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CFPUA 10 12 2011 Regular Meeting Cape Fear Public Utility Authority Regular Meeting October 12, 2011 Members Present: Jim Quinn, Chairman Mike Brown, Vice-Chairman Patricia Kusek, Secretary Burrows Smith, Treasurer Rick Catlin, Commissioner Brian Berger, Commissioner Charlie Rivenbark, Councilman Ron Sparks, Councilman Cynthia Wolf Gene Renzaglia J.C. Hearne, II Staff Present: Matt Jordan, Chief Executive Officer Michael Richardson, Interim Chief Operating Officer Cheryl Spivey, Chief Financial Officer Karen Durso, Assistant to the CEO Frank Styers, Director of Engineering Beth Eckert, Environment and Safety Director Tom Morgan, Human Resources Director Carey Disney Ricks, Chief Communications Officer Nancy Johnson, Customer Service Director Ken Vogt, Wastewater Treatment Superintendent Jim Craig, Utility Services Superintendent Jim Flechtner, Engineering Manager Melinda Hoggard, Accounting Manager Julia Vosnock, Procurement Manager Gary McSmith, Senior Project Engineer Tige Brubaker, Project Manager Kipp Glazier, Environmental Services Superintendent Donna S. Pope, Clerk to the Board Attorney Present: Linda A. Miles, the Miles Firm, PLLC Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 1 Guests Present: Jenny Hurtado Joyce Malone Bob Wallen Dustin Wagner, State Utility Contractors Tony Boahn, McKim & Creed Eric Williams, HDR Tyler Newman, Business Alliance for a Sound Economy Kevin Maurer, Wilmington Star-News Call to Order, Opening Comments, and Determination of a Quorum. Mr. Quinn called the meeting to order at 9:00 a.m. and thanked those in attendance. He opened by stating that assistance to customers is a concern for the Board but that Utility Authorities are prohibited from providing monetary assistance in the ways that the City and County previously provided. He reminded all that the Authority has partnered with the United Way and Salvation Army to provide assistance to customers. Mr. Quinn reported that Mr. Sparks is seeking state and federal funding that can be utilized by the City and County to offset bills for customers in need. Mr. Quinn declared a quorum present. Mr. Berger arrived at 9:10 a.m. Adoption of the Agenda. Agenda was adopted unanimously. Approval of the Minutes. Ms. Kusek presented the minutes of the September 14, 2011, meeting and asked if there were corrections. Mr. Smith recommended a correction to the third paragraph of the Finance Committee report, s -time increase. Mr. Brown moved to approve the Minutes of the September 14, 2011, meeting with the recommended correction and addition. Ms. Wolf seconded the motion, and the corrected Minutes were approved unanimously. Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 2 Public Comments: Ms. Hurtado spoke regarding increased costs for water and sewer, the 10 percent late charge, and the base rate being charged when there is no water usage. Ms. Hurtado also requested that the Authority consider the needs of disabled customers and senior citizens. Ms. Malone spoke regarding high bills. Ms. Malone also had a concern regarding her meter being covered with overgrowth and not having an automatic reading device attached to it. She shared photographs of her meter site and requested a bill adjustment. Ms. Malone expressed concern about chlorine taste and residue in the water. Mr. Quinn directed staff to investigate Mr. Wagner stated that he represented the lowest responsible bidder on the Barnards Creek and to reject all bids and rebid the project. the bill. Mr. Wallen thanked the Authority for retaining the Customer Service Center in the lobby of the City of Wilmington building at 305 Chestnut Street. He said that he had recently used the drive- through at the Chestnut Street location and finds the employees to be kind and courteous. Mr. Wallen stated that the believed the move of Utility Services staff and materials from River Road rd to North 23 Street had saved money by decreasing travel time. Mr. Wallen suggested a meter replacement program which would allow the Authority to gradually move to monthly billing instead of an expensive method which could involve the use of bonds and debt service. Mr. Wallen suggested ways in which the Authority could disseminate water-saving tips and public information. Consent Agenda: Mr. Quinn presented the Consent Agenda, as follows: (1)Recommendation to revise the current Sewer Use Ordinance definition of Significant Non-Compliance (SNC) to match the State and Federal definition and to add the definition of Control Authority to clarify the revised SNC definition. (2)Adoption of a Resolution designating Melinda Hoggard, Accounting Manager, as Designated Agent and Cheryl Spivey, CFO, as Secondary Agent for FEMA Disaster Assistance during Hurricane Irene. Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 3 (3)Authorization for the CEO to purchase up to six generators from the MTU Onsite Energy, now or formerly known as Covington Power Services, at a budget impact of $210,000, as provided in the CIP. Following clarification questions on Items 2 and 3, Mr. Sparks moved to adopt and approve the Consent Agenda. Mr. Renzaglia seconded the motion, and the Consent Agenda passed unanimously. New Business - Administrative Reports. Finance Report, 2011 Bond Update: Ms. Spivey reported that the Authority bond sale was very successful, with the closing scheduled for October 13. Of the $44 million bond sale, -fund 2003 City of Wilmington Revenue Bonds at a savings to the Authority of $175,000. The Authority will pay a total interest cost of 3.83 percent, which is 1.13 percent below Revenue Bond Index. The s revenues from the water and wastewater systems, and the annual debt service will be $2.8 million for 25 years. cies base the ratings on the following factors: a stable and growing customer base and service area, solid financial position, willingness to raise rates as necessary to support operations and financial margins, affordable rates compared with income levels, and a moderate five-year Capital Improvement Plan. Mr. Smith thanked Ms. Spivey and Mr. Jordan for their dedication and work to make the Bond sale a success. Customer Service Update: Ms. Johnson updated the Board on the monthly billing study. Staff is conducting a business case evaluation and will have the timeline established for the November Long Range Planning Committee meeting. A recommendation should be ready for FY2013 budget discussions. The informal survey staff has conducted among customers regarding interest in monthly billing has a slightly higher percentage of customers who would prefer to remain with bi-monthly billing. Preferences seem to vary between in-person responses being opposed, and online or phone responses having a greater number in favor of monthly billing. Ms. Johnson reported that Penn Credit collections are scheduled to begin on October 12. The final collection letter. Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 4 Monthly Financial Update: Ms. Spivey reported that, with 25 percent of the fiscal year lapsed, operating revenues are at 27.22 percent of budget and expenditures are at 18.54 percent of budget. September water distribution was significantly less than September 2010. Mr. Smith added that System Development Charges are at 44 percent of the anticipated revenues for the fiscal year, a growth and economic indicator. He suggested that the Finance Committee consider SDC reports that distinguish between residential and non-residential fees. Engineering Report: Recommendation to Authorize the CEO to execute a joint funding agreement for a Water Resources Investigation with the United States Geological Survey (USGS. The agreement is provided in the CIP, at a budget impact of $195,000. Messrs. Styers and McSmith, manager for the project, explained the purpose of the agreement with USGS, which will explore the availability and quality of groundwater in the surficial, Castle Hayne, and Peedee Aquifers in New Hanover County and forecast the effect of changes such as withdrawals, river channel deepening, rise of sea level, and aquifer storage and recovery. Mr. McSmith reported that the USGS possesses the best resources to obtain the data necessary for a thorough study and the data will be readily available for future use because the USGS is a public agency. Authority members asked if beach communities or other local governments were participating in the study. Mr. McSmith advised that Wrightsville Beach has offered all of its data for use in the study. Authority staff will attend the next Wrightsville town meeting, and other governing boards can be approached to participate in the next phase of the study. Mr. Sparks moved to authorize the joint funding agreement, and Mr. Smith seconded the motion. Mr. Brown expressed concern regarding a mechanism whereby other local governments could provide financial support to the study. Mr. McSmith clarified that the USGS participation in the amount of $155,000 should underwrite the participation by the beach communities, and the beach governments would provide the test results for all of their wells. Mr. Catlin recommended getting the State Water Resources division involved, and Mr. McSmith reported that Authority representatives would meet with the State the following week. Mr. Rivenbark called the question, and the joint funding agreement passed unanimously. Mr. Quinn recessed the meeting at 10:20 a.m. The Authority reconvened at 10:35 a.m. Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 5 Engineering Report, continued: Recommendation to reject the Barnards Creek Pump Station and Motts Creek Pump Station interim improvements construction proposals received on September 22, 2011, and authorize the CEO to re-advertise the contract. Mr. Flechtner reported that, on the day the bids were received and opened, there was a discrepancy between the clocks in the lobby and the I.T. conference room. proposal was not opened because of the timing. Of the bids opened, only one bidder had provided all of the required information. Ms. Miles explained that the General Statutes allow for the rejection of bids and rebidding of a project and that staff had recommended as the most conservative course of action. Staff and Ms. Miles answered clarifications from Board members regarding the clocks, the procedure for receiving