Loading...
HomeMy WebLinkAboutCFPUA 12 9 2015 CAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES DECEMBER 9, 2015 Lucie Harrell Conference Room Regular Meeting 9:00 AM 230 GOVERNMENT CENTER DRIVE WILMINGTON, NC 28403 I. CALL TO ORDER Ms. Kusek called the meeting to order at 9:00 AM with all Authority members present. II. DETERMINATION OF A QUORUM 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 Present Authority Cindee Wolf Cape Fear Public Utility Present 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 Present 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 Karen Durso Cape Fear Public Utility Property Acquisition Specialist Present Authority Donna Pope Cape Fear Public Utility Clerk/Executive Secretary to the Present Authority Board Cheryl Spivey Chief Financial Officer Cape Fear Public Utility Present Authority Frank Styers Cape Fear Public Utility Chief Operations Officer Present Authority Carel Vandermeyden Cape Fear Public Utility Director of Engineering Present Cape Fear Public Utility Authority Page 1 Minutes Authority Board December 9, 2015 Authority Leslie Ogilvie Cape Fear Public Utility Assistant to the Executive Present Authority Director Kristine Irick Cape Fear Public Utility Customer Service Director Present Authority Beth Eckert Cape Fear Public Utility Director of EMD Present Authority Tom Morgan Cape Fear Public Utility HR Director Present Authority John Payne Cape Fear Public Utility Internal Auditor Present Authority Mike McGill Cape Fear Public Utility Chief Communications Officer Present Authority Julie McLawhon Cape Fear Public Utility Budget/Finance Manager Present Authority Julia Vosnock Cape Fear Public Utility Procurement Manager Present Authority Kent Harrell Cape Fear Public Utility Engineering Manager Present Authority Viktoriya Cape Fear Public Utility IT Help Desk Technician Present Rumyantseva Authority Richard King City of Wilmington Present Jim Iannucci New Hanover County Present Heidi Cox Division of Water Resources Present Tony Boahn McKim & Creed Present III. ADOPTION OF AGENDA Mr. Norris moved to adopt the Agenda. Mr. Rivenbark seconded the motion, and the Agenda was adopted unanimously. IV. APPROVAL OF MINUTES 1. Authority Board - Annual Meeting - Nov 10, 2015 9:00 AM Mr. Brown moved to accept the Minutes of the November 10, 2015, Annual Meeting. Mr. Norris seconded the motion, and the Minutes were uannimously approved. RESULT: ACCEPTED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: William Norris AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple V. PUBLIC COMMENTS - 4 MINUTE LIMIT PER SPEAKER There were no public speakers. VI. PRESENTATION 1. GFOA Distinguished Budget Presentation Award Cape Fear Public Utility Authority Page 2 Minutes Authority Board December 9, 2015 Mr. Brown, Chair of the Finance Committee, presented the Government Financial Officers' Association Distinguished Budget Presentation Award to staff and recognized Ms. McLawhon and Ms. Ogilvie for their work on the budget document. The award is the highest form of recognition for governmental budgeting. RESULT: REVIEWED 2. Financial Parameters Policies and Guidelines Ms. Spivey presented an overview of the Authority's financial policies and practices and explained their relationship to bond ratings. She reported that 40 percent of the bond rating is based upon the policies and practices. The Authority has a AA rating from both Moody's and Standard & Poors. The Authority's current budgeting practice uses a 1.20 debt coverage ratio, with the budget created for operation under less than optimal conditions. This budgeting practice allows departments a margin to use if needed, and departmental managers have proven that they do not spend above their needs. This budgeting method has historically produced cash at year's end that has provided a greater debt coverage than the budgeted 1.20. For the past five years, the debt coverage has been 1.54 to 1.77. Cash generated can be used for pay-go capital, reducing borrowing through bonds. There are three primary factors both rating agencies review when determining the rating: debt coverage; liquidity or cash on hand; and debt. Moody's compares debt to revenue, and Standard & Poors compares debt to net capital assets. Liquidity is the Authority's greatest strength in determining its AA rating. Ms. Spivey presented two questions for Board consideration: 1. Should the Authority continue the current practices? 