Loading...
CFPUA 12 14 2011 CAPE FEAR PUBLIC UTILITY AUTHORITY DECEMBER 14, 2011 REGULAR MEETING Members Present: James Quinn, Chairman Mike Brown, Vice - Chairman Patricia Kusek, Secretary Burrows Smith, Treasurer Cindee Wolf Gene Renzaglia Rick Catlin Ron Sparks Charlie Rivenbark Brian Berger J.C. Hearne Staff Present: Matt Jordan, CEO Jim Flechtner, COO Cheryl Spivey, CFO Karen Durso, Assistant to CEO Carey Disney Ricks, CCO Frank Styers, Director of Engineering Nancy Johnson, Customer Service Director /Deputy CFO Tom Morgan, H.R. Director Beth Eckert, Safety & Environment Director Mike Richardson, Water Treatment Superintendent Ken Vogt, Wastewater Treatment Superintendent Jim Craig, Utility Services Superintendent Julie McLawhon, Finance & Accounting Manager Christene Pyne Mitchell, Engineering Manager Julia Vosnock, Procurement Manager Steve Mongeau, Program Manager Chris Neal, Program Manager Craig Lundin, Project Manager Jamison Fair, Project Manager Tige Brubaker, Project Manager Donna S. Pope, Clerk CFPUA Regular Meeting 12.14.2011 Page 1 Guests Present: Bob Wallen Ray Cox, Highfill Infrastructure David Criser, Criser & Troutman Tony Boahn, McKim & Creed J.. Solomon, CH2M Hill Carter Hubard, W.K. Dickson Eric Williams, HDR Jim Ianucci, New Hanover County Call to Order, Determination of a Quorum, and Adoption of the Agenda Mr. Quinn called the meeting to order at 9:00 a.m. and declared a quorum present. Mr. Rivenbark moved to adopt the meeting agenda. Mr. Hearne seconded the motion, and it passed unanimously. Approval of Minutes Ms. Kusek presented the minutes of the November 9, 2011, Annual Meeting, and noted a grammatical correction on Page 9, Item 2. Mr. Brown moved to approve the minutes, as corrected. Ms. Wolf seconded the motion, and it passed unanimously. Public Comments Mr. Wallen spoke regarding pump station aesthetics and suggested that the Authority consider the use of natural gas generators for pump stations. Mr. Wallen supported pro -rated bonuses for Authority employees. Consent Agenda Mr. Quinn presented the Consent Agenda, as follows: 1. Authorization for the CEO to enter into a unit price contract for procurenent of water and wastewater treatment chemicals for a period of 12 months, provided in the operating budget. 2. Authorization for the CEO to reject all bids for aluminum sulfate and sulfuric acid. 3. Authorization for the CEO to reject the Burnt Mill Creek Outfall Manhole Rehabilitation construction proposals received and re- advertise the project. CFPUA Regular Meeting 12.14.2011 Page 2 4. Authorization for the CEO to execute a contract with Southeast Pipe Survey, Inc., for Sanitary Sewer Pipe Inflow and Infiltration Camera and Cleaning, at a budget impact of $411,355, provided in the CIP. 5. Authorization for the CEO to execute a contract amendment with W.K. Dickson for collection system improvements to include redesign of gravity sewer lines, easement mapping, and design of Whiskey Creek pump station upgrades, at a budget impact of $206,500, provided in the CIP. 6 Authorization for the CEO to purchase 74 IBM Maximo software licenses, at a budget impact of $162,2 61. 11, provided in the CIP. 7. Authorization for the CEO to execute a contract amendment with Glover Instrumentation and Controls, Inc., for services at the Sweeney Water Treatment Plant and Nano Plant, at a budget impact of $49,680, provided in the operating budget. 8. Ordinance making Supplemental Appropriations to the Operating Fund for the Fiscal Year Ending June 30, 2012. 9. Resolution instructing the CEO to release information only on those accounts which have already been discussed by the account holders. Mr. Smith moved to approve the Consent Agenda, and Mr. Renzaglia seconded the motion. Mr. Catlin asked for clarification on Item 8, and Mr. Berger requested further information on Item 9. Mr. Smith amended his motion to approve Items 1 — 7, and Mr. Sparks seconded the motion. Items 1 — 7 of the Consent Agenda were unanimously approved. Mr. Jordan recommended moving Item 8 to the Finance Report and Item 9 to the Attorney's Report, and the Board agreed with his recommendation. Public Relations Report Ms. Ricks reported that Utility Services continues its water line flushing program. Work with the City on the Third Street streetscape is progressing. The Authority can send texts or emails to customers via the "notify me" service on the website. The Authority has collected 538 pounds of food for the Food Bank's annual drive. Jonathan Ham, Project Engineer, has coordinated with the American Society of Civil Engineers for the Authority to