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HomeMy WebLinkAboutCFPUA 9 10 2014 Regular Meeting CAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES SEPTEMBER 10, 2014 Lucie Harrell Conference Room Regular Meeting 9:00 AM 230 GOVERNMENT CENTER DRIVE WILMINGTON, NC 28403 I. CALL TO ORDER II. DETERMINATION OF A QUORUM Ms. Kusek called the meeting to order at 9:00 AM and declared a moved to excuse Mr. White. Mr. Rivenbark seconded the motion, a Mr. Rivenbark reported that Mr. Brown would be a few minutes late. Attendee Name Organization Title Status Arrived Departed Patricia Kusek Cape Fear Public Chair Present Utility Authority Jim Quinn Cape Fear Public Vice Chair Present Utility Authority James Brumit Cape Fear Public Secretary Present Utility Authority Mike Brown Cape Fear Public Treasurer Present 9:07 Utility Authority AM Cindee Wolf Cape Fear Public Present 10:45 Utility Authority AM William Norris Cape Fear Public Present Utility Authority Larry Sneeden Cape Fear Public Present Utility Authority Kevin O'Grady Cape Fear Public Present Utility Authority Charlie Rivenbark Cape Fear Public Present Utility Authority Woody White Cape Fear Public Excused Utility Authority Thomas Wolfe Cape Fear Public Present Utility Authority Jim Flechtner Cape Fear Public Executive Director Present Utility Authority Linda Miles Cape Fear Public Attorney Present Utility Authority Karen Durso Cape Fear Public Assistant to the Executive Present Utility Authority Director Donna Pope Cape Fear Public Clerk/Executive Secretary Present Utility Authority to the Board Cheryl Spivey Cape Fear Public Chief Financial Officer Present Utility Authority Frank Styers Cape Fear Public Chief Operations Officer Present Cape Fear Public Utility Authority Page 1 Minutes Authority Board September 10, 2014 Utility Authority Carel Vandermeyden Cape Fear Public Director of Engineering Present Utility Authority John Payne Cape Fear Public Internal Auditor Present Utility Authority Melinda Hoggard Cape Fear Public Financial Systems Analyst Present Utility Authority Kristine Irick Cape Fear Public Customer Service Director Present Utility Authority Julia Vosnock Cape Fear Public Procurement Manager Present Utility Authority Steve Mongeau Cape Fear Public Sr. Project Manager Present Utility Authority Kent Harrell Cape Fear Public Engineering Manager Present Utility Authority Kevin Boyett Cape Fear Public Maintenance Supervisor Present Utility Authority Lawrence Caddell Cape Fear Public IT Helpdesk Technician Present Utility Authority Heidi Cox State of North Present Carolina Dianne Williams State of North Present Carolina Phil Tripp Present Dr. Arnold Sobol Present Mr. and Mrs. Donald Present DeVane Lydia Coutre Wilmington Star Present News Kathleen Riely Present III. ADOPTION OF AGENDA Mr. Rivenbark moved to adopt the day's Agenda. Mr. Norris secon Agenda was unanimously adopted. IV. APPROVAL OF MINUTES 1. Authority Board - Regular Meeting - Aug 13, 2014 9:00 AM Mr. Brumit presented the Minutes of the August 13, 2014, Regular Mee to approve the Minutes. Mr. Wolfe seconded the motion, and the approved and accepted unanimously. RESULT: ACCEPTED [UNANIMOUS] MOVER: James Brumit, Secretary SECONDER: Thomas Wolfe AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White V. PUBLIC COMMENTS - LIMIT: 4 MINUTES PER SPEAKER Cape Fear Public Utility Authority Page 2 Minutes Authority Board September 10, 2014 There was no public comment. VI. AUGUST 13 SPEAKER UPDATE Mr. Flechtner updated the Board on speakers from the August meeting. The first three speakers addressed one topic. Staff and the Long Range Planning Ordinance and recommended a revision, which would be presented i The fourth speaker from August was a businessman representing an aerial meter r company. Aerial reading might be an option to consider in the out program is complete but would not be beneficial to the Autho Authority members had no questions for Mr. Flechtner. VII. CONSENT AGENDA Ms. Wolf moved to approve the Consent Agenda. Mr. Norris second Consent Agenda was unanimously approved in its entirety. 1. Connection Deferral Policy Revision RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 2. Recommended Changes to the Definition of Development RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 3. Fee Schedule Revision for Water Tower Leases RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 4. Surplus Items to be Sold on GovDeals Cape Fear Public Utility Authority Page 3 Minutes Authority Board September 10, 2014 RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Rivenbark, Wolfe EXCUSED: White 5. Emergency Construction Services Contract RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 6. Authorization to Bid and Purchase Sole Source Smith and Loveless Assemblies RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, RivWolfe EXCUSED: White 7. Sole Source Sensus Water Meter Purchase RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 8. Sole Source Itron Transmitters for Meter Reading RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 