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HomeMy WebLinkAboutMarch 9 2016 Meeting Minutes CAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES MARCH 9, 2016 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 declared a quorum present. Mr. Brown moved to excuse Mr. Rivenbark. Mr. O'Grady 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 Present Authority Cindee Wolf Cape Fear Public Utility Present Authority Charlie Rivenbark Cape Fear Public Utility Excused 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 Frank Styers Cape Fear Public Utility Chief Operations Officer Present Authority Carel Cape Fear Public Utility Director of Engineering Present Vandermeyden Authority Melinda Hoggard Cape Fear Public Utility Interim Chief Financial Officer Present Authority Kristine Irick Cape Fear Public Utility Customer Service Director Present Authority Leslie Ogilvie Cape Fear Public Utility Assistant to the Executive Present Authority Director Cape Fear Public Utility Authority Page 1 Minutes Authority Board March 9, 2016 Tom Morgan Cape Fear Public Utility HR Director Present Authority Beth Eckert Cape Fear Public Utility Director of EMD Present Authority Gary McSmith Cape Fear Public Utility Engineering Manager Present Authority Kent Harrell Cape Fear Public Utility Engineering Manager Present Authority Donna Pope Cape Fear Public Utility Clerk to the Board Present Authority Linda Miles Miles Firm, PLLC CFPUA Consulting Attorney Present Richard King City of Wilmington Assistant City Manager Present Chris Coudriet New Hanover County County Manager Present Tim Burgess New Hanover County Assistant County Manager Present Tony Boahn McKim & Creed Present Heidi Cox NC Public Water Supply Present John H. Lyon AT&T Director of External Affairs Present Mitch Brigulio Davenport & Associates Present Robert Sink Verizon Present Ray Cox Highfill Infrastructure Present Margaret Gray Pender County Present Lisa Wartebacher New Hanover Present Bryan McCabe Pender County Present Anne Langan Present III. ADOPTION OF AGENDA Mr. Norris moved to adopt the Agenda. Mr. Brumit seconded the motion, and the Agenda was unanimously adopted. IV. APPROVAL OF MINUTES 1. Authority Board - Regular Meeting - Feb 10, 2016 9:00 AM RESULT: ACCEPTED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: Cindee Wolf AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark V. PUBLIC COMMENTS - 4 MINUTE LIMIT PER SPEAKER Mr. Lyon spoke regarding the Northchase water tower and cell phone antenna leases. He requested a consideration of rent abatement for AT&T contributions to repairs to the tower. Ms. Langan spoke regarding her bill and a leak adjustment. Mr. Flechtner and Ms. Irick answered Board questions regarding leak adjustments, and Ms. Irick reported that she would review the account and meet with Ms. Langan. VI. SPEAKER UPDATE FROM THE FEBRUARY 10 BOARD MEETING Cape Fear Public Utility Authority Page 2 Minutes Authority Board March 9, 2016 Mr. Flechtner updated the board on concerns voiced by Mr. Beagle at the February Authority meeting. VII. PRESENTATION A. U.S. Highway 421 Corridor Utilities Mr. Boahn presented recommendations for providing water and sewer utilities along the U.S. Highway 421 Corridor. New Hanover County and Authority staff, County fire services, and representatives of Wilmington Business Development contributed data and information used for the report. For analysis purposes, the corridor was divided into five zones, with projected demands for each zone. The study provided three scenarios for projected growth along the corridor: conservative or low growth; optimal or high growth; and a mostly likely scenario of moderate growth. The report recommendations focused on the most likely and optimal growth projections. The most likely demand for sewer along the corridor is 660,000 gallons per day (GPD), and the optimal demand is 1,000,000 GPD, with a 25-year buildout. The engineering report recommended a phased approach to sewer services, with the first phase providing 330,000 GPD. The force main and pump station system was estimated at $9.7 million. A force main header collection system was recommended, with an estimated cost of $2.4 million, bringing the total for wastewater to $12.1 million. Alternatives were provided for cost savings. The elimination of two pump stations in zones of lower demand could reduce the total cost by $3.5 million, and either or both pump stations could be added in the future. The report recommended water infrastructure to provide 1,500 gallons per minute of water for fire flow protection, including the construction of a water main in addition the existing