participate in the Toys for Tots program. Attorney's Report Item 9, from Consent Agenda - Resolution instructing the CEO to release information only on those accounts which have already been discussed by the account holders. CFPUA Regular Meeting 12.14.2011 Page 3 Ms. Miles presented Item 9 from the Consent Agenda, a Resolution regarding release of information on accounts which have already been discussed by account holders. She explained that the Resolution was needed before staff could release account information to Board members, local elected officials, members of Congress, or the media and was to be used only when an account holder had made his or her utility account public. Ms. Miles answered clarification questions from Board Members. Mr. Brown moved to approve the Resolution, and Mr. Berger seconded the motion. Mr. Catlin asked about applicability to roommates or spouses. Ms. Miles advised that, if more than one person is listed on an account but only one had discussed the account publicly, the Authority would need permission from the second account holder to discuss the account. Mr. Quinn called for a vote. Ms. Kusek, Ms. Wolf, and Messrs. Quinn, Renzaglia, Smith, Brown, Hearne, Rivenbark, Sparks, and Berger voted in favor of the motion. Mr. Catlin was opposed. The Resolution was approved, ten to one. Ms. Miles requested that the Board enter into closed session at the end of the meeting to discuss a legal claim and a personnel matter. Chief Executive Officer's Report Mr. Jordan presented the Environmental and Safety Management Report, Exhibit 10 in the Agenda. Messrs. Jordan and Richardson answered clarification questions regarding water distribution. Committee Reports Executive Committee. Mr. Quinn reported that the Executive Committee reviews reports from other Committees and finalizes the monthly agenda. Because many Agenda items are reviewed by the Finance Committee, the Executive Committee will meet after the monthly Finance Committee meeting in the future. Both Committees meet on the first Wednesday of each month, to finalize items for the monthly Board meeting. Mr. Quinn stated that both the Executive Committee and Human Resources Committee had reviewed a proposal for employee compensation enhancement prior to the December meeting. Human Resources Committee. Mr. Hearne asked Mr. Morgan to provide background information and review the options presented to the Committees. CFPUA Regular Meeting 12.14.2011 Page 4 Mr. Morgan reported that there had been no employee pay increases since July 2008 except for employees who received promotions or reclassifications that resulted in raises. Thirty percent of employees who transferred to the Authority on July 1, 2008, did not receive pay increases. On July 1, 2009, and subsequent fiscal years, health and dental insurance deductibles, co -pays and co- insurance costs increased for employees, at an average annualized increase of $862 per employee. During budget deliberations for Fiscal Year 2012, the H.R. Committee reviewed options for 1, 1.5, and 2 percent merit increases, lump sum employee compensation, or no increase. The option recommended by the Committee and adopted by the full Board was for no pay increases. Mr. Morgan outlined three Employee Compensation Enhancement Proposal options, as follows: • A one -time discretionary longevity bonus, based on an employee's date of fulltime employment, to wit: Hired before July 1, 2008 $1,000 (217 employees) Hired July 1, 2008 — June 30, 2009 750 (22 employees) Hired July 1, 2009 — June 3 0, 2010 500 (9 employees) Hired July 1, 2010 — June 30, 2011 250 (24 employees) Hired July 1, 2011 —November 3 0, 2011 100 (12 employees) Based on employment levels of November 18, 2011, the payroll cost for the one time bonus would be $244,600, with an accompanying payroll burden of $46,792, for a total estimated cost of $291,392. • Two percent (2 %) across the board salary increase, effective January 2012, with a payroll cost of $120,687 and associated payroll burden of $23,088 for a total of $143,775 for the remainder of Fiscal Year 2012. The annualized payroll for future years would be $241,374 and payroll burden of $66,176, for a total estimated annualized cost of $287,550. The estimated costs were based on November 18, 2011, employment levels. • No action at this time, pending the Class and Compensation Study and Fiscal Year 2013 Budget deliberations. Any compensation for the current Fiscal Year would require funding appropriation by the full Board. Mr. Hearne reported that the Human Resources Committee believed the full Board should consider the