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HomeMy WebLinkAbout2025-05-14 MinutesCAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES MAY 14, 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 with all Board members present. II. DETERMINATION OF A QUORUM Authority 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 Luke Waddell, Sr., Councilman Rob Zapple, Commissioner Staff present: Kenneth Waldroup, Executive Director Nicolette Fulton, Attorney Beth Eckert, Deputy Executive Director John McLean, CFO and Deputy Executive Director Kevin Morris, Deputy Executive Director Lori Tayson, HR Director Vaughn Hagerty, Chief Communications Officer Cord Ellison, Chief Information Officer Julia Vosnock, Deputy CFO Craig Wilson, Assistant Operations Director Matt Tribett, Assistant Operations Director Ben Kearns, Water Resources Manager Brittany McKim Spell, Deputy Attorney Mackenzie Coulter, Real Estate Manager Deborah Leonard, HR Manager Sherry Brooks, HR Business Partner Ben Guerrieri, Procurement & Budget Manager Elizabeth Severt, Strategy & Performance Manager Ethan Waters, Strategy & Performance Analyst Kelsey Mongeau, Strategy & Performance Analyst Heidi Hackett, Customer Service Manager Dennis Wood, Customer Service Lobby Supervisor Tara Arnette, Environmental Sustainability & Safety Manager Jack Walsh, Water Operator Jeremey Snead, Utility Maintenance Mechanic Tristian Rickabaugh, Water Operations Supervisor Christian Mathis, Senior Wastewater Treatment Control Operator Lauren Friedly, Wastewater Operator Jonathan Wise, Utility Maintenance Mechanic Makeba Robinson, Deputy Clerk Judy Lawton, Deputy Clerk Donna S. Pope, Clerk III. SHARP AWARD PRESENTATION Ms. Arnette presented the award to staff from the Sweeney Water Treatment Plant and the Laughlin Wastewater Treatment Plant (Northside). SHARP stands for Health Achievement Recognition Program, and it is a national program recognizing employers with demonstrated outstanding safety programs. North Carolina's program is one of the largest in the country, and it is administered by the North Carolina Department of Labor. Sweeney and Northside first received the award in 2014 and have received it every year since. Messrs. Sneed and Walsh accepted the award for Sweeney. Ms. Friedly and Messrs. Mathis, Rickabaugh, and Wise accepted the award on behalf of Northside staff. Board and staff applauded employees representing the two plants.Mr. Waldroup praised Authority staff's longterm safety achievements. Ms. Adams added that, as a professional whose work includes industrial safety, she believes that safety includes what you do when no one is watching. She expressed appreciation for everything staff does to make CFPUA a workplace that keeps employees safe. IV. ADOPTION OF AGENDA Mr. Smith moved to adopt the day's agenda. Mr. Zapple seconded the motion, and it passed unanimously. V. APPROVAL OF MINUTES A. Approval of Minutes - Regular Meeting - April 9, 2025 Dr. Cannon presented the minutes from the April 9, 2025. Mr. Zapple moved to approve the minutes. Mr. Waddell seconded the motion, and it passed unanimously. VI. PUBLIC COMMENTS - 4 MINUTE LIMIT PER SPEAKER There were no public speakers for the regular meeting. VII. PUBLIC HEARING FOR FY26 BUDGET Ms. Adams opened the public hearing at 9:10 AM. A. FY26 Budget Presentation Mr. McLean presented the recommended budget for the fiscal year beginning July 1, 2025. The operating budget is $129,353,416, an increase of 7.8 percent over FY25. Mr. McLean reported that the budget focuses on maintaining service levels and that it reflects the consolidation with Wrightsville Beach and the need for increased capital spending for the upcoming Southside project. There are three components of maintaining service levels. They are attracting and retaining a competitive workforce, supporting system operations and maintenance, and funding capital infrastructure through both debt and pay -go projects. Costs for these components are slightly lower than projected in last year's rate model. Debt service on bonds for FY26 include debt service of the FY25 bonds, for a total debt service of $2.89 million. $3.1 million will be transferred to capital projects. For staffing, the budget includes 3.5 percent for combined merit and market raises, one reclassification, one new position, and the closure of the downtown lobby. Staff has developed a new fee structure for Development Services effective July 1, 2025, that will provide for a 42-44 percent recovery on CFPUA costs for providing the services. The fees include a $1.00 fee for printed bills that will go into effect January 1, 2026. The Wrightsville Beach consolidation will move the Town from being a wholesale customer to the Town's residents becoming retail customers. CFPUA will add Town employees to CFPUA's workforce and add operating costs for the Town's utilities, but there will be a net positive impact on CFPUA's budget. The positive impact results from the addition of Wrightsville Beach customers to CFPUA's retail customer basis, and from the structure of the agreement wherein Town customers will pay for projects directly benefiting Wrightsville Beach through a rate differential. Mr. McLean answered questions regarding the project -related rate differential and received feedback from Board members regarding future reporting of financial items related to the consolidation. The estimated cost for the Southside project is $400 million. Project costs directly impact rates, with gradual increases leading up to construction. Staff and the