CFPUA 09 14 2011 Regular Meeting
CAPE FEAR PUBLIC UTILITY AUTORITY
REGULAR MEETING
SEPTEMBER 14, 2011
Members Present:
Jim Quinn, Chairman
Mike Brown, Vice-Chairman
Pat Kusek, Secretary
Burrows Smith, Treasurer
Gene Renzaglia
Cindee Wolf
J.C. Hearne, II
Rick Catlin, Commissioner
Brian Berger, Commissioner
Ron Sparks, Councilman
Charlie Rivenbark, Councilman
Staff Present:
Matt Jordan, CEO
Cheryl Spivey, CFO
Mike Richardson, Interim COO
Karen Durso, Assistant to CEO
Frank Styers, Engineering Director
Beth Eckert, Environment & Safety Director
Carey Disney Ricks, CCO
Tom Morgan, H.R. Director
Nancy Johnson, Customer Service Director
Ken Vogt, Wastewater Treatment Superintendent
Julia Vosnock, Procurement Manager
Christine Neal, Program Manager
Christene Mitchell, Engineering Manager
Jim Craig, Utility Services Superintendent
Steve Mongeau, Asset Management Program Manager
Brad Jones, Water Treatment Supervisor
John Malone, Water Treatment Supervisor
Allan Southerland, Water Control Operator
Richard Hopman, Utility Maintenance Foreman
Bruce Edwards, Water Control Operator
Larry Redenbaugh, Facilities Specialist
Mike Grantham, Wastewater Treatment Operator
John White, Wastewater Treatment Operator
Kevin Boyett, Pump Station Supervisor
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Andrew Jones, Warehouse Manager
Joel Bing, Environmental Program Manager
Donna S. Pope, Clerk
Attorney Present:
Linda A. Miles, the Miles Firm, PLLC
Guests Present:
Sterling Cheatham, City Manager
Jim Iannucci, NHC Engineering Director
Lawless Bean, City of Wilmington
Diane Williams, N.C. Division of Water Quality
J.D. Solomon, CH2MHill
Kevin Mauer, 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 declared a quorum present. Mr. Hearne
joined the meeting at 10:15 a.m. Mr. Quinn introduced himself as Chairman and read an excerpt
from the February 8, 2007, recommendations of the Joint City/County Water & Sewer Advisory
Committee wherein the Advisory Committee recognized that the City of Wilmington and New
Hanover County faced significant future capital investments in their water and sewer systems
that would total over $400 million in the next ten to fifteen years. Mr. Quinn stated that his goals
as Chairman included a continued commitment to capital improvements, keeping the water and
environment clean, improving the understanding of the Authority, and continuing
relationships with the City of Wilmington and New Hanover, our parent organizations. Mr.
Quinn recognized City and County staff in attendance at the meeting.
Adoption of Agenda:
unanimously.
Approval of Minutes:
Ms. Kusek presented the minutes of the August 10, 2011, Authority meeting. There were no
corrections to the minutes. Mr. Sparks moved to approve the minutes. Ms. Kusek seconded the
motion, and it passed unanimously.
CFPUA 9.12.2011 MINUTES Page 2
Presentations:
.
Resolution Recognizing Staff for Service during Hurricane IreneMr. Quinn presented a
Resolution Recognizing Cape Fear Public Utility Authority staff for their outstanding service
during Hurricane Irene, August 26 and 27, 2011. Mr. Catlin moved to adopt the Resolution. Mr.
Smith seconded the motion, and it passed unanimously. Messrs. Quinn and Jordan thanked
employees and presented copies of the Resolution to the following Department representatives:
Allan Southerland, on behalf of the Sweeney Water Treatment Plant;
Rich Hopman, on behalf of Water Treatment, Maintenance;
Bruce Edwards, on behalf of Water Treatment, Groundwater;
Larry Redenbaugh, on behalf of Wastewater Treatment Maintenance;
Mike Grantham, on behalf of the Northside Wastewater Treatment Plant;
John White, on behalf of the Southside Wastewater Treatment Plant;
Kevin Boyett, on behalf of Utility Services, Pump Stations and Collections;
Andrew Jones, on behalf of Utility Services, Construction;
Joel Bing, on behalf of Environment & Safety Management; and
Christene Mitchell, on behalf of the Engineering Department, whose members worked at the
New Hanover County Emergency Operations Center during the storm.
