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February 10 2016 Meeting Minutes CAPE FEAR PUBLIC UTILITY AUTHORITY AUTHORITY BOARD MINUTES FEBRUARY 10, 2016 Lucie Harrell Conference Room Regular Meeting 9:00 AM 230 GOVERNMENT CENTER DRIVE WILMINGTON, NC 28403 I. CALL TO ORDER II. DETERMINATION OF A QUORUM Attendee Name Organization Title Status Arrived Departed Patricia Kusek Cape Fear Public Utility Chair Present Authority James Brumit Cape Fear Public Utility Vice-Chair Present Authority Mike Brown Cape Fear Public Utility Secretary Present Authority Larry Sneeden Cape Fear Public Utility Treasurer Present Authority Jim Quinn Cape Fear Public Utility Present Authority Cindee Wolf Cape Fear Public Utility Present Authority Charlie Rivenbark Cape Fear Public Utility Present Authority William Norris Cape Fear Public Utility Present Authority Kevin O'Grady Cape Fear Public Utility Present Authority Woody White Cape Fear Public Utility Present 10:30 Authority AM Rob Zapple Cape Fear Public Utility Present Authority Jim Flechtner Cape Fear Public Utility Executive Director Present Authority Frank Styers Cape Fear Public Utility Chief Operations Officer Present Authority Beth Eckert Cape Fear Public Utility Director of EMD Present Authority Melinda Hoggard Cape Fear Public Utility Interim CFO Present Authority Kristine Irick Cape Fear Public Utility Customer Service Director Present Authority Carel Cape Fear Public Utility Director of Engineering Present Vandermeyden Authority Tom Morgan Cape Fear Public Utility HR Director Present Authority Cape Fear Public Utility Authority Page 1 Minutes Authority Board February 10, 2016 John Payne Cape Fear Public Utility Internal Auditor Present Authority Kent Harrell Cape Fear Public Utility Engineering Manager Present Authority Leslie Ogilvie Cape Fear Public Utility Assistant to the Executive Present Authority Director Renee Maiorano Cape Fear Public Utility Compensation Manager Present Authority Donna Pope Cape Fear Public Utility Clerk/Executive Secretary to Present Authority the Board Linda Miles Miles Firm, PLLC CFPUA Consulting Attorney Present Jeff Ling (Dr.) Evergreen Solutions Present Wayne Beagle Present Richard King Wilmington, City of Assistant City Manager Present Jim Iannucci New Hanover County Present Heidi Cox N.C. Public Water Present Supply Tony Boahn McKim & Creed Present III. ADOPTION OF AGENDA Mr. Brown moved to adopt the day's Agenda. Mr. Norris seconded the motion, and it passed unanimously. IV. APPROVAL OF MINUTES 1. Authority Board - Regular Meeting - Jan 13, 2016 9:00 AM RESULT: ACCEPTED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: Charlie Rivenbark AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 2. 1.13.16 CFPUA CIP Workshop Minutes Mr. Brown moved to approve the minutes of the January 13 Capital Improvement Projects Workshop. Mr. O'Grady seconded the motion, and the minutes were approved unanimously. RESULT: REVIEWED V. PUBLIC COMMENTS - 4 MINUTE LIMIT PER SPEAKER Mr. Wayne Beagle spoke regarding water connection fees to his property on Bald Eagle Lane in the Porters Neck area. VI. CONSENT AGENDA Mr. Zapple requested that items 2, 5, 7, 8, 9, and 12 be removed from the Consent Agenda for clarification. Cape Fear Public Utility Authority Page 2 Minutes Authority Board February 10, 2016 1. Customer Information System and Financial System (ERP) Contract RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 2. Customer Information System and Financial System (ERP) Funding and Staffing Ms. Irick answered clarification questions from Board members regarding the ERP project and funding and the need to continue using the Sungard system. The initial project will be for customer service and financial software. The new software will be run parallel for a certain period of time to Sungard to check accuracy and provide redundancy. The Sungard costs will be in the operating budget. The Itineris costs will be in the capital budget. Mr. Quinn wanted to ensure that Board members understood the costs involved in funding the new ERP. RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 3. Resolution for Interim Chief Financial Officer RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 4. Approval of Budget Ordinance #16-016 Ms. Irick answered a clarification question regarding the increased budget for collections. RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 5. Meter Contract Ms. Irick explained that new construction had necessitated the purchase and installation of additional meters. When old meters are removed, they cannot be returned to the ground if they contain lead. Cape Fear Public Utility Authority Page 3 Minutes Authority Board February 10, 2016 RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 