CFPUA 11 13 2013
Cape Fear Public Utility Authority
Annual Meeting
November 13, 2013
Authority Members Present:
Jim Quinn, Chairman
Pat Kusek, Vice-Chair
Jim Brumit, Secretary
Mike Brown, Treasurer
Cindee Wolf
Larry Sneeden
Bill Norris
Charlie Rivenbark, Councilman
Neil Anderson, Councilman
Woody White, Commissioner
Authority Member Absent:
Tom Wolfe, Commissioner
Staff Present:
Jim Flechtner, Interim Executive Director
Cheryl Spivey, Chief Financial Officer
Frank Styers, Engineering Director
Beth Eckert, Environmental Director
Tom Morgan, H.R. Director
Karen Durso, Assistant to the Executive Director
Mike McGill, Chief Communications Officer
John Payne, Internal Auditor
Ken Vogt, Wastewater Treatment Superintendent
Julie McLawhon, Budget & Finance Manager
Julia Vosnock, Procurement Manager
Jim Craig, Utility Services Supertendent
Cord Ellison, I.T. Manager
Donna S. Pope, Clerk to the Board
Attorney Present:
Linda A. Miles, the Miles Firm, PLLC
Guests Present:
Jim Iannucci, New Hanover County
Diane Williams, N.C. Department of Natural Resources
Brian Scott, Thompson, Price, Scott, Adams & Co., CPAs
Shirley Johnson
Mike Wells
Citizens and members of the press
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Call to Order, Opening Comments, and Determination of a Quorum.
Mr. Quinn called the meeting to order at 9:00 a.m., welcomed attendees, and declared a quorum
present. Mr. Rivenbark moved to excuse Mr. Wolfe. Ms. Kusek seconded the motion, and it
passed unanimously.
Adoption of the Agenda.
seconded the motion, and the
Agenda was unanimously adopted.
Approval of Minutes.
Mr. Brumit presented the Minutes of the October 9, 2013, meeting and moved for their approval.
Ms. Kusek seconded the motion, and it passed unanimously.
Presentation.
Messrs. McGill and Vogt presented the North Carolina American Water Works Association
Water Environmental Association Disaster Preparedness Award, which was recently received by
the Authority The Authority made improvements to
with the National Weather Service to create real-time mapping for storm surges. The Authority
received the Disaster Preparedness Award in 2010.
Public Comments.
Ms. Johnson and Mr. Wells spoke about the Chair Road force main project. They stated that the
adjoining neighborhoods had been promised sewer service by the County many years ago and
requested that the Authority consider extending service to their homes and others in the
community who use septic systems. Ms. Johnson reported that residents had experienced some
delays and disruption from the project but that the construction crews had been cooperative. Mr.
Wells reported that he had paid various impact fees to the County during construction and
expansion of his home. Mr. Quinn asked Mr. Styers to meet with the speakers and report to the
Board.
Public Comment Update from October meeting.
Mr. Flechtner updated the Board on items from the October 9 public commentary.
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Consent Agenda.
Mr. Quinn presented the Consent Agenda, as follows:
1. New Cingular Wireless PCS, LLC (AT&T,) 15-year lease at $2,500 per month for the
th
placement of nine antennae on the 17 Street water tower.
2. Amendment with Pender County Interlocal Agreement transferring a NPDES (wastewater
discharge) permit to Pender County, with no budget impact.
3. Amendment to the Chair Road Associates, LLC, agreement, with no budget impact.
4. Sole source purchase of Motorola ACE 3600 units for SCADA implementation, at a cost of
$268,773.40.
5. Contract with Barry Strock Consulting Associates, Inc., for assistance with financial,
billing, and payroll software vendor selection and related contract negotiations, at a cost
of $54,929.
6. Contract with Vehicle Tracking Solutions for GPS tracking devices and web-based
monitoring software, at a cost of $60,519.20.