9. Purchase of Additional Maximo Licenses from Preferred Partner Cape Fear Public Utility Authority Page 4 Minutes Authority Board September 10, 2014 RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 10. Sole Source SCADA Units RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 11. Purchase of Five New Replacement 4WD Utility Trucks RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White 12. Contract Amendment for Additional Engineering Design Services wi International Company RESULT: APPROVED [UNANIMOUS] MOVER: Cindee Wolf SECONDER: William Norris AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Riv EXCUSED: White VIII. NEW BUSINESS A. Administrative Reports i. Engineering Report 1. Condemnation for 5 Ft. Temporary Construction Easement in Heritage Park, 106 Bermuda Drive Mr. Vandermeyden presented the item. The subject easement is th 50 temporary easements needed for construction of the Heritage P that has not been obtained. Staff has received no response fromowners. The easement appraised at $200 for the land and $600 for landsca the property to its original state. If the condemnation is app will be for Ms. Miles to send a 30-day notice letter. Cape Fear Public Utility Authority Page 5 Minutes Authority Board September 10, 2014 Mr. Norris moved to proceed with condemnation for the temporary construction easement. Mr. O'Grady seconded the motion, and it was approved unanimously. RESULT: ADOPTED [UNANIMOUS] MOVER: William Norris SECONDER: Larry Sneeden AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Rivenbark, Wolfe EXCUSED: White ii. Attorney's Report Ms. Miles had no report but requested a Closed Session to discus condemnation action. iii. Executive Director's Report Mr. Flechtner presented the Environmental and Safety Performance reports. 1. Environmental Report There were no questions on the Environmental Report. 2. Safety Performance Report Mr. Morgan reported that the July report indicated a slight upti incidents and DART (Days Away, Restricted Activity). There were six incidents in July, including three insect stings or bites and one back strain were placed on restricted activity. There was only one injury i Management is addressing safety concerns and employee awareness. B. Committee Reports i. Executive Committee The Committee had no report. Ms. Kusek referred Board members t the Executive Committee meeting of September 3. 1. Executive Committee Minutes ii. Long Range Planning Committee Mr. Sneeden asked Mr. Vandermeyden to update the Board on the Committee's August 28 meeting. Mr. Vandermeyden reported that the Committee discus land near Sidbury Road. The property has been identified in mas sewer services but is currently beyond the Urban Services Boundary. The Committee directed staff to prepare a resolution supporting expansion of w in the northeastern part of the County. The Committee will revi September 25 meeting. Cape Fear Public Utility Authority Page 6 Minutes Authority Board September 10, 2014 1. Long Range Planning Committee - Regular - Aug 28, 2014 3:00 PM RESULT: NO ACTION REQUIRED 2. Recommended Changes to the Capacity Allocation Ordinance Mr. Vandermeyden summarized the key changes to the Capacity Allo Ordinance. The Committee recommended the following revisions: 1. Reduce the threshold for an additional 20,160 gallon phased allo from 70 percent of building permits being issued to 50 percent. 2. Reduce the threshold for capacity reservation through an SDC pay agreement from 40,320 to 30,240 gallons per day. 3. Identify the characteristics of basins eligible for capacity res SDC Agreement as being those with available capacity no less tha with at least 20,160 gpd remaining in the basin and available for other projects immediately after any SDC Agreement. Authority members expressed concern that the last developer who capacity could be responsible for upgrades to increase capacity. Vandermeyden explained that the SDC Agreement is only one tool available for obtaining capacity. Ms. Wolf added that staff should be aware o limited capacity and have plans for expansion through the Author Wolfe commented that the availability of capacity could be an im component in a developer obtaining financing for a project. Following clarification questions, Mr. Sneeden moved to approve recommended changes to the Capacity Allocation Ordinance, Append Sections 7 and 8. Ms. Wolf seconded the motion, and it passed unanimously. RESULT: APPROVED [UNANIMOUS] MOVER: Larry Sneeden SECONDER: Cindee Wolf AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Rivenbark, Wolfe EXCUSED: White iii. Finance Committee Mr. Brown asked Ms. Spivey to present the Committee report. 