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CFPUA 02 08 2012 Regular Meeting CAPE FEAR PUBLIC UTIILITY AUTHORITY FEBRUARY 8, 2012 REGULAR MEETING Members Present: James Quinn, Chairman Mike Brown, Vice Chairman Patricia Kusek, Secretary Burrows Smith, Treasurer Gene Renzaglia J.C. Hearne Ron Sparks Charlie Rivenbark, Councilman Rick Catlin, Commissioner Jason Thompson, Commissioner Member Absent: Cindee Wolf Staff Present: Matt Jordan, CEO Jim Flechtner, COO Cheryl Spivey, CFO Karen Durso, Assistant to the CEO Nancy Johnson, Customer Service Director Carey Ricks, CCO Frank Styers, Engineering Director Tom Morgan, H.R. Director Mike Richardson, Water Treatment Superintendent Ken Vogt, Wastewater Treatment Superintendent Jim Craig, Utility Services Superintendent Julia Vosnock, Procurement Manager Gary McSmith, Senior Project Engineer Craig Lundin, Project Manager Tige Brubaker, Project Manager Jeremiah Neral, Camera Operator, Operations & Maintenance Avery Fishburn, Camera Assistant, Operations & Maintenance Attorneys Present: Linda A. Miles, the Miles Firm, PLLC Ryal Tayloe, Ward & Smith CFPUA February 8, 2012 MINUTES Page 1 Guests Present: Bob Wallen Patrick Seay, Godwin Pump Bud Nichols, National Pump Shawn Powell, National Pump Lawless Bean, City of Wilmington Tommy Escueda, Brown & Caldwell Tony Boahn, McKim & Creed Eric Williams, HDR Diane Williams, Public Water Supply (State of NC) Jim Ianucci, New Hanover County Call to Order, Opening Comments, and Determination of a Quorum. Mr. Quinn called the meeting to order at 9:00 a.m. He commented on the January sewer spill at there were positive outcomes from the accident. The low- pressure alarm system at the wastewater treatment plant worked to alert staff to the problem, and area and had a project underway nearby, so that work crews from that job were able to assist Authority employees in a timely manner. Mr. Quinn thanked staff members for their quick response in stopping and controlling the incident. Mr. Quinn declared a quorum present and noted that Ms. Wolf had informed him of her absence. Adoption of the Agenda. t with Blue Cross and Blue Shield for prescription benefit management. Mr. Rivenbark moved to adopt the Agenda with the requested addition. Ms. Kusek seconded the motion, and it passed unanimously. Resolution In Recognition of Burrows Smith, Authority Treasurer. Mr. Quinn thanked Mr. Smith for his service to the Authority since its inception in 2007. He stated that Mr. Smith had served the Authority well as its Treasurer and would be difficult to replace. He stated that Mr. Smiths knowledge of construction and development had been an asset and encouraged the Commissioners to appoint someone with a similar background and experience. Mr. Quinn presented Mr. Smith with a plaque noting his service to the Authority s contributions and recognizing his service. CFPUA February 8, 2012 MINUTES Page 2 Mr. Smith stated that he had greatly enjoyed his time on the Board. He expressed his appreciation to and respect for employees and stated that his biggest regret was that employees had not received raises. He charged the Board with the responsibility of granting raises to staff, whom Mr. Sparks moved to the adopt the Resolution recognizing Mr. Smith. Mr. Renzaglia seconded the motion, and it passed unanimously. Mr. Smith received a standing ovation from the Board, staff, and attendees. Approval of Minutes from January Authority Meeting. Ms. Kusek presented the minutes from the January 11, 2012, Authority meeting and noted a correction on page 6 from $1,000 to $10,000, and two typographical corrections on page 9. There were no other corrections, and Ms. Kusek moved to approve the January minutes. Mr. Smith seconded the motion, and it passed unanimously. Staff Recognition. Ms. Kusek recognized Operations employees Avery Fishburn and Jeremiah Neral and thanked them for putting out a fire outside her office building. The gentlemen had noticed a brush fire as extinguishers, and put out the fire before the fire department was able to respond to Ms. Kusek quick response and stated that they had saved property, businesses, and possibly lives through their actions. Messrs. Fishburn and Neral were applauded by those present. Public Comments. Mr. Quinn asked the Clerk if there were people registered for comment. Ms. Pope responded that Mr. Nichols of National Pump was present. Messrs. Quinn, Thompson, and Rivenbark expressed concern that a vendor speaking during public comment about an item on the Agenda could be inappropriate. Mr. Hearne agreed but stated that the Authority does not have a policy prohibiting such speech. He suggested that the Board ask Mr. Nichols to hold his comments until the agenda item was presented. Mr. Jordan stated that the National Pump item was on the Consent Agenda but could be moved to the Finance report. Mr. Smith recommended that the item be discussed earlier in the meeting so that the interested attendees did not have to wait. CFPUA February 8, 2012 MINUTES Page 3 Mr. Quinn directed Mr. Jordan and Ms. Miles to revise the Public Comment Policy. Consent Agenda. Mr. Thompson moved to adopt the Consent Agenda, excepting Item 1, and Mr. Sparks seconded the motion. Mr. Catlin stated that he had questions regarding Item 2. Mr. Thompson amended his motion to adopt the Consent Agenda, excepting Items 1 and 2. Mr. Smith seconded the motion, and it passed unanimously. The Consent Agenda, Items 3 6 were approved, as follows: 3. Authorization for the CEO to execute a construction contract with State Utility Contractors, Inc., for Burnt Mill Creek, Phase 2, sewer improvements, at a budget impact of $2,626,090.05, provided in the CIP. 4. Adoption of a Resolution approving acceptance of a loan from the Clean Water State Revolving Fund in the amount of $3,025,992 for Burnt Mill Creek Phase 2 sewer improvements and adoption of an associated Supplemental Appropriations Ordinance. 