7. Contract with Carahsoft Technology Corp., for automated agenda creation, tablet,
archived video integration, and software maintenance and support for a period of 12
months, at a cost of $11,880.
8.
Sewer System rehabilitation, with no current budget impact.
9. Contract with Synagro Central, LLC, for residual management services for an initial term
of three years (January 1, 2014 December 31, 2016), with two additional one-year
renewal options, with a beginning rate of $68,450 per month up to 20,000 cubic yards of
residuals.
10. Authorization to advertise and sell items on GovDeals, with donation of unsold to local
non-profits, with proceeds going into general operating fund.
11. Ordinance revision to Section 5.2(e), Billing and Payment related to landlords and
tenants.
12. Ordinance revision to Section 5.6(d), reflecting mandated changes to public information
per N.C. General Statutes.
13. Resolution authorizing Community Compliance staff to disclose confidential customer
account information to a North Carolina District Court Magistrate or to the Clerk of
Court and authorizing Compliance staff to testify in court.
14. Professional Services contract with Black & Veatch for design of a new water line and a
new force main to the Flemington area, water line design cost of $368,400 and force main
design cost of $93,550.
15. Budget Ordinance and Budget Amendment #14-009 recognizing additional revenues and
appropriations in the Capital Projects Funds for the Flemington Water Main Connection
project, recognizing contributions of $1,875,000 from Duke Progress.
Mr. Rivenbark requested clarification on Items 6, 9, 11, and 13. Mr. Brumit requested
clarification on Item 2, and Mr. Anderson requested clarification on Item 1. Mr. Rivenbark
moved to approve Consent Agenda Items 3, 4, 5, 7, 8, 10, and 12. Mr. Anderson seconded the
motion, and it passed unanimously. The Board addressed the remaining items in order.
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1. New Cingular Wireless PCS, LLC (AT&T,) 15-year lease at $2,500 per month for the
th
placement of nine antennae on the 17 Street water tower.
Mr. Anderson asked how staff knew the Authority was getting a fair price on the lease. Mr.
Flechtner reported that the pricing was consistent on wireless leases and that some of the
contracts were legacy contracts. He reported that staff could revisit the pricing, and Messrs.
Rivenbark and Quinn recommended analyzing comparable leases. Ms. Kusek moved to continue
the item. Mr. Rivenbark seconded the motion, and Item 1 was unanimously continued.
2. Amendment with Pender County Interlocal Agreement transferring a NPDES permit to
Pender County, with no budget impact.
Mr. Brumit asked what the implications of the amendment were for the Authority, both short and
long-
County and the County discharge permit. He reported that the Interlocal Agreement reserved
allocation and a future right of first refusal for the Authority. Mr. Flechtner reported that the
Mr. Anderson moved to approve Item 2. Mr. Brumit seconded the motion, and it passed
unanimously.
6. Contract with Vehicle Tracking Solutions for GPS tracking devices and web-based
monitoring software, at a cost of $60,519.20.
Ms. Vosnock answered clarification questions regarding the bid sheet, Mr. Rivenbark moved to
approve the Item. Mr. Anderson seconded the motion, and it passed unanimously.
9. Contract with Synagro Central, LLC, for residual management services for an initial
term of three years (January 1, 2014 December 31, 2016), with two additional one-year
renewal options, with a beginning rate of $68,450 per month up to 20,000 cubic yards of
residuals.
Mr. Rivenbark asked Mr. Vogt to define residuals and explain residual management. Residuals
are the biosolids or sludge that remains after wastewater treatment. The residual management
process applies the residuals to farmland in five counties as a soil amendment and has been used
locally since the early 1990s. Following clarification questions, Mr. Rivenbark moved to
approve the item. Mr. Anderson seconded the motion, and it passed unanimously.
11. Ordinance revision to Section 5.2(e), Billing and Payment related to landlords and
tenants.
Mr. Rivenbark commended the revisions and requested that staff keep landlords fully abreast of
account changes. Ms. Johnson reported that staff employs a notification letter to a landlord when
a tenant closes the account and could add a notification letter for the beginning of service.
