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CFPUA 5 8 2013 Regular Meeting Cape Fear Public Utility Authority May 8,2013 Regular Meeting Authority Members Present: Jim Quinn, Chairman Pat Kusek, Vice-Chair Jim Brumit, Secretaiv Mike Brown,Treasurer Charlie Rivenbark, Councilman Neil Anderson, Councilman Thomas Wolfe, Commissioner Woody White, Commissioner Cindee Wolf Keith Betts Lariv Sneeden Staff Present: Matt Jordan, CEO Jim Flechtner, COO Chem 1 Spivey, CFO Frank Styers, Engineering Director Beth Eckert, Environmental Director Tom Morgan,H.R. Director Mike McGill, CCO John Payne, Internal Auditor Karen Durso, Assistant to CEO Julie McLawhon, Budget and Finance Manager Melinda Hoggard, Financial Systems Analyst Ramona Burns, Accounting Manager Julia Vosnock,Procurement Manager Teresa Horsboll, Buyer Tymekia Askevv, Fiscal Support Specialist Kristi Simpson-Hoggard,Payroll Specialist Christene Mitchell, Engineering Manager Kent Harrell, Engineering Manager Gary McSmith, Engineering Manager Jim Craig, Utility Services Superintendent Mike Richardson,Water Resources Manager Ken Vogt,Wastewater Treatment Superintendent Geoffrey Cermack,Wastewater Treatment Supervisor Milton Vann,Wastewater Treatment Supervisor Donna S. Pope, Clerk CFPUA May 8, 2013, Meeting Page 1 Attorney Present: Linda A. Miles,the Miles Firm,PLLC Guests Present: George,House, Brooks,Pierce,McLendon,Humphrey, and Leonard Chris Coudriet,New Hanover County Manager Jim Iannuci,NHC Engineering Director Joshua Swift,NHC Health Department Dianne Harvell, Environmental Health Eric Williams,HDR Dustin Wagner, SVC Jim Beck Ryan McAlister, BASE Media Representatives Call to Order,Determination of a Quorum, and Opening Comments: Mr. Quinn called the meeting to order at 9:00 a.m. and declared a quorum present. Mr. Anderson arrived at 9:10 a.m. Adoption of the Agenda: Mr. Jordan requested the addition of two items to the day's agenda, as follows: • Water Quality Report,to be added to the CEO Report, and • NEI Force Main Contract,to be added to the Finance Committee Report. Mr. Sneeden asked if there was an agenda item for the Marquis Hills and Heritage Park sewer replacement projects, and Mr. Jordan reported that the item would be discussed under the Long Range Planning Committee Report. County representatives kvere present for the discussion. Mr. Rivenbark moved to adopt the Agenda with the requested additions. Mr. Betts seconded the motion, and the Amended Agenda was adopted unanimously. Approval of Minutes: Mr. Brumit moved to approve the Minutes of the April 10, 2013, Regular Meeting, as presented. Mr. Brown seconded the motion, and it passed unanimously. Presentation to Finance Staff: CFPUA May 8, 2013, Meeting Page 2 Mr. Blown presented the Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting for the Fiscal Year ended June 30, 2012, to Ms. Spivey, Ms. McLawhon, Ms. Hoggard, Ms. Alexander, Ms. Askew, Ms. Vosnock, and Ms. Horsboll. Mr. Blown reported that the Authority had received this significant recognition every year that he had served on the Board and thanked Ms. Spivey and Finance staff for their hard work and commitment to the Authority. Public Comments: Mr. Beck spoke regarding conservation. Consent Agenda: Mr. Quinn presented the Consent Agenda, as follows: 1. Authorization for the CFO to execute contracts to renew the employee health insurance plan with Blue Cross &Blue ,Shield of North Carolina as to the third party administrator and to execute a contract with HighMark as the stop-loss provider for FY2014. 2. Authorization for the CFO to execute a contract with T&L Truck Repair for routine maintenance and repair of heavy duty vehicles and trailers for 112-month period with the option for renewal for three additional 12-month terms, estimated cost S200,000 annually for heavy duty vehicles and 512,000 for trailers. 3. Authorization for the CFO to execute a contract with Hughes Brothers, Inc., for routine maintenance and repair of medium duty vehicles for a 12-month period with the option for renewal for three additional 12-month terms, estimated cost 57.5,000 annually. I. Authorization for the CFO to execute a contract with Hazen & ,Sawyer, P.C. for professional services for disinfection byproducts evaluation, at a budget impact of 5173,600. .5. Authorization for the CFO to execute a contract with ,Siemens Industry, Inc., for odor and corrosion control services, at a budget impact of 51,160,000, with approximately S.56,000 to be reimbursed by the Town of Wrightsville Beach. 