5. Authorization for the CEO to execute a contract amendment for McKim & Creed regarding the installation of a horizontal directional drill under Barnards Creek, not to exceed $20,000.00, provided in the CIP. 6. Adoption of a Resolution directing the CFO to write off accounts totaling $326,311.88 as uncollectible bad debt. Consideration of Items removed from Consent Agenda. 1.Authorization for the CEO to enter into a contract with National Pump & Compressor to provide emergency bypass pumping services for one year with the option to renew for up to three additional one-year terms. Cost dependent on the number and type of emergency. Ms. Vosnock reviewed the bidding process for emergency bypass pumping services and reported that staff had reviewed references on the recommended company. Mr. Smith reported that the Finance Committee had vetted the item and that staff had investigated and both the Committee and staff felt comfortable with the recommendation. Mr. Sparks added that the bid was significantly lower than the next lowest bid and that the Committee had recommended award of the contract to National with a parallel contract with CFPUA February 8, 2012 MINUTES Page 4 Godwin as backup. National. Ms. Vosnock reported that the Agenda item did not contain an additional contract with Godwin for backup services and that if the vendor did not perform, staff would rebid the service. Mr. Renzaglia reminded the Board that there is no contract in place at present but that staff had contacts they could call for assistance during emergencies. He stated that the Finance Committee was confident that National would be available and able to perform the work. Mr. Nichols of National Pump & Compressor advised the Board that he had signed up public comment speaker sheet to be available to answer questions and not to address them during the public comment period to influence their votes. Mr. Nichols, Ms. Vosnock, and Mr. Craig answered clarification questions from Board members. Mr. Smith moved to approve the contract award to National Pump & Compressor for emergency bypass pumping services. Mr. Renzaglia seconded the motion. Mr. Sparks recommended that the Authority have the ability to fall back to the second lowest bidder and asked Ms. Miles if that action was prohibited. Ms. Miles responded that the Authority could not have a backup contract from the same pool of bidders but could have a secondary contract for emergency pumping services, which would need to be rebid. contract was awarded to National Pump & Compressor. 2.Authorization for the CEO to execute a contract with HDR Engineering, Inc. of the Carolinas for professional design and construction phase services for raw water system improvements, at a budget impact of $166,400, provided in the CIP. Following clarification questions, Mr. Catlin moved to approve this item. Mr. Sparks seconded the motion, and it passed unanimously. New Business, Administrative and Committee Reports. Engineering Report: Mr. Styers provided an update on the Aquifer Storage and Recovery project. Construction was divided into two contracts. Sydnor Hydro drilled two wells at the Westbrook Tank Site at a cost of $580,365.25. M.B. Kahn received the contract award for well head construction, including pumping equipment, piping, and interconnections to the distribution system, at a price of $1,102,900. The original project included three wells, but one well in the Black Creek Aquifer CFPUA February 8, 2012 MINUTES Page 5 had been deleted, and the associated change order is being negotiated with M.B. Kahn. Staff recently received notification that only work completed by September 30, 2012, would be reimbursed through the American Recovery and Reinvestment Act of 2009 (ARRA). Staff is working with EPA and the Public Water Supply to expedite and complete as much of the project as possible and a meeting is scheduled with state representatives for Thursday, February 9, in Raleigh. Mr. McSmith answered clarification questions from Authority members. Mr. Renzaglia asked how much the project cost. Mr. McSmith said it would take $1-1.5 million to complete, with 50 percent of the project being funded by an ARRA grant and 50 percent through a low-interest with the grant that can delay work on the project. Messrs. McSmith and Richardson explained that the Aquifer Storage project will enable the Authority to use underground aquifers to store 200 million gallons of treated water that can be used for peak demand needs, for blending water in areas where needed, and for backup use if an emergency occurred in the distribution system. The Authority recessed at 10:00 a.m. and reconvened at 10:10 a.m. Operations Report: overflow of January 23. The overflow was stopped through pump and haul operations