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10-02-2007 CAPE FEAR PUBLIC UTILITY AUTHORITY BOARD MEETING OCTOBER 2, 2007 MEMBERS PRESENT:MEMBERS ABSENT: Matt Hunter, Chairman Gene Renzaglia Burrows Smith Kathryn Johnston Rod Andrew Robert Greer Charles Wells Steve Thomas Bill Caster Jim Quinn Jason Thompson Guest: Ed Donuhue, Municipal & Financial Services Group (MFSG) David Hyder, Municipal & Financial Services Group (MFSG) Steve Kaii-Ziegler, Municipal & Financial Services Group (MFSG) Roger McCall, IT Project Manager, Municipal & Financial Services Group (MFSG) Chairman Hunter called the meeting to order at 8:05 a.m. 1. Opening Comments Chairman Matt Hunter a. Determination of Quorum: A total of 11 Authority members were in attendance. A quorum was present. b. Recent Officer Guidance to MFSG: The primary issues that the Authority has been focusing on are Human Resources and the Inter-Local Agreement drafts. Each Authority member should have received an information package from Brent McAbee on payroll issues. There are several forms that each Authority member should fill out and return to Brent McAbee or Avril Pinder. Chairman Hunter stated that it is an election season and the information being gathered from the various candidate forums indicate that the public is very confused about the new authority. 2. Approval of Minutes Steve Thomas a. Minutes Corrections & Approval: Bill Caster made a motion to approve the September 4, 2007, minutes. Gene Renzaglia seconded the motion. Motion passed. 3. Committee Reports Chairman Hunter modified the agenda to accommodate Bill Lynch, since he is due in court at 9:00 a.m. Bill Lynch will discuss the Inter-Local Agreement. a. Human Resources Committee: Kathryn Johnston The Human Resources Committee continues to work on the eight core items. The General Manager position is proceeding very well. The General Manager will be responsible for the hiring of the direct Î reports. The direct reports to the General Manager have been advertised. Î The other job descriptions are proceeding, as well as, the pay class study; MFSG is also working on the policy and procedures. Bill Lynch suggested that a draft generic employment contract for the General Manager position be made available to the Executive Committee, since they will be responsible for negotiating a contract once the Authority has made its decision. The contract will also inform prospective candidates what is expected Î from them if they are chosen for the position. Bill Lynch will submit a draft generic employment contract to Authority Î members for their review. b. Inter-Local Agreements Committee: Rod Andrew Bill Lynch The committee met on Monday, September 24, 2007. Burrows Smith, Rod Andrew, and Ed Donuhue met with Bill Lynch and reviewed the first draft of the Inter-Local Agreement. Ed Donahue and Bill Lynch will review the agreement for content. Î Bill Lynch stated that both the County and the City of Wilmington have Î interests that they are trying to protect. It will be difficult to address them without limiting the ability of the Authority to function. After the Inter-Local Agreement Committee approves the changes to the Î document, it will go to the City of Wilmington and County Attorneys for their approval. Bill Lynch was 2 Ed Donuhue stated that the contract is open, but the funding has expired. Î Bill Lynch has also been asked to review the SunGard contract. The SunGard contract provision, includes customer service and other Î related systems, financial services and the basic systems that will need to be functioning when the Authority becomes operational. The contract was reviewed, it had no warranty clause in it, and it is hard to Î get a warranty on a service contract since it is a service and not a job that is going to be completed. A penalty Î down time for eight hours for each of the periods the Authority will receive a $1,000 penalty. This is to keep them from having down time on the service agreement. The contract also had a law provision from Florida that was changed to Î North Carolina. Once the changes are completed, the contract will be signed and submitted Î to SunGard. Mr. Lynch also reviewed a contract with Condrey and Associates, Inc. to perform a pay classification and compensation study for the Authority. The Water and Sewer Act has a specific statute concerning employee Î personnel records, and Bill Lynch has requested that Condrey and Associates comply with the statute. Since Condrey and Associates are going to be on site, the Authority has Î asked that they include insurance and a hold harmless provision in the contract. The provison will be included in the contract. The Condrey and Associates contract states that a fee of $55,000 is to be Î paid in two installments, but it does not say when the installments are due, that issue will need to be addressed. Once the changes to the contract are complete, the contract will be signed Î and submitted