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CFPUA 09 8 2010 MEETING CAPE FEAR PUBLIC UTILITY AUTHORITY REGULAR MEETING SEPTEMBER 8, 2010 Members Present: Gene Renzaglia, Chairman Jim Hunter, Vice-Chairman Mike Brown, Secretary Burrows Smith, Treasurer Bobby Greer, Commissioner Bill Caster, Commissioner Ron Sparks, Councilman Charlie Rivenbark, Councilman J.C. Hearne, II Jim Quinn Member Absent: John Tunstall Staff Present: Matt Jordan, CEO Nancy Gallinaro, COO Cheryl Spivey, CFO Karen Durso, Assistant to Mr. Jordan Carey Disney Ricks, PIO & Public Relations Frank Styers, Director of Engineering Martha Zeigler, Customer Service Director Tom Morgan, Human Resources Director Beth Eckert, Environment & Safety Director Mike Richardson, Drinking Water Superintendent Ken Vogt, Wastewater Superintendent Jim Craig, Utility Services Superintendent Cord Ellison, I.T. Manager Steve Mongeau, Program Manager, Asset Manager Bill Pinnix, Engineering Manager Jim Flechtner, Engineering Manager Craig Lundin, Project Manager CFPUA September 8, 2010 MINUTES Page 1 Attorney Present: Linda A. Miles, Miles Firm, PLLC, Consulting Attorneys Guests Present: Jay Young Tyler Newman Michael Lee Michael Mack, Pender County Brian McCabe, Pender County Jim Ianucci, New Hanover County Eric Williams Kathleen Rielly Jeremy Blair Opening Comments and Determination of a Quorum: Mr. Renzaglia called the meeting to order and declared a quorum present. He welcomed attendees to the meeting and reminded Authority members that there was a CIP workshop planned for the afternoon, in the Authority offices. Adoption of Agenda: Mr. Caster moved to adopt the agenda. Mr. Hunter seconded the motion, and it passed unanimously. Approval of Minutes: Mr. Brown presented the minutes of the August 11, 2010, meeting. Mr. Hunter moved to approve the minutes. Mr. Caster seconded the motion, and it passed unanimously. Public Comments: requesting that they be changed. Authority website, and filming of Authority meetings. He provided a copy of his presentation to the Clerk for inclusion with the minutes. CFPUA September 8, 2010 MINUTES Page 2 Consent Agenda: Mr. Renzaglia introduced the Consent Agenda, as follows: 1.Resolution in Support for the Cape Fear Regional Sustainability Planning Consortium Grant. 2.Resolutions to approve pursuit of Clean Water and Drinking Water State Revolving Fund Money: (a)Replacement of existing sewer lines within the Burnt Mill Creek Wastewater Collection System Basin; th (b)Rehabilitation of wastewater collection lines in the area of 30 Street; (c)Construction of a wastewater collection system to replace failing septic systems in the Marquis Hills area; th (d)Construction of a drinking water system to replace water lines in the area of 30 Street; (e)Construction of a drinking water system project to extend water distribution lines to the Bald Eagle Lane area, to replace existing individual wells that are currently experiencing water quality problem, and 3.Authorization for the Chief Executive Officer to execute SunGard Public Sector, Inc., Application Service Provider Agreement for a five-year term beginning October 1, 2010. Mr. Quinn stated that he wished to discuss Item 2, the Resolutions to pursue Clean Water and Drinking Water State Revolving Funds. Mr. Caster moved to approve Items 1 and 3 of the Consent Agenda. Mr. Sparks seconded the motion, and it passed unanimously. Discussion followed regarding Item 2 on the Consent Agenda, the Clean Water and Drinking Water Resolutions. Mr. Quinn expressed concerns regarding Items (c) and (e), Marquis Hills wastewater and Bald Eagle Lane water. He proposed that any expansion projects not be approved until Authority members have agreed upon an expansion policy. He suggested expansion of the system be discussed during the CIP workshop. projects for particular neighborhoods were greater than those customers would pay, and that would leave the other rate payers to cover debt service. Mr. Sparks agreed with Mr. Quinn. CFPUA September 8, 2010 MINUTES Page 3 Mr. Smith respectfully disagreed and stated that he would like to vote on the revolving fund resolutions. He believed the discussion was a continuation of conflicts between the City and s formation. Mr. Smith moved to approve all of Item 2 (a e), and Mr. Hunter seconded the motion. Mr. Quinn stated that his concern was with the lack of an Authority policy regarding expansion of the system. After further discussion, staff was directed to bring more information to the Board, to answer questions regarding costs, application deadlines, and the possibility of returning monies at a future date if a project were removed. Mr. Sparks presented a substitute motion to vote on Item 2, a e, at the end of the current