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Mr. Brumit asked to be recused from the vote because he owned investment property. Mr.
Brown moved to recuse Mr. Brumit. Ms. Wolf seconded the motion, and Mr. Brumit was
unanimously recused.
Mr. Brown moved to approve Item 11, Section 5.2(e) Ordinance revision. Mr. Norris seconded
the motion, and it passed unanimously.
13. Resolution authorizing Community Compliance staff to disclose confidential customer
account information to a North Carolina District Court Magistrate or to the Clerk of
Court and authorizing Compliance staff to testify in court.
explained that Compliance staff needed to be able to release information for criminal tampering
charges when they discovered someone had been stealing water, other meter tampering, or
vandalism. Mr. Sneeden moved to approve the Resolution. Ms. Kusek seconded the motion,
and it passed unanimously.
Mr. Ellison answered clarification questions about Item 7, the Carahsoft contract for the
automated agenda and related items. Item 7 had already been approved, and no further action
was necessary.
Ms. Vosnock and Mr. Ellison left the meeting following the Consent Agenda discussion and
adoption.
New Business.
Annual Report:
Mr. Flechtner presented the Annual Report for Fiscal Year 2013. The
Authority serves more than 68,000 customers, representing approximately 200,000 citizens and
The
Authority provided reliable service that affected every sector of the local economy, and its
investment in infrastructure is designed to provide improved resiliency, reduce risks, and to meet
current needs and future expectations. Mr. Flechtner reported that, stretched end-to-end, the
mains in the Authority system would stretch from Wilmington to Phoenix, Arizona.
During the year, treatment plant staff processed five billion gallons of water. The environmental
daily compliance rate was 99.84 percent, and the Authority continues to identify areas for
positive environment impact with a regular compliance audits and efficiencies. The Authority is
an active community partner, working with the City and County to expand sewer into areas
served by septic systems and provide approximately 1,000 homes with reliable, safe sewer
service. The Authority worked cooperatively with the National Weather Service to prepare
storm surge models. Staff coordinated with the production company for Iron Man 3 to minimize
impacts of a sewer rehabilitation project near the movie studio and continued to work
cooperatively with development stakeholders on cost-sharing projects.
The Authority received several awards in 2013, including the NC AWWA-WEA Disaster
Preparedness Award, the NC Area Wide Optimization Award for Drinking Water Systems,
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several NC Department of Labor recognition awards, and Government Finance Officers
Association awards for Excellence in Financial Reporting and a Distinguished Budget
Presentation.
Mr. Flechtner credited Authority employees for their hard work, professionalism, and dedication
to the community, and he thanked Ms. Durso and Mr. McGill for their work on the Annual
Report.
FY2013 Audit:
Mr. Scott of Thompson, Price, Scott Adams & Company presented the Audit
for the Fiscal Year ending on June 30, 2013, and Ms. Spivey presented the Comprehensive
Annual Financial Report for FY2013, which had been prepared by Finance staff. Mr. Scott
reported that the Audit found no material errors and no significant deficiencies in internal
controls. The Authority began the fiscal year with a net position of $372,707,637 and closed the
fiscal year with a net position of $391,303,534, recognizing a net gain of $18,595,897. Mr.
Scott thanked Finance Department staff for their assistance throughout the audit process.
Mr. Rivenbark moved to accept the FY2013 Audit. Mr. Norris seconded the motion, and it
passed unanimously.
The Authority recessed at 10:15 and reconvened at 10:30.