6. Penalty Billing Ordinance Revision Unanimously approved. RESULT: REVIEWED 7. Authorization for the Executive Director to Execute a $340,791.36 Change Order with T. A. Loving Company for the Heritage Park Water and Sewer Extension Project Mr. Sneeden asked to be recused because of a conflict of interest within his company. Mr. White moved to recuse Mr. Sneeden. Mr. Rivenbark seconded the motion, and it passed unanimously. Mr. Vandermeyden explained that soil conditions in the Heritage Park area necessitated additional fill material. CFPUA and County representatives negotiated the final change order amount. The project is close to completion, with no further change orders anticipated. RESULT: APPROVED \[10 TO 0\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple RECUSED: Sneeden 8. Authorization for the Executive Director to Execute a $104,000 Contract Amendment with W.K. Dickson for Construction Phase Services for a New Pump Station on Edgewater Club Road Mr. VAndermeyden answered clarification questions regarding the project and the contract amendment. RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 9. Authorization for Design-Build Procurement- Alandale/Kerr Ave Manhole Project Mr. Vandermeyden answered questions regarding the design-build procedure. Cape Fear Public Utility Authority Page 4 Minutes Authority Board February 10, 2016 RESULT: APPROVED \[10 TO 0\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple RECUSED: Sneeden 10. Authorization for Design-Build Procurement - Southside Waste Water Treatment Plant Heat Exchanger Replacement Project. RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 11. Authorization for the Executive Director to Execute a $85,690 Change Order for Harvest Environmental Services, Inc. to Replace the Sodium Hypochlorite Tank at the Northside Wastewater Treatment Plant. RESULT: APPROVED \[UNANIMOUS\] MOVER: Mike Brown, Secretary SECONDER: James Brumit, Vice-Chair AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple 12. Replacement Blowers for Basin #1 at Sweeney Water Treatment Plant Mr. Zapple expressed appreciation that maintenance staff will do the installation work for the blower replacement. RESULT: APPROVED \[UNANIMOUS\] MOVER: Charlie Rivenbark SECONDER: Rob Zapple AYES: Kusek, Brumit, Brown, Sneeden, Quinn, Wolf, Rivenbark, Norris, O'Grady, White, Zapple VII. NEW BUSINESS A. Administrative Reports i. Attorney's Report Ms. Miles had no report and did not need a closed session. ii. Executive Director's Report At the January meeting, a Board member asked how many customers were added last year. In Fiscal Year 2015 (July 2014 - June 2015), 172 water customers and 731 sewer Cape Fear Public Utility Authority Page 5 Minutes Authority Board February 10, 2016 customers were added. Some new customers received both services. Water growth was 1.6 percent over the previous year, and sewer 1.2 percent. Mr. Flechtner reported that re-funding bonds is expected to save $1.15 million annually. Proposals from underwriters are under review. The Flemington water line is complete with final testing underway. Service should be active by the end of February. Mr. O'Grady commented on recent news stories regarding lead in water systems. He Requested that staff provide information to the public regarding the safety of CFPUA water in addition to the annual water quality report. CFPUA also has a lead testing program. Board members briefly discussed the water reuse and "gray water." 1. Safety Performance Report The report was provided in the Agenda and is incorporated herein by reference. RESULT: REVIEWED 2. Environmental Report The report was provided in the Agenda and incorporated herein by reference. There were no questions. RESULT: REVIEWED B. Committee Reports i. Executive Committee The minutes were provided in the Agenda packet. There were no questions for the Committee. 1. 2.3.16 Executive Committee Meeting Minutes RESULT: REVIEWED ii. Human Resources Committee 1. 1.28.16 Human Resources Committee Minutes RESULT: REVIEWED 2. Evergreen Classification and Compensation Study Presentation Cape Fear Public Utility Authority Page 6 Minutes Authority Board February 10, 2016 The HR Committee received a preliminary version of the classification and compensation study at its January 28 meeting. Mr. Morgan introduced Dr. Ling of Evergreen Solutions to summarize the report for the Board. Dr. Ling reviewed the methodology used in the study and reported that CFPUA staff had been very interested and responsive in the focus groups and in completing the JAT (job analysis tool). Employees seemed to be actively invested in the community and recognized the Authority's role in the region. Employee concerns focused on retention, pay parity, and wage compression. CFPUA has 27 