Flemington water main. The total estimated cost for water infrastructure was $8.1 million, with $4.1 million attributable to fire protection. The estimated timeline for the project is 36 months, including design and the permitting process. CAMA regulations, wetlands mitigation, and easement acquisitions should be addressed as part of the project. Mr. Boahn will present the report findings to the New Hanover County Commissioners at their March 21 meeting. Mr. Boahn answered questions from Authority members regarding construction recommendations and the drawbacks to gravity sewer in the area. Mr. White reported that County staff had advised that the $4.1 million for fire protection in the water project could be addressed by use of the district fire taxes. He suggested that the Authority, County, and City consider a partnership to share project costs, stating that all would benefit from the project. Messrs. Quinn and O'Grady reminded the Board that the 421 corridor does not lie within the city limits. After further clarification questions regarding the project recommendations, Ms. Kusek thanked Mr. Boahn for the report. 1. U.S. Highway 421 Corridor Utilities Preliminary Engineering Report Presentation Cape Fear Public Utility Authority Page 3 Minutes Authority Board March 9, 2016 RESULT: REVIEWED B. Bond Refunding Summary Mr. Flechtner introduced Mr. Brigulio to update the Board on the re-funding of the Authority's 2008 revenue bonds and 2006A City Certificates of Participation (COPS). The COPS financed the City's purchase of Quality Water Supplies, Inc., and Cape Fear Utilities, Inc., known as the Dobo companies. The COPS are secured by underlying assets, and the two Dobo corporations were converted to non-profit corporations, which are currently under the control of the Authority. If included in the re-funding, the Authority would replace the COPS with revenue bonds. Ms. Miles reported that she and Authority staff are working with bond counsel to determine the appropriate methodology to be used for re-funding the COPS. City staff has been apprised of the Authority's intention to re-fund the COPS. Mr. Brigulio summarized the intricacies of the re-funding process and explained the forward delivery agreement and the debt service reserve fund associated with the 2008 revenue bonds. Using current interest rates, the total projected savings of re-funding the revenue bonds and COPS is $27,823,921, an annual savings of approximately $1.5 million. VIII. CONSENT AGENDA Mr. Zapple asked that Items 1 and 6 be removed from the Consent Agenda for clarification and discussion. Mr. Brown moved the remaining items on the Consent Agenda. Mr. Brumit seconded the motion, and it passed unanimously. 1. Authorization for the Executive Director to Execute a $100,000 Amendment with Parker Poe Adam & Bernstein, LLP for the Bond Refunding Mr. Flechtner answered clarification questions. RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: William Norris AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark 2. Authorization for the Executive Director to Designate J.P. Morgan as the Senior Managing Underwriter and Wells Fargo Securities, RW Baird & Co. And Raymond James as the Co-Managers. Cape Fear Public Utility Authority Page 4 Minutes Authority Board March 9, 2016 RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark 3. Authorization for the Executive Director to Execute a $1,360,100 Construction Contract with M.B. Kahn Construction, Inc. for Alum Sludge Storage Tanks. RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark 4. Authorize New CIP Project Funding for the Shinnwood Road Utility Relocation RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark 3. Authorization for the Executive Director to Execute a $130,998 Contract Amendment 2 with Hazen and Sawyer for Construction Administration and Observation for the Alum Sludge Storage Tanks. RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark 5. North Chase Tank Structure Improvements Mr. Flechtner and Ms. Miles answered clarification questions regarding the tank and the need for repair before hurricane season. Mr. Brown moved Items 1 and 6 for approval. Mr. Norris seconded the motion, and it passed unanimously. Cape Fear Public Utility Authority Page 5 Minutes Authority Board March 9, 2016 RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: William Norris AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark 6. Sulfuric Acid Bulk Storage Repairs RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark 7. Interlocal Agreement for Antenna Installation RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Norris, O'Grady, White, Zapple EXCUSED: Rivenbark IX. NEW BUSINESS A. Administrative Reports i. Attorney's Report Ms. Miles had no report. ii. Executive Director's Report Mr. Flechtner referred the Board to the Environmental and Safety reports in the agenda packet and reported that the Authority is performing well in both areas. He reminded the Board that staff will conduct a full-scale emergency exercise on March 16, simulating water loss at the Sweeney Water Treatment Plant. The exercise will allow staff to check the accuracy of computer modeling and provide "real world" information to determine what parts of the water system are vulnerable to the loss of water pressure. 