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CFPUA 08 12 2009 Board Meeting CAPE FEAR PUBLIC UTILITY AUTHORITY AUGUST 12, 2009 REGULAR MEETING Members Present: Jim Hunter, Vice-Chairman Burrows Smith, Secretary Bill Caster, Commissioner Bobby Greer, Commissioner Ronald Sparks, Councilman James Quinn, Councilman John Tunstall J.C. Hearne, II Members Absent: Gene F. Renzaglia, Chairman Charles Wells, Treasurer Kathryn L. Johnston Staff Present: Matt Jordan, Chief Executive Officer Karen Durso, Assistant to the CEO Brent McAbee, Chief Financial Officer Linda Miles, Consulting Attorney Frank Styers, Director of Engineering Tom Morgan, Human Resources Director Carey Disney Ricks, Public Relations/Public Information Officer Haskell Rhett, Strategic Planning Officer Mike Richardson, Drinking Water Superintendent Ken Vogt, Wastewater Treatment Superintendent Craig Lundin, Project Manager, Engineering Department Jim Flechtner, Engineering Manager Bill Pinnix, Engineering Manager Milton Vann, Southside Wastewater Treatment Plant Supervisor Geoffrey Cermak, Northside Wastewater Treatment Plant Supervisor Carrol Shidal, Walnut Hills Wastewater Treatment Plant Supervisor CFPUA August 12, 2009, Minutes Page 1 Donna S. Pope, Clerk to the Board Guests Present: Tony Boahn, McKim & Creed Kelley Ham, McKim & Creed Teri Russ, Environmental Services, Inc. Scott Siebel, Environmental Services, Inc. Peter Connelly Tyler Newman, Business Alliance for a Sound Economy Evan Folds Call to Order and Determination fo a Quorum: Mr. Hunter called the meeting to order and declared a quorum present. Adoption of the Agenda: Mr. Caster moved to adopt the Agenda. Mr. Smith seconded the motion. There was no discussion, and the motion passed unanimously. Approval of Minutes: Mr. Smith presented the minutes from the July 8, 2009, meeting and moved for approval of same. Mr. Caster seconded the motion. Mr. Quinn stated that in July he had requested further information regarding customer statements west tier. He reiterated his request for an authoritative response. Mr. Jordan stated that staff is continuing to research and formulate an answer. There were no further comments regarding the minutes, and Mr. Hunter called the question. The motion to approve the July minutes passed unanimously. Public Comments: CFPUA August 12, 2009, Minutes Page 2 uniform block rate. He stated t. gave the Clerk a copy of his powerpoint presentation. North Carolina law regarding irrigation meters that went into effect July 1, 2009. He urged the Authority to consider a system to assist builders who were in the permit process prior to July 1 and developers with existing, platted subdivisions where the infrastructure is already installed. He also thanked Engineering staff for their attention to capacity management issues. Mr. Jordan advised that Board Committees had discussed both issues and that the Finance Committee report would provide more information regarding the irrigation meters. Mr. Quinn requested a staff report regarding the impact of wells. He stated that the cost of treated water could act as a disincentive for customers to use Authority water for irrigation. He also requested information regarding the re- begun engineering studies regarding those matters and plans to develop a long-term answer and approach. Mr. Folds spoke regarding the fluoridation of water and potential health risks of fluoride exposure. Mr. Jordan invited him to stay for a presentation during the meeting where the New Business: Engineering Report: Country Haven Pump Station, contract amendment: Mr. Styers recommended authorization for Mr. Jordan to execute an IDIQ contract amendment with McKim & Creed to the County Haven Pump Station Phase II contract for evaluation of a new pump station site, in the amount of $4,700. The work was recommended in order to identify wetlands on the site. Mr. Greer moved to authorize Mr. Jordan to execute the contract amendment with McKim & Creed in the amount of $4,700. Mr. Smith seconded the motion. There was no discussion, and the motion carried unanimously. Raw Water Pump Station, professional services contract: CFPUA August 12, 2009, Minutes Page 3 Mr. Styers requested authorization for Mr. Jordan to execute a professional services contract with Black & Veatch for preliminary engineering, detailed design, construction documents, and bidding for construction of a proposed raw water pumping station to supply the Sweeney Water Treatment Plant. The contract would be at hourly rates, not to exceed $650,836. The project is funded in the FY 2010 Capital Improvement Plan budget. Mr. Flechtner and Mr. Richardson were available to answers questions regarding this item. Mr. Caster moved to authorize the contract, and Mr. Sparks seconded the motion. In discussion, Mr. Smith asked if the Authority already owned a site for the pump station and how large the station would be. Mr. Flechtner replied that the general location has been identified, but no site has been acquired yet. The pump station would house four large pumps that would be controlled remotely from the Sweeney Plant. Mr. Greer suggested delaying the project because the Authority is not currently using all the water it produces. Mr. Flechtner stated that the design and procurement stages would be very lengthy. The pumps must be specially designed. Mr. Richardson stated that the Sweeney Plant current receives enough raw water to produce 25.5 million gallons per day (mgd), which is less than its 27.5 mpd capacity. When the expansion is complete, the plant will have the capacity to produce 35 mgd but will not have enough raw water to meet that capacity. Mr. Jordan added that the recommended contract is for design and permitting. The raw water pump station construction will be addressed at a later date. Mr. McAbee stated that he anticipated the construction monies to be part of the next bond issue, and construction should be targeted for 2012 or 2013. There were clarification questions regarding interconnections with between the Sweeney Plant and the nano-filtration plant, as well as interconnections to serve the Porters Neck area. Mr. Sparks stated that the money for the raw water pump station professional services and design was already budgeted, and he supported going forward so there would be enough water available in the future. Mr. Greer requested an overview of capacity for both water and sewer so that the Board may make intelligent, fact-based decisions. Mr. Smith asked if Mr. Caster would consider amending his motion and suggested delaying the project. Mr. Caster declined to amend his motion. CFPUA August 12, 2009, Minutes Page 4 Mr. Quinn observed that he also served on the Board of the Lower Cape Fear Water & Sewer Authority and had been aware of the need for more water to the Sweeney Plant for some time. He stated that the Authority decided a year ago to control its own destiny by building the raw water pump. He supported the project. Mr. Hunter called the question and asked for a vote by show of hands. Messrs. Caster, Sparks, Quinn, Tunstall, and Hearne voted in favor of the motion. Messrs. Greer, Smith, and Hunter voted against the motion. The motion carried five to three. Archaeological Investigation of the Southside Wastewater Treatment Plant: Mr. Lundin reported that the discovery of artifacts during the Environmental Assessment of the McKean Maffitt (Southside) Wastewater Treatment Plant resulted in the need for an archaeological investigation and assessment of the site. The first two phases of the archaeological study were completed during the Environmental Assessment, using the budget for that assessment. Following the Phase 2 study, the North Carolina State Historic Preservation Office (SHPO) determined the site to be eligible for the National Register of Historic Places. The site along the river bank was occupied by Siouan-speaking people in the period of 3,000 BC 1,000 AD. The artifacts found have been in good condition, with a high density of artifacts in the area. These factors indicate that the site is relatively intact and undisturbed. Environmental Services, Inc., the Authority environmental consultant, has developed a Data Recovery Plan for Phase 3, which has been approved by State Historic Preservation Office staff. Phase 3 artifact recovery will involve manual excavation with up to 23,000 artifacts being retrieved and transported for permanent curation. The plan also includes up to five dating samples from the site, a management summary and final report. The cost is $263,000. It is not anticipated that human remains will be found on Unmarked Human Burial and Human Skeletal Remains Protectdealing with unmarked burials is not included in the contract. The Authority will enter into a Memorandum of Agreement with the N.C. Division of Water Quality, the N.C. State Historic Preservation Officer setting forth the requirements of site excavation and mitigation. CFPUA August 12, 2009, Minutes Page 5 There were several clarification questions from Authority members, which were answered