compensation proposals. He added that it was a tough situation — employees deserved something, but rate payers had also suffered. CFPUA Regular Meeting 12.14.2011 Page S Mr. Quinn reported that the Executive Committee recommendation was to direct the CEO to complete the Class and Compensation Study and develop a pay program with cost of living adjustments and merit increases, for consideration during Fiscal Year 2013 Budget discussions. He added that Executive Committee members did not want a premature discussion of salaries and did not want to act reflexively because other governmental units had given year -end bonuses. He stated that staff should have a pay program they could count on and it was time to look towards the future. Mr. Catlin asked when the compensation study would be completed and if it would use comparisons in the private sector. Mr. Jordan reported that the study would be finished in late January or early February, and Mr. Morgan reported that the comparisons included both public and private sector jobs. Mr. Catlin did not feel it was appropriate to do anything on salaries without the study information. Messrs. Morgan and Jordan answered clarification questions regarding the Class and Compensation Study which was completed in 2007 and adopted by the Authority in 2008. The study has not been updated since 2008, and positions have evolved since the Authority assumed operations. The current study cost $32,000. Mr. Rivenbark asked how bonuses or a salary increase would be funded. Mr. Jordan and Ms. Spivey reported that money could be used from the contingency and surplus funds. Ms. Wolf stated that, after serving on the Board and interaction with staff, she believed the Class and Compensation study to be appropriate and should be used during budget deliberations. She supported the one -time discretionary bonuses to award employees for doing good jobs and for recognizing efficiencies that saved the Authority money. Mr. Sparks added that the efficiency study showed that employees are on task and efficient and that employees had worked really hard, generating $5,000,000 in savings. He expressed concern about a low level of morale among employees and a concern that people would leave their jobs when the economy improved. Mr. Sparks stated that he supported the bonuses. After further discussion, Mr. Renzaglia moved to direct the CEO to complete the Class and Compensation Study and to develop a pay program with cost of living and /or merit increases for consideration during the Fiscal Year 2013 budget deliberations. Mr. Smith seconded the motion. Mr. Jordan expressed his appreciation of the Board's consideration and its recognition that the organization is successful because of employees' working day in and day out. CFPUA Regular Meeting 12.14.2011 Page 6 Mr. Berger asked for clarification of Mr. Renzaglia's motion. Mr. Renzaglia repeated the motion. Mr. Sparks cautioned Authority members about raising expectations among employees by stating that salary increases would be considered in the future. He restated his support of the one -time bonus as a "thank you" to the workforce. Ms. Wolf agreed. Mr. Catlin stated that compensation studies do not always generate raises and there should not be specific expectations for raises. Mr. Renzaglia stated that the Authority needed the data from the study to make decisions moving forward. He expressed his empathy for employees. Mr. Quinn called for a vote. Ms. Kusek and Messrs. Quinn, Brown, Smith, Renzaglia, Hearne, Catlin, Berger, and Rivenbark voted to direct Mr. Jordan to complete the Class and Compensation Study and to develop a pay program with cost of living and /or merit increase for consideration during Fiscal Year 2013 budget deliberations. Ms. Wolf and Mr. Sparks were opposed. Motion carried, nine to two. Mr. Quinn stated that implementation of pay increases did not necessarily have to wait until the beginning of the new fiscal year and could happen sooner. Mr. Brown asked Mr. Jordan to clearly communicate with employees that the Board appreciates them and their work and is trying to make good and prudent decisions. Long Range Planning Committee. Ms. Wolf reported that the Committee met on November 17 and that the next meeting would be December 15, 2011, at 3:00 p.m. Mr. Styers summarized items addressed by the Committee at its November 17 meeting, as follows: • Strategic plan review • Raw Water supply update • Rain water harvesting At its next meeting, the Committee will receive a report from Black and Veatch on the raw water supply and continue its discussion of strategic planning. CFPUA