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That's my gavel. Very good. Good morning, everyone. And I'm going to go ahead and call

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the July 10, 2019 meeting, board meeting of the Cape Fear Public Utility Authority to

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Order. And our first act of business on the agenda is termination of a quorum. And I'd

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like to entertain a motion to excuse Mr. Zappel. I move. Second. All in favor say

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aye. Aye. Opposed? All right. And now we move on to the adoption of our agenda. The

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agenda's in front of you. And I will entertain a motion to adopt today's agenda.

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Come on. Second. All in favor say aye. Aye. Opposed? And I will ask our secretary to

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present the minutes. The minutes of the regular authority board meeting from June 12

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are in your packet and available for review. Second. All in favor say aye. Aye. Opposed? All

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right. So we are moving through our agenda pretty quick this morning. I do have a

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presentation, and I'll ask Mike Brown to please join me at the podium. Bring a

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seat. Mike was wondering if this day would ever come. And I was going to roast him a

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little bit and talk about his gray hair. He's got a few gray hairs now for nine

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years of serving on this board. And then he's come to the end of his term. And

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Cape Fear Public Utility Authority, you're allowed to serve three consecutive

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terms, and Mike has certainly done that since 2010. And it's kind of with mixed

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emotion, because I've really appreciated the leadership that he's given this

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board over the years. But I know he's ready to hand it over to someone else.

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So I'm going to read, we always take, read a resolution, and I'm going to

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read this for Mike. Mike Brown was appointed to New Hanover County in

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2010 by New Hanover County in 2010 to serve as a board member of Cape Fear Public

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Utility Authority. Mr. Brown has served three terms as board member and has

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shown his support of Cape Fear Public Utility Authority's mission to provide

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high quality services to the citizens and businesses of the region. Mr.

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Brown has held several officer positions on the board, serving as chair,

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treasurer, and secretary. Mr. Brown has served on the Executive,

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Finance, and Long-Range Planning Committees. He has proven his dedication to

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Cape Fear Public Utility Authority and its employees through his guidance and

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involvement as a board member. Now therefore, board and staff do formally

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recognize and thank Mike Brown for his services as a member of the Cape Fear

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Public Utility Authority, and this is adopted this 10th of July, 2019.

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Mike, thank you so much for all your service.

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I appreciate the recognition.

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It has been a pleasure to be on this board. Somebody suggested in 2009,

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I believe, after we've been around for a year or two, that

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it might be a board I would want to get involved in, and I got involved and we were

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going through some, I guess, growing pains at the time.

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And it's been a real pleasure to get involved.

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I really do believe in this organization. It's a great organization. It has great

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leadership. Our leadership and Jim and his team, I don't know who's calling me,

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have a great deal of integrity, and I grew to really respect that.

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And they also have a thirst for continued improvement and excellence.

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And I think that's really been the story of CFUA, and that we

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have a great deal of integrity. And I think that's really been the story

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of CFUA, and that we have a great deal of integrity.

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of CFUA, and that we take a little bite of the apple

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every day and try to improve and improve and improve. And the end result of that

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is looking back, I think we're in a much, much better

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position in New Hampshire County and City of Wilmington than we were

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back in 2006. And how that manifests

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itself is that we aren't in the news for sewer spills

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and problems, and staying out of the news is good news. So with

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that, it's been a real pleasure. And this has been a great board to work on.

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It's a great example of a board full of people who probably

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have different political persuasions and points of view

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who always come together once a month and work together to

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work through the issues. We rarely, rarely, rarely have any disagreement.

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And that's because we have good leadership and a good staff

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and a good working environment. So it's been a real pleasure and I appreciate it.

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And I'll stick around and bug y'all from time to time

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about something. I keep promising people.

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I don't know if it's appropriate or not for me to say anything, but most of you know

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that I worked for 30 years as a city attorney.

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In all my time, I don't think I've ever had a

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board chair or a mayor that spent as much time and

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effort as Mike did when we started out with the Gen X discovery.

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And I really want to thank him for that.

