the Committee met on July 24 and asked Mr. Morgan to update the Board. Mr. Morgan reported that the Committee reviewed, unanimously approved, and recommended to the full Board two items that had been approved under Item 7 on the Consent Agenda. There were no questions from Board members regarding the Human Resources report. 1. Human Resources Committee - Regular-Jul 24, 2014 9:00 AM Cape Fear Public Utility Authority Page 5 Minutes Authority Board August 13, 2014 RESULT: NO ACTION REQUIRED iii. Long Range Planning Committee Mr. Vandermeyden reported that the Committee met on July 24 and discussed several topics. He referred Board members to the Committee minutes for a full list of discussion items. The Committee received a staff report and recommendation regarding Reclaimed Water use. North Carolina does not allow direct re-use of reclaimed water for potable purposes but allows some indirect uses. The treated effluent from the Northside Wastewater Treatment Plant is "Type 1" and meets state standards for indirect use of treated wastewater, known as reclaimed water. The Committee approved staff's goal of evaluating the use of reclaimed water for bulk customers and authorized the application for the appropriate permits from the State for its use. Mr. Rivenbark reminded the Board that the treated wastewater produced by the Authority is cleaner than the raw river water treated at the Sweeney Water Treatment Plant. He stated that the cost of water treatment and the scarcity of water would eventually lead to the use of reclaimed water as potable water. Ms. Miles reported that the Legislature recently passed laws allow for the mixing of reclaimed water with raw water for treatment as drinking water. The new statute requires that the reclaimed water be "Type 2," that it be mixed at no more than a 20 percent ratio with other raw water sources, and that the reclaimed water be stored in a basin separate from other treated water prior to being mixed with raw water and treated. Ms. Miles reported that the legislation is a big step for North Carolina. The Authority could develop a customer base for bulk reclaimed water to be used for landscape irrigation and cooling towers. Mr. Flechtner reported that representatives of the University of North Carolina at Wilmington has expressed interest in the use of reclaimed water as a bulk customer. A partnership with the University could result in the future construction of a reclaimed water line from the Northside Plant to campus, with the potential of other customers connecting to the line. Staff has not discussed the cost to be associated with bulk reclaimed water sales. 1. Long Range Planning Committee - Regular-Jul 24, 2014 3:00 PM RESULT: NO ACTION REQUIRED iv. Finance Committee Mr. Brown reported that the Committee met on July 31 and on August 6. The July 31 meeting was to interview candidates for the Authority's Fiscal Year 2015 Bond Sale. 1. Authorization for the Executive Director to Designate Citi as the Senior Managing Underwriter and Wells Fargo and Raymond James as the Co-Managers. Cape Fear Public Utility Authority Page 6 Minutes Authority Board August 13, 2014 Ms. Spivey reported that staff and the Authority's financial advisor had selected three firms to for full interviews. Messrs. Brown, Brumit, Rivenbark, and Wolfe joined staff and the advisor to conduct the interviews. The underwriter's primary role in a negotiated sale is to market bonds to investors on the Authority's behalf at the lowest interest rate. Citigroup has the most familiarity with the Authority, and has been recommended by the interview panel to serve as the Senior Underwriter. The panel recommended Wells Fargo and Raymond James to serve as co-managers, with the ability to reach additional markets. Mr. Brown moved to approve Citi as the Senior Managing Underwriter and Wells Fargo and Raymond James as co-managers. Mr. Rivenbark seconded the motion, and it passed unanimously. RESULT: APPROVED[UNANIMOUS] MOVER: Mike Brown,Treasurer SECONDER: Charlie Rivenbark AYES: Kusek, Quinn, Brumit, Brown,Wolf, Norris,O'Grady, Rivenbark,White, Wolfe EXCUSED: Sneeden 2. August 2014 Monthly Finance Report Ms. Spivey reported that Authority revenues are trending upward, and the FY15 Budget is in good standing. Mr. O'Grady stated that accounts receivables seemed high and asked how the receivables balances compared to those of other utilities of the same size. Ms. Spivey reported that bimonthly billing was part of the reason because individual bills are higher when meters are read every two months. The Authority collection rate is 98 percent, which within the same range as its peers, and the receivables balance has dropped from the Authority's early years of operation. Ms. (rick reported that collections staff actively pursues both active and inactive accounts. Active accounts 120 days or older go to the State debt setoff and to Penn Credit. Accounts that have aged out and need to be written off are covered in the reserves allowance. Ms. Spivey and Ms. (rick will prepare a full review of accounts receivables and collections for the Finance Committee and the full Board. Ms. Spivey reported that the Authority was included in a local bill that could provide a new collection method. IX. OLD BUSINESS There was no old business. X. AUTHORITY Q&A/CLOSING COMMENTS Cape Fear Public Utility Authority Page 7 Minutes Authority Board August 13, 2014 Mr. Wolfe asked if the aerial meter reading concept mentioned by Mr. Siebenthal could be applicable for Authority use. Mr. Flechtner reported that the Authority system is not yet ready for full remote reading. Meters are switched to AMR based on the reading routes, and 14,000 of the approximately 66,000 meters are now automatic read meters. Meter readers collect data from their trucks as they drive their routes and can stop and manually read a meter immediately when necessary. Aerial meter reading would be similar to the method used by the drivers with AMR but an employee would need to make a site visit if the aerial reading missed data. The AMR meters are compatible with the AMI process, which could collect data in real time from an office location. Mr. Wolfe asked what action could be taken to resolve the Warren and Smith family request for a variance from mandatory connection. Mr. Flechtner reported that the request had been reviewed by staff and the response was consistent with other similar property situations. Staff had made some suggestions for connection that could cost less. Ms. Miles reported that the Authority's formative ILA requires mandatory connection. The Authority Ordinance provides that an appeal goes to the Executive Director and the property owners have recourse through N.C. Superior Court if they do not agree with the Executive Director's decision. A court action would be the Warrens' next option. Board members supported mandatory connection, but several members expressed a desire to assist the Warrens. The Board discussed options to revise the Ordinance regarding appeals and discussed the rational basis for determining a separate class of customers. Ms. Miles explained that a separate class can be created with distinct parameters defining the class. All customers within a class must be treated the same. Ms. Miles reported that a variance or exception for mandatory connection must be based upon the land and not the circumstances of the individual. Mr. Flechtner answered questions regarding a less costly method of connection that could be used by the Warrens, which would involve their obtaining an easement across adjoining land to connect with the water line on Blue Clay Road. The installation of a smaller diameter line would also save money. Ms. Wolf reminded the Board that the lot division falls under the "minor subdivision" rule of the County. Mr. Flechtner reported that staff has less concern about an individual lot than with a parcel being divided over time. Mr. White agreed that was a reasonable concern that could be addressed by an agreement with the property owners including a contingency clause regarding a future sale or further subdivision of the land. Mr. Flechtner suggested that staff revisit the Ordinance, mandatory connection requirements, and parameters for creating a class of customers and bring the topic to the next Long Range Planning Committee meeting on August 28. The Board supported his recommendation. Mr. Warren thanked the Board and Authority staff for their time and consideration. XI. ADJOURNMENT Cape Fear Public Utility Authority Page 8 Minutes Authority Board August 13, 2014 There was no further business or discussion, and Mr. Norris moved to adjourn. Mr. Brown seconded the motion, and it passed unanimously. The Authority adjourned at 10:00 AM. The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, September 10, 2014. The meeting will be held in the Lucie Harrell Conference Room, New Hanover County Administration Building, 230 Government Center Drive, in Wilmington, North Carolina. The meeting will commence at 9:00 A.M. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority Page 9