Regular Meeting 12.14.2011 Page 7 Mr. Sparks suggested that staff discuss rainwater harvesting with City of Wilmington planning and zoning staff. The Authority entered recess at 10:15 a.m. and reconvened at 10:25 a.m. Finance Committee. Mr. Smith reported that the Committee met on December 7 and asked Mr. Flechtner to review on the Blue Point Force Main and Country Haven Pump Station project. The Blue Point force main is an 8 -inch line approximately 11 years old, with a 100,000 gallon per day flow. There have been ten breaks in 15 months on the line, of unknown origin. The line was removed from service in November, and a temporary line was installed along Furtado Drive. Staff recommended the following permanent solution, which was endorsed by the Finance Committee: • Permanent force main along Furtado Drive, projected cost of $85,000 • Country Haven Pump Station upgrade, consisting of a 12 -inch force main costing $700,000, pump station design of $300,000, and construction of $1 million The upgrades would allow for an estimated increased capacity of 192,000 gallons per day in the basin served by the Country Haven Pump Station. A budget amendment transferring $1,738,273 from the Operating Fund to the Capital Projects Fund would be required to fund the upgrades. Mr. Flechtner and Ms. Miles answered questions regarding the Blue Point Force Main breaks, and analysis of the failure, and potential liability for the breaks. Ms. Miles advised that the analysis of the pipe failure should be complete in three to six months, and she and staff will report back to the Board. Mr. Smith moved to approve the Finance Committee recommendation to fund the Blue Point, Furtado, and Country Haven upgrades and to approve the executed budget amendment. Ms. Wolf seconded the motion, and it passed unanimously. Customer Service Update: Ms. Johnson presented the Customer Service report. On December 7, 2011, the Finance Committee heard an appeal by Mr. Arthur Bullock regarding retroactive billing on his account. The Committee recommended that the previous charges not be removed from the account because the Authority must apply its policies to all customer accounts evenly. The Committee recommended no change to the Authority Ordinance retroactive billing section. The Committee directed staff to work through an extended payment plan with the customer. CFPUA Regular Meeting 12.14.2011 Page 8 Mr. Smith moved for the full Board to approve and ratify the Finance Committee action. Mr. Brown seconded the motion. Mr. Catlin asked for clarification regarding the cause of the billing error and the amount of time billed. Mr. Renzaglia reported that the customer had lived in the property for nine years and had exercised due diligence in applying for service from the City. For an unknown reason, the sewer was connected but not billed by the City or Authority. Upon discovery of the error, the Authority billed retroactively for three years, as allowed by state law and the Authority Ordinance. Mr. Catlin stated that he would have suggested a compromise and the customer being billed for three years rather than nine appeared to be a compromise. He felt it was unfortunate for the customer but understood. Mr. Jordan and Ms. Miles reported that data scrubbing by the Authority had revealed discrepancies, some in favor of the Authority and some in favor of customers, and adjustments had been made in either circumstance. The policy and Ordinance have been applied consistently. Mr. Quinn called for a vote, and the motion passed unanimously. Ms. Johnson reported that the Authority has a two percent collection rate on accounts sent to Penn Credit for collection. Customers paid $10,875.16 directly to the Authority, and $13,610.38 had been paid to Penn Credit. Collection costs to date were $4,609. The next group of collection accounts will go to Penn Credit in January 2012. Ms. Spivey reported that the Finance Committee continues discussions on bulk water rates for re -sell bulk customers and irrigations. Item 8 from Consent Agenda - Ordinance making Supplemental Appropriations to the Operating Fund for the Fiscal Year Ending June 30, 2012. Ms. Spivey presented Item 8 from the Consent Agenda and explained its purpose. The projected bond sale figures included a Debt Service Reserve Fund. The reserve fund was not required at closing, reducing the bond amount and cost of issuance. There was also a savings as a result of re- funding City bonds from 2003. The recommended budget amendment reflects the associated revision to Operating Fund Revenues and Appropriations for Fiscal Year 2012 in the