by 11:00 am on January 24, and a temporary bypass line was operational by Wednesday, January 25, at 2:00 p.m. The causes of the estimated 1.4 million gallon overflow are under investigation. Mr. Flechtner praised staff for their work and expressed appreciation to the following departments: Utility Services, Construction, Warehouse staff, Public Information, Environment and Safety, and Engineering. He thanked State Utility Contractors and the City of Wilmington Engineering, Traffic, and Police Departments for their timely and efficient assistance. Mr. Flechtner outlined long-term improvements in the Barnards Creek and Motts Creek area which are scheduled to be completed by mid-summer 2012. Mr. Flechtner answered questions from Board members about water quality and water sampling and reported that the creek was restored within three days of the spill. Mr. Smith observed that there are other mains made of ductile iron that travel underneath creek beds that should be addressed in future CIP plans. Mr. Catlin reminded those present that the Authority did not install the line and did not have it in the forefront for replacement because it was only 15 years old. Mr. Jordan assured the Board that the ongoing CFPUA February 8, 2012 MINUTES Page 6 CIP and Asset Management initiatives would be used to identify and rehabilitate vulnerable wastewater lines. Mr. Sparks requested that he be excused from the meeting. Mr. Rivenbark moved to excuse Mr. Sparks. Mr. Brown seconded the motion, and it passed unanimously. Mr. Sparks left the meeting at 10:30 a.m. A quorum remained. PIO Report: Ms. Ricks reported that the Authority is working with the City of Wilmington, New Hanover County, and other agencies on a Greenway and Blueway Master Plan. The partnership will promote recreation, healthy living, transportation, conservation, economic vitality, and connectivity. The project kick-off meeting was held in January, and a final plan and informational brochure will be produced in December 2012. The Authority previously cooperated with the City for the Cross-City Trail project where Authority easements were used to allow pedestrian access through UNC-W and along Rose Avenue. Ms. Miles reported that the Directors of the New Hanover County Department of Social Services and the Health Department had requested notification when utility services have been discontinued so that their staff could determine whether or not unsafe or unhealthy conditions existed and if they could provide assistance to residents without water. Ms. Miles talked to County Attorney staff and learned that DSS would hold information confidential but that Health Department data could become public information. Ms. Miles advised that the Board must pass a resolution to release information to the County departments, and the draft Resolution in the Agenda allowed for such notice after service had been disconnected for 24 hours or more. Mr. Jordan added that staff did not know exactly how the mechanism for notification would be handled. He stressed that the Authority has a good working relationship with the Health Department and other agencies but needs an understanding of how the process would work. Board members discussed the merits of the request and the unintended consequences that could result from such notifications. Mr. Renzaglia stated that there were 790 shut off notices sent out monthly by the Authority, a figure that was similar to cutoff notices sent by the City and County when they provided water and sewer services. He recommended that the Board proceed cautiously, as the notifications and required follow-up could require a great deal of staff time. Ms. Kusek and Mr. Smith expressed concern about information being released that could cause problems for customers. Mr. Smith suggested that information regarding the availability of assistance from DSS or the Health Department be included with the cutoff notice letters rather than providing the cutoff data to the county agencies. Mr. Catlin stated that he did not support sensitive information becoming public and if the Health Department information became public, he would recommend working with DSS. He expressed CFPUA February 8, 2012 MINUTES Page 7 ompson stated that the proposal was a step in the right direction and suggested that notice be sent to the agencies a certain number of days after a cutoff so that customers had the opportunity to pay their bills. Mr. Renzaglia moved to direct Mr. Jordan to meet with DSS representatives to develop an appropriate mechanism and bring a recommendation to the Board in the near future. Mr. Catlin seconded the motion, and it passed unanimously. Ms. Miles requested a closed session at the end of the meeting to discuss a lawsuit. CEO Report: Mr. Jordan referred the Board to Exhibit 8 in the Agenda, the Environmental and Safety Management Report. There were two small Sanitary Sewer Overflows and two employee accidents in December. Blue Cross Blue Shield Employee Health Insurance Amendment. Mr. Morgan reviewed recommended an amendment to the Administrative Services Agreement for prescription benefits. Blue Cross Blue Shield will change from Medco to Prime Therapeutics for prescription drug services, effective April 1, 2012. Employees will not experience any change in benefits or disruption of service. Mr. Renzaglia moved to approve the