meeting. Mr. Caster seconded the motion, and it passed unanimously. New Business: Administrative Reports: Operations Report - Asset Management Presentation: Ms. Gallinaro and Mr. Mongeau provided an update of the Enterprise Asset Management -g decisions as a team, and much of the work, such as GIS, is being developed in-house by Authority employees. Ms. Gallinaro reported that a pilot program is planned to go live on October 27, and the initial system up and running on November 22. Ms. Gallinaro answered clarification questions from Authority members. A copy of the powerpoint presentation is attached hereto and incorporated by reference. The Authority recessed at 10:05 a.m. and reconvened at 10:15 a.m. Public Relations/Public Information Report: Ms. Ricks reported that the Authority is working out logistics for its customer assistance agreement with the United Way. Salvation Army staff will take applications and determine eligibility. Ms. Ricks answered clarification questions from Authority members. CFPUA September 8, 2010 MINUTES Page 4 Ms. Ricks reported that she anticipated a training program for regional public information officers regarding emergency situations. Staff continues to work with media outlets, in particular the Cumulus network, to promote Authority initiatives. Mr. Brown will chair a Board committee to work with Ms. Ricks as an avenue for outreach and education regarding the Authority. Messrs. Caster and Sparks agreed to serve with Mr. Brown. Messrs. Renzaglia and Jordan thanked Ms. Ricks for her work, including internal communications, planning, and facilitation of authority meetings. Ms. Miles reported that she would have a recommended policy amendment to present during the Long Range Planning Committee report. CEO Report: Mr. Jordan reported that there were four reportable accidents in August. The incidents were: a rear-ended by another driver, and a wrist injury. Mr. Jordan dir successes. Long Range Planning Committee Report: Mr. Styers reported that the Committee met on September 1, 2010, and reviewed the following items: (1)Assessment language for the Ordinance. Special assessments are permitted by North Carolina law and would offer a mechanism for property owners or the Authority to initiate a process where all or a portion of construction costs for a project would be paid by the property owners who would receive the services. Staff will continue to refine the assessment language for Committee and Board approval. (2)Utility Reimbursement Agreement for Water Infrastructure. Staff presented two options for providing water infrastructure reimbursement to a developer and will continue to investigate other options. Mr. Smith requested that a recommendation be presented to the Long Range Planning Committee in advance of its October meeting. CFPUA September 8, 2010 MINUTES Page 5 Mr. Rivenbark arrived at 10:40 a.m. (3)421 Wastewater Treatment Plant Interlocal Agreement. The Committee reviewed the Interlocal Agreement prepared by staff and the Authority attorney and recommended that it be brought to the full Board for consideration. Mr. Hunter moved to approve the Interlocal Agreement and authorize the Chairman to execute same. Mr. Greer seconded the motion. Staff answered clarification questions regarding the time line for the project, anticipated costs, level of Authority participation, and capacity. Mr. Renzaglia called the question, and the Interlocal Agreement with Pender County was approved unanimously. (4)Operations Center Lease Agreement. The Committee reviewed a staff recommendation for a two-- City Operations Center located off River Road. The property was designed specifically for utility services by the City. The renewal would extend the contract until June 30, 2013. The Committee directed staff to negotiate the lease renewal and the possibility of future renewals, with the final renewal of contract coming to the Board at a future date for consideration. (5)Irrigation Meter Ordinance Revision. The North Carolina Legislature amended N.C.G.S. 143- July 1, 2009, so that property owners would not be required to install a separate irrigation meter. Staff recommended a change to Article II, Section 2.6 of the General Provisions of the CFPUA Ordinance in accordance with the change to the statute. Ms. Miles answered clarification questions from Authority members. Mr. Smith moved to revise the irrigation meter ordinance language, Article II, Section 2.6, by adding the following paragraph: Local government water systems and large community water systems shall require separate meters for new, in-ground irrigation systems on lots platted and recorded in the office of the Register of Deeds in the county or counties in which the real property is located after