Finance Committee recommended a 6.9 percent rate increase for water and sewer customers. The recommended rate for a separate irrigation meter is $7.73 for 1,000 gallons. Irrigation only accounts do not pay sewer charges. The average increase for a water and sewer residential customer will be $5.12, and the average increase for a customer with water, sewer, and a separate irrigation meter will be $16.90. The irrigation charges are less than they would be for customers irrigating through their regular domestic meters. Messrs. McLean and Waldroup answered questions regarding potential changes in use with the higher irrigation rate. Mr. Waldroup outlined public outreach to the County, City, the university, hospital, and schools regarding the new irrigation rate. Following Mr. McLean's presentation, there were no public speakers regarding the budget. Mr. Rivenbark moved to close the public hearing, and Mr. Waddell seconded the motion. The motion passed unanimously, and the hearing closed at 9:34 AM. VIII. ADOPTION OF FY26 BUDGET A. Adoption of FY26 Budget Ordinances Mr. Smith moved to adopt the budget for the fiscal year beginning July 1, 2025, and the associated budget ordinances. Mr. Corder seconded the motion, and it passed unanimously. The adopted FY26 operating budget is $129,353,416, and the adopted capital budget is $207,357,000. IX. CONSENT AGENDA There were no questions about the Consent Agenda. Mr. Scalise moved to approve all Consent items. Mr. Waddell seconded the motion, and it passed unanimously. A. $209,548 Contract Amendment #2 with HDR Engineering, Inc. of the Carolinas for Owner Advisor Services on SSWWTP project B. Crooked Pine Water Main Cost Recovery Project C. Sole Source Purchase of Liquid Oxygen from Linde, Inc. D. Budget Ordinance Appropriating Series 2025 Bond Proceeds X. NEW BUSINESS A. Administrative Reports 1. Attorney's Report Ms. Fulton had no report for open session. She requested a closed session to reporton two items. 2. Executive Director's Report Key Indicators The report was in the agenda packet for Board review. Mr. Zapple commented favorably on the days' cash on hand and positive growth figures for the past five months. ii. Safety Report The report was in the agenda packet for Board review. iii. Environmental Report The report was in the Board packet for review. iv. Strategic Plan Update The report was in the agenda packet for Board review. V. Economic Development Projects Update The report was in the agenda packet for Board review. B. Committee Reports 1. Executive Committee Ms. Adams requested volunteers to serve with her on the Nominating Committee to recommend officers for Fiscal Year 2026. Messrs. Corder, Waddell, and Zapple volunteered to serve on the Committee. i. Minutes - May 7, 2025 The minutes were in the agenda packet for review. 2. Long Range Planning Committee i. Minutes - April 24, 2025 The minutes were in the agenda packet for Board review. ii. Update on 54" Diameter Steel Raw Water Main Project The update was in the agenda packet for Board review. Mr. Zapple expressed appreciation for LCFWASA Board members who supported special appropriations from the state for the water line. iii. Briefing on Raw Water Pipe Leak Investigation The update was in the agenda packet for Board review. iv. Update on Consolidation Project (Town of Wrightsville Beach) The update was in the agenda packet for Board review. V. Factoring in Escalation (Inflation) in Capital Planning The update was in the agenda packet for Board review. 3. Finance Committee Minutes - May 7, 2025 The minutes were in the agenda packet for review. ii. Monthly Financials Mr. McLean presented the April financial data. The financial report includes $13 million in SDC transfers from the Town of Wrightsville Beach. Retail rates are on track for the budget year. Mr. McLean reported that he anticipates a year-end surplus around $50 million. He will bring recommendations to the Finance Committee for use of the undesignated fund balance. iii. $11,423,554 Contract with Crowder Construction Company for Southside Wastewater Treatment Plant Early Sitework GMP #1. Mr. Wilson answered questions from Board members related to the contract. Mr. Waddell moved to approve the contract. Mr. Rivenbark seconded the motion, and it passed unanimously. 4. Sustainability Committee The Committee did not meet in April. 5. Human Resources Committee The Committee did not meet prior to the Board meeting. XI. OLD BUSINESS There was no old business. XII. AUTHORITY Q & A / CLOSING COMMENTS There were no additional comments or questions from the Board. XIII. CLOSED SESSION Mr. Rivenbark moved to enter closed session to discuss contract negotiations and potential litigation. Mr. Smith seconded the motion, and it passed unanimously. The Board entered closed session at 9:45 AM. Following a report from legal counsel and feedback from the Board, Mr. Rivenbark moved to return to open session. Mr. Corder seconded the motion, and it passed unanimously. The Board returned to open session at 10:14 AM. Mr. Smith moved to initiate eminent domain proceedings against Dr. Arnold Sobol for property located on River Road, Wilmington, North Carolina. Mr. Rivenbark seconded the motion, and it passed unanimously. XIV. ADJOURNMENT There was no further business to come before the Board, and Mr. Waddell moved to adjourn. Mr. Rivenbark seconded the motion, and it passed unanimously. The Board adjourned at 10:15 AM. The next regular CFPUA meeting will be Wednesday, June 11, 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