2. Should any of the current practices become Board-adopted policies? Ms. Spivey reported that rating agencies have confidence in written policies, but that budgeting policies could restrain the Authority's ability to function under less than optimal conditions. She reported that the current practices have worked well for the Authority, providing a margin of debt coverage favored by the rating agencies, while allowing flexibility for daily operations. The adoption of a policy to budget for debt coverage greater than 1.2 could support the reduction of debt balance. Ms. Spivey answered questions from Board members regarding debt coverage and the Authority's year-end cash margin. Board members discussed the value of formal policies in relation to bond ratings and the use of pay-go capital versus bond funding. The Board agreed that the amount of cash retained by practice or policy warranted further discussion. Board members provided feedback to staff for further discussions. They requested data on the cost Cape Fear Public Utility Authority Page 3 Minutes Authority Board December 9, 2015 versus savings to be realized from a higher bond rating and information regarding the effect on rates. They also requested the potential effect on rates of using a portion of the $50 million currently maintained for liquidity for capital project pay-go. RESULT: REVIEWED VII. CONSENT AGENDA Mr. O'Grady requested information on Item 1, and Mr. Zapple requested clarification on Items 4 and 5. Mr. Brumit moved to approve the remainder of the Consent Agenda. Mr. O'Grady seconded the motion, and it passed unanimously. 1. Southside Wastewater Treatment #1 Primary Clarifier Mr. Flechtner explained the reason for the sole source purchase. Mr. O'Grady moved to approve the item. Mr. Brumit seconded the motion, and it passed unanimously. RESULT: APPROVED \[UNANIMOUS\] MOVER: Kevin O'Grady SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 2. Award of Water & Wastewater Treatment Chemical Contracts RESULT: APPROVED \[UNANIMOUS\] MOVER: James Brumit, Vice-Chair SECONDER: Kevin O'Grady AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 3. Sole Source Purchase for Coagulant Aid Polymer RESULT: APPROVED \[UNANIMOUS\] MOVER: James Brumit, Kevin O'Grady AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 4. Sole Source Purchase of MTU Onsite Energy Generator Following clarification of the sole source item, Mr. Zapple moved to approve the purchase. Mr. Rivenbark seconded the motion, and it passed unanimously. Cape Fear Public Utility Authority Page 4 Minutes Authority Board December 9, 2015 RESULT: APPROVED \[UNANIMOUS\] MOVER: Rob Zapple SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 5. Authorization for the Executive Director to Execute a $203,625.54 Change Order with T.A. Loving Company for the Marquis Hills Sewer Extension Project Mr. Vandermeyden explained the soil quality issues involved with the Marquis Hills project. Mr. Zapple moved for approval. Mr. Rivenbark seconded the motion, and it passed unanimously. RESULT: APPROVED \[UNANIMOUS\] MOVER: Rob Zapple SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 6. Write Offs - December 2015 RESULT: APPROVED \[UNANIMOUS\] MOVER: James Brumit, Vice-Chair SECONDER: Kevin O'Grady AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 7. 2310 North 23rd Street Lease RESULT: APPROVED \[UNANIMOUS\] MOVER: James Brumit, Vice-Chair SECONDER: Kevin O'Grady AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 8. 2016 Meeting Calendar Resolution RESULT: APPROVED \[UNANIMOUS\] MOVER: James Brumit, Vice-Chair SECONDER: Kevin O'Grady AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple VIII. NEW BUSINESS Cape Fear Public Utility Authority Page 5 Minutes Authority Board December 9, 2015 A. Administrative Reports i. Attorney's Report ii. Executive Director's Report 1. Environmental Report RESULT: REVIEWED 2. Safety Performance Report Mr. Morgan reported that the OSHA reportable and DART incidents included six incidents which resulted from vehicular accidents where the other driver was at fault. RESULT: REVIEWED B. Committee Reports i. Executive Committee 1. December 2, 2015 Executive Committee Meeting Minutes Mr. Zapple requested clarification on the discussion of Itron meters from the Executive Committee minutes. RESULT: REVIEWED 2. Interlocal Agreement Contingency Reserve Mr. Flechtner presented the Interlocal Agreement with the City of Wilmington. The Authority will request its release from the EPA Consent Decree in January, and the City will release the contingency reserve funds after the Consent Decree is released. The Authority agrees to use the funds for projects within the City limits. Mr. O'Grady moved to approve the item. Mr. Brown seconded the motion, and it passed unanimously. RESULT: APPROVED \[UNANIMOUS\] MOVER: Kevin O'Grady SECONDER: Mike Brown, Secretary AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple ii. Finance Committee 1. Finance Committee - Regular Meeting - Dec 2, 2015 9:00 AM Cape Fear Public Utility Authority Page 6 Minutes Authority Board December 9, 2015 RESULT: NO ACTION REQUIRED 2. December 2015 Monthly Finance and Customer Service Report Ms. Spivey reported that the November financial data reflected a solid month, with revenues and expenditures on target. RESULT: REVIEWED 3. Potential Debt Refundings - 2008 Revenue Bonds and 2006A Certificates of Participation Issued by City of Wilmington Ms. Spivey reported that she and the Authority's financial advisor, Davenport, recommended the re-funding of some existing debt, at an estimated savings of $800,000 per year. After clarification questions, Mr. White moved to begin the process of selecting an underwriting team, with an update to the Board in 30 days. Mr. Norris seconded the motion, and it passed unanimously. Ms. Kusek recessed the meeting at 10:10 AM. The Board reconvened at 10:20 AM. RESULT: REVIEWED iii. Human Resources Committee 1. November 19, 2015 Human Resources Committee Minutes RESULT: REVIEWED 2. 