July 1, 2009. Mr. Rivenbark seconded the motion, and it passed unanimously. CFPUA September 8, 2010 MINUTES Page 6 (6)Project Updates. The Committee received a project update report. Black and Veatch is conducting on-site investigation of the Hobas pipe failure at the Ogden Interceptor. The Ogden construction is on schedule and expected to be complete in November. Design is underway for the River Road force main repair, and staff anticipates that Authority members. (7)Chair Road Associates, LLC, Agreement. Ms. Miles is working with the attorney and representatives for Chair Road Associates to develop appropriate language regarding a reservation of capacity for a period of two years, pursuant to an approved developer agreement. The recommended revision to the Authority Capacity Management Program reads: The Authority may, for a proposed Utility Infrastructure Reimbursement Agreement, reserve the requested sewer capacity for a period of time not to exceed twenty-four (24) months from the date of execution of the Utility Infrastructure Agreement in accordance with the Policies for such agreements. If the requested sewer allocation is not fully permitted and legally reserved by the issuance of a DENR/DWQ sewer extension permit by the end of the 24-month time period, the Authority may release the flow reservation at the end of the 24-month period. Two language changes were also recommended: (1) changed under the (2) the timing of payment of system development charges. Ms. Miles and Mr. Styers answered clarification questions from Authority members regarding the proposed revisions. Board members expressed concern regarding the existence of two options for the timing payment of system development charges and requested clarification to that language. Mr. Jordan recommended bringing the revised language regarding system development charges to the Board for consideration at a later date, and Authority members endorsed his recommendation. The Board considered the language regarding capacity reservation for Utility Infrastructure Reimbursement Agreements. Ms. Miles and Mr. Jordan explained the purpose of the reservation of capacity. Messrs. Greer and Sparks expressed concerns CFPUA September 8, 2010 MINUTES Page 7 the developer had requested another month to review the revision regarding reservation of capacity and that staff could bring the revised Capacity Management Program to the Board in October. Mr. Renzaglia recognized Michael Lee, legal counsel for Chair Road Associates, LLC. Mr. Lee stated that the change in language from reservation to allocation was a dramatic more time for review. Ms. Miles and Mr. Jordan answered clarification questions from Authority members. Mr. Sparks moved to bring the changes to the Capacity Management Program to the Board in October. Mr. Brown seconded the motion, and it passed unanimously. Ms. Miles added that proposed changes to the policies on third-party developer agreements could also be brought to the Board in October. Finance Committee Report: Mr. Smith expressed concern about the lack of water sales and its potential effect on the Authority budget. He asked Ms. Spivey to present the August financial report. Ms. Spivey reported that the books for Fiscal Year 2010 closed on August 31 and staff is preparing financial statements for the arrival of auditors on September 27. Ms. Spivey reported no significant changes in the Balance Sheets from July to August. The Authority has $11.8 million in receivables, $4 million of which is 120 days or more. There are payment plans for $125,000, down $78,000 from July, indicating that payment plans are being completed. The estimated uncollectible for FY 2010 is $3.3 million, which is 6 percent of revenue. The Committee requested comparison data from the City and County. For FY 2007, Wilmington booked 1.5 percent uncollectible debt. The City had a lower amount for FY 2008, but uncollectible debt was not fully recognized because of the consolidation and transfer of accounts to the Authority. New Hanover County did not book uncollectible debt for water and sewer fees, but booked 7 percent uncollectibles on engineering fees and rent. Ms. Spivey and Mr. Jordan stated that economic factors contributed to uncollectible debt, and other utilities have experienced this as well. CFPUA September 8, 2010 MINUTES Page 8 With 17 percent of the year finished, revenue is at 16.42 percent, which is 1.8 percent higher than last fiscal year. Operating expenditures are at 9.52 percent, and revenues are approximately $200,000 higher than expenditures. Ms. Spivey reported that a Request for Proposal with a deadline of September 22 had gone out for a collection agency. She expects to take a recommendation the Finance Committee in