6 Authorization for the CFO to execute a construction contract with Fast Coast Contracting, Inc., for force main installation as part of the Country Haven Pump ,Station upgrade, at a budget impact of 5626,.500. 7. Authorization for the CFO to execute a contract amendment with McKim & Creed, Inc., for engineering design services associated with the Market ,Street Pump ,Station --11 modification project, at a budget impact of 5-10-1,69.5. 8. Authorization for the Chairman and,Secretary to execute an Interlocal Agreement with the City of Wilmington for cost recovery in the amount of 5.582,.500 for road work associated with Phase IB of the Northeast Interceptor, and Authorization for the Chairman, ,Secretary, and CFO to executed the associated Budget Ordinance and Amendment. New Business,Administrative Reports: CFPUA May 8, 2013, Meeting Page 3 Attorney Report. Ms. Miles requested a Closed Session later in the meeting to discuss the Environmental Protection Agency proposed Consent Decree. Ms. Miles reported that House Bill 488 is under review by the North Carolina General Assembly. The Bill allows for Local Preference Policies. The Authority adopted a local preference policy in 2010. Ms. Wolfe moved to send a letter to the local representatives in support of local preference policies. Ms. Iusek seconded the motion, and it passed unanimously. Ms. Miles reported that legislative issues frequently require an immediate response and that it is difficult to poll all Board members in the time allowed to respond. She requested the Board's consideration of allowing the Executive Committee to provide direction on legislative items. After a brief discussion, Ms. Wolfe moved to authorize the Executive Committee to provide direction to Ms. Miles on legislative issues. Mr. Betts seconded the motion, and it passed unanimously. Ms. Miles reported that there is a bill to require the recording or videotaping of all closed sessions. Five Authority members have advised Ms. Miles they are opposed to the bill,with one supporting the bill. Ms. Miles asked that Board members contact her with further comments. CEO Report. Mr. Jordan presented the Environmental Performance Report for March 2013. There vvas one sanitary sewer overflow of approximately 700 gallons caused by a grease blockage. The water systems operated with no violations, as did the Northside and Walnut Hills wastewater treatment plants. The Southside wastewater treatment plant failed its toxicity tests in March but passed them in April. Staff is working with a consultant and the North Carolina toxicity laboratory staff to investigate and remedy the sporadic toxicity failures. The Utility Services Collection Systems, Pump Stations, and Rights-of-Way Divisions and the Environmental Management program passed the ISO 14001 audit with no non-conformances. Mr. Morgan presented the Safety Report for March 2013. The OSHA recordable rate is below the industiy average, and the DART rate is above average. There were two vehicular accidents in March and one personal medical incident at work. Mr. Morgan reported on safety initiatives in place and advised that a comprehensive driving training program is being planned. Mr. Sneeden suggested that staff investigate the cost of installing and using GPS systems in Authority vehicles to monitor their use. Mr. Ellison reported that staff had looked into such systems for Customer Service vehicles and could research the possibility further. Mr. Richardson presented and distributed the 2012 Water Quality Report. The report is required annually by Federal law and must be made available to customers. All customers will be mailed a postcard announcing the report, explaining how to view the Report on the vvebsite, and how to obtain a hard copy. In early June, copies of the report will be available at Authority offices, the County administration building, City Hall,the Wilmington Housing Authority, and County libraries. CFPUA May 8, 2013, Meeting Page 4 Mr. Jordan introduced John Payne, the Authority's first Internal Auditor, and Authority members Nvelcomed Mr. Patine. New Business, Committee Reports: Executive Committee. Ms. Kusek reported that Mr. McGill had prepared a "stump speech" that Authority members could use when speaking to community groups about the Authority. She thanked Mr. McGill and encouraged Board members to represent the Authority Nvithin the community. Human Resources Committee. Ms. Kusek reported that the Committee had recommended two items, which had been approved on the Consent Agenda. The Committee had also revie-,ved the safety incentive day used