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Well, I was going to just offer this up and I wasn't close to that like

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you were. But of all the people that have ever been on this board

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and the ones that are on it presently, I can think of no one that had the correct

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demeanor that Mike did to put up

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to be in that whatever you want to call it

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daily, nightly, personally,

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board chair. I'd have probably got percent to

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prison. But Mike, and I work with Mike now and he's the same way

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at the office. It's just a pleasure to know someone and to have someone

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sitting in that chair that handled that during the tough times.

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We didn't put Gen X in the water, but a lot of people made out like

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that we were the bad guys and Mike was the right person at the right time to be there.

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Any more comments?

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All right, we will move on. We do

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next on our agenda is Oath Office for

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Briggs, our newest member of the board.

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Go on up there, Hollis.

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That's all right.

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Thank you.

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Going up there, Hollis. That's all right.

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Are you writing something back?

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I, Hollis, you can do that.

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I, Hollis B. Briggs, Jr. do soundly swear that I will support

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and maintain the Constitution and laws of the United States

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and the Constitution and laws of the state of North Carolina,

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not inconsistent therewith, and that I will faithfully

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discharge the duties of my position as a member of the Cape Fear Public Utility

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Authority.

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Thank you.

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You sound back up.

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And then you can take a seat at the table.

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Thank you.

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All right.

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Thank you, Karen.

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There you go.

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Thank you.

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Mr. Briggs, I speak on behalf of the whole board. We welcome you.

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Thank you. Thank you. Thank you.

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All right. We now move on to

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Item 8. It's our public comments time and

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7.

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I'm sorry. I skipped one of the most important things. I apologize.

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This is our fiscal year 2020 board of officers.

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The nominating committee is met and they would like to recommend that slate of officers.

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Yes, and on behalf of the nominating committee, it's my pleasure to

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put this slate in front of the board.

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Bill Norris as chair, Wesley Corder as vice chair,

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Dean Hackney as secretary, and Jennifer Adams as treasurer.

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I'll entertain a motion to accept that slate.

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All in favor say aye. Aye. Opposed? All right.

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Thank you all for serving.

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Now we move to our public comments. Ms. Polk, do we have any speakers today?

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Yes, sir.

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Mr. Newcomb?

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More minutes. Got it. Yes, sir.

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And if you would state your name when you get to the podium in your address, please.

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Good morning. My name is Tom Newcomb and I live on Barksdale Road.

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I'm going to discuss some of what I learned from the 194 page

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FOIA document I recently received from Mr. Haggerty.

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It deals with the exchange of the GAC and the Sweeney filters.

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As you know, I think this exchange took far too long.

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13 months passed from the time Mr. Fletcher knew that the absorption was occurring until

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the first tank of GAC was exchanged. This caused the

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necessary exposure of your customers to a long list of PFAS chemicals

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while you dithered about trying to figure out how to fix the

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desorption problem and actually reduce the PFAS levels without drawing too much attention

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to what you're up to. While there is no scientific evidence

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to suggest that any meaningful harm was done to your customers,

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it illustrates the lengths to which you have gone to manage public opinion

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regarding your ability to treat water and to make rational financial decisions.

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Your actions and inactions have obscured the significant reduction

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in the PFAS levels in the finished water resulting from this exchange of GAC.

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My water today contains substantially less than 1%

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of the PFAS that was in it as recently as 2017

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and is far less affected by PFAS than many other

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water treatment systems around the world. Yet you are held bent on spending

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$215 million to fix the problem that is being dealt with

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quite effectively by your current treatment process and the

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NCDEQ Consent Agreement with Camelers. I also

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learned that in May 2018 Calgon provided a quotation for

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replacement of the old GAC. The quoted price

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was $981,000. The old GAC had been

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analyzed and found to be non-hazardous. That meant it could be disposed of

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in three different ways. It could be used as a co-fuel

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incinerator at no extra charge or disposed in a landfill

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which you had said you did not want to do. Or by paying an extra

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$285,000 it could be trucked to New York

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state for disposal at a certified incineration facility.

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You chose this expensive option

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apparently to avoid the risk of being accused of quote,

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smokestack dispersal, unquote, by for example a local

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environmental expert. We all know how well that worked out.

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I also learned that it typically takes the Calgon workers

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only one eight hour shift to replace the GAC in one of the filters.