October. The Committee endorsed the hiring of a bill review consultant, which would review electric bills and rates, as well as other expenses. That consultant will work on a contingency basis, earning be a percentage of the savings recognized by the Authority. A Request for Proposal will be prepared and advertised. Item 2 (a-e) from the Consent Agenda: The Board returned to consideration of Item 2 from the Consent Agenda, as follows: Resolutions to approve pursuit of Clean Water and Drinking Water State Revolving Fund Money: (f)Replacement of existing sewer lines within the Burnt Mill Creek Wastewater Collection System Basin; th (g)Rehabilitation of wastewater collection lines in the area of 30 Street; (h)Construction of a wastewater collection system to replace failing septic systems in the Marquis Hills area; th (i)Construction of a drinking water system to replace water lines in the area of 30 Street; and (j)Construction of a drinking water system project to extend water distribution lines to the Bald Eagle Lane area, to replace existing individual wells that are currently experiencing water quality problem. Mr. Jordan stated that Ms. Eckert had obtained information requested earlier in the meeting regarding the revolving fund resolutions. Ms. Eckert reported that the Bald Eagle Lane project would have to wait until September of 2011 for application if not approved today, and that the Marquis Hills project could be submitted again in March of 2011. Ms. Eckert further advised that state personnel would review applications and send their selections to Federal officials. Drinking water funds would be awarded in summer 2011, and she had not been able to speak with anyone to learn when the clean water funds would be awarded. It was her understanding that funds could be declined after the award decisions. Mr. Caster observed that declining an award of funds could be detrimental to future applications. CFPUA September 8, 2010 MINUTES Page 9 Mr. Pope re--e) from the Consent Agenda, seconded by Mr. Hunter. The Resolutions passed unanimously. Mr. Smith requested that staff investigate any additional reporting or compliance that could be attached to the Clean Water and Drinking Water applications. Old Business: Mr. Renzaglia referred Authority members to information provided by Ms. Pope regarding fluoride and asked them to review her memorandum. He stated that the amount of fluoride added to the drinking water by the Authority is at the low end of the recommended range. Mr. Renzaglia asked Ms. Pope to provide the costs of filming Authority meetings in the Harrell room, with viewing on the New Hanover County television station. Ms. Pope reviewed two proposals from NHC-TV. The first proposal included a live broadcast, pre and post production services and processes, and digital media copies to the Authority and cost $120 per meeting hour. The second proposal provided the same services without live broadcast but with a viewing schedule on the NHC-TV station. That option cost $85 per meeting hour. Authority members agreed that filming meetings added to the transparency of Authority proceedings. Mr. Smith moved to approve the second option, at a cost of $85 per meeting hour, with no live k seconded the motion. Messrs. Renzaglia, Smith, Caster, Quinn, Rivenbark, Sparks, Hearne, and Brown voted in favor of the motion. Messrs. Greer and Hunter were opposed. The motion carried. Questions and Answers: Mr. Caster asked for feedback on the Soil & Water District concern regarding easements, as expressed by Mr. Bill Hart at two prior meetings. Mr. Jordan reported that the Authority had formally response to the District, as requested. The District had asked for more notice regarding easement clearings. The easement clearing schedule will be posted on the Authority website. Mr. Brown asked about a customer concern on Cardinal Drive that had been emailed to the Board. Ms. Pope responded that she had referred the question to the Customer Service Center Manager. Mr. Renzaglia reminded the Authority that the CIP Workshop would begin at 1:30 p.m. CFPUA September 8, 2010 MINUTES Page 10 Closed Session: Mr. Smith moved to enter into closed session to discuss a personnel issue. Mr. Caster seconded the motion, and it passed unanimously. Staff members, visitors, Ms. Pope, and Mr. Jordan left the meeting, with Ms. Miles and the Board remaining. The Authority entered closed session at 12:00 noon. Open Session and Adjournment: The Authority returned to open session and adjourned by consensus at 12:10 p.m. The next meeting of the Cape Fear Public Utility Authority will be held on Wednesday, October Administration Building. Respectfully submitted, Donna S. Pope Clerk to the Board CFPUA September 8, 2010 MINUTES Page 11