Resolution Recognizing Gene Renzaglia, Authority Chairman from July 2008 June 2011. Mr.
Sparks moved to adopt a Resolution recognizing Mr. Renzaglia and thanking him for his
dedication to the Authority and the citizens of the City of Wilmington and New Hanover County,
his support of the founding principles of the Authority, his diligence and hard work in creating
the organizational chart, hiring the management team, serving on Authority Committees, and in
guiding the Authority during his tenure as Chairman. Mr. Smith seconded the motion, and it
passed unanimously.
Mr. Quinn presented the Resolution and a gavel plaque to Mr. Renzaglia to commemorate his
service as Authority Chairman. Mr. Quinn stated that he served on Council when the Authority
, recognizing his technical expertisein
the engineering field. He stated that the Authority and the community owe Mr. Renzaglia a debt
of gratitude for his service and dedication. Mr. Renzaglia continues to serve as an Authority
member.
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Public Comments:
There were no speakers for Public Comment.
Consent Agenda:
Authorization for Procurement to advertise and sell items on GovDeals and donate those items
to local non-profits if those items are not sold on GovDeals. Mr. Smith moved to approve the
Authorization as recommended by staff. Ms. Kusek seconded the motion, and it passed
unanimously.
New Business, Administrative Reports:
Operations Report.
Steve Mongeau, Program Manager for Asset Management, provided a
progress report on Asset Management and an overview of results expected from Phase II of the
program implementation. Asset Management addresses key areas such as prioritization of
investment and activities, work orders, integration of merged systems, training, succession
planning, integrating initiatives such as the Water Resources Master Plan and Strategic Plan,
growth, long range planning, and project scheduling.
ns have been brought on line with the Maximo (CMMS)
Routine maintenance can be scheduled using Maximo, and labor, material, and work history can
be tracked with the system.
The second phase of Asset Management implementation will expand the use of the Maximo
system through the Authority, development a formal maintenance program based on
maintenance task analysis, and expand business case evaluations and risk assessment of
infrastructure. Much of the work during Phase II will be done by Authority employees, with
less utilization of consulting services.
Mr. Mongeau answered clarification questions from Authority members and gave examples of
instances wherein Asset Management had saved time and money.
Authorization for the CEO to execute a contract amendment with CH2M Hill for professional
services to support Phase II Asset Management Implementation. Staff recommended the
approval of the contract amendment, in the amount of $490,000, included in the FY2012 Budget.
Mr. Smith moved to authorize the contract amendment. Mr. Rivenbark seconded the motion,
and it passed unanimously.
Environment and Safety Management Report and Annual Wastewater Report for the
period of July 1, 2010, through June 30, 2011.
Ms. Eckert presented the Annual Wastewater
Report for the Fiscal Year ending June 30, 2011. The Report is posted on the Authority website
and available for distribution at several locations. The Northside and Southside Wastewater
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Treatment Plants had no violations during the year. The Walnut Hills package plant had three
biochemical oxygen violations. The Northside Plant now receives septage for treatment. The
plants continue to operate at an optimal level and to protect the environment.
There were 23 Sanitary Sewer Overflows (SSOs) during the year. Ten of the SSOs occurred
during Tropical Storm Nicole with heavy rainfall; six SSOs were caused by debris and grease;
six were caused by pipe failures, and one was caused by a bypass pump failure.
-party certification.
Authority staff members continue education and outreach efforts so that residents will know
what they can do to help prevent sewer overflows. Efforts include the distribution of fat trappers
for kitchen grease and public service announcements explaining how opening manhole covers
during rainstorms can cause overflows in the system. Ms. Eckert thanked staff members for their
efforts and commitment to protecting the environment.
Public Relations Report.
Ms. Ricks reported on the Board job shadowing initiative and showed
photos of Authority members working with staff in Customer Service, Meter Reading,
Engineering Project Management, SCADA at the Sweeney plant, ESM Compliance, and plant
maintenance at the Walnut Hills wastewater package plant. Messrs. Rivenbark, Catlin, Brown,
Quinn, and Hearne commented on the departments they had visited and praised employees for
their knowledge and commitment. Ms. Kusek added that she had the privilege of visiting several
departments and stated that the Authority employed some of the finest people she had met in her
entire career.
Ms. Eckert answered questions from Board members about pre-treatment by corporate customers
such as Corning.
Mr. Hearne arrived at 10:15 a.m.
