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CFPUA 04 27 2011 Special Meeting CAPE FEAR PUBLIC UTILITY AUTHORITY SPECIAL MEETING APRIL 27, 2011 Members Present: Gene Renzaglia, Chairman Mike Brown, Secretary Burrows Smith, Treasurer Cindee Wolf Patricia Kusek Rick Catlin, Commissioner Brian Berger, Commissioner Ron Sparks, Councilman Charlie Rivenbark, Councilman Members Absent: J.C. Hearne, II, Vice-Chairman Jim Quinn Staff Present: Matt Jordan, Chief Executive Officer Cheryl Spivey, Chief Financial Officer Karen Durso, Assistant to the CEO Carey Disney Ricks, Public Information Officer Donna S. Pope, Clerk Attorney Present: Linda A. Miles, the Miles Firm, PLLC Guests Present: Sterling Cheatham, Manager, City of Wilmington Carolyn Johnson, City Attorney Debra Mack, City Finance Director Kemp Burpeau, Deputy County Attorney Avril Pinder, County Finance Director The Cape Fear Public Utility Authority called a Special Meeting on April 27, 2011, in the Lucie Harrell Conference Room located in the New Hanover County Administration Building, 230 Government Center Drive. CFPUA Special Meeting, April 27, 2011 Page 1 Call to Order, Determination of a Quorum, and Adoption of the Agenda: Mr. Renzaglia called the meeting to order at 9:00 a.m. and declared a quorum present. Mr. Berger arrived at 9:10 a.m. Mr. Renzaglia welcomed City and County staff to the meeting and seconded the motion, and it passed unanimously. Old Business: Discussion of Collections of Delinquent Solid Waste Accounts for the City of Wilmington: Mr. Renzaglia briefly reviewed the issue to be discussed. A question has arisen about the cies for solid waste accounts. Ms. Miles has discussed the issue with School of Government attorneys, who are of the opinion that such authority is not stated in the statute. determined. Mr. Jordan reported that the incremental costs had not been resolved. Ms. Spivey reported that she had revised her determination of costs using a methodology costs for billing and collecting stormwater and solid waste was $147,000. Authority members asked for input from City representatives. Ms. Mack thanked the Authority for inviting City staff to the special meeting and stated that the City and County had invested in the Authority and wanted it to work. Ms. Mack praised Authority staff members for their work in researching and reconstructing stormwater accounts that were dropped during data conversion. She reminded Board members that the City and Authority had entered into a Supplemental Interlocal Agreement regarding the use of rights-of- way on City streets, wherein the Authority pays no license fee for entering and working in the rights-of-way and that, if the Authority could not comply with the solid waste delinquent collections, the Authoirty would have to pay the City a license fee. Ms. Mack reviewed her methodology and analysis of incremental costs, with a final figure of $65,857. Mr. Smith stated that his primary concern was to have a legal method under which Ms. Spivey audit statement. The incremental costs were not his priority. Mr. Rivenbark agreed. CFPUA Special Meeting, April 27, 2011 Page 2 address the silence in the statute regarding collection of solid waste delinquencies. Ms. Miles reported that only our State Senator can introduce such a bill. She had spoken with Senator Goolsby, who said he would want to get input from Authority members on the issue. Ms. Johnson advised that she could not speak for Council but that she and Mr. Cheatham could take the suggestion of local legislation to City Council for its consideration. She said that the question of solid waste delinquencies had evolved over time. She added that there are contractual agreements between the City and Authority. She could not advise the Authority on its options or legal position. She stated that there was no definite answer to the legal question but there was a legal argument that the Authority could legally continue its past practices. Burpeau stated that the attorneys who created the Interlocal Agreement and other formation regarding solid waste but believed there was a purported right to go forward and no laws prohibited collections and the allocation of revenues in the agreements in regards to delinquent collections. Mr. Burpeau added that a local bill would be the best resolution. Mr. Rivenbark asked if there were statutes or case law specifically prohibiting the collection of solid waste delinquencies. Ms. Miles said there were not. The Board discussed options to clarify the question regarding solid waste delinquent collections. Potential legal challenges were briefly discussed. Board members sought to clarify what could be done to provide a comfort level to the Authority CEO and CFO when signing audit certifications regarding regulatory compliance. Mr. Smith moved to continue to collect solid waste delinquent accounts. Mr. Rivenbark seconded the motion for discussion. An exception or disclosure statement regarding solid waste delinquencies for audit purposes was discussed. Staff needed clarification before beginning the FY2011 audit. Ms. Wolf expressed her desire to achieve a comfort level for staff. Ms. Spivey stated that she believed she could sign the audit with an exception noted regarding solid waste delinquent collections. CFPUA Special Meeting, April 27, 2011 Page 3 Collections through a credit agency were discussed. Ms. Miles clarified that Federal law requires that City or County must be the party seeking relief through a credit agency for their delinquencies. Messrs. Rivenbark and Sparks volunteered to discuss and clarify that item with Council. Messrs. Catlin and Brown expressed their wishes to clarify the legal question of solid waste delinquent collections at the legislative level. Mr. Smith restated his motion to continue solid waste collections with an audit disclaimer or exception statement. Mr. Renzaglia called the question. Ms. Wolf, Ms. Kusek, and Messrs. Renzaglia, Smith, Rivenbark, Sparks, and Brown voted in favor of the motion. Messrs. Berger and Catlin were opposed. The motion carried, seven to two. Mr. Brown moved to resolve the question of authority to collect solid waste through a legislative solution . Mr. Catlin seconded the motion. Mr. Renzaglia stated that all three parties to the Interlocal Agreement should be in agreement in pursuing a legislative solution. After a brief discussion, Mr. Renzaglia called the question. Ms. Kusek, Ms. Wolf, and Messrs. Renzaglia, Smith, Brown, Sparks, Catlin, and Berger voted in favor of the motion. Mr. Rivenbark was opposed. Motion carried, eight to one. Mr. Smith moved to adjourn. Mr. Brown seconded the motion, and it passed unanimously. There being no further business to come before the Authority, the meeting adjourned at 10:15 a.m. The next regular meeting of the Cape Fear Public Utility Authority will be held on Wednesday, May 11, 2011, beginning at 9:00 a.m. The meeting will be held in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope, Clerk CFPUA Special Meeting, April 27, 2011 Page 4