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HomeMy WebLinkAbout2025-04-09 MinutesCAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES APRIL 9, 2025 Room 139 Regular Meeting 9:00 AM 230 GOVERNMENT CENTER DRIVE WILMINGTON, NC 28403 I. CALL TO ORDER Ms. Adams called the meeting to order at 9:00 AM. II. DETERMINATION OF A QUORUM A quorum of the Board was present. Mr. Rivenbark moved to excuse Mr. Waddell from the day's meeting and Mr. Corder until his arrival. Mr. Smith seconded the motion, and it passed unanimously. Mr. Corder arrived at 9:10 AM. Board members present: Jennifer Adams, Chair Deans Hackney, Vice -Chair Jessica Cannon, Secretary Wes Corder, Treasurer Leslie Hudson, Authority Member Bill Smith, Authority Member Charlie Rivenbark, Councilman Dane Scalise, Commissioner Rob Zapple, Commissioner Board member excused: Luke Waddell, Sr., Councilman Staff present: Nicolette Fulton, Attorney John McLean, CFO and Deputy Executive Director Beth Eckert, Deputy Executive Director Kevin Morris, Deputy Executive Director Julia Vosnock Faircloth, Deputy Finance Officer Lori McKoy, HR Director Cord Ellison, Chief Information Officer Vaughn Hagerty, Chief Communications Officer Elizabeth Severt, Strategic & Performance Manager Gary McSmith, Chief Engineer Cammie Bellamy, Public Information Officer Matt Tribett, Assistant Operations Director Craig Wilson, Assistant Operations Director Kelsey Mongeau, Strategy & Performance Analyst Ethan D. Waters, Strategy & Performance Analyst Deborah Leonard, HR Manager Sherry Brooks, HR Business Partner Ben Kearns, Water Treatment Superintendent Vatrice Robinson, Water Operator Matt Darnell, Water Operator Kevin Denson, Surface Water Facilities Manager Greg Purcell, Water Control Supervisor Lawrence Southerland, Surface Water Planner -Scheduler Sara Eskew, Deputy Clerk Makeba Robinson, Deputy Clerk Judy Lawton, Deputy Clerk Donna S. Pope, Clerk to the Board Guests: Jennifer Rigby Tyler Newman III. SWEENEY TREATMENT FACILITY RECOGNITION Mr. Morris presented the Environmental Protection Agency's Area -Wide Optimization Program Gold Star Award to staff representing the Sweeney Water Treatment Plant. The program recognizes excellence surface water treatment, and the Gold Star designation goes to utilities with ten or more consecutive years achieving the honor. This is the thirteenth year that Sweeney has been recognized. Messrs. Morris, Wilson, and Kearns recognized the following staff members: Vatrice Robinson, Matt Darnell, Kevin Denson, Greg Purcell, and Lawrence Southerland. The Board thanked staff for their hard work and dedication. IV. ADOPTION OF AGENDA Ms. Adams presented the day's agenda, with two amendments, as follows: 1. Adding a Resolution to Amend CFPUA's Articles of Incorporation in the Attorney's Report; and 2. Moving Item 3, ii, the sole source SCADA renewal contract to the closed session. Mr. Scalise moved to approve the Agenda as recommended. Mr. Zapple seconded the motion, and it passed unanimously. V. APPROVAL OF MINUTES Dr. Cannon moved to approve the minutes of the March 12 Regular Meeting and the Capital and Budget workshop on the same day. Mr. Zapple seconded the motion, and it passed unanimously. A. Approval of Minutes - Regular Meeting - March 12, 2025 B. Approval of Minutes - CIP & Budget workshop March 12, 2025 VI. PUBLIC COMMENTS - 4 MINUTE LIMIT PER SPEAKER There were no public speakers. VII. CONSENT AGENDA Mr. Zapple requested clarification on Items A and B, and Mr. Smith requested clarifications on Items B and C. Mr. Rivenbark moved to approve Item D. Mr. Zapple seconded the motion, and it passed unanimously. A. Resolution Accepting Low Interest State Loan for the Southside Wastewater Treatment Plant Replacement and Upgrade project Mr. McLean answered questions regarding cash flow and reimbursement. Mr. Zapple requested a monthly cash flow projection for projects being funded by the state revolving loan program. Ms. Hudson added that the loans allow CFPUA to defer debt service until the end of the loan and avoid capitalized interest. Following the discussion, Mr. Rivenbark moved to approve the Resolution. Mr. Zapple seconded the motion, and it passed unanimously. B. Wastewater Master Plan Amendment Messrs. Morris and McSmith answered questions regarding plan cost increases, wet weather modeling, and the plan's scope. Following discussion, Mr. Smith moved to approve the item. Mr. Rivenbark seconded the motion, and it passed unanimously. C. $1,000,075 Construction Contract with Lancaster Electric Company for the Wrightsville Beach SCADA Conversion and Generator Replacement Project Mr. Tribett answered questions regarding the project and the bids received. Following discussion, Mr. Scalise moved to approve the contract. Mr. Rivenbark seconded the motion, and it passed unanimously. D. $92,200 Engineering Contact Amendment with CDM Smith for the Wrightsville Beach SCADA Conversion and Generator Replacement Project VIII. NEW BUSINESS A. Administrative Reports 1. Attorney's Report Ms. Fulton presented a Resolution supporting an amendment to CFPUA's Articles of Incorporation by the City and County. Mr. Scalise moved to approve the resolution. Mr. Smith seconded the motion, and it passed unanimously. Ms. Fulton requested a closed session to discuss CFPUA v. Chemours, potential litigation, and contract negotiations. 