Mr. Quinn adjourned the meeting for a break at 10:20 a.m. The Authority reconvened at 10:30
a.m.
Ms. Miles stated that she would have two items to discuss in closed session.
Resolution relative to the Disposition of Claims and Judgments sought or entered against
Authority members (Board), Authority officers or employees. Ms. Miles recommended the
adoption of a Resolution protecting Board members, officers, and employees against claims in
civil court. The Resolution would not include legal actions arising from criminal activities,
malice, fraud, or corruption.
Mr. Brown moved to adopt the Resolution as recommended by legal counsel. Mr. Rivenbark
seconded the motion, and it passed unanimously.
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CEO Report.
Mr. Jordan presented the Environmental & Safety Management monthly report
and answered clarification questions from Authority members.
Customer Service Feedback Report. Mr. Jordan reported that Ms. Durso had volunteered and
developed a customer feedback procedure and requested that she update the Board on results.
Ms. Durso reported that she had a great interest in customer service, causing her to designthe
program and recommend it to Mr. Jordan. The Efficiency and Competitiveness Study also
supported the use of a customer service feedback program. Ms. Durso works closely with
Customer Service and Utility Services and makes phone calls to customers after a work order is
complete. She has received very positive responses from customers and has recommended some
minor adjustments to customer service procedures as a result. She will continue to conduct
customer service feedback calls and report to Mr. Jordan, with updates as requested to the Board.
New Business, Committee Reports:
Finance Committee.
Bond Order Authorizing the Issuance of Not to Exceed $52,200,000 Water
& Sewer System Revenue Bonds of the Cape Fear Public Utility Authority. Mr. Smith referred
Authority members to the Bond information and supporting documentation in their Agendas.
The Committee supported the adoption of a Bond Order for the issuance of water and sewer
revenue bonds not to exceed $52,200,000.
Ms. Spivey reviewed the Bond documents. The Local Government Commission approved the
bond sale on September 13. Ms. Spivey and Messrs. Smith and Jordan had met with rating
agencies earlier in the week and expect to receive the ratings within the next week. The Bonds
should be sold on September 28, 2011, and funds received on or about October 13, 2011.
A five percent rate increase may be needed in Fiscal Year 2013 to support the debt service on the
Bonds. The increase would be a one-time increase to meet this need. Additional increases in
future years may be needed to continue the Capital Improvements Program.
The Board reviewed the capital projects listed for the Bond sale. Ms. Spivey and Messrs. Smith
and Jordan answered clarification questions from Authority members.
Mr. Smith moved to approve the Bond Order authorizing the issuance of water and sewer
revenue bonds in an amount not to exceed $52,200,000. .Mr. Renzaglia seconded the motion.
Following discussion and further clarification questions, Mr. Quinn called the question, and
theBond Order passed unanimously.
Resolution Designating TD Bank as an Official Depository. The Finance Committee
recommended BB&T and TD as official depositories for Bond proceeds. The Authority already
utilizes BB&T. Staff requested official designation of TD Bank as a depository. Mr. Smith
moved to adopt the Resolution designating TD Bank as an official depository. Mr. Catlin
seconded the motion.
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Ms. Spivey answered clarification questions from Authority members regarding deposit security,
liquidity, and yield on investments. Mr. Quinn called the question, and it the Resolution was
unanimously adopted.
August Financial Reports: The August financial data was included in the Agenda. There were
no questions from the Board regarding the monthly statements.
Long Range Planning Committee.
Mr. Quinn reported that Ms. Wolf will chair the Committee
beginning in September.
Monthly Billing Update: Ms. Johnson provided an update on monthly billing. A poll of
customers who call the Authority, walk-er
feedback calls has been conducted. There is also an survey on the Authority website for
customers to indicate their preference for monthly or bimonthly billing. Results show that 52
percent of customers surveyed prefer the continuation of bimonthly billing, and 44 percent would
like monthly billing. The remaining responses did not indicate a preference.
Mr. Renzaglia asked if the survey questions addressed the cost of converting to monthly billing.
Ms. Johnson responded that some customers had asked about costs, and Ms. Ricks added that
customer Facebook comments asked about costs. Mr. Renzaglia asked if staff had determined
what the costs would be to convert. Mr. Quinn stated that staff had presented three estimates of
costs but the estimates included costs for equipment purchases and did not represent the cost of
monthly billing alone.