pay grades with a 53 percent spread. Dr. Ling reported that 77.6 percent of employees are below mid-range, and 22.4 percent are above mid-range, with 58 percent in the first quartile of their pay ranges. The study team reviewed all job classifications and recommended some title changes. The study included data from 21 peer organizations in North Carolina, South Carolina, and Virginia, and 68 positions were benchmarked. National cost of living data was also used in the market adjustment calculation. Evergreen presented three options to implement the study. The first option would reclassify the positions identified to their proper pay grade classification. Option 1 would impact 49 employees by bringing them to the minimum of their proposed pay ranges, at an annual salary cost of $84,184. The second option would include the reclassification of the positions identified in Option 1, and bring the employees to the same range penetration in their existing or new pay grade, not to exceed the first quartile of the proposed salary ranges. This option would impact 161 employees, with an annual salary cost of $332,168. The third option would include Options 1 and 2, and bring the employees to the same range penetration in their existing or new pay grade, not to exceed the midpoint of the proposed salary ranges. This option would impact 213 employees with an annual salary cost of $425,830. Dr. Ling and Mr. Morgan answered questions from Authority members regarding benefit comparison, turnover rates, retention data, and the reasons for conducting class and compensation studies. Mr. Morgan reported that CFPUA's last study was four years ago and that it is advisable to calibrate the pay plan every three to five years. Mr. White reported that the County HR Department will conduct a targeted study if a particular department has retention or salary issues, rather than doing a full study. Mr. Sneeden asked how employees could achieve higher merit increases. Mr. Rivenbark asked about exit interviews. Mr. Morgan reported that 34 employees left in 2015, and that 11 of them retired. Some took other jobs, moved out of the area, or had personal reasons for leaving. Mr. Brumit reminded the Board that there is a program for bonus pay based upon job certifications. Cape Fear Public Utility Authority Page 7 Minutes Authority Board February 10, 2016 Mr. Morgan reported that the HR Committee would receive the final report. He recognized Renee Maiorano for her work on the class and compensation study. Ms. Maiorano served as the project manager, and Mr. Morgan praised her contributions. Ms. Kusek recessed the meeting at 10:15 AM. The Board reconvened at 10:30 AM. Mr. Brumit moved to excuse Mr. White, who needed to leave to meet another obligation. Mr. O'Grady seconded the motion, and it passed unanimously. A quorum remained. RESULT: REVIEWED iii. Long Range Planning Committee 1. Long Range Planning Committee - Regular - Jan 28, 2016 3:00 PM RESULT: NO ACTION REQUIRED 2. FY-2017 CIP Discussion and Recommendation of Approval Mr. Vandermeyden presented the FY17 CIP, consisting of 43 projects that had been vetted through the departments. He reported that 75 percent the projects represented system-wide improvements, and 25 percent were discrete projects. The trend for system-wide improvements continues over the ten-year CIP. Mr. Sneeden reported that the Committee recommended approval. Ms. Wolf moved to adopt the FY17 Capital Improvement Projects. Mr. Rivenbark seconded the motion, and it passed unanimously. RESULT: REVIEWED iv. Finance Committee 1. Finance Committee - Regular Meeting - Feb 3, 2016 9:00 AM RESULT: NO ACTION REQUIRED 2. February 2016 Monthly Finance and Customer Service Report Ms. Hoggard reported that revenues are good and expenses where expected. Water consumption from February 2015 through January 2016 was 1.43 percent greater than calendar year 2014. RESULT: NO ACTION REQUIRED VIII. OLD BUSINESS There was no old business. Cape Fear Public Utility Authority Page 8 Minutes Authority Board February 10, 2016 IX. AUTHORITY Q&A / CLOSING COMMENTS Mr. Zapple commended staff on the water emergency exercise planned for March 16, stating that it represented CFPUA's leadership in the state and probably the nation. X. CLOSED SESSION There was no closed session. XI. ADJOURNMENT There was no further business to come before the Board, and Mr. Rivenbark moved to adjourn. Mr. Norris seconded the motion, and the meeting adjourned unanimously at 10:35 AM. The next regular CFPUA meeting will be Wednesday, March 9, 2016. The meeting will be held in the Lucie Harrell Conference Room, 230 Government Center Drive, Wilmington, North Carolina. Respectfully submitted, Donna S. Pope Clerk to the Board Cape Fear Public Utility Authority Page 9