to Condrey and Associates. Mr. Lynch inquired if the Authority had any rules and procedures in place for conducting meetings. It was stated that the Authority had By-Laws, but no rules and procedures for conducting meetings. Mr. Lynch will submit the information to the Chairman and Authority Î members. The Authority will not make improvements or enter into agreements to serve if it will inhibit its ability to meet the needs of the City of Wilmington or County customers. There has only been one Authority in North Carolina that has failed and it Î was due to the subdivision not letting the Authority function as it should. Bill Lynch informed Authority members that when a formal committee (standing committee) meets, the meeting must be posted, so that the public is aware of the meeting. It does not have to be advertised in the paper, but it should be posted at the Î meeting place and where the public can view it. A copy of the notice should be given to anyone who has requested they be Î notified, example, the newspaper. 3 Three people constitute a formal meeting. Î Mr. Lynch will review a matrix that MFSG will compile of regular Î scheduled Authority meetings, special meetings, standing committees and special committee and task force meetings. MFSG will put notice of any meetings on the web site, as well as, the Î public bulletin board. It was stated that if there are more than three elected officials in a room to Î conduct business, it has to be announced as a meeting or it has to have another definition. If there is a quorum (the majority) present that constitutes a meeting, Î unless it is a social gathering. The key number is a quorum except for standing committees. Î Notices need to be posted 48 hours in advance of the meeting. Î Steve Thomas requested that the public notice and information be inserted Î as a section in the procedures and rules manual along with the definition of a committee. Mr. Lynch will prepare a draft of the procedures and rules for Authority Î members to review before the next meeting. c. Facilities Committee: Burrows Smith It was stated that after the General Manager is hired, the needs of the Authority will be better outlined. There are approximately four or five locations that the Facilities Committee is considering for a facility. d. Information Technology Committee: Gene Renzaglia The staff has been working with SunGard to identify all the components that will be needed to make the system operational. Once the components are identified, the contract will be ready for Î approval by the Authority. Staff will ask SunGard to provide them with the details they need and a Î time frame so that the information can be presented to the various committees or groups that will need to interface with each other. The IT position has been advertised and the Authority is in the process of Î identifying that person. Once the person is hired, they will work with SunGard to coordinate all the activities that need to transpire in order for the software system to be developed. The contract with SunGard will be implemented before the IT person is Î hired. This will enable SunGard the opportunity to develop the software system. MFSG stated that the IT recruitment period ends on Tuesday, October 9, Î 2007. 4 Telephone interviews will be conducted by MFSG and the Authority will Î decide if the Executive Committee should allow the General Manager to identify and hire the IT position. SunGard will need to purchase certain items to do the internal work to Î identify all the activities that are needed to develop the program. Although it would be very helpful to have the IT manager in place, it is Î not critical that the person be available prior to going ahead with the software development. In addition to managing the software programs, the IT manager will need Î to implement an e-mail system, purchase hardware and personal computers for employees, etc. e. Communications Committee: Matt Hunter Based on what Bill Lynch just stated, the Chairman is going to change the name of the Committee from Communication Committee to a Committee Report, since he is the only one on the Committee and it is not a standing committee. Chairman Hunter gave a brief update to the Authority Board on his role as interim public information officer. Mark Boyer and Malissa Talbert, the two public information officers for Î the County and the City of Wilmington, provided Chaiman Hunter with some basic media training. It was stated that Chairman Hunter drafted a letter to all County and City of Wilmington employees regarding information about the direct reports and encouraged everyone who felt they were qualified for any positions listed to apply. Chairman Hunter will send a copy of the letter to Authority members. Î f. : Greg Thompson The Inter-Local Agreement was conveyed to the Authority Board and they are currently reviewing it. The City Council will have a second reading on the Inter-Local Agreement. The Board of County Commissioners voted on Monday, October 1, 2007, to be the fiscal agent for the Authority. It was stated that the reason the County accepted the responsibility to be Î the fiscal agent instead of the City of Wilmington was due to the structure of City Council, for expenditures over $5,000 or more the expense would have to be approved by City Council. Chairman Hunter thanked the Board of County Commissioners for Î accepting the responsibility to be the fiscal agent. 