Loading...
HomeMy WebLinkAboutMay 11 2016 Meeting Minutes CAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES MAY 11, 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 called the meeting to order at 9:00 AM and declared a quorum present. Mr. O'Grady moved to excuse Ms. Wolf. Mr. Brumit 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 Chairman Present 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 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 Vandermeyden Cape Fear Public Utility Director of Engineering Present Authority Beth Eckert Cape Fear Public Utility Director of EMD Present Authority Melinda Hoggard Cape Fear Public Utility Interim Chief Financial Officer Present Authority John McLean Cape Fear Public Utility Chief Financial Officer Present Authority Cape Fear Public Utility Authority Page 1 Minutes Authority Board May 11, 2016 John Payne Cape Fear Public Utility Budget/Finance Manager Present Authority Kristine Irick Cape Fear Public Utility Customer Service Director Present Authority Julie McLawhon Cape Fear Public Utility Budget/Finance Manager Present Authority Leslie Ogilvie Cape Fear Public Utility Assistant to the Executive Present Authority Director Viktoriya Cape Fear Public Utility IT Help Desk Technician Present Rumyantseva Authority Donna Pope Cape Fear Public Utility Clerk/Executive Secretary to the Present Authority Board Linda Miles Miles Firm, PLLC CFPUA Consulting Attorney Present Jim Iannucci New Hanover County Present Heidi Cox Division of Water Resources Present Tony Boahn McKim & Creed Present Tim Burgess New Hanover County Present Joey Mitchell Xtralight Present Calvin Brown Xtralight Present Steve Zorda Xtralight Present Joe Badera Xtralight Present Dave Napier Xtralight Present Barry Melvin Xtralight Present Ken Penion Xtralight Present Sarah Summers Xtralight Present Donna Blake-Weems Xtralight Present Tyler Moore Sensus Meters Present Rob Watson Ferguson Waterworks Present III. ADOPTION OF AGENDA Mr. Brown moved to adopt the day's Agenda. Mr. Brumit seconded the motion, and it passed unanimously. IV. APPROVAL OF MINUTES 1. Authority Board - Regular Meeting - Apr 13, 2016 9:00 AM Mr. Brown moved to approve the April minutes, and Mr. Brumit seconded the motion. Mr. Zapple requested a revision to language regarding the EPA Consent Decree in the Executive Director's report. Messrs. Brown and Norris agreed to the revision, and the minutes were unanimously approved. RESULT: ACCEPTED AS AMENDED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: William Norris AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Rivenbark, Norris, O'Grady, White, Zapple EXCUSED: Wolf V. PUBLIC COMMENTS - 4 MINUTE LIMIT PER SPEAKER Cape Fear Public Utility Authority Page 2 Minutes Authority Board May 11, 2016 Mr. Mitchell of Xtralight thanked the Board for allowing a discussion of the meter bid and thanked staff for working with him to answer CFPUA's bid questions. VI. SPEAKER UPDATE FROM THE APRIL 13, 2016 BOARD MEETING Mr. Flechtner reported that the bid item discussed by Messrs. Mitchell and Fountain in April would be addressed in the Finance Committee report. VII. CONSENT AGENDA Mr. Zapple asked Ms. Miles if she should be recused from Item 4 on the Consent Agenda because his company does business with Black's Tire. Ms. Miles ascertained that Mr. Zapple did not have any financial interest in Black's Tire, so he did not have a conflict of interest. Mr. Norris moved to approve the Consent Agenda. Mr. Rivenbark seconded the motion, and it passed unanimously. 1. Write Off Certain Uncollectable Utility Accounts RESULT: APPROVED \[UNANIMOUS\] MOVER: William Norris SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Rivenbark, Norris, O'Grady, White, Zapple EXCUSED: Wolf 2. Water Meters RESULT: APPROVED \[UNANIMOUS\] MOVER: William Norris SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Rivenbark, Norris, O'Grady, White, Zapple EXCUSED: Wolf 3. Country Haven Pump Station Sole Source Spare Pump Purchase RESULT: APPROVED \[UNANIMOUS\] MOVER: William Norris SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Rivenbark, Norris, O'Grady, White, Zapple EXCUSED: Wolf 4. Medium Duty Fleet Maintenance Contract Cape Fear Public Utility Authority Page 3 Minutes Authority Board May 11, 2016 RESULT: APPROVED \[UNANIMOUS\] MOVER: William Norris SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Rivenbark, Norris, O'Grady, White, Zapple EXCUSED: Wolf 5. Southside Waste Water Treatment Plant Primary Clarifier 1 Change Order RESULT: APPROVED \[UNANIMOUS\] MOVER: William Norris SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Rivenbark, Norris, O'Grady, White, Zapple EXCUSED: Wolf VIII. NEW BUSINESS A. Administrative Reports i. Attorney's Report Ms. Miles did not have a report for open session. She requested a closed session to discuss a possible claim. ii. Executive Director's Report 1. CFO Appointment Mr. Flechtner introduced Mr. McLean, the Authority Chief Financial Officer. Mr. McLean came to CFPUA from the State of Louisiana. He holds Bachelor's and Master's Degrees from Louisiana State University and is a Certified Public Account. Mr. Zapple moved to adopt the Resolution appointing Mr. McLean. Mr. Brown seconded the motion, and