by Mr. Lundin, Ms. Ham of McKim & Creed, and Ms. Russ and Mr. Siebel of Environmental Services, Inc. Mr. Sparks moved to authorize the Chief Executive Officer to execute a contract amendment with McKim & Creed in the amount of $288,000 for professional services associated with the performance of the Archaeological Investigation and a Letter of Map Revision and to execute a Memorandum of Agreement with the North Carolina Division of Water Quality and the North Carolina State Historic Preservation Officer. Mr. Smith seconded the motion, and it passed unanimously. Environmental and Safety Report and Update: Ms. Eckert presented the monthly report for the Environment and Safety Department. Only one Authority employed had an injury in July. There were three Sanitary Sewer Overflows, with a total of 400 gallons reaching surface water. Ms. Eckert briefly reviewed charts regarding water flows, and Mr. Richardson was available to by reference. The Authority recessed at 10:10 a.m. and reconvened at 10:20 a.m. Operations Report: Aquifer Storage and Recovery Report: Mr. Richardson provided an overview on the Aquifer Storage and Recovery System (ASR). The Authority will receive federal stimulus funds of $3,000,000 to fund the project. $1.5 million is is a grant, and $1.5 million will be a loan, at zero percent interest, to be paid back over 20 years. The ASR will allow the water plants to produce extra water in the fall and winter months to be used during peak demand in the spring and summer months or for use during emergency situations. Up to 300,000,000 gallons a year can be stored in the aquifer, which is approximately a supply for 100 days. Upon retrieval, the water will be lightly treated with chlorine before being reintroduced into the system. Mr. Richardson briefly explained the technology behind aquifer storage and recovery. The crustaceous aquifer in coastal North Carolina lends itself well to the process. Twenty states in CFPUA August 12, 2009, Minutes Page 6 the country use aquifer storage and recovery. North Carolina has one system in the Greenville area. Construction will take 14-18 months, and the wells for the aquifer will be located in the Oleander/Military Cutoff Road area. The Authority is developing a wellhead protection program for both the aquifer and for the nano- plant area and ordinances to protect the areas from tampering or depletion of water from wells other than our own. There were clarification questions from Board members regarding the buffer between the treated water and natural water in the aquifer and protection against contaminants. Drinking Water Fluoridation: Mr. Richardson provided a definition of fluorine, a natural trace element, and explained its recommended addition to public water supplies as a tool to prevent tooth decay. He presented articles from the American Academy of Family Physicians and the American Water Works Association. Fluoridation is supported by the U.S. Department of Health and Human Services. There were clarification questions from Authority members. Public Relations/Public Information Report: Mr. Jordan presented Peak Performance Awards from the National Association of Clean Water Agencies to wastewater treatment staff, as follows: Gold Award for no permit violations during 2008, presented to the Southside Wastewater Treatment Plant, Milton Vann, Plant Supervisor, accepting the award: Silver Award, no more than five violations during 2008, presented to the Northside Wastewater Treatment Plant, Jeff Cermak, Plant Supervisor, accepting the award; and Silver Award, no more than five violations during 2008, presented to the Walnut Hills Wastewater Treatment Plant, Carroll, Plant Supervisor, accepting the award. Mr. Jordan and Ms. Ricks also recognized Ken Vogt, the Wastewater Treatment Superintendent. Ms. Ricks reviewed public outreach activities which Authority staff members conducted in July. The Authority participated in a rain garden certification program and an irrigation workshop with North Carolina Cooperative Extension Services. There are public service announcements on the CFPUA August 12, 2009, Minutes Page 7 Cumulus and Sonrise radio and television stations, and the City of Wilmington television station. The Greater Wilmington Business Journal has done several articles highlighting the Authority, and the Wilmington Star-News did a series of articles about the Authority. Ms. Ricks has established a Facebook page for the Authority. Staff members recently held a covered-dish The Authority held a successful