2. Executive Director's Report Key Indicators Mr. Zapple noted that inspections were at the second highest number in 12 months. Board members discussed the impact of tariffs on CFPUA's inventory of materials. Mr. McLean answered questions regarding residential disconnection data. ii. Safety Report There were no questions on the report. iii. Environmental Report There were no questions on the report. iv. Strategic Plan Update There were no questions on the report. V. Economic Development Projects Update There were no questions on the report. vi. Briefing regarding Trifluoroacetic acid (TFA) Ms. Eckert reported on Trifluoroacetic acid (TFA). TFA is an ultra short -chain PFAS and a terminal degradation byproduct of several manufacturing processes. TFA has been found at the Chemours Fayetteville Works site. Two countries have established health guidelines for TFA. Germany has established 60,000 parts per trillion (ppt), and the Netherlands have established 2,200 ppt. Dr. Detlef Knappe and his NCSU team developed customer analytical methods for TFA. They found TFA at more than 100,000 ppt in pre-2017 samples of raw water from the Cape Fear River. In 2024, samples of finished water from a residential customer's tap in the Sweeney service area indicated 1,630 ppt and 1,660 ppt. Both levels are well below the European health guidelines, but Dr. Knappe's research indicates that Sweeney's granular activated charcoal system does not effectively remove TFA. Ms. Eckert answered questions from Board members and received feedback. Staff is adding information regarding TFA to the CFPUA website and continues to work with the PFAS Collaboratory to use novel sorbents and analyze their effectiveness on ultra short -chain PFAS, including as TFA. vii. FY 26 Budget Recommendation Mr. McLean presented an overview of the recommended budget for the fiscal year beginning July 1, 2025. Mr. McLean requested that Board members provide budget notices to him or Mr. Waldroup by April 18 for staff research. Staff will respond to Board budget notes by April 25. The recommended operating budget is $129,372,364. Mr. McLean reviewed staffing adjustments recommended for FY26, with pay and compensation accounting for $37.4 million of the operating budget. Based upon Board feedback from the March CIP and Budget Workshop, staff developed fee changes. They include a separate rate for irrigation meters of $7.74 per 1,000 gallons. This rate is lower than the cost of using a household meter for irrigation because water flowing through an irrigation meter does not incur any sewer charges. Approximately 86 percent of irrigation meters are used by single-family residential customers. Irrigation is a large part of CFPUA's water peaking factor, and the irrigation rate can encourage conservation and reduce peaking during the summer months. Mr. McLean answered questions regarding the methodology for determining the irrigation rate and its impacts on customers and revenues. A new fee is a printed bill fee of $1.00 each month for customers who receive statements in the mail instead of only receiving electronically. That charge will go into effect January 1, 2026, and staff will develop communications regarding the fee and explaining how to receive bills electronically. A third revision addresses development services fees. CFPUA's current fees recover approximately 12 percent of the costs of providing inspections and plan review. Staff recommended shifting to a price per linear foot basis for service main extensions. The estimated cost increase is between 2.8 and 4.1 percent, depending upon lot size. Board members discussed the potential impacts of the fee change upon building. Mr. Corder stated that he believed developers are more concerned with an efficient turnaround in plan review and inspections than in cost increases. Mr. Hackney agreed and supported recovering full costs of staff time for the reviews and inspections. At the workshop, staff recommended closing the customer service lobby in the City's Skyline Center, and Board members agreed with the recommendation. The closure will provide $75,000 in annual savings. The consolidation of Town of Wrightsville Beach utilities into CFPUA should be completed by September 30, 2025. Town customers will add approximately 3 percent to CFPUA's customer base, and Town customers will be retail customers instead of the Town being a wholesale customer. The projected payback period for Town -related projects paid from the Town to CFPUA is 8.54 years. The consolidation has a favorable impact on CFPUA rates. The Board reviewed rates for FY26. Staff