That's my gavel. Very good. Good morning, everyone. And I'm going to go ahead and call
the July 10, 2019 meeting, board meeting of the Cape Fear Public Utility Authority to
Order. And our first act of business on the agenda is termination of a quorum. And I'd
like to entertain a motion to excuse Mr. Zappel. I move. Second. All in favor say
aye. Aye. Opposed? All right. And now we move on to the adoption of our agenda. The
agenda's in front of you. And I will entertain a motion to adopt today's agenda.
Come on. Second. All in favor say aye. Aye. Opposed? And I will ask our secretary to
present the minutes. The minutes of the regular authority board meeting from June 12
are in your packet and available for review. Second. All in favor say aye. Aye. Opposed? All
right. So we are moving through our agenda pretty quick this morning. I do have a
presentation, and I'll ask Mike Brown to please join me at the podium. Bring a
seat. Mike was wondering if this day would ever come. And I was going to roast him a
little bit and talk about his gray hair. He's got a few gray hairs now for nine
years of serving on this board. And then he's come to the end of his term. And
Cape Fear Public Utility Authority, you're allowed to serve three consecutive
terms, and Mike has certainly done that since 2010. And it's kind of with mixed
emotion, because I've really appreciated the leadership that he's given this
board over the years. But I know he's ready to hand it over to someone else.
So I'm going to read, we always take, read a resolution, and I'm going to
read this for Mike. Mike Brown was appointed to New Hanover County in
2010 by New Hanover County in 2010 to serve as a board member of Cape Fear Public
Utility Authority. Mr. Brown has served three terms as board member and has
shown his support of Cape Fear Public Utility Authority's mission to provide
high quality services to the citizens and businesses of the region. Mr.
Brown has held several officer positions on the board, serving as chair,
treasurer, and secretary. Mr. Brown has served on the Executive,
Finance, and Long-Range Planning Committees. He has proven his dedication to
Cape Fear Public Utility Authority and its employees through his guidance and
involvement as a board member. Now therefore, board and staff do formally
recognize and thank Mike Brown for his services as a member of the Cape Fear
Public Utility Authority, and this is adopted this 10th of July, 2019.
Mike, thank you so much for all your service.
I appreciate the recognition.
It has been a pleasure to be on this board. Somebody suggested in 2009,
I believe, after we've been around for a year or two, that
it might be a board I would want to get involved in, and I got involved and we were
going through some, I guess, growing pains at the time.
And it's been a real pleasure to get involved.
I really do believe in this organization. It's a great organization. It has great
leadership. Our leadership and Jim and his team, I don't know who's calling me,
have a great deal of integrity, and I grew to really respect that.
And they also have a thirst for continued improvement and excellence.
And I think that's really been the story of CFUA, and that we
have a great deal of integrity. And I think that's really been the story
of CFUA, and that we have a great deal of integrity.
of CFUA, and that we take a little bite of the apple
every day and try to improve and improve and improve. And the end result of that
is looking back, I think we're in a much, much better
position in New Hampshire County and City of Wilmington than we were
back in 2006. And how that manifests
itself is that we aren't in the news for sewer spills
and problems, and staying out of the news is good news. So with
that, it's been a real pleasure. And this has been a great board to work on.
It's a great example of a board full of people who probably
have different political persuasions and points of view
who always come together once a month and work together to
work through the issues. We rarely, rarely, rarely have any disagreement.
And that's because we have good leadership and a good staff
and a good working environment. So it's been a real pleasure and I appreciate it.
And I'll stick around and bug y'all from time to time
about something. I keep promising people.
I don't know if it's appropriate or not for me to say anything, but most of you know
that I worked for 30 years as a city attorney.
In all my time, I don't think I've ever had a
board chair or a mayor that spent as much time and
effort as Mike did when we started out with the Gen X discovery.
And I really want to thank him for that.
Well, I was going to just offer this up and I wasn't close to that like
you were. But of all the people that have ever been on this board
and the ones that are on it presently, I can think of no one that had the correct
demeanor that Mike did to put up
to be in that whatever you want to call it
daily, nightly, personally,
board chair. I'd have probably got percent to
prison. But Mike, and I work with Mike now and he's the same way
at the office. It's just a pleasure to know someone and to have someone
sitting in that chair that handled that during the tough times.
We didn't put Gen X in the water, but a lot of people made out like
that we were the bad guys and Mike was the right person at the right time to be there.