rededication ceremony at the Northside Wastewater Treatment Plant and participated with the City in outreach efforts regarding the upcoming Front Street streetscape project. Staff held a public information meeting for Middle Sound residents concerning mandatory connection, which was well-attended and well-received. Ms. Ricks continues to develop future outreach opportunities, including an appearance by Mr. McAbee and Mr. Flechtner on a local television interview program. Mr. Quinn commented that some of the newspaper coverage had been negative. He believed there was an unfair representation in the assertion that the Authority hired 50 more people than were needed to operate water and sewer by the City and County and stated that those employees were needed to replace administrative and support positions that were provided by other had decreased. He requested information explaining the additional positions and a cost Jordan responded that staff is developing that information. Ms. Ricks added that the Star-News reporter had stated that he would retract incorrect information. Mr. Sparks stated that he had attended the outreach meeting regarding the Front Street streetscape project. He requested that staff investigate the possibility of working in three shifts over each 24-hour period to hasten the work and lessen the impact on residents and business owners in the downtown area. Amendment of Ordinance to provide Civil Penalties for Obstruction in Easements: Ms. Miles proposed a revision to Appendix C of the Authority Ordinance which would provide for civil penalties when property owners refuse to remove permanent structures in the ity easement. The revision would also provide standards and a method for allowing encroachments which do not substantially hinder immediate repairs of a utility line. Ms. Miles and Mr. Craig answered clarification questions from Authority members. CFPUA August 12, 2009, Minutes Page 8 Mr. Smith moved to adopt the recommended changes to Appendix C of the Ordinance, and Mr. Hearne seconded the motion. In discussion, Mr. Greer and Mr. Sparks recommended that Section 8, Appeals, be amended so that appeals would be heard by the Chief Executive Officer, with no designee acting in his stead. Mr. Smith amended his motion to include that change to the Appeals section. Mr. Greer seconded the amended motion, and it passed unanimously. Mr. Jordan reported that the in the upcoming months. In addition, Mr. McAbee is working on an analysis of Authority resources and efficiencies compared to the water and sewer systems as they operated separately under the County and City. Staff is also developing a model of water cost based upon the tier structure. Mr. Jordan stated that there are many rate models, and each has its merits. Mr. McAbee has announced his retirement, and Mr. Jordan thanked him for his years of service that he was a better man for having known Mr. McAbee. Recruitment for the position of Chief Financial Officer will be developed in the near future, to facilitate a smooth transition. Mr. Caster left the meeting at 11:27 a.m. A quorum remained. Finance Committee Report: Mr. McAbee reported that Fiscal Year 2009 ended with $40.2 million in cash on hand. Approximately $4 million has been transferred to a Post Employment Benefit Fund for retiree health coverage. $24 million will be held in capital reserves, and $12.5 million in operations reserves. The City of Wilmington transferred $5.2 million to the Authority at the end of FY 2009, and New Hanover County transferred $4.45 million. In the first stage of collection procedures, letters will be sent to approximately 4,800 customers with accounts that are 90 days and $350 past due. Four customer service staff members have been designated to work with customers to arrange payment plans. The second stage of collection efforts will be directed at customers with more than $200 past due. Mr. McAbee reviewed expenditures and revenues for the month of July. A copy of his report is attached hereto and incorporated by reference. CFPUA August 12, 2009, Minutes Page 9 June and July water sales were lower than the same periods in 2008. There has been more rainfall and milder temperatures. Other types of utilities have also experienced decreased usage, which may be attributable to economic conditions. Staff will continue to closely monitor water sales in August and September. Mr. Quinn asked if the Authority could develop a mechanism to assist landlords with uncollectible utility bills from tenants. Mr. Smith