5 g. Detailed Project Schedule Briefing: David Hyder distributed a Critical Path Management worksheet and General Manager Hiring Process Schedule to Authority members. Please refer to the handout for more details. The Critical Path Management (CPM) has been altered as requested by Steve Thomas. The CPM was presented at the September meeting and is essentially a Î road map for consolidation. The CPM was created to list all the tasks that need to be implemented and Î accomplished between now and when the Authority becomes operational. It is broken up into seven categories which include Finance and Î Accounting, Human Resources, Customer Service, Engineering Operations and Maintenance, Environmental and Safety Issues, Legal and Information Technology. There are 280 tasks that are listed on the schedule with a duration period Î for each task, a start date, end date and how many days in total it will take to complete the task. It also identifies what tasks need to be done prior to another task being Î accomplished. Steve Thomas will be responsible for managing the CPM. Î He will give an update at each Authority Board meeting on which critical Î path items are being worked on and when they will be accomplished and if there are any problems that will need addressing to accomplish those tasks. Currently, there are not a lot of tasks that need to be completed since all Î the deadlines have been met. The agendas for each of the committees are formulated by the CPM. Î The General Manager should be hired before the Authority can approve the organization chart. and approval on Î the organization chart. The total number of applicants that were received for the General Manager Î position was 91. Twelve applicants were contacted for telephone interviews. Î The Executive Committee conducted the interviews. Î Eight people were selected, only seven will interview, one decided not to Î participate. The General Manager will be hired before the direct reports. Î The Authority will negotiate a contract with the General Manager on Î Monday, November 19, 2007. The Inter-Local Agreement should be approved before the General Manager is hired. It was stated that no where in the draft Inter-Local Agreement between the Î City of Wilmington and the County does it state that the Authority would provide water and sewer services. 6 One of the items that will need to be inserted into the agreement in order Î to sell bonds is a promise from the City of Wilmington and the County not to form competing water and sewer systems because if the Authority does, then they cannot sell reverend bonds, because no one will buy them. There are several items of substance in the Inter-Local Agreement that Î need to be addressed by the attorneys. The Authority has the responsibility to look out for the best financial Î interest of the Authority and it may not be the same as the best interest for the City of Wilmington and the County. The goal is to have an Inter-Local Agreement to the Authority by the next Î meeting, so that it can be approved. The issues associated with the Inter-Local Agreement should not interfere Î or delay the interview selection for the General Manager. There are two issues that need to be addressed, they are as following: Î The ability of the Authority to enter into Inter-Local Agreements outside of the service district. Cities are allowed to grow by annexation and How the annexation follows the route of infrastructure. The earliest date that both entities could have the Inter-Local Agreement approved is Tuesday, November 20, 2007. The members of the Authority stated that a meeting or workshop should be held before the November board meeting to provide the public and elected officials not on the Authority Board a better understanding of what the Authority is trying to accomplish. 4. Break Authority members took a five minute break from 9:15 a.m. to 9:20 a.m. The meeting reconvened at 9:20 a.m. h. Critical Path Briefing: Steve Thomas He stated that the elected officials who are serving on the Authority Board need to take the information back to their organizations and get them to agree on the Inter-Local Agreement, so that the agreement can be approved by both entities by the November 20, 2007, deadline. It is critical that the Inter-Local Agreement be approved, so that the July 1, Î 2008, deadline for becoming operational is not delayed. 5. Decision Briefings a. Transition Document and Inter-Local Agreement Approval: Rod Andrew , at 8:30 a.m. to discuss the Inter-Local Agreement. 