amount of $3,524M38. Mr. Catlin moved to adopt the Ordinance making Supplemental Appropriations. Mr. Sparks seconded the motion, and it passed unanimously. CFPUA Regular Meeting 12.14.2011 Page 9 Deferral Policy for Mandatory Connection: Ms. Mitchell presented the recommended deferral policy and associated Ordinance revision. The deferral policy would allow a customer to defer the majority of connection costs while considering the effects on existing rate payers. A customers may defer the Authority tap fee of $4,200 and $230 meter set fee, and whatever costs they would be required to pay privately to a plumber to connect to Authority services. A customer could also choose to pay the tap fee and meter set fee at the present costs and defer connection. If the fees are deferred, the fees will be charged at the rate in effect at the time they are paid. The deferral period would be for three years, with the customer having the ability to re- apply and receive a second deferral for a total of six years. The customer would be required to pay System Development Charges, which may be financed with 10 percent down and 5 percent interest over eight years. A bi- monthly availability rate would also be charged. The customer would need to provide certification from a North Carolina licensed plumbing inspector that his or her system is operating properly and does not present an environmental hazard. Should a well or septic system fail, the customer would be required to connect to the Authority system. Ms. Mitchell answered clarification questions from Authority members. Approximately 300 property owners could be affected by mandatory connection and the deferral policy. Mr. Sparks requested that Authority members re- consider availability and base charges during budget discussions. Mr. Catlin observed that some customers did not request water and sewer services and expressed concerns about the unexpected financial burden faced by customers. Mr. Smith stated that availability and base charges would represent over $1 million if not charged. Mr. Jordan added that not having a base charge on vacant property had been discussed during meetings of the Landlord Tenant Committee, and Ms. Spivey reported that not charging for vacant properties would represent 2 — 2.5 percent of a rate difference. Ms. Wolf moved to adopt the deferral policy for mandatory connection as recommended by staff and to approve the associated Ordinance revision. Ms. Kusek seconded the motion. Ms. Kusek, Ms. Wolf, and Messrs. Quinn, Renzaglia, Brown, Smith, Hearne, Rivenbark, and Berger voted in favor of the motion. Messrs. Catlin and Sparks were opposed. Motion carried, nine to two. Ms. Spivey referred the Board to the November financial reports in the Agenda. Water distribution will be monitored closely in future months. With 42 percent of the year lapsed, revenues are at 43.51 percent and expenses at 32 percent. Old Business. There was no old business. Closing Comments. Mr. Quinn stated that the Board had just concluded two hours of discussion of water and sewer issues, in contrast to water and sewer only being discussed during CFPUA Regular Meeting 12.14.2011 Page 10 budget deliberations when the services were run by the City and County. He thanked the Board and staff for their time and effort on the issues presented. Closed Session. Mr. Rivenbark moved to enter closed session to discuss a claim and a personnel matter. Mr. Brown seconded the motion, and it passed unanimously. The Authority entered closed session at 11:15 a.m. Ms. Miles, Ms. Pope, and Messrs. Jordan, Styers, and Flechtner remained in the meeting. The Authority discussed a potential claim. At 11:30 a.m., Ms. Miles and all staff members left the meeting, and the Board discussed a personnel matter. At 11:55 a.m., Messrs. Rivenbark and Sparks asked to be excused. Mr. Brown moved to excuse both gentlemen. Mr. Brown seconded the motion, and it passed unanimously. Messrs. Sparks and Rivenbark left the meeting. At 12:20 p.m., Mr. Smith moved to return to open session. Mr. Catlin seconded, the motion passed unanimously, and the Authority returned to open session. At 12:21 p.m., Mr. Smith moved to adjourn. Mr. Catlin seconded, and the motion passed unanimously. The Authority adjourned at 12:21 p.m. The next meeting of the Cape Fear Public Utility Authority will be Wednesday, January 11, 2012. The meeting will commence at 9:00 a.m. and will be held in the Harrell Conference Room of the New Hanover County Administration Building, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Authority CFPUA Regular Meeting 12.14.2011 Page 11