introduced a discussion of irrigation meter system development charges. He expressed concerns that system development charges for a second meter would place a financial burden on builders and first-time home buyers of new construction, as well as previously-platted subdivisions with infrastructure in place but no houses. Mr. Smith moved to revise the ordinance and fee schedule so that no system development charge would be associated with the installation of a 5/8-inch irrigation meter for any lot platted before July 1, 2009. Mr. Tunstall seconded the motion. In clarification, staff explained that many areas of the state have a water line to each property but that many subdivisions in New Hanover County have one water line that sits on a property line between two lots, with each lot having a separate meter. In those situations, the addition of an irrigation meter would necessitate another line to ensure appropriate pressure to both properties. System Development Charges are based upon meter size. Mr. Jordan reported that staff is investigating and developing solutions to address these concerns as they relate to future development and plans to bring a procedure to the Long-Range Planning Committee. After discussion, Mr. Hunter called the question, and the motion passed unanimously. Long-Range Planning Committee Report: Mr. Hunter introduced Mr. Styers to summarize the six items reviewed by the Long-Range Planning Committee during its August 5 meeting. They were: (1)421 Engineering Agreement has been negotiated between the Authority, Pender County, and McKim & Creed for a total of $663,330. An Interlocal Agreement has been developed by Authority staff and its consulting attorney and is under review by Pender County. The Interlocal Agreement is for equal cost-sharing for engineering fees only. (2)The Committee reviewed a presentation from Mr. Pinnix regarding Capacity Management and approved staff recommendations as follows: CFPUA August 12, 2009, Minutes Page 10 (a)For residential development, limit capacity to 20,000 gallons per day (gpd) per each phase of a development, until the phase has received 70 percent or more of its building permits. At that time an additional 20,000 gpd can be requested by the developer via the permit modification process; and (b)Evaluate commercial development capacity on a case by case basis. Staff is preparing appropriate ordinance revisions for presentation to the full Board in September. (3)Mr. Rhett advised the Committee on wells and the development of a wellhead protection program and applicable ordinances, in coordination with New Hanover County. (4)The Committee received an update on the Aquifer Storage and Recovery System and the award of stimulus funds for the project. (5)The Committee directed staff to identify funding for a cost-sharing agreement with the developer of the Myrtle Landing Subdivision, to relocate the Laurel Ridge Pump Station. (6)The Committee directed staff to identify funding for cost-sharing on a 16-inch dry force main to serve the Riverside Subdivision on Castle Hayne Road and to allow the developer to build a small pump station and transfer property to the Authority for a future pump station. Mr. Hunter reminded Authority members that budget cuts had necessitated changes to the Improvement Plan and that the Myrtle Landing/Laurel Ridge and Riverside Subdivision pump station projects were examples of compromises staff has been required to make. Mr. Smith agreed and added that he feared that the Authority would impede growth in its customer base by not having money for infrastructure. Human Resources Committee Report and Closed Session: Mr. Smith moved to enter closed session to discuss a personnel matter in accordance with N.C.G.S. 143-318.11(a)(6). Mr. Tunstall seconded the motion, and it passed unanimously. The Authority entered a closed session at 12:20 p.m. Ms. Miles and Mr. Morgan were in attendance. Mr. Greer left the meeting at 12:30. A quorum remained in attendance. CFPUA August 12, 2009, Minutes Page 11 Mr. Smith moved to return to open session, and Mr. Hearne seconded the motion, which passed unanimously. Mr. Smith moved to adjourn the meeting. Mr. Tunstall seconded the motion, and it passed unanimously. The meeting adjourned at 12:55 p.m. The next meeting of the Cape Fear Public Utility Authority will be on Wednesday, September 9, 2009, at 9:00 a.m. in the Lucie Harrell Conference Room, New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope, Clerk CFPUA August 12, 2009, Minutes Page 12