Loading...
CFPUA 08 10 11 regular meeting minutes CAPE FEAR PUBLIC UTILITY AUTHORITY AUGUST 10, 2011 REGULAR MEETING Members Present: Mike Brown, Vice-Chairman Burrows Smith, Treasurer Cindee Wolf Gene Renzaglia Charlie Rivenbark, Councilman Rick Catlin, Commissioner Brian Berger, Commissioner Members Absent: Jim Quinn, Chairman Pat Kusek, Secretary Ron Sparks, Councilman J.C. Hearne Staff Members Present: Matt Jordan, Chief Executive Officer Cheryl Spivey, Chief Finance Officer Karen Durso, Assistant to the CEO Frank Styers, Director of Engineering Nancy Johnson, Customer Service Director Beth Eckert, Safety & Environment Director Carey Disney, Ricks, Chief Communications Officer Tom Morgan, Human Resources Director Jim Flechtner, Engineering Manager Christene Pyne Mitchell, Engineering Manager Mike Richardson, Interim Chief Operating Officer Ken Vogt, Wastewater Treatment Superintendent Jim Craig, Utility Services Superintendent Julia Vosnock, Procurement Manager Tige Brubaker, Project Manager Donna S. Pope, Clerk to the Board Attorney Present: Linda A. Miles, the Miles Firm, PLLC, Consulting Attorneys CFPUA 8.10.2011 REGULAR MEETING Page 1 Guests Present: Jeff Poley, Parker, Poe, Adams & Bernstein, LLP Rick McClung, Utility Advisors Network Ryan Maher, Robert W. Baird & Company Kent Lawrence, Citigroup Global Markets, Inc. Brad Jurkovac, Woolpert, Inc. Tyler Newman, BASE J.D. Solomon, CH2MHill Opening Comments, Determination of a Quorum, and Adoption of the Agenda. Mr. Brown called the meeting to order at 9:00 a.m. and declared a quorum present. Mr. Berger joined the meeting at 9:08 a.m. Mr. Brown presented the Agenda for adoption. Mr. Rivenbark moved to adopt the Agenda. Ms. Wolf seconded the motion, and it passed unanimously. Approval of Minutes. Mr. Brown presented the Minutes of the July 13, 2011, Regular Board Meeting for approval. Ms. Pope noted a typographical error on Page 5 of the minutes. Mr. Smith moved to approve the Minutes with the noted correction. Mr. Catlin seconded the motion, and it passed unanimously. Public Comment. There were no speakers for public comment. Consent Agenda. Mr. Brown presented the Consent Agenda for approval, as follows: 1.Authorization for the CEO to execute a construction contract with Insituform Technologies, Inc. for the Burnt Mill Creek Sanitary Sewer Rehabilitation (Hoggard Drive to Rosemont Avenue) improvements. 2.Authorization for the CEO to sell the pallet racks at Operations Center Drive by private negotiation and sale to Equipment Safety Specialist for $1,584.00, which will include patching of the anchor bolt holes in the floor. 3.Request for approval of the Surplus Personal Property Policy. 4.Request for approval of credits on water accounts for those residential customers who participate in the lead and copper monitoring program. CFPUA 8.10.2011 REGULAR MEETING Page 2 5.Request for approval to send accounts that are 180 days past due and in collection or final status to Penn Credit for collections. 6.Authorization to revise the Mandatory Connection section of the Ordinance to remove the requirement for properties with failing private systems to extend the public mains. 7.Authorization for the CEO to approve a change order to Atlantic Construction and Development, Inc., for additional emergency work on the Airport Collection System, at a budget impact of $61,222.25, provided in the Capital Improvements Program. 8.Authorization for staff to issue a request for proposal, select a consultant, and permit the CEO to execute a contract for a Classification, Compensation, and Benefits Study for an amount not to exceed the budget amount of $35,000. Ms. Wolf requested that Item 6, Mandatory Connection Ordinance revision, be removed from the Consent Agenda and placed in the Long Range Planning Committee report for discussion. Mr. Morgan answered clarification questions regarding Item 8. Mr. Rivenbark moved to approve the Consent Agenda, Items 1-5 and 7-8. Mr. Smith seconded the motion, and it passed unanimously. Items 1, 2, 3, 4, 5, 7, and 8 were approved. New Business, Administrative Reports. Ms. Spivey presented the Initial Resolution for the 2011 Revenue Bond Sale, not to exceed $54,500,000, and supporting documentation. Authority members had received a copy of the Ms. the approval of the Resolution. Ms. Spivey introduced Messrs. McClung, Lawrence, Maher, and Poley, who were available to answer questions directed to the bond financing team. Mr. Flechtner reviewed the Capital Projects associated with the Bond sale and answered clarification questions from Board members. Mr. McClung presented projected rate increases necessary to support the bond indebtednesses over the next four fiscal years, as follows: 5 percent