7 Rod Andrew will send a notice to the Authority members advising them of Î the meeting. b. Employee Benefit Package Presentation: Kathryn Johnston The Human Resources Committee has been working tirelessly to bring the benefit package back to the Authority so that it complies with the two guiding principles. It was difficult to get the two of them together with a comparable benefit Î and comparable rate structure. A tremendous amount of work has been going on to get the organization chart complete. The Committee is anticipating recommending the organization chart to the Î Authority at the November board meeting. There are some concerns about spousal health coverage and the 401K programs. There are several technological differences that the Committee is working Î on to resolve. The City of Wilmington health package is very good. The cafeteria plan is being reviewed. Condrey and Associates have been engaged to do the pay and class study in conjunction with MFSG. Human Resources Committee has not had any contact with Condrey and Associates. c. Fiscal Agent Resolution: Charles Wells distributed a copy of the Designation of Fiscal Agent Resolution to Authority members. Please refer to the handout for more details. At the last meeting on Tuesday, September 4, 2007, a resolution was passed designating the City of Wilmington as the fiscal agent for the Authority. Due to the administrative complexity, the City of Wilmington could not Î function as the fiscal agent. The County will be the fiscal agent for the Authority. Î Charles Wells presented Chairman Hunter with the resolution for his Î signature stating that the County would be the fiscal agent for the Authority. A motion was made by Charles Wells to substitute New Hanover County Î as the fiscal agent instead of the City of Wilmington. The motion was seconded by Rod Andrew. Motion passed. d. Contract Approvals: Charles Wells distributed information on three service contracts to Authority members. Please refer to the handouts for more detail. The Finance Committee met on Wednesday, September 26, 2007, and discussed the water and rate study, developed and prepared the budget and reviewed the contracts that were submitted to the Authority. 8 A total of $30,023 has been spent for MSFG expenses for the advertising of the General Manager and Information Technology positions. A letter was prepared to Chairman Hunter requesting that the Authority approve certain contracts that are necessary for the Authority operations. The contracts are as following: Î SunGard initial start up, conversion fees and monthly payments for 36 Î months - $265,000 MFSG current and future services - $771,000 Î Condrey and Associates Human Resources Technology Assistance - Î $55,000 The funding amounts for SunGard and MFSG are through the end of the Î year. Charles Wells made a motion to approve the contracts as mentioned: Î SunGard $265,000; MFSG $771,000 and Condrey and Associates for $55,000. Burrows Smith seconded the motion. Motion passed. It was stated that more funding requests will be made before the end of the year to keep the Authority moving towards the July 1, 2008, operational date. 6. OLD BUSINESS Questions and Answers Change of Regular Scheduled Meeting Dates: Matt Hunter One item that was tabled from the September 4, 2007, meeting was changing the schedule of the Authority Board meetings. Steve Thomas A motion was made at the Tuesday, September 4, 2007, meeting to move the regular scheduled Authority Board meetings to the second Wednesday of each month and move the time from 8:00 to 9:00 a.m. The request that lead to the tabling of the motion was that there was not Î enough time to review and discuss the motion; it has been a month since the item was tabled. Steve Thomas made a motion to move the regular scheduled Authority Î Board meetings to the second Wednesday of each month and move the time from 8:00 to 9:00 a.m. Jim Quinn seconded the motion. Motion carried 10 to 1. (Rod Andrew opposed). It was stated that since the meetings are becoming more popular with the Î public, moving the time up from 8:00 a.m. to 9:00 a.m. would accommodate the public better. MFSG will format a calendar showing the new dates and time. Î The next regular scheduled Authority Board meeting will be on Î Wednesday, November 15, 2007. 