it passed unanimously. Mr. Flechtner recognized Ms. Hoggard for her work as Interim CFO over the past several months, and the Board thanked Ms. Hoggard. RESULT: APPROVED \[UNANIMOUS\] MOVER: Rob Zapple SECONDER: Mike Brown, Secretary AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Rivenbark, Norris, O'Grady, White, Zapple EXCUSED: Wolf 2. Safety Performance Report Cape Fear Public Utility Authority Page 4 Minutes Authority Board May 11, 2016 The safety performance report was in the Agenda for review. There were no questions. RESULT: REVIEWED 3. Environmental Report The environmental report was in the Agenda for review, and there were no questions. RESULT: REVIEWED B. Committee Reports i. Executive Committee Ms. Kusek reported that the Authority's had maintained its bond rating with Standard & Poor's steady and that Moody's had upgraded its rating. She read an email from Authority member Mike Brown to Mr. Flechtner into the record, as follows: "Jim, I know the popular saying goes, 'It's better to be lucky than good,' but, in this case, I think CFPUA should be recognized for being 'good so that they could then be lucky.' We are certainly taking advantage of a little luck as the economic conditions have aligned well and allowed the Authority to capitalize on lower interest rates, but had you and the CFPUA team not been doing such a great job these past eight years executing on a sound operational, risk mitigation, and financial management strategy, CFPUA wouldn't be in the position it is today to capitalize on current market conditions. I think this is really commendable, and I'm sure you are proud of your team. "It's a great example of how consolidation has worked to create efficiencies and how removing politics from the equation has allowed a board of 11 people, to include county and city elected officials from opposing political parties, to work together in support of a staff and organization that is doing commendable things. In many ways, our board only deserves credit for doing two simple things: 1. Taking good advice from an intelligent, well-prepared staff and their leadership in our decision-making process; and 2. Staying out of the way and letting the professionals do their job. "We have played a minor role in the grand scheme of things, and you all have made it so easy for us as board members. The staff deserves all of the credit. Well done! - Mike" Ms. Kusek agreed with Mr. Brown's comments and commended staff. Mr. Rivenbark added that CFPUA's budget has remained lower than the for City and County water and sewer budgets been prior to consolidation and that sanitary sewer overflows had been greatly reduced. Cape Fear Public Utility Authority Page 5 Minutes Authority Board May 11, 2016 1. May 4, 2016 Executive Committee Minutes RESULT: REVIEWED ii. Long Range Planning Committee 1. Long Range Planning Committee - Regular - Apr 28, 2016 3:00 PM RESULT: NO ACTION REQUIRED 2. Comments Regarding Cape Fear River Water Supply Evaluation Mr. Sneeden reported that the Committee reviewed and discussed CFPUA's recommended comments on the state's evaluation of river water resources. The comments are due on May 18. Mr. Boahn clarified the meaning of the "7Q10" distinction, which represents the lowest average seven-day flow over a ten-year period. He explained the issues of concern to CFPUA and other downstream users of raw water from the Cape Fear River. The evaluation seemed to contain a disproportionate balance of certainty for Jordan Lake allocations but over downstream availability. The draft report used 2010 data and did not appear to reflect current usage data and modeling for the 30-year period addressed in the study. The Board discussed the issues raised in CFPUA's recommended response and affirmed its support of allocation of water from the river to protect the needs of downstream users. Mr. Flechtner reported that the local legislators will be copied on CFPUA's official comment letter to the Environmental Management Commission. RESULT: NO ACTION REQUIRED iii. Finance Committee 1. Finance Committee - Regular Meeting - May 4, 2016 9:00 AM RESULT: NO ACTION REQUIRED 2. May Finance Report and Customer Service Update Ms. Hoggard reported that, with 83 percent of the year finished, operating revenues were 91.45 percent of budget. System Development Charges were 150 percent of budget. Operating expenses were 70.93 percent of budget. Consumption was up 2.4 percent over last year and 2.21 percent over calendar year 2014. The April financial data was in the Agenda packet. Cape Fear Public Utility Authority Page 6 Minutes Authority Board May 11, 2016 RESULT: NO ACTION REQUIRED 3. FY17 Recommended Budget Mr. Flechtner reported that the budget contains three major components, the capital projects, expenditures, and revenues. The Capital Improvement Projects were reviewed and adopted at the February Board meeting, and the expenditures were reviewed in April. Today's focus was on revenues. The final recommended budget will reflect savings from the May refunding of CFPUA's 2008 bonds and the City's Certificates of Participation. Total revenues for FY2017 are budgeted at $75,615,566. The budget provides a sufficient debt coverage ratio and projected monies to go towards pay-go