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HomeMy WebLinkAboutCFPUA 11 10 2015 CAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES NOVEMBER 10, 2015 Lucie Harrell Conference Room Annual Meeting 9:00 AM 230 GOVERNMENT CENTER DRIVE WILMINGTON, NC 28403 I. CALL TO ORDER Ms. Kusek called the meeting to order and declared a quorum present. Mr. Norris moved to excuse Ms. Wolf and Mr. Quinn. Mr. Rivenbark seconded the motion, and it passed unanimously. Mr. Zapple moved to excuse Mr. White. Mr. Norris seconded the motion, and it passed unanimously. Attendee Name Organization Title Status Arrived Patricia Kusek Cape Fear Public Utility Chair Present Authority James Brumit Cape Fear Public Utility Vice-Chair Present Authority Mike Brown Cape Fear Public Utility Secretary Present Authority Larry Sneeden Cape Fear Public Utility Treasurer Present Authority Jim Quinn Cape Fear Public Utility Excused Authority Cindee Wolf Cape Fear Public Utility Excused Authority Charlie Rivenbark Cape Fear Public Utility Present Authority William Norris Cape Fear Public Utility Present Authority Kevin O'Grady Cape Fear Public Utility Present Authority Woody White Cape Fear Public Utility Excused Authority Rob Zapple 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 Leslie Ogilvie 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 Cape Fear Public Utility Authority Page 1 Minutes Authority Board November 10, 2015 Cheryl Spivey Cape Fear Public Utility Chief Financial Officer Present Authority John Payne Cape Fear Public Utility Internal Auditor Present Authority Beth Eckert Cape Fear Public Utility Director of EMD Present Authority Mike McGill Cape Fear Public Utility Chief Communications Officer Present Authority Julie McLawhon Cape Fear Public Utility Budget/Finance Manager Present Authority Kent Harrell Cape Fear Public Utility Engineering Manager Present Authority Gale Lyndon Present Bob Lyndon Present Heidi Cox Division of Environmental Present Quality April Adams Cherry Bekaert LLP Present II. DETERMINATION OF A QUORUM III. ADOPTION OF AGENDA Mr. Sneeden moved to adopt the Agenda. Mr. Norris seconded the motion, and it passed unanimously. IV. APPROVAL OF MINUTES 1. Authority Board - Regular Meeting - Oct 14, 2015 9:00 AM Mr. Brown moved to approve the October minutes. Mr. Norris seconded the motion, and it passed unanimously. RESULT: ACCEPTED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: William Norris AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White V. PUBLIC COMMENTS - 4 MINUTE LIMIT PER SPEAKER There were no public speakers. VI. SPEAKER UPDATE FROM THE OCTOBER 14, 2015 BOARD MEETING Mr. Flechtner reported on speaker concerns from the October meeting. He and Ms. Miles answered Board questions regarding mandatory connection for mobile home parks. Staff is reviewing the ordinance and will work with park owners to develop a methodology to moving the homes from septic to sewer in a phased, economical manner. The item will come to the Board through the Long Range Planning Committee. VII. AUDITOR'S PRESENTATION BY CHERRY BEKAERT & ANNUAL FINANCIAL REPORT BY CHERYL SPIVEY, CFO Cape Fear Public Utility Authority Page 2 Minutes Authority Board November 10, 2015 1. Annual Audit Report Ms. Spivey thanked Ms. McLawhon and the Finance team for their work with the auditors and on preparing the Comprehensive Annual Financial Report for FY2015. She introduced Ms. Adams of Cherry Bekaert, LLP, to present the Audit Report. Ms. Adams reported that the Authority received an unqualified opinion, which is the highest level of assurance that can be achieved. She reviewed the role of the external auditor and the required communications between the auditor and the Board. Ms. Adams explained the financial policies and accounts included in the audit and accounting standards applied. She thanked staff for their cooperation and preparation for the audit, stating that it is rare for auditors to arrive on site and find everything they need available at the beginning of an audit. There were no Board questions for Ms. Adams, and Ms. Kusek thanked her for the report. Ms. Spivey presented the Comprehensive Annual Financial Report (CAFR) for FY2015. The Authority had a strong financial year, with revenues 8 percent over budget and $2.5 million over FY2014. FY2015 expenditures were 90 percent of budget. Debt service