9 Steve Thomas made a motion to reserve the fourth Wednesday at 9:00 a.m. of each month as a reserve date for special meetings as they are called by the Authority Board. Seconded by Jason Thompson. Motion passed. NEW BUSINESS a. Selection of Date for General Manager Interviews: Steve Thomas The Executive Committee has discussed and prepared a schedule for the hiring of the General Manager. The Authority Board needs to meet to witness the interviews of the final Î two or three candidates for the position of the General Manager. The interview meeting will be a special session of the Authority Board and Î it will be a closed session. To keep on schedule, Authority members suggested holding the General Î Manager Finalist interviews on Tuesday, October 16, 2007 from 8:00 a.m. to 3:00 p.m. in Conference Room 601. Two interviews will be completed in the morning and one after lunch. Î Steve Thomas made a motion to schedule a special meeting of the Î Authority Board on Tuesday, October 16, 2007 at 8:00 a.m. to 3:00 p.m. to be held in Conference Room 601. Burrows Smith seconded the motion. It was suggested that a two-hour time limit be given to each finalist and that the finalists be given the option of having a public or a closed session interview. Gene Renzaglia made a motion to amend the first motion to adjust the time from 8:00 a.m. to 3:00 p.m. to 8:30 a.m. to 3:30 p.m. so that the Board could accommodate all the members of the Authority. Steve Thomas accepted the amended motion. The motion was seconded by Jason Thompson. The amendment was accepted. Steve Thomas restated the current motion. The motion is that we have a special meeting of this Board on Tuesday, October 16, 2007 from 8:30 a.m. to 3:30 p.m. to conduct the finalist interviews for the General Manager position. Motion passed. b. Selection of Date for Facility Tour: Chairman Hunter Chairman Hunter made a motion to table the selection of a date for a facility tour until the November meeting. Steve Thomas seconded the motion. Motion passed. 8. Authority Members or Public Comments Retreat Recommendations Chairman Hunter Chairman Hunter made a motion to table the retreat recommendations until the November meeting. 10 Burrows Smith made a motion to conduct a Authority Board meeting on Wednesday, October 24, 2007 at 9:00 a.m. to address the Inter-Local Agreement. Seconded by Steve Thomas. Motion passed. Burrows Smith stated that Authority members should have a copy of the Î latest draft of the Inter-Local Agreement prior to that meeting, so that they will be familiar with its contents. Kathryn Johnston stated that she thought the retreat was to bring the Î Authority members up to speed on the critical issues that would impact their ability to vote on the Inter-Local Agreement. There should only be two or three contingent issues that will need to be Î discussed on the Inter-Local Agreement. Ed Donuhue stated that there are several issues that the Authority will need to discuss at the retreat. The first item is that there is half a billion dollars of construction facing the Authority over the next eight to ten years. The Authority members will need to understand where those numbers are Î coming from, why, and what is driving those numbers. Some of the decisions that are being made now will have an impact on Î future items and it is important that the Authority members understand them. The second item is the issue of relations with the City of Wilmington, New Hanover County and adjacent governments or other entities that may want to join the Authority at a future date. The third item is the facility tours. Some of the members have visited all the facilities and some have not, it is Î important for the creditability of the Authority that members are familiar with the information. The fourth item is getting Authority members involved in some of the professional and industry associations to keep them abreast on changing regulations laws, and practices in the industry, etc. It was stated that the Authority should hold the retreat after the General Manager is hired, so that they would have input on issues. Ed Donuhue stated that one of the things he would like to do at the retreat is to invite either or both the Executive Directors from the western Virginia Water Authority (the model in Roanoke), they have both been very willing to share information with MFSG. Chairman Hunter requested that Frank Styers and MaryAnn Hinshaw organize the retreat and work with MFSG to find three different dates in mid December for the retreat that they could present to Authority members at the November meeting. It was stated that MaryAnn Hinshaw is retiring. Pay Information: Avril Pinder distributed a Payroll Calendar to Authority members. Please refer to the handout for more details. 11 Avril Pinder informed Authority Board members that several members have not turned in their payroll information for reimbursement. The information should be submitted to the County Finance office. Agenda Information: Chairman Hunter Chairman Hunter stated that agenda items should be submitted to him until information is received from Bill Lynch on the correct format. The next regular scheduled meeting of the Cape Fear Public Utility Authority will be held on Wednesday, November 15, 2007 at 9:00 a.m. in Conference Room 601, 230 Government Center Drive, Wilmington, North Carolina. ADJOURNMENT Burrows Smith made a motion for adjournment. The motion was seconded by Steve Thomas. Motion passed. The meeting was adjourned at 10:20 a.m. 12