recommended a 6.9 percent increase for FY26 for both water and sewer. The approximate dollar -amount increase for an average home will be $5.13. Staff anticipates continuing 6.9 percent increases over the next six years, but the rate model will be reviewed and updated as needed each year. The rates will help providing funding for Southside in FY31 and support CFPUA's bond rating and ability to issue bonds. There is no change to System Development Fees, and staff has budgeted for fewer housing units for those fees. Mr. McLean answered questions regarding rates, and the Board discussed rate impacts upon customers. The Finance Committee will review the budget at its May 7 meeting. The Budget Hearing is scheduled for the May 14 Board meeting, and the Board may adopt the budget following the hearing or at a meeting by June 30. B. Committee Reports 1. Executive Committee April 1, 2025, Committee Minutes The Committee did not have a quorum for its April 1 meeting, and the meeting was informational only. 2. Long Range Planning Committee March 27, 2025, Committee minutes The minutes were in the Agenda for review. ii. FY2026 and 10-year Capital Improvements Plan for Recommendation to the Boa rd The Committee recommended the Capital Improvement Plan for FY26 and the projected capital plans for the next ten years. Mr. Smith moved to approve the CIP. Mr. Zapple seconded the motion, and it passed unanimously. iii. Southside WWTP Value Engineering Update The Committee reviewed the value engineering savings for the Southside project. The summary was in the Agenda for Board review. 3. Finance Committee The Committee did not meet in April. Monthly Financials Mr. McLean presented the monthly financial report. He projected the unassigned fund balance reaching $50 million by the end of the fiscal year. The bond sale will be held on April 16. Staff and financial advisors have been keeping a close watch on interest rates. CFPUA maintained favorable ratings with Moody's and Standard & Poor's. Ms. Hudson recommended that Mr. McLean send the reports from S&P and Moody's to the Board. ii. Sole Source SCADA renewal The item was moved to the closed session for discussion. iii. Amendment to the SCADA Services On -Call Contract Mr. Ellison presented the item and answered questions from the Board. Mr. Smith moved to approve the contract amendment. Mr. Rivenbark seconded the motion, and it passed unanimously. 4. Sustainability Committee i. March 27, 2025, Committee minutes The Committee met on March 27, and the minutes were in the Agenda packet for review. ii. UNCW M.S. Data Science Student Projects on Source Water Dr. Cannon reported that two Master's students in Data Science from UNC- Wilmington had interned with EMD staff. The Committee received their reports and reviewed interactive features and dashboards created for staff use. A report on the student projects was included in the Agenda packet for Board review. Dr. Cannon further reported that CFPUA has entered into an international residency program through the UNC-W Cameron School of Business. Residency students are lifelong learners currently in the work force who will work mostly with EMD staff. She commended Mr. Waldroup for developing and supporting CFPUA's participation in the residency program. 5. Human Resources Committee March 17, 2025, Committee minutes The minutes were in the agenda for review. ii. Employee Compensation Review and Recommendations The compensation recommendations are included in the proposed FY26 Budget. iii. CFPUA Culture Assessment Recommendations Ms. Adams requested that Board members review the recommendations made by staff and the Committee and provide feedback. IX. OLD BUSINESS There was no old business. X. AUTHORITY Q & A / CLOSING COMMENTS There were no Board questions or further comments. XI. CLOSED SESSION Mr. Rivenbark moved to enter closed session to discuss CFPUA v. Chemours, potential litigation, and contract negotiations. Mr. Scalise seconded the motion, and it passed unanimously. The Board entered closed session at 11:05 AM with Ms. Fulton, Ms. Eckert, Ms. Eskew, Ms. Lawton, Ms. Robinson, Ms. Pope, and Messrs. Morris, Ellison, and Hagerty present. The Board received reports from staff and provided direction to legal counsel. Following discussion, Mr. Rivenbark moved to return to open session. Dr. Cannon seconded the motion, and it passed unanimously. The meeting returned to open session F-MIPAVIUâ–şVAI Mr. Smith moved to approve the renewal of the sole source SCADA contract. Mr. Rivenbark seconded the motion, and it passed unanimously. XII. ADJOURNMENT There was no further business to come before the Authority, and Mr. Zapple moved to adjourn. Mr. Rivenbark seconded the motion, and it passed unanimously. The Board adjourned at 12:18 PM. The next regular CFPUA meeting will be Wednesday, May 14, 2025. The Board will meet in Rooms 138 and 139, New Hanover County Administration Building, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board