amendment to the Blue Cross contract. Ms. Kusek seconded the motion, and it passed unanimously. Executive Committee: Mr. Quinn reminded the Board that the position of Authority Treasurer was open following Mr. was a requirement for the Treasurer to serve as the Finance Committee Chair, and Ms. Miles advised that was not a requirement. Mr. Quinn reported that the Bylaws provide for the Executive Committee to appoint Committee members and Committee Chairs. He requested that Committee Chairmen select an alternate or Deputy Chair to conduct Committee meetings when they are unavailable and to advise the Executive Committee, Mr. Jordan, and Ms. Pope who will be Deputy Chair. Long Range Planning Committee: The Long Range Planning Committee met on January 27, with Mr. Quinn chairing the meeting in Ms. Chair Road Water Agreement. Chair Road representatives addressed the Committee to discuss options for water lines. Chair Road had proposed a 16-inch water main. New state regulations for disinfection byproducts dictate that pipes be installed so that water is turned over so that the CFPUA February 8, 2012 MINUTES Page 8 age of water is minimized between the source and end user, and Authority staff did not recommend the 16-inch line. Staff and Chair Road representatives will meet next week to discuss options and the project schedule. Chair Road and General Electric have not finalized a related agreement. The Authority and Chair Road have a sewer agreement in place. Board members encouraged staff and the developer to be specific about the timeline and to work together to accomplish a joint goal. Meter Replacement and Monthly Billing. Ms. Johnson and Mr. Mongeau updated the Committee on the two Business Case Evaluations being used to analyze meter replacement and monthly billing options. Raw Water Supply. The Committee did not receive a report on this item. On February 6, Messrs. Jordan, Flechtner, and Styers met with Don Betz and representatives of Pender County, Brunswick County, and Invista. Mr. Betz provided an overview of Lower Cape Fear Water & agreed that the raw water supply system needed to be expanded. LCFWSA will be updating its raw water bulk sales agreements. Strategic Plan Revisions. CIP for Fiscal Year 2013. Ms. Mitchell and Mr. McSmith updated the Committee on pump the coming fiscal year. The Committee decided to hold a Board workshop to review and discuss the CIP on February 23 in lieu of the February Long Range Planning meeting. The meeting will be held from 8:30 a.m. until noon in the Authority offices. Mr. Styers and Engineering staff will be available for individual meetings with Board members to discuss the CIP. Finance Committee: Mr. Smith reported that he would like the Authority to continue discussions on expansion into established neighborhoods where water and sewer needs exist and suggested that New Hanover County might be able to cooperate with the Authority to handle the expense of such expansions. The Board briefly discussed the logistics of such expansion. Mr. Jordan reported that staff would identify eight to ten projects into established neighborhoods and develop options and cost estimates. Ms. Spivey reviewed the Budget calendar for Fiscal Year 2013. The Finance Committee will have a first review of rates in March. Monthly Financial Data. Ms. Spivey reported that, with 58 percent of the year lapsed, revenues are at 58.85 percent of budget and expenditures at 44.72 percent. CFPUA February 8, 2012 MINUTES Page 9 Ms. Johnson provided a Customer Service update. System Development Charges are at 84 percent of budget, with a strong showing in January from two large commercial accounts and one large multi-unit account. Ms. Johnston reported that, due to stringent rules regarding credit card information and PIN numbers, customer service phone calls to the Authority would not be recorded. The complete financial reports and customer service data for January were in the Agenda and will be available on the Authority website. Old Business. There was no old business. Closing Comments. Mr. Quinn encouraged the Commissioners to appoint a replacement for Mr. Smith quickly. Closed Session. Ms. Miles recommended a closed session to discuss Tommy Davis Construction v. CFPUA. Mr. Hearne asked if he should be recused because Mr. Davis was a former client. Ms. Miles advised that he did not need to be recused if he did not currently represent Mr. Davis. Mr. Smith moved to enter closed session to discuss the Davis lawsuit, receive reports from legal counsel, and provide direction to counsel. Mr. Renzaglia seconded the motion, and it passed unanimously. The Authority entered closed session at 11:25 a.m. Ms. Miles and Mr. Tayloe reported on the litigation matter and received direction from the Board. Open Session. Mr. Rivenbark moved to return to open session. Mr. Smith seconded the motion, and it passed unanimously. The Authority returned to open session at 12:11 p.m. Mr. Smith moved to adjourn. Mr. Renzaglia seconded the motion, and it passed unanimously. The Authority adjourned at 12:12 p.m. The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, March 14, at 9:00 a.m. The Authority will meet in the Lucie Harrell Conference Room, New Hanover County Administration Building, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board CFPUA February 8, 2012 MINUTES Page 10