Any more comments?
All right, we will move on. We do
next on our agenda is Oath Office for
Briggs, our newest member of the board.
Go on up there, Hollis.
That's all right.
Thank you.
Going up there, Hollis. That's all right.
Are you writing something back?
I, Hollis, you can do that.
I, Hollis B. Briggs, Jr. do soundly swear that I will support
and maintain the Constitution and laws of the United States
and the Constitution and laws of the state of North Carolina,
not inconsistent therewith, and that I will faithfully
discharge the duties of my position as a member of the Cape Fear Public Utility
Authority.
Thank you.
You sound back up.
And then you can take a seat at the table.
Thank you.
All right.
Thank you, Karen.
There you go.
Thank you.
Mr. Briggs, I speak on behalf of the whole board. We welcome you.
Thank you. Thank you. Thank you.
All right. We now move on to
Item 8. It's our public comments time and
7.
I'm sorry. I skipped one of the most important things. I apologize.
This is our fiscal year 2020 board of officers.
The nominating committee is met and they would like to recommend that slate of officers.
Yes, and on behalf of the nominating committee, it's my pleasure to
put this slate in front of the board.
Bill Norris as chair, Wesley Corder as vice chair,
Dean Hackney as secretary, and Jennifer Adams as treasurer.
I'll entertain a motion to accept that slate.
All in favor say aye. Aye. Opposed? All right.
Thank you all for serving.
Now we move to our public comments. Ms. Polk, do we have any speakers today?
Yes, sir.
Mr. Newcomb?
More minutes. Got it. Yes, sir.
And if you would state your name when you get to the podium in your address, please.
Good morning. My name is Tom Newcomb and I live on Barksdale Road.
I'm going to discuss some of what I learned from the 194 page
FOIA document I recently received from Mr. Haggerty.
It deals with the exchange of the GAC and the Sweeney filters.
As you know, I think this exchange took far too long.
13 months passed from the time Mr. Fletcher knew that the absorption was occurring until
the first tank of GAC was exchanged. This caused the
necessary exposure of your customers to a long list of PFAS chemicals
while you dithered about trying to figure out how to fix the
desorption problem and actually reduce the PFAS levels without drawing too much attention
to what you're up to. While there is no scientific evidence
to suggest that any meaningful harm was done to your customers,
it illustrates the lengths to which you have gone to manage public opinion
regarding your ability to treat water and to make rational financial decisions.
Your actions and inactions have obscured the significant reduction
in the PFAS levels in the finished water resulting from this exchange of GAC.
My water today contains substantially less than 1%
of the PFAS that was in it as recently as 2017
and is far less affected by PFAS than many other
water treatment systems around the world. Yet you are held bent on spending
$215 million to fix the problem that is being dealt with
quite effectively by your current treatment process and the
NCDEQ Consent Agreement with Camelers. I also
learned that in May 2018 Calgon provided a quotation for
replacement of the old GAC. The quoted price
was $981,000. The old GAC had been
analyzed and found to be non-hazardous. That meant it could be disposed of
in three different ways. It could be used as a co-fuel
incinerator at no extra charge or disposed in a landfill
which you had said you did not want to do. Or by paying an extra
$285,000 it could be trucked to New York
state for disposal at a certified incineration facility.
You chose this expensive option
apparently to avoid the risk of being accused of quote,
smokestack dispersal, unquote, by for example a local
environmental expert. We all know how well that worked out.
I also learned that it typically takes the Calgon workers
only one eight hour shift to replace the GAC in one of the filters.
Remaining three days are spent waiting on test results
to see if the brand new GAC created in a high temperature
process and containing nothing for a bacteria to thrive on
is somehow creating a bacterial hazard.
One thing I did not learn was the labor and equipment cost for the GAC
installation services. That's because Mr. Steyer specifically
requested a lump sum quotation for this single source project.
That way the cost of the material cannot be separated from the cost for
labor and the GAC material price cannot be
compared to the market rates for similar GAC. In my
opinion this exchange could easily be done by properly trained and equipped
CFPUA employees. Instead of changing seven tanks over
a five week period twice per year you could be changing one tank every
two or three weeks. This could be done on a very flexible schedule to
accommodate any seasonal issues that might arise. This would provide a
far more stable operation and would be more cost effective.
Despite Mr. Fleckner's repeated claims that large parts of the
operation go down during the exchange of a single tank
the plain truth is that your recent capacity expansion from 35
to 44 million gallons per day will cause those 44
million gallons to pass through the existing 14 tanks.