1. Finance Committee - Regular Meeting - Sep 3, 2014 9:00 AM Cape Fear Public Utility Authority Page 7 Minutes Authority Board September 10, 2014 RESULT: NO ACTION REQUIRED 2. $75 Million Revenue and Refunding Bonds - Adoption of Preliminary Findings Resolution Ms. Spivey presented the Preliminary Findings Resolution for the 2014 Bond sale. The Authority will issue both "new money" bonds and refund bonds the City in 2005. The new money bonds equal $23,000,000 which will be used for pro meet expanding needs for the Authority system and to ensure thathe system remains in compliance with all State and federal requirements. -year capital improvement plan. Many of the projects support the Authority in fulfilling the req Consent Decree with the Environmental Protection Agency. The followi projects will be funded through the 2014 new money bonds. 1. Replacement and rehabilitation of wastewater and water mains and manholes at a cost of $8.8 million. 2. Partnership with New Hanover County to construct sewer, pump stations, and force mains to serve the areas of Marquis Hills an which the County has identified as existing neighborhoods with f s approximately $4.3 million. 3. Construction of water transmission mains to improve hydraulics, customers, and improve water interconnections at a cost of appro million. 4. The decommissioning of the Walnut Hills wastewater treatment plant and construction of sewer transmission infrastructure to direct Northside Wastewater Treatment Plant at a cost of approximately 5. Rehabilitation of concrete clear wells at surface water treatmen a cost of approximately $2.7 million. 6. Replacement and upgrade of water meters throughout the service a to improve reading accuracy and convert from a primary manual re an automated read system at a cost of approximately $2.4 million Based on the most recent estimates provided by the underwriter, the annual debt service expenditures to fund the projects will be approxima for the current fiscal year and approximately $1.4 million per y years (FY16-FY40). Cape Fear Public Utility Authority Page 8 Minutes Authority Board September 10, 2014 The Bond issue includes the refunding of City bonds. In the current bond market, the Authority can reduce its debt service by refunding $50,000,000 of revenue bonds that were issued by the City in 200 the most recent estimates provided by the underwriter, the savings are approximately $200,000 for the current fiscal year and between $ $500,000 per year over the next 19 fiscal years (FY16-FY34), when the bonds will be paid in full. The Finance Committee recommended the adoption of the Revenue and Refunding Bond Resolution authorizing the issuance of bonds not $75,000,000 to finance the costs of the projects, to refund the pay the costs of issuing the 2014 Bonds, and, if necessary, to f reserve and making preliminary findings in support of the Bond issuance. The Resolution further approves the following financing team: ( Poe Adams & Bernstein LLP, Raleigh, North Carolina, as bond coun Citigroup Global Markets Inc. of Cary, North Carolina, Wells Fargo Bank, National Association, of Charlotte, North Carolina, and Raymond James & A Richmond, Virginia, as underwriters (3) approves the selection b Underwriters of Womble Carlyle Sandridge & Rice, PLLC, of Raleigh, North Charlotte, North Carolina, as feasibility consultant; and (6) re National Association of Charlotte, North Carolina, as trustee for The Resolution authorizes the Chief Financial Officer, with advi Executive Director of the Authority and bond counsel, to file an the North Carolina Local Government Commission for its approval of the issuance of the 2014 Bonds, and the Resolution authorizes the Ch Executive Director, and the Chief Financial Officer to do any an necessary to complete the steps necessary for the issuance of the 2014 Bonds. Supporting documentation for the agenda item included the Financ Mr. Rivenbark moved to adopt the Bond Resolution. Mr. Wolfe sec motion, and it passed unanimously. Ms. Spivey reported that representatives of the rating agencies Standard and Poors and Moody's will visit the Authority offices on October 10 Board members are invited to meet agency representatives and ass answering their questions. The Bonds will sell at the end of October, closing is scheduled for December 3, and funds will be transferred to the Authority at that time. Cape Fear Public Utility Authority Page 9 Minutes Authority Board September 10, 2014 RESULT: ADOPTED [UNANIMOUS] MOVER: Charlie Rivenbark SECONDER: Thomas Wolfe AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Rivenbark, Wolfe EXCUSED: White 3. New Customer Financing Policy Ms. Irick reviewed the Customer Financing procedures used by sta proposed Customer Financing Policy. With mandatory connection r staff expects to see increased interest in financing connection fees and System Development Charges. A customer can finance the cost of connecting to CFPUA services development charges (SDC). Depending on the available services, may request loan assistance for water or sewer services and, in some cases, both services. In order to obtain a loan, the customer must be the p and occupy the property. The customer pays 10 percent of the re a down payment, the meter set fee, if applicable, and the cost of recording the deed of trust with the County Register of Deeds. Financing term of the balance of the loan for an eight-year term. CFPUA offers financing to