in FY2013, 5 percent in FY2014, 5 percent in FY2015, and 2 percent in FY2016. Projected revenues are conservative estimate. CFPUA rates are in the mid-range or just below those of similar utilities. Mr. Berger requested a model that would help customers determine what their rates would be in future years. CFPUA 8.10.2011 REGULAR MEETING Page 3 The Board discussed t bonds are desirable to investors in the current market. After discussion and clarification questions, Mr. Smith moved to approve the Initial Resolution and to proceed with the bond sale. Mr. Renzaglia seconded the motion, and it passed unanimously. The Resolution and supporting documentation are incorporated herein by reference and are available upon request. Public Relations Report: Ms. Ricks reported on the groundbreaking for the Third Street Improvements Project with the City of Wilmington. Ms. Ricks reported on the job shadowing program for Authority members. Twelve job positions will be shadowed, and several Board members have already participated in the program. Ms. Wolf stressed the valuable educational opportunity for Board members through the program. Ms. Wolf and Messrs. Smith and Renzaglia praised the employees with whom they had worked. Messrs. Smith and Renzaglia added that system rehabilitation and employee support are important throughout the Authority. Mr. Rivenbark referred to the billing and collections staff as the unsung heroes of the Authority. He stated that he had expected professionalism and witnessed it during his job shadow session. Ms. Ricks distributed a new informational brochure for the Authority. The brochure will be placed in the lobby and other prominent locations in the community. Ms. Miles had nothing to report in Open Session. She requested a Closed Session at the end of the meeting to discuss a personnel item. Mr. Jordan reported that the Executive Committee had requested that the Environment and Safety report be included in the Agenda for review. Ms. Eckert answered clarification questions from Board members. Mr. Jordan reported that the River Road repair had been successfully completed. The project involved a complex repair requiring coordination with the Division of Environment and Natural CFPUA 8.10.2011 REGULAR MEETING Page 4 Resources, the North Carolina Ports Authority, CSX railroad, and the Department of Transportation. Efficiency and Competitiveness Study: Mr. Jordan prefaced the study summary by stating that the Authority had recognized many economies of scale and efficiencies since its formation in 2007 and assumption of operations in 2008. The efficiency study helped to identify all opportunities for efficiencies. Mr. Jordan introduced Brad Jurkovac of Woolpert, Inc. Mr. Jurkovac reviewed the methodology Woolpert utilized for the study. He interviewed approximately 40 employees at their jobsites, observing the work being done. The review focused on people, practices, and technology. The study identified efficiencies that could be achieved over a five-year time frame. Additional positions were identified for the Asset Management Program. Mr. Jurkovac cautioned that the requirements and technological changes could affect the business model used by the Authority. Mr. Jurkovac reported that CFPUA ranked fifth best of 80 agencies evaluated by Woolpert, with young age of the Authority. The Efficiency and Competitiveness Study is incorporated herein by reference and is available upon request. Messrs. Jurkovac and Jordan answered clarification questions from Authority members. Mr. Catlin requested that Mr. Jordan develop an implementation plan for the study recommendations and present it at the Board retreat in September. The Authority recessed at 10:25 a.m. and reconvened at 10:40 a.m. New Business, Committee Reports. Finance Committee: Mr. Smith reported that most material reviewed and recommended by the Finance Committee at its August 3 meeting had been approved on the Consent Agenda. Ms. Spivey reported $3.2 million could be added to the fund balance based on unaudited FY2011 financials that have not been adjusted for year-end accruals. CFPUA 8.10.2011 REGULAR MEETING Page 5 Ms. Johnson presented the Customer Service update through July 2011. She updated the Board on discussions regarding conversion to monthly billing. At its July 28 meeting, the Long Range Planning Committee had suggested bringing a procedure to implement monthly billing to the full Board. The Finance Committee requested additional information, including feedback from other utilities with monthly billing and the benefits those agencies had recognized. Ms. Johnson reported that the requested research was underway. She reported that Authority customer service representatives hear sporadic