The Long Range Planning Committee sought direction from the full Board regarding further
exploration and the development of a monthly billing plan.
Mr. Rivenbark observed that the survey results were not overwhelmingly in favor of monthly
billing. Mr. Sparks believed additional information was needed before a decision could be made.
Mr. Renzaglia asked Mr. Jordan if he had considered an approach to address monthly billing
options. Mr. Jordan reported that two options exist: (1) hire more staff for accommodate meter
reading and billing, keeping the current system in place; and (2) using more automation, which
could be more efficient in the long run but would be a capital cost with debt service to support
the expense. Mr. Jordan stated that costs need to be identified and isolated, and he recommended
using the Asset Management Business Case Evaluation to study the questions. Mr. Smith
supported proceeding with a study and analysis so that the Board could make an educated
decision. Mr. Berger supported a side by side comparison of monthly versus bimonthly billing
and every conceivable scenario.
After further discussion and clarification questions, Mr. Sparks moved to endorse the Long
Range Planning recommendation to direct the CEO to continue to develop a strategy and plan
CFPUA 9.12.2011 MINUTES Page 7
and to determine the financial impacts associated with the implementation of monthly billing.
Ms. Wolf seconded the motion, and it passed unanimously.
Mr. Berger offered a second motion related to the monthly billing consideration. He moved to
direct staff to conduct a side by side comparison and provide a report on all of the costs under
different scenarios for monthly versus bi-monthly billing, and, if feasible, some on monthly and
some on bi-monthly. He believed that information to be essential to making a decision. Ms.
Kusek and Mr. Sparks stated that they believed that was the direction given to staff. Mr. Jordan
stated that he understood the comparison and scenarios to be part of the direction and that he
appreciated the clarification. Mr. Berger was satisfied with the clarification and withdrew his
motion.
Mr. Sparks advised the Chairman that he needed to leave the meeting and requested that he be
excused. Mr. Brown moved to excuse Mr. Sparks. Ms. Kusek seconded the motion, and it
passed unanimously. Mr. Sparks was excused and left the meeting at 11:30 a.m.
Raw Water Pump Station. Mr. Styers reported that discussions continue with the Lower Cape
needs for raw water. Lower Cape Fear is conducting its study and evaluation, which should be
complete in 90-120 days.
Growth Discussion. Discussions continue regarding planning with the City of Wilmington, New
Hanover County, and Highway 421 Corridor stakeholders. The Authority Board will join in
formulating a growth philosophy and policies.
Kerr Avenue Water Line and Interconnections. Mr. Styers reported on the Kerr Avenue water
line and its interconnection between Sweeney and the Nano-filtration Water Plant. The
Some funding has been identified, and other funding strategies are being developed.
Kirkland and Country Haven Pump Station. The Committee had reviewed and discussed
capacity at the Kirkland/Country Haven pump station in the Northeastern portion of the County.
Ms. Wolf added that she had an additional item to add to the next Long Range Planning
Committee, as requested by Mr. Catlin. The Committee will discuss raw water storage at its
September 22 meeting, in addition to other items already scheduled.
Mr. Brown asked about the Nano Plant groundwater levels and sinkholes. Mr. Styers reported
that staff if developing a white paper regarding aquifer management.
Old Business:
There was no old business and no further questions from Authority members.
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Closed Session:
Mr. Rivenbark moved to enter closed session to discuss personnel matters and to receive an
update from legal counsel regarding the Environmental Protection Agency enforcement action.
Mr. Berger seconded the motion, and it passed unanimously. The Authority entered closed
session at 11:45 a.m. Ms. Miles, Ms. Pope, and Messrs. Jordan and Morgan remained in the
meeting with the Board.
Ms. Miles reported on the status of the EPA enforcement action.
The Board received a report and gave direction to staff and legal counsel on a legal action related
The Board briefly discussed evaluation procedures for employees reporting directly to the Board.
Return to Open Session and Adjournment:
Ms. Wolf moved to return to open session. Mr. Rivenbark seconded the motion, and it passed
unanimously. The Authority returned to open session at 12:10 p.m.
Ms. Wolf moved to adjourn. Ms. Kusek seconded the motion, and it passed unanimously. The
Authority adjourned at 12:11 p.m.
The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday, October
12, 2011, in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington,
North Carolina.
Respectfully submitted,
Donna S. Pope
Clerk to the Board
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