all customers regardless of credit worthiness and credit scores are t checked prior to approval of the loan. Subordinations have been approv Authority retains its place in the line of mortgage holders. Lo new owners have not been allowed. The loan program is similar t previously offered by New Hanover County. The current fees associated with water service are a system deve of $1,920 and a $2,100 connection fee, which includes a $250 met current fees for sewer service are a system development charge od a connection fee of $2,460. Ms. Irick outlined the amount due at amount that would be billed bimonthly per service based upon cur A deed of trust secures the Authority's interest in the propert must be satisfied when the property is sold. When a loan becomes delinquent, the delinquent balance is sent to debt setoff and a third party There are currently 1,163 loans outstanding totaling $315,574, w delinquencies. To date, collection efforts have been limited to debt setoff and referral to collections. Staff recommended a formalized loan policy to provide clear guid administration of the loan program and to protect the Authority loss. The development of a delinquent collection process for the loans would help to ensure equity for existing customers who pay their bills Additions to the policy for future loans would include the disco Cape Fear Public Utility Authority Page 10 Minutes Authority Board September 10, 2014 service to the property if loan payments are more than 30 days delinquent. Services will be disconnected if the Authority is not made whole check, dishonored bank draft, or a dishonored credit card payme business days of the occurrence. Prior to loan approval, any a the customer already has with the Authority must be in good standing Ms. Irick, Ms. Spivey, and Ms. Miles answered questions about lo subordination, payoff of the loan when a property is sold, and t foreclose on a deed of trust or recover if a property is foreclosed upon or the owner declares bankruptcy. Board members discussed how to balance the need for a financing to mandatory connection with protecting Authority ratepayers fro of delinquencies. Ms. Spivey reminded the Board that the policy had not been formally adopted and it would be a good time to address any conc After discussion, Mr. Quinn moved to amend the loan policy to wo loans subordinated in the future to follow the new loan guidelines, being current at the time of subordination, and being subject to disconnection current. After further discussion, Mr. Quinn restated his moti seconded it. Mr. Brown suggested that, if the policy were approved, staff implement and monitor it closely, and bring back to the Board for further revi was detrimental to customers. Ms. Kusek called for a vote on the subordination amendment, and amendment was approved unanimously. Mr. Quinn moved to adopt the amended policy. Mr. Norris seconded the motion, and it passed unanimously. RESULT: APPROVED AS AMENDED [UNANIMOUS] MOVER: Jim Quinn, Vice Chair SECONDER: Cindee Wolf AYES: Kusek, Quinn, Brumit, Brown, Wolf, Norris, Sneeden, O'Grady, Rivenbark, Wolfe EXCUSED: White 4. September 2014 Finance Report The August financial data was in the Agenda packet. There were from Board members. Ms. Irick reviewed the Accounts Receivables by type of service a charges. Supporting documentation was provided in the Agenda packet. Out of Cape Fear Public Utility Authority Page 11 Minutes Authority Board September 10, 2014 approximately $12,000,000 in current receivables, 68.9 percent i days old, 59 percent is for current charges, and 6.4 percent is three years and will be written off. Ms. Irick and Ms. Spivey answered questions from Board members. Ms. Spivey reported that water consumption has risen and sales a higher than the same period in 2013. Sales are 4.6 percent high Board adopted the current rates. IX. OLD BUSINESS There was no Old Business. X. AUTHORITY Q&A / CLOSING COMMENTS There were no questions or closing comments during this period. XI. CLOSED SESSION Mr. Rivenbark moved to go into closed session to discuss the Fal Wolfe seconded the motion, and it passed unanimously. The Author at 10:20 AM, and Ms. Kusek called for a recess. The Authority r 10:30 AM. XII. ADJOURNMENT Ms. Wolf moved to return to open session. Mr. Norris seconded the motion, and it passed unanimously. The Authority returned to open session at 10:45 AM from the meeting. Mr. Rivenbark asked Mr. Flechtner for an update on an issue a de regarding City and Authority design regulations. Mr. Flechtner reported that a l- routed to avoid trees and that staff strives to be flexible in a The Board briefly discussed City and County planning and the Urb Mr. Quinn moved to adjourn. Mr. Norris seconded the motion, and the Autho adjourned at 10:55 AM. The next regular meeting of the Cape Fea be Wednesday, October 8, 2014. The Board will meet in the Lucierence Room, New Hanover County Building, 230 Government Center Drive, Wilmin the meeting will begin at 9:00 AM. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority Page 12