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Remaining three days are spent waiting on test results

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to see if the brand new GAC created in a high temperature

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process and containing nothing for a bacteria to thrive on

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is somehow creating a bacterial hazard.

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One thing I did not learn was the labor and equipment cost for the GAC

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installation services. That's because Mr. Steyer specifically

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requested a lump sum quotation for this single source project.

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That way the cost of the material cannot be separated from the cost for

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labor and the GAC material price cannot be

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compared to the market rates for similar GAC. In my

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opinion this exchange could easily be done by properly trained and equipped

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CFPUA employees. Instead of changing seven tanks over

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a five week period twice per year you could be changing one tank every

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two or three weeks. This could be done on a very flexible schedule to

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accommodate any seasonal issues that might arise. This would provide a

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far more stable operation and would be more cost effective.

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Despite Mr. Fleckner's repeated claims that large parts of the

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operation go down during the exchange of a single tank

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the plain truth is that your recent capacity expansion from 35

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to 44 million gallons per day will cause those 44

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million gallons to pass through the existing 14 tanks.

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Those filters do not represent any sort of

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capacity constraint now nor in the mid-term outlook. Meanwhile

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the Kenworth crisis is coming to a quiet end.

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You board members should do the right thing and wait until the outcome of your

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civil suit against Kenworth is known. Then let the people

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decide what they want you to do. Thank you. Are there any

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questions or comments?

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Mr. Fleckner. I'd just like to mention that this topic was discussed

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with long-range planning last month and the presentation from that meeting

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is in the board packet and if there are any questions we'd be glad to answer them.

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Thank you.

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Speaker update from

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June 12th. Thank you. We had one speaker last month who spoke

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about PFAS issues and there was no additional follow-up to that discussion.

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Thank you.

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Bring this to our consent agenda. We have six items on the consent agenda.

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I am going to go ahead and pull number one from that and

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I'll entertain a motion for two through six.

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All in favor say aye. Opposed?

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Number one, the ordinance related to the interlocal agreement regarding raw water pipeline

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design and construction. I'm going to ask our CFO Mr. McClain.

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We've got some changes

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to that. Good morning.

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What this budget ordinance does is it squares up the

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All water line project budget to reflect the actual proportions or percentages that are

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in the ILA. Originally, the cost for design and bidding were split 50-50. Those proportions

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are now something different. It's 36.585 percent for CFUA and 63.415 percent for Brunswick County.

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The other thing that this ordinance does is it appropriates Brunswick County's portion

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of the construction costs. So if you'll remember, CFUA is going to be the project manager. We

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will be paying 100 percent of those construction invoices and getting reimbursed from Brunswick

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County. So this gives us the budget authority. We had the budget authority for our portion

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that was appropriated in FY20 CIP, and this just squares it up to appropriate Brunswick

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County's portion. When this budget ordinance was presented to the finance committee, there

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were some costs that were omitted, some bidding costs. So this is just a little correction.

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It doesn't change the amounts too much, and it certainly doesn't change the substance

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of the budget ordinance. And I'd be glad to walk through the math. You have a couple

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of handouts. This is the amended budget ordinance in front of you, and there's a little Excel

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spreadsheet that supports those amounts that are in that budget ordinance. So I'll entertain

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any questions. If there are none, we are requesting approval.

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Second. All in favor say aye. Aye. As opposed? All right. Passes. That completes our consent agenda

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for the day, and we'll move on to... We didn't vote on the whole consent agenda. Yes, we did.

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Did I miss that? No, y'all were fast. All right. It was quick. Got to keep up around

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that. Yeah, I meant that completely. We're going to move on to new business, our administrative

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reports, and Linda, our attorney's report. I do not have a report, but we will go into

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closed session. Mr. Halas is here to discuss CFPUA versus Camores and DuPont and exactly

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where we are. And our executive director's report. Thank you. In the packet this month

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we have our quarterly CIP status report. There's a lot of good information about our efforts

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to continue our investment in infrastructure. Also the key indicators, the environmental

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report and safety report are also included. And you also see the customer service report

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is included as well, and the executive committee discussed this and recommended that we include

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the customer service report as a written report like the others monthly and have quarterly

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presentations from our customer service director. But in the meantime, if you have any questions

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as always about the report or anything in between those presentations, please let us know

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and we're more than happy to get you that information. And that's it. All right. Thank

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you very much. Move on to committee reports. Executive committee met those minutes

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in your package as well as the nominating committee. Those minutes are also in your packets. If

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there's no questions, we'll move on to long-range planning. Long-range planning met on June

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27. We had some very good informational presentations which we asked that be included in the package.