1. Environmental Report 2. Safety Performance Report B. Committee Reports i. Executive Committee The committee minutes were in the agenda packet. Cape Fear Public Utility Authority Page 6 Minutes Authority Board March 9, 2016 1. March 2, 2016 Executive Committee Minutes ii. Finance Committee 1. Finance Committee - Regular Meeting - Mar 2, 2016 9:00 AM The committee minutes were in the agenda packet. RESULT: NO ACTION REQUIRED 2. March Finance Report and Customer Service Update Ms. Hoggard reported that February revenues were slightly above February 2015. Expenditures were above last year but within a reasonable range for this point in the fiscal year. Water consumption was 1.4 percent over February 2015 and 1.4 percent over calendar year 2014. RESULT: NO ACTION REQUIRED iii. Human Resources Committee 1. March 1, 2016 Human Resources Committee Minutes The committee minutes were in the agenda packet. RESULT: REVIEWED 2. March 1, 2016 Human Resources Committee Documents Mr. Morgan summarized the three options provided in the classification and compensation study. Option 1 would reclassify the positions identified to their proper pay grade classification. It would impact 49 employees by bringing them to the minimum of their proposed pay ranges, at an annual salary cost of $84,184. Option 2 would include the reclassification of the positions identified in Option 1, and bring the employees to the same range penetration in their existing or new pay grade, not to exceed the first quartile of the proposed salary ranges. This option would impact 161 employees, with an annual salary cost of $332,168. Option 3 would include Options 1 and 2, and bring the employees to the same range penetration in their existing or new pay grade, not to exceed the midpoint of the proposed salary ranges. This option would impact 213 employees with an annual salary cost of $425,830. The Committee recommended that the Board accept the classification and compensation study and recommended a phased approach for implementation of at least two years. The Committee recommended four (4) percent as a budget placeholder for salary adjustments, including reclassifications and merit increases. An additional amount would be budgeted for the associated payroll costs. Cape Fear Public Utility Authority Page 7 Minutes Authority Board March 9, 2016 Mr. Morgan answered questions from Board members regarding the employee feedback used in the study, the evaluation process used by the Authority, and merit increases. Mr. Morgan presented information regarding turnover rates and data obtained by staff during exit interviews with employees voluntarily leaving the Authority. Report materials were in the agenda packet. RESULT: REVIEWED iv. Long Range Planning Committee The Committee minutes were in the agenda packet, and there was no Committee business for Board discussion. 1. Long Range Planning Committee - Regular - Feb 25, 2016 3:00 PM X. OLD BUSINESS There was no old business. XI. AUTHORITY Q&A / CLOSING COMMENTS There were no questions or closing comments. XII. CLOSED SESSION Mr. Norris moved to enter closed session to discuss a personnel matter. Mr. Brumit seconded the motion, and it passed unanimously. The Authority entered closed session at 10:30 AM, with Mr. Flechtner, Ms. Miles, and Ms. Pope present. After a brief discussion, Mr. Brumit moved to return to open session. Mr. Norris seconded the motion, and it passed unanimously. The Authority returned to open session at 10:35 AM. XIII. ADJOURNMENT There was no further business to come before the Authority, and Mr. Brumit moved to adjourn. Mr. Norris seconded the motion, and it passed unanimously. The Authority adjourned at 10:35 AM. The next regular meeting of the Cape Fear Public Utility Authority will be April 13, 2016. The Authority will meet in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington, North Carolina, and the meeting will begin at 9:00 AM. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority Page 8