requests for monthly billing, particularly when a customer has experienced high consumption or had a water leak. Monthly billing would be of use to retirees budgeting on a fixed income and also to landlords of rental properties. The Authority would recognize a one-time cash flow benefit at the time of conversion. Ms. Johnson presented a proposed six-month timeline for implementation of monthly billing and stressed that a strong communications plan was necessary prior to implementation. Implementation of monthly billing would require the hiring of five additional meter readers, three customer service associates, one billing specialist, and one collections specialist. Mr. Smith reported that the cost of implementation for a half year of monthly billing would be $400,000, which was not included in the FY2012 budget. He stated that the additional research Ms. Johnson is doing might reveal that monthly billing will make up the $400,000 through increased receivables. Mr. Rivenbark favored monthly billing as a customer convenience. Mr. Renzaglia opposed monthly billing because of its cost. The July 2011 financial data had been distributed as part of the Agenda. There were no questions from the Board regarding the July financials. Human Resources Committee: The Committee recommended the Classification, Compensation, and Benefits Study, which had been approved on the Consent Agenda. Mr. Morgan reminded Authority members that they were encouraged to attend employee meetings with Mr. Jordan. Employee concerns brought forward at the meetings will be CFPUA 8.10.2011 REGULAR MEETING Page 6 Long Range Planning Committee: July 28 but did not have a quorum of Committee members present. The Committee received information regarding stakeholder discussions, the 421 Consortium being organized by Ms. Ricks, monthly billing, and the raw water pump station. Messrs. Richardson, Styers, and Jordan answered questions regarding the raw water needs of CFPUA and a proposal by the Lower Cape Fear Water and Sewer Authority (LCFWSA) to build the raw water pump station. Mr. Renzaglia asked if CFPUA was considering upgrading its own system and raw water line to bring more water to the Sweeney plant. Mr. Styers stated in the affirmative, that all options will be considered for the best long term decision for CFPUA. Mr. Renzaglia asked Mr. Catlin, as an LCFWSA member, if LCFWSA would provide a cost estimate on its water and the cost to CFPUA over the next ten years if LCFWSA builds the pump station. Mr. Catlin stated that the LCFWSA Board met this week and would do a cost analysis of increasing the capacity from its Kings Bluff intake to the tank and would provide a cost sharing proposal to CFPUA. LCFWSA would provide estimated costs for future water. The next Long Range Planning Committee meeting will be Thursday, August 25, at 2 p.m., in Authorization to revise the Mandatory Connection section of the Ordinance to remove the requirement for properties with failing private systems to extend public mains (Item 6 from the Consent Agenda, moved to Long Range Planning). Ms. Wolf stated that she had requested a discussion of the Mandatory Connection Ordinance Revision so that Board members would fully understand the reasoning behind the revision, due to the prohibitive costs of a private citizen extending a main to serve his property. Customers should know that, if a system fails, the New Hanover County Health Department would address the health and safety issue but the customer would need to address the problem. The Long Range Planning Committee will discuss extensions for the future growth of the Authority system as part of the Capital Improvements Program. Ms. Wolf moved to approve the Mandatory Connection Ordinance revision, as recommended by staff. Mr. Rivenbark seconded the motion, and it passed unanimously. CFPUA 8.10.2011 REGULAR MEETING Page 7 Old Business. There was no old business. Closed Session. Mr. Rivenbark moved to enter closed session to discuss a personnel matter. Mr. Renzaglia seconded the motion, and it passed unanimously. Staff and visitors left the meeting. Ms. Miles, Ms. Pope, and Messrs. Jordan and Morgan remained in the meeting. The Authority entered closed session at 11:10 a.m., received reports from staff and a recommendation from legal matter. Open Session and Adjournment. Mr. Rivenbark moved to return to open session. Mr. Smith seconded the motion, and it passed unanimously. Mr. Smith moved to adjourn. Mr. Rivenbark seconded the motion, and it passed unanimously. The Authority adjourned at 11:20 a.m. The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, September 14, 2011, at 9:00 a.m. 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 8.10.2011 REGULAR MEETING Page 8