and opening bids, and the events related to the September 22 bid opening. Mr. Sparks moved to enter into closed session to discuss the bids in detail. Ms. Kusek seconded the motion, and it passed unanimously. The Authority entered into closed session at 10:50 a.m. Engineering staff, Purchasing staff, Ms. Miles, Mr. Jordan, and Ms. Pope remained in the meeting with the Board. The Board received further information from staff and Ms. Miles regarding the bids received for September 22, 2011, and the bid protocol. Mr. Rivenbark moved to return to open session. Mr. Smith seconded the motion, and it passed unanimously. The Authority returned to open session at 10:55 a.m. Mr. Renzaglia advised that he needed to leave the meeting and requested that he be excused. Ms. Wolf moved to excuse Mr. Renzaglia. Mr. Brown seconded the motion, and it passed unanimously. Mr. Renzaglia was excused from the meeting, and a quorum remained. Mr. Sparks moved to reject the staff recommendation to reject the Barnards Creek and Motts Creek interim improvements construction proposals and re-advertise the contract. Mr. Rivenbark seconded the motion, and it passed unanimously. Mr. Styers provided the bid tabulation sheets for the project. The only responsive bidder was State Utility Contractors at a bid of $3,391,810. Mr. Sparks moved to award the contract to State Utility Contractors. Mr. Rivenbark seconded the motion, and it passed unanimously. Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 6 Request for Authorization for the CEO to approve Amendment 2 of the Raw Water Pump Station contract with Black & Veatch. Mr. Styers reported that the Lower Cape Fear Water & Sewer Authority (LCFWSA) has executed an engineering agreement with McKim & Creed to update its CIP from 2008. The LCFWSA evaluation will address the 14 miles of raw water main between the LCFWSA raw water pump station and reservoir and evaluate two sites for a proposed raw water pump station. The recommended amendment to the CFPUA contract with Black & Veatch will provide data enabling CFPUA to make an informed evaluation and determination of its needs and the best strategies to meet the long-term raw water needs for the Sweeney Water Treatment Plant. Mr. Smith moved to approve the contract amendment. Mr. Sparks seconded the motion. Mr. Catlin observed that the contract amendment under consideration is a component of a larger discussion with LCFWSA and provides needed information. Mr. Quinn called the question, and the contract amendment was unanimously approved. Public Information Officer/Public Relations Report: Ms. Ricks reported that Authority representatives will provide reports to City Council at its November 15 meeting and the County Commissioners at their November 21 meeting. Mr. Quinn requested that elected officials serving on the Authority compile questions from their respective Boards in advance and provide them to Authority staff to help them prepare the reports. Ms. Ricks reported on the successful completion of the Job Shadow Initiative and showed pictures of Authority members and Mr. Jordan job shadowing in various departments. Messrs. Smith, Jordan and Sparks commended staff and shared insights from their job shadow assignments with utility crews, EMS laboratory and maintenance staff, and I.T. and SCADA. Ms. Ricks added that she can incorporate the job shadow into future Board orientations. Ms. Miles presented a Resolution regarding the release of account information in order to maintain the integrity of Authority services. The Resolution would address circumstances wherein customers discussed accounts in a public forum and would allow Authority representatives to address discrepancies in information or reporting. Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 7 After discussion, the Board deferred the Resolution back to the Executive Committee for further review and development. Mr. Jordan invited Board members to the Employee Appreciation Picnic, to be held on Friday, October 21, 2011, from 11 a.m. to 2 p.m. at Empie Park. Mr. Jordan referred the Board to the Environment and Safety Report, Attachment 8 in the Agenda. There were no questions regarding the report. Mr. Jordan reported that the Authority has been awarded funding of five projects from the Clean Water State Revolving Fund, as follows: th (1)30 Street Sewer Replacement; (2) (3)Greenfield Lake Sewer Outfall Replacement; (4)Between the Creeks Pump Station #28; and (5)Alandale Pump Station Removal Project. Mr. Catlin advised that New Hanover County had formed a committee to identify and address permitting problems associated with construction and infrastructure projects and requested input endeavor. Committee Reports. Long Range Planning Committee: Ms. Wolf and Mr. Styers reported that the Committee met on September 22, 2011, and discussed several items and received reports, as follows: raw water reservoir discussion; raw water pump station; monthly billing update; growth discussion; and aquifer management. The next Long Range Committee meeting will be October 27 at 2 p.m. in the Authority offices. Resolution Supporting an Agreement with the North Carolina Department of