capital projects. Cash funding of some projects reduces the amount of bonds that need to be issued in the future. No change is recommended to either the volumetric use rate or the fixed rate for water and sewer. Water revenues are budgeted at $31.3 million and wastewater at $36.8 million. $275,000 will be appropriated for retiree health insurance, and that money will come from funds set aside in 2008 by the City and County to cover transferring employees. Mr. Payne explained the factors used in determining the System Development Charge each fiscal year. The calculation includes interest rates, a factor for capital project budgeting, and water peaking factors. For FY17, bond interest rates have been reduced, and the daily average flow went down. The SDC for FY17 for both a water and sewer connection would be reduced by $840. Mr. Payne reviewed the FY17 Budget calendar. The Board workshop will be May 17, and the public hearing on the recommended budget will be held at the June 8 regular meeting. RESULT: NO ACTION REQUIRED Next: 6/1/2016 12:00 AM 4. System Development Charge Ordinance Mr. Quinn requested information comparing CFPUA's method of calculating System Development Charges to that used by other utilities. Mr. O'Grady stated that lowering the SDCs assisted future customers but not the current ratepayers who had contributed to CFPUA's strong financial position. He suggested that the Board consider lowering rates over time and using cash on hand. Mr. White agreed that the Board should consider the amount of cash reserves that should be maintained. Mr. Brown stated that the lower SDC would contribute to affordability in housing in the area. Mr. O'Grady stated that the water and sewer bill was a big part of affordability in household budgeting. Cape Fear Public Utility Authority Page 7 Minutes Authority Board May 11, 2016 Mr. Sneeden stated that cash-funding for projects helped to keep rates stable over time. Mr. Zapple spoke of the importance of funding capital projects in reducing sanitary sewer overflows. Mr. Brumit requested a review of the ten-year rate modeling and reducing rates during the budget workshop. Mr. Flechtner presented the Agenda item, which the Finance Committee had recommended become effective at the beginning of the fiscal year on July 1. Mr. Brumit stated that the Committee recommended publicizing the SDC change so that new customers could wait to take advantage of the reduction. Mr. Flechtner reported that staff had a press release ready pending today's vote. Mr. Norris moved to approve the System Development Charge Ordinance, effective July 1. Mr. Brown seconded the motion, and it passed unanimously. RESULT: APPROVED \[UNANIMOUS\] MOVER: William Norris SECONDER: Mike Brown, Secretary AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Rivenbark, Norris, O'Grady, White, Zapple EXCUSED: Wolf IX. OLD BUSINESS 1. Comprehensive Meter Replacement Program Phase II Update Mr. Vandermeyden presented the item, and he and Ms. Miles answered clarification questions regarding staff's recommendation to reject all bids and rebid the project. Following discussion, Mr. Sneeden moved to reject all bids, and Mr. O'Grady seconded the motion. Mr. Brown moved to enter into closed session to receive advice from legal counsel. Mr. Zapple seconded the motion, and Messrs. Sneeden and O'Grady agreed. The motion passed unanimously, and the Board entered closed session at 10:30 AM. Ms. Vosnock, Ms. Miles, Ms. Pope, and Messrs. Flechtner, Vandermeyden, Payne, and McLean remained in the meeting. The Board returned to open session at 11:45 AM. Mr. Sneeden repeated his motion to approve staff's recommendation to reject all bids and rebid the project. Mr. O'Grady confirmed his second of the motion, and it passed unanimously. Mr. Vandermeyden presented the Development Process and Procedures Manual prepared and distributed by Engineering staff to BASE, engineers, contractors, and developers. Each Board member received a copy of the manual. Cape Fear Public Utility Authority Page 8 Minutes Authority Board May 11, 2016 Ms. Kusek reminded the Board that Authority Officers will be voted upon at the July meeting. She and Messrs. White and Rivenbark serve as the Nominations Committee, and she asked that Board members let them know if they are interested in serving as a corporate officer. RESULT: REVIEWED X. AUTHORITY Q&A / CLOSING COMMENTS XI. CLOSED SESSION Mr. Norris moved to enter closed session to discuss a possible claim with legal counsel and staff. Mr. Brown seconded the motion, and it passed unanimously. The Board entered into closed session at 10:50 AM. Mr. Rivenbark moved to return to open session. Mr. Zapple seconded the motion, and it passed unanimously. The Board entered open session at 11:02 AM. XII. ADJOURNMENT Mr. Norris moved to adjourn. Mr. Rivenbark seconded the motion, and it passed unanimously. The Board adjourned at 11:03 AM. The next regular meeting will be Wednesday, June 8, 2016. The meeting will commence at 9:00 AM and will be held in the Lucie Harrell Conference Room, 230 Government Center Drive. The June meeting will include a public hearing on the recommended budget for Fiscal Year 2017. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority Page 9