was 93 percent of budget. Debt service is the largest expense and reflects the Authority's commitment to improving and maintaining its infrastructure. The year ended with $57 million in undesignated cash funds. The Authority retains a three month operating reserve, which equals $15.6 million. Ms. Spivey and Mr. Flechtner recommended maintaining $50 million in undesignated cash and transferring $7,000,000 to pay capital projects with cash, which would reduce future bond debt. Bond coverage for FY2015 was 1.77, the best coverage in the Authority's history. Ms. Spivey answered questions from Authority members regarding budget, expenditures, capital projects, debt coverage, and bond ratings. RESULT: REVIEWED VIII. ANNUAL REPORT PRESENTATION BY JIM FLECHTNER, EXECUTIVE DIRECTOR Mr. Flechtner presented the Annual Report for FY2015 and thanked Ms. Ogilvie and Mr. McGill for their work on the report. The Authority provides essential services to 200,000 people each day, while maintaining a strong financial performance and adding over 1,000 new water customers and over 700 new sewer customers. Mr. Flechtner explained the industry "five pillars" of basic sanitation, disease protection, fire protection, environmental protection, and economic development and outlined the ways in which the Authority supports those pillars. Ms. Kusek thanked all staff for their work and dedication running a 24/7 utility operation. Mr. Zapple congratulated Mr. Flechtner on the report and suggested that the five pillar concept could be used in public relations outreach. Mr. Flechtner will present the report to the County at a December Commissioners' meeting and to City Council in early 2016 Cape Fear Public Utility Authority Page 3 Minutes Authority Board November 10, 2015 IX. CONSENT AGENDA Mr. Zapple asked for more information on Item 5. Following clarification questions, Mr. Rivenbark moved to approve the Consent Agenda as presented. Mr. Zapple seconded the motion, and it passed unanimously. 1. Approval of BA#16-013 Reduction in City of Wilmington Capital Project Revenue and Appropriations for Project #09S015, Northern Route Force Main RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White 2. Approval of Budget Ordinance #16-012 for Sale of Capital Assets RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White 3. Approval of Budget Ordinance #16-004 to Reduce Kirkland Capacity Capital Project Funds Revenue & Appropriations RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White 4. FY16 Fleet Vehicle Replacements RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White 5. Ozone Generator Equipment and Installation Purchase Cape Fear Public Utility Authority Page 4 Minutes Authority Board November 10, 2015 RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White 6. Highfill Infrastructure Engineering, P.C., Amendment #1 RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White X. NEW BUSINESS A. Administrative Reports i. Attorney's Report Ms. Miles had no report for open session but requested a closed session to discuss two lawsuits. ii. Executive Director's Report Mr. Flechtner reported that the Southside Wastewater Treatment plant will be receiving the 2015 Operation and Maintenance Excellence Award for the Eastern Region from the North Carolina Section of the American Water Works Association and Water Environment Association. 1. Environmental Report The environmental report was in the agenda packet. RESULT: REVIEWED 2. Safety Performance Report Mr. Morgan presented the safety report and explained OSHA recordable incidents and DART rates. RESULT: REVIEWED B. Committee Reports i. Executive Committee 1. Executive Committee Meeting Minutes Cape Fear Public Utility Authority Page 5 Minutes Authority Board November 10, 2015 RESULT: REVIEWED 2. Memorandum of Understanding- State Health Plan Mr. Morgan presented the item, which will allow staff to move forward with exploring the option of enrolling employees in the State Health Plan. The plan can accept 10,000 participants from local governmental units with a limit of 1,000 participants from each enrolling unit. Following clarification questions, Mr. Brumit moved to approve the memorandum of understanding. Mr. Rivenbark seconded the motion, and it passed unanimously. Ms. Kusek recessed the meeting at 10:00 AM, and the Authority reconvened at 10:10 AM. RESULT: APPROVED \[UNANIMOUS\] MOVER: James Brumit, Vice-Chair SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White ii. Long Range Planning Committee 1. Long Range Planning Committee - Regular - Oct 22, 2015 3:00 PM RESULT: NO ACTION REQUIRED 2. House Bill 44 Impacts on Mandatory Water Connection Mr. Vandermeyden reported on items reviewed by the Committee at its October 22 meeting. Ms. Miles reported on a regulatory act passed by the North Carolina Legislature at the end of its session that enacted regulatory changes that affected many areas of local government. Of particular importance to water-sewer authorities were new rules regarding well permits that can affect mandatory connection and system growth. The rules go into effect on August 1, 2016. Ms. Miles is discussing the issue with the League of Municpalities and School of Government staff and has contacted the attorney who drafted the bill for the Legislature for clarification. She and Mr. Flechtner will be meeting with the local delegation members to discuss the regulation's potential impact on the Authority's system. Board members discussed the implications of the new rules. RESULT: REVIEWED Next: 12/17/2015 3:00 PM 3. Mandatory Connection for Mobile Home Parks Update Mobile home park connection will be further reviewed by staff and brought to the Board through the Long Range Planning Committee. Cape Fear Public Utility Authority Page 6 Minutes Authority Board November 10, 2015 RESULT: NO ACTION REQUIRED iii. Finance Committee 1. Finance Committee - Regular Meeting - Nov 4, 2015 9:00 AM RESULT: NO ACTION REQUIRED 2. November 2015 Monthly Finance and Customer Service Report Ms. Spivey presented the October financial data. Water consumption is equal with the same time last year. Revenues and expenditures are on target. RESULT: REVIEWED 3. Security Modifications Ms. Irick presented staff recommendations to enhance the Customer Service department, particular the lobby area. The Engineering Department has redesigned the lobby to provide more security for staff and a private area for customers who need to discuss account information in depth with staff. The cost of renovations is expected to be $70,000, and staff recommended the hiring of an unarmed contract security guard at $35,000. Following clarification questions, Mr. Sneeden moved to approve the modifications and the supporting budget transfer. Mr. O'Grady seconded the motion, and it passed unanimously. RESULT: APPROVED \[UNANIMOUS\] MOVER: Larry Sneeden, Treasurer SECONDER: William Norris AYES: Kusek, Brumit, Brown, Sneeden, Rivenbark, Norris, O'Grady, Zapple EXCUSED: Quinn, Wolf, White 4. Sewer Lien Update Ms. Irick reported that two lien notices have been published in the í╜▄▓╜■┼Ċ◘■ {ĊĂʼnỚbśŎℓ, and a third is ready to be published. Liens can be filed 30 days after the publication. The total amount of liens is $299,000 for active, sewer-only accounts. RESULT: REVIEWED iv. Communications Committee 1. Communications Committee Minutes The Committee minutes were in the agenda packet, and there was no discussion. Cape Fear Public Utility Authority Page 7 Minutes Authority Board November 10, 2015 RESULT: REVIEWED XI. OLD BUSINESS There was no old business. XII. AUTHORITY Q&A / CLOSING COMMENTS Mr. Brumit reminded the Board of evaluation materials to be completed and returned by the December Authority meeting. XIII. CLOSED SESSION Mr. Brumit moved to enter closed session to discuss and provide direction to legal counsel on intervention in an Appeal by the Fayetteville Public Works Commission of an Environmental Management Commission decision granting an Interbasin Transfer and on the C.B. Windswept, Point South, and Sanco cases against the Authority. Mr. Norris seconded the motion, and it passed unanimously. The Board entered closed session at 10:50 AM. Mr. Norris moved to return to open session. Mr. Rivenbark seconded the motion, and it passed unanimously. The Board returned to open session at 11:31 AM. XIV. ADJOURN Mr. Rivenbark moved to adjourn. Mr. Norris seconded the motion, and it passed unanimously. The Board adjourned at 11:32 AM. The next regular CFPUA meeting will be Wednesday, December 9, 2015. The meeting will be held in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington, North Carolina, and will commence at 9:00 AM. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority Page 8