Environment and Natural Resources to address Potable Water Supply. Mr. Catlin presented the Resolution and provided background information. House Bill 609 allows the Division of Water Resources to act on behalf of government entities to explore long- term water storage alternatives, including reservoirs. Mr. Catlin reported that studies predict a Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 8 potential for water shortages in the region within 30 years. He presented a map showing a prospective location for a shallow coastal reservoir near Lock and Dam Number 1 on the Cape Fear River. The reservoir could capture water from tropical storms and could address some long- term water storage needs. Environmental impacts and other consequences would need to be considered. The Lower Cape Fear Water and Sewer Authority had approved the resolution, which asksthe State of North Carolina to prepare a contract for consideration by both Authorities for a feasibility study. The contract would be the first of its kind developed by the Division of Water Resources. At completion of the study, the North Carolina permitting requirements will have been met, and the State would assist in obtaining permits at the Federal level. The estimated cost of the feasibility study and associated analysis is $100,000, with an equal allocation to be borne by LCFWSA and CFPUA. Mr. Catlin stated that a consultant would be needed for the rest of the evaluation, and both Authorities would have seats at the table to address their needs. The Resolution called for a 50/50 allocation of costs between CFPUA and LCFWSA. Messrs. purchased by the Authority. LCFWSA should be considered and that the rates CFPUA to LCFWSA should help offset the not have money allocated for the study. Funding can be identified from the contingency fund would be six months before the contract development would be complete, which would provide time for budgeting and cost allocation. Mr. Sparks moved to adopt the Resolution Supporting the Agreement with North Carolina Department of Environment and Natural Resources to address potable water supply. Mr. Berger seconded the motion. Mr. Rivenbark requested clarification on the question of the 50/50 cost allocation for the contract with the State and the possibility of CFPUA paying through its rates to LCFWSA. Mr. Jordan uys approximately 50 percent of the raw water produced by LCFWSA. Mr. Jordan added that he supported the concept are generated by CFPUA. Ms. Wolf presented a would need to go back to LCFWSA for Board approval. Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 9 Mr. Quinn asked for clarification regarding equal access or allocation of water. Mr. Catlin responded that the State assigns CFPUA and LCFWSA equal (50/50) allocation of the 106 MGD withdrawal from the Cape Fear River. Mr. Catlin reminded the Board that it would need to approve the contract after its development. Ms. Wolf withdrew her substitution motion. Mr. Quinn called the question, and the Resolution passed unanimously. Other New Business: Resolution Authorizing Staff to seek funding for Utility Improvements from State and Federal Appropriations. Mr. Sparks presented the Resolution and reported that he and Mr. Catlin had discussed avenues to find additional funding for capital projects. The Resolution would grant Mr. Jordan the authority to seek any funding and direct him to explore funding resources at the Federal and/or State levels. Grants and other funding applications would come to the full Board for approval. Mr. Sparks moved to approve the Resolution. Mr. Catlin seconded the motion, and it passed unanimously. Potential Grant Funding for County and City for Customer Assistance. relief. The City of Wilmington and/or New Hanover County would be the parties requesting and administering the funds. The Authority could direct customers to the appropriate staff person at the County or City. The City previously contributed $200,000 in grant funds for assistance, and Mr. Sparks anticipated $500,000 for the City and County combined. Mr. Catlin added that he has spoken with Commissioner Chairman Barfield and County Manager Shell, and County staff is exploring additional funding sources. Closing Comments: Mr. Hearne reminded Authority members that their CEO evaluations were due to the Human Resources Committee. Mr. Quinn reminded the Authority that November 9, 2011, will be the Annual Meeting and meeting or a day meeting and possible locations. Cape Fear Public Utility Authority. October 12, 2011, Regular Meeting Page 10 After a brief discussion, the Board agreed to have an evening meeting in the County rthouse at 6 p.m. on November 6 and directed the Clerk to make the appropriate arrangements with New Hanover County. There being no further business to come before the meeting, Mr. Smith moved to adjourn. Ms. Kusek seconded the motion, and it passed unanimously. The Authority adjourned at 12:10 p.m. The Annual Meeting of the Cape Fear Public Utility Authority will be at 6 p.m. on Wednesday, November 9 Building, 24 North Third Street, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority. 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