to reward employees for an accident-free year. Long Range Planning Committee. Ms. Wolf asked Mr. Styers to present the Committee report. Mr. Styers introduced Mr. Coudriet, County Manager, Mr. Swift, Deputy Director of the Health Department, and Ms. Harwell, Environmental Health Manager, to provide additional information on the Marquis Hills, and Heritage Park septic systems. Mr. Swift explained the State's legal definition of a malfunctioning a septic system. Signs of septic problems include a discharge of seNvage to the ground or to surface or groundNvaters, seNvage backing up into a building or drains,and pooling of liquid in yards after rainfall. Mr. Swift summarized the results of an independent survey commissioned by the Health Department to gather data on septic failures in the two communities. The survey alloNved residents to respond anonymously and Nvas designed to gather data that County staff could use to analyze the public health risk of the septic systems. Of 1053 surveys mailed to residents, 343 Nvere returned, representing a 32.5 percent rate of return, a good response rate for the type of survey used. A majority of the septic tanks in use are 30 years old or older. 45.6 percent of respondents had pumped their tanks Nvithin two to three years; 40.7 percent had pumped over three years ago; and 13.7 percent had never had their septic systems pumped clean. Ms. Harwell reported that regular septic maintenance Nvould be to pump the system ever- five years. Mr. Swift reported that Motts Creek flows through Marquis Hills. Surface water testing since 2005 has implicated septic effluent as a factor in Nvateixvay pollution. A 2012 sample confirmed human Nvaste in Motts Creek. The Health Department concluded that the septic system in Marquis Hills and Heritage Park pose a public health risk to the community and that connecting the communities to public seNver Nvill be the best solution. Mr. Coudriet reported that the Commissioners had received the Health Department report and voted to move foixvard Nvith septic replacement in the two neighborhoods. On behalf of the Commissioners and the County, Mr. Coudriet requested a partnership Nvith the Authority on the projects. The Count- CFPUA May 8, 2013, Meeting Page 5 proposed that the Authority pay for the engineering and design costs and contribute of$2,500 for each lot in the subdivisions. Mr. Jordan reported that the request from the County -,vas the same as the original partnership proposal made several months ago and that Authority staff had allocated funds in the FY2014 Capital Budget for the Authority's portion of the expense. The contribution for Heritage Park is $1364,000 and the contribution for Marquis Hills is $2,900,000. The Authority also included $500,000 to provide Nvater service in Heritage Park. After clarification questions, Ms. Wolf moved to approve the County's partnership proposal in the amounts included in the FY2014 CIP and to move foixvard with the projects. Ms. I usek seconded the motion, and it passed unanimously. Mr. Jordan reported that Authority and County staff and legal representatives would develop an Interlocal Agreement for the projects. Mr. White commended the partnership as an example of good government. He reported that the Commissioners Nvill direct County staff to develop a ten-year plan to address septic replacement throughout the County. He hoped that the Authority-,would be able to continue to partner Nvith the County on projects. Mr. Wolfe presented a map shoving areas with septic systems and urged staff to think about the appropriate sizes of lines to serve future customers. Mr. Styers requested that Ms. Wolf amend her motion to authorize Mr. Jordan to execute pending engineering contracts for Marquis Hills and Heritage Park. Ms. Wolf and Ms. Iusek agreed, and the amended motion Nvas approved unanimously. Mr. Styers continued Nvith a summaiv of the Long Range Planning Committee's March 25 meeting. The Committee revieNved a draft of the groN-,th policy and provided guidance to staff on revisions. The policy Nvill come to the Board for approval at a future date. The Committee received reports on flow monitoring and flow adjustments, revieNved proposed Ordinance amendments, and received an update on mandator- connection for the 1995 Annexation area. The next Committee meeting is May 23. The Authoritv recessed at 10:00 a.m. and reconvened at 10:15 a.m. Finance Committee. Mr. Blown introduced Ms. Spivey, and she presented the proposed Budget for Fiscal Year 2014, which Nvill begin on July 1, 2013. The $72.77 million budget includes $37.37 million for operating expenses, debt service of$2934 million, and $32.7 million in capital projects. The budget provides a 1.22 debt coverage ratio and includes a proposal for employees to receive a one percent market adjustment and up to 2 percent merit adjustment. $6,000,000 Nvill be transferred from the FY2013 budget to FY2014 for cash projects. Staff revieNved particulars from the budget and ans-,vered questions. Members provided recommendations for additional information to be included in the budget documents. The Public Hearing on the FY2014 Budget will be held at 9:00 a.m. on Wednesday, May 15, in the Authority offices and Nvill be folloNved by a Board Nvorkshop on the Budget. CFPUA May 8, 2013, Meeting Page 6 Closed Session: Following the Budget presentation, Mr. Quinn announced that some Authority members needed to leave the meeting early and recommended that the closed session to discuss the EPA settlement be moved ahead in the meeting. Mr. Rivenbark moved to enter closed session to discuss the proposed EPA Consent Decree. Ms. Iusek seconded the motion, and it passed unanimously. The Authority- entered closed session at 11:05 a.m., with Ms. Miles, Ms. Eckert, Ms. Spivey, Ms. Durso, Ms. Pope, and Messrs. House Jordan, Styers, Flechtner, and McGill in attendance. The Board received a report and recommendation from Mr. House and Ms. Miles and discussed the proposed Consent Decree. Open Session: Mr. Rivenbark moved to return to open session. Ms. Iusek seconded the motion, and it passed unanimously. The Authority returned to open session at 12:15 p.m. Mr. White moved to amend the Consent Decree to conform with the unofficial position that City Council had reached in closed session on May 7, 2013, that the parties should pay a penalty of$300,000 to the EPA in lieu of paying a penalty of$180,000 and funding a supplemental environmental project in the amount of $240,000. Mr. Rivenbark seconded the motion. Mr. Sneeden and Ms. Wolf spoke in opposition to the motion. After further discussion, Mr. Quinn called for a vote. Ms. Iusek and Messrs. Quinn, BlONyn, Betts, White, Wolfe, Rivenbark, and Anderson voted in favor of the motion. Ms. Wolf and Messrs. Brumit and Sneeden syere opposed. Motion carried, eight to three. The Board instructed Mr. House to discuss the recommended change with Department of Justice and EPA counsel. Finance Committee Report, continued. Staff presented two items for Board reviesy, as follosys: 1. Nano to Market ,Street Waterline Construction Contract. Ms. Mitchell reported that staff recommended contract award to the lowest responsive bidder, State Utility Contractors, in the amount of$680,220. 2. NEI Force Main Contract. Ms. Mitchell reported that staff recommended that the bids for PhaselB of the NEI Force Main construction be rejected and rebid. Following clarification questions, Mr. Betts moved to award the Nano to Market Street Waterline Construction contract to State Utility Contractors. Mr. Rivenbark seconded the motion, and it passed unanimously. Mr. Bros-,-n moved to reject all bids for Phase 1B of the Northeast Interceptor and to rebid the project. Mr. Rivenbark seconded the motion for discussion purposes. Staff explained the qualification process used by the Authority and the requirements for subcontractors on the NEI bids. Following discussion, Mr. Quinn called for a vote. The motion passed unanimously. CFPUA May 8, 2013, Meeting Page 7 3. Revisions to the Customer ,Service Deposit Policy. Mr. White moved to approve the recommended revisions to the Customer Service Deposit Policy, and Mr. Brown seconded the motion. Ms. Miles recommended one change to the policy language. Mr. White moved to amend his motion to approve the revisions smith conformity to legal requirements. Mr. Brown agreed to the amended motion, and it passed unanimously. Monthly financial reports were available in the Agenda booklets. Old Business: There was no old business. Closing Comments: Mr. Quinn thanked Authority members, Councilmembers,and Commissioners for working together. Ms. lusek moved to adjourn. Mr. Betts seconded the motion, and it passed uanimously. The Authority adjourned at 12:35 p.m. The June meeting of the Cape Fear Public Utility Authority will be Wednesday, June 12, 2013. The meeting will be held in the Lucie Harrell Conference Room, Nesv Hanover County Bruce Shell Administration Building, located at 230 Government Center Drive,Wilmington,North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board CFPUA May 8, 2013, Meeting Page 8