1555 : December 3, 2015 HR Committee Minutes RESULT: REVIEWED 3. CFPUA Entry Into State Health Plan Mr. Morgan presented the Committee recommendation for the State Health Plan (SHP). Legislation passed in 2015 authorized local governmental units with no more than 1,000 participants in their health insurance plan to enter the SHP, with a maximum of 10,000 people allowed to enroll in the plan. The SHP operates on a calendar year, and in order to preserve its engagement status, the Authority would need to join the SHP as soon as possible. In order to accommodate open enrollment, staff and the Committee recommended a start date of February 1, 2016, with a funding ratio of 80/20. Enrollment in the SHP is expected to provide lower costs to employees for their coverage and provide between $380,000 to $506,000 annual savings, depending on the type of plan chosen by employees. The SHP offers three plans: an 80/20 Cape Fear Public Utility Authority Page 7 Minutes Authority Board December 9, 2015 enhanced PPO; a 70/30 PPO; and a Hi-Deductible with an HRA. The plans are comparable to or better than the current plans available to Authority employees, and utilize the same Blue Cross Blue Shield network. The SHP includes wellness initiatives that enable employees to lower their premiums. Mr. Morgan provided one-time costs for termination of the current plans and the payment of claims incurred but not presented for payment. He recommended considering a termination date of February 15 for the Authority plan so that there would be a slight overlap to ensure a successful transition for employees. Because of the timing of the plan year, employees will have new deductibles and out of pocket totals to meet for 2016. Mr. Morgan and Committee members explained that it would be not be advisable to wait until July 1 and the Authority's next fiscal year for enrollment due to the 10,000 maximum number of new enrollees in the SHP. By July 1, the 10,000 maximum may have been met, and the Authority would lose its opportunity to join the SHP. Under the legislation, the SHP will not accept retirees from local governmental units. The Authority will purchase insurance for the "legacy employees," those employees who transferred from the City or County as of July 1, 2008, under the terms of the formational ILA. The Authority does not provide retiree coverage for employees hired on or after July 1, 2008. Following clarification questions and discussion, Mr. O'Grady moved the Committee recommendation. Mr. Brown seconded the motion, and it passed unanimously. RESULT: APPROVED \[UNANIMOUS\] MOVER: Kevin O'Grady SECONDER: Mike Brown, Secretary AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple IX. OLD BUSINESS There was no old business. X. AUTHORITY Q&A / CLOSING COMMENTS There were no questions. In closing, Ms. Kusek wished the Board and staff Happy Holidays. XI. CLOSED SESSION Mr. Rivenbark moved to enter closed session to discuss legal matters, as follows: Appeal of Environmental Management Commission decision by the Fayetteville Public Works Commission; Hoosier Daddy, LLC v. CFPUA; Cape Fear Public Utility Authority Page 8 Minutes Authority Board December 9, 2015 CFPUA v. Hoosier Daddy, LLC; Tommy Davis Construction, Inc. v. CFPUA; Point South Properties, LLC and Sanco Builders Corporation v. CFPUA; and C.B. Windswept, LLC, Telfair Summit, LLC, and CB Snow's Cut Landing, LLC v. CFPUA. Mr. Norris seconded the motion, and it passed unanimously. The Authority entered closed session at 11:00 AM, with Mr. Flechtner, Ms. Miles, and Ms. Pope in attendance. Ms. Miles reported to the Board. Mr. Rivenbark moved to return to open session. Mr. Norris seconded the motion, and it passed unanimously. The Authority entered open session at 11:15 AM. Mr. Brown moved to approve a Supplemental Budget Ordinance in the amount of $871,000 for the settlement of lawsuits. Mr. Rivenbark seconded the motion, and it passed uanimously. Mr. Brown moved to settle the Tommy Davis Construction, Inc. lawsuit for the amount of $108,013.08. Mr. Norris seconded the motion, and it was approved unanimously. Mr. Brown moved to settle the Point South Properties, LLC and Sanco Builders Corporation lawsuit for the amount of $367,044.07. Mr. Norris seconded the motion, and it was approved unanimously. Mr. Rivenbark moved to settle the C.B. Windswept, LLC, Telfair Summit, LLC, and CB Snow's Cut Landing, LLC lawsuit for the amount of $395,551.61. Mr. Norris seconded the motion, and it passed unanimously. XII. ADJOURN There being no further business to come before the Board, Ms. Kusek adjourned the meeting at 11:17 AM. The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, January 13, 2016. The meeting will begin at 9:00 AM and will be held in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority Page 9