Summary of FY2013 Financial Results:
Ms.
financial condition improved during FY2013. Expenditures were $6.6 million below budget,
with operating expenditures $1.38 million less than FY2012. The Authority recognized some
customer growth, with 964 new water customers and 450 new sewer customers. System
Development Charges were $469,000 above budget, connection fees $310,000 above budget,
fixed water charges $520,000 above budget, and fixed sewer charges $730,000 above
budget. There was a decline in metered water usage across all customer types, with water use
6.7 percent less than in FY2012 and sewer use 4.6 percent less than FY2012. Water volumetric
charges were $1.1 million below budget and sewer volumetric charges $190,000 below
budget. Debt service equaled
the investment in infrastructure rehabilitation, maintenance, and other capital projects. Cash,
.5 million available
for non-operating or capital use. If used on capital projects, this represents funding that will not
require the issuance of Bonds.
expenses by bond covenants, and reserves an additional month through its own policy. Bond
coverage for FY2013 was 1.54. The Authority has an AA Bond rating, which is positively
influenced by cash reserves. Staff anticipates going to the Bond market later in the current fiscal
year, pending a review of Capital Improvement needs.
:
Ms. Miles reported that she had nothing to discuss in open session. She
recommended a closed session to update the Board on litigation in the C.B. Windswept, Sanco,
and Tommy Davis cases.
Interim :
Mr. Flechtner referred the Board to the Safety and
Environmental reports in their agenda packets. Mr. Brumit praised and thanked all Authority
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staff for completing a fifth month in a row with diminishing accident rates an excellent safety
record.
Executive Committee Report:
The Executive Committee met on November 6 and finalized the
Agenda for the Annual Meeting.
Human Resources Committee Report:
Ms. Kusek reported that the Committee was busy with
the selection process for the Executive Director. Committee members had met with Mr.
Anzivino of Springsted and planned to conduct preliminary interviews following the Board
meeting. Ms. Kusek asked Board members to hold December 10 open for the full Board to
interview candidates.
Long Range Planning Committee.
The Committee met on October 24 and reviewed several
items brought by staff. Mr. Styers and Ms. Wolf reported that, in preparation for the FY2014
CIP, the meeting included project updates and that the Committee reviewed and adjusted funding
levels as recommended by staff. Ms. Wolf reported that over $14,000,000 has been identified
and commended staff on their work. Mr. Styers reviewed the recommended reallocation of
funds. A portion of the monies will go to the emergency repair funds, with $1.6 million in
sewer emergency repairs and $560,000 in water emergency repairs. The remaining $11.9 million
will be available to help fund FY2015 Capital Projects.
Ms. Wolf moved to approve and adopt the funding reallocations as recommended by staff. Mr.
Rivenbark seconded the motion. Mr. Styers answered questions and provided information on
projects in the CIP review. Mr. Quinn called for a vote, and the motion passed unanimously.
Finance Committee.
The Finance Committee had no further report. Ms. Spivey and Mr.
Brown were available to answer any questions regarding the monthly financial data or the year-
end financials.
Old Business:
There was no old business.
Closing Comments:
Mr. Anderson commended staff for bringing expenditures in under budget
for FY2013. Mr. Rivenbark agreed but reminded the Board that rates pay for infrastructure and
the Authority must be cognizant of infrastructure needs when setting the budget for next year.
Closed Session:
Mr. Rivenbark moved to enter closed session to discuss litigation with C.B.
Windswept, Sanco, and Tommy Davis v. CFPUA and New Hanover County. Mr. Anderson
seconded the, and it passed unanimously. The Authority entered closed session at 11:05 a.m.,
received a report from Ms. Miles, and provided her with feedback and direction.
Open Session and Adjournment:
Mr. Anderson moved to return to open session. Mr. Brown
seconded the motion, and the motion passed unanimously. The Authority returned to open
session at 11:28 a.m.
Mr. Brown moved to adjourn. Mr. Sneeden seconded the motion, and it passed unanimously.
The Authority adjourned at 11:30 a.m.
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The next regular meeting of the Cape Fear Public Utility Authority will be Wednesday,
December 11, 2013. The meeting will begin at 9:00 a.m. and will be held in the Lucie Harrell
Government Center Drive, Wilmington, North Carolina.
Respectfully submitted,
Donna S. Pope
Clerk to the Board
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