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I don't believe we're doing a presentation on those at this meeting, but certainly

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look over those and contact staff, you know, if there's any questions, but very, very good

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informational presentations on the PFAS reduction and equal order demand that we've experienced

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over the last month or two. Okay. Great. Thank you, Ms. Sneed. And we now move on

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to our finance committee and our new treasurer, Ms. Jennifer. So the finance committee met

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on July 3rd and those meetings, those minutes are in the meeting packet agenda. And then

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we've got Mr. Clean with an update. Okay. So taking us through our summary statement

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of revenues and expenditures, these numbers are as of June 30th. You can see that our expenditures

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have exceeded our revenues system-wide both from the operating and the capital side by

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about $9.2 million. And that brings that unrestricted fund balance number to around $90 million.

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I want to caveat these numbers. It says as of June 30th and 100% through the year, but we

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are still paying invoices and recording invoices for goods and services that were rendered

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and received prior to, on or prior to June 30th still. And also this doesn't reflect

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the last payroll of the year, this operating expenditure number right here. So that means

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that this number will go down the actual final number, but I do anticipate having an operating

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surplus of somewhere around $3-4 million. On the capital side, this reflects our deliberate

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decision to spin down our fund balance to that optimal level, that $50 million. So

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this is all in accordance with our financial plans. Part of that operating surplus that

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I mentioned, that $3-4 million that we'll likely have is due to outperformance in our

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water and wastewater volume and fixed charges. And you can see it's, again, that continued

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trend where our number of equivalent residential units, basically customers, we've exceeded

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our actual customers have exceeded our budgeted estimates on both the water and the wastewater

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side. You can see here on the water side and here on the wastewater side. And also that

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consumption or usage per customer has also exceeded what we budgeted or what we assumed

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in the budget. So that brings, this is kind of a look at our revenues in total.

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You can see that with the water and the wastewater side, there's our outperformance there. So a

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large portion of that surplus that we will likely have is due to outperformance on the

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revenue side. Just a quick update on the Gen X numbers. We've spent around $7.9 million

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incident to date. And we've received $635,000 in state grant funding. So the rest obviously

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has been funded from our rate payers. I did want to talk a little bit about the bond

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issue that's coming up. We're issuing bonds, revenue bonds, to finance the raw waterline

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project in partnership with Brunswick County and also the Sweeney enhancements project.

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So we have a working group call today that consists of underwriters, bond counsel, our

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financial advisors to talk about next steps and the different action items that each

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party has to do. At the August meeting, we will be bringing a preliminary findings

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resolution to the board. And all that does is it expresses the board's intent to issue

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the bonds and what the purpose of the bond issuance is. In late August, we'll have

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bids due for the raw waterline and the Sweeney project. We will be on the docket in, I

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think it's the September 1st, LGC meeting where we will seek approval for the bond

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issuance. And after approval at the September meeting, the board will be presented with a

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bond resolution and a bond order. That's the formal document where we're actually ordering

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the bonds. And that will be presented for adoption at the September meeting. We will

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price the bonds, planning on pricing the bonds in mid-October and closing and actually

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receiving the bond proceeds in late October or early November. So that's just a kind

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of a quick update of the calendar and the next steps for that bond issuance. With

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that, I'll take any questions. Thank you.

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Thank you, John.

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One item of note also from the Finance Committee, we used to, Ms. Eric used to

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present the customer service report. We're going to move that to just as a

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presentation item within the Executive Director's Report rather than have a

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monthly presentation.

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All right. Thank you very much.

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All right. That brings us to the end of our regular agenda. Any old business that

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we need to discuss today?

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If not, I want to thank everybody for being here and we are going to go

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into...

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We need a motion to go into closing session to discuss CFPA versus D-Pont

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Incomolence.

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All in favor say aye.

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Opposed?

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All right. We'll take about five minutes.

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Thank you.