Those filters do not represent any sort of
capacity constraint now nor in the mid-term outlook. Meanwhile
the Kenworth crisis is coming to a quiet end.
You board members should do the right thing and wait until the outcome of your
civil suit against Kenworth is known. Then let the people
decide what they want you to do. Thank you. Are there any
questions or comments?
Mr. Fleckner. I'd just like to mention that this topic was discussed
with long-range planning last month and the presentation from that meeting
is in the board packet and if there are any questions we'd be glad to answer them.
Thank you.
Speaker update from
June 12th. Thank you. We had one speaker last month who spoke
about PFAS issues and there was no additional follow-up to that discussion.
Thank you.
Bring this to our consent agenda. We have six items on the consent agenda.
I am going to go ahead and pull number one from that and
I'll entertain a motion for two through six.
All in favor say aye. Opposed?
Number one, the ordinance related to the interlocal agreement regarding raw water pipeline
design and construction. I'm going to ask our CFO Mr. McClain.
We've got some changes
to that. Good morning.
What this budget ordinance does is it squares up the
All water line project budget to reflect the actual proportions or percentages that are
in the ILA. Originally, the cost for design and bidding were split 50-50. Those proportions
are now something different. It's 36.585 percent for CFUA and 63.415 percent for Brunswick County.
The other thing that this ordinance does is it appropriates Brunswick County's portion
of the construction costs. So if you'll remember, CFUA is going to be the project manager. We
will be paying 100 percent of those construction invoices and getting reimbursed from Brunswick
County. So this gives us the budget authority. We had the budget authority for our portion
that was appropriated in FY20 CIP, and this just squares it up to appropriate Brunswick
County's portion. When this budget ordinance was presented to the finance committee, there
were some costs that were omitted, some bidding costs. So this is just a little correction.
It doesn't change the amounts too much, and it certainly doesn't change the substance
of the budget ordinance. And I'd be glad to walk through the math. You have a couple
of handouts. This is the amended budget ordinance in front of you, and there's a little Excel
spreadsheet that supports those amounts that are in that budget ordinance. So I'll entertain
any questions. If there are none, we are requesting approval.
Second. All in favor say aye. Aye. As opposed? All right. Passes. That completes our consent agenda
for the day, and we'll move on to... We didn't vote on the whole consent agenda. Yes, we did.
Did I miss that? No, y'all were fast. All right. It was quick. Got to keep up around
that. Yeah, I meant that completely. We're going to move on to new business, our administrative
reports, and Linda, our attorney's report. I do not have a report, but we will go into
closed session. Mr. Halas is here to discuss CFPUA versus Camores and DuPont and exactly
where we are. And our executive director's report. Thank you. In the packet this month
we have our quarterly CIP status report. There's a lot of good information about our efforts
to continue our investment in infrastructure. Also the key indicators, the environmental
report and safety report are also included. And you also see the customer service report
is included as well, and the executive committee discussed this and recommended that we include
the customer service report as a written report like the others monthly and have quarterly
presentations from our customer service director. But in the meantime, if you have any questions
as always about the report or anything in between those presentations, please let us know
and we're more than happy to get you that information. And that's it. All right. Thank
you very much. Move on to committee reports. Executive committee met those minutes
in your package as well as the nominating committee. Those minutes are also in your packets. If
there's no questions, we'll move on to long-range planning. Long-range planning met on June
27. We had some very good informational presentations which we asked that be included in the package.
I don't believe we're doing a presentation on those at this meeting, but certainly
look over those and contact staff, you know, if there's any questions, but very, very good
informational presentations on the PFAS reduction and equal order demand that we've experienced
over the last month or two. Okay. Great. Thank you, Ms. Sneed. And we now move on
to our finance committee and our new treasurer, Ms. Jennifer. So the finance committee met
on July 3rd and those meetings, those minutes are in the meeting packet agenda. And then
we've got Mr. Clean with an update. Okay. So taking us through our summary statement
of revenues and expenditures, these numbers are as of June 30th. You can see that our expenditures
have exceeded our revenues system-wide both from the operating and the capital side by
about $9.2 million. And that brings that unrestricted fund balance number to around $90 million.
I want to caveat these numbers. It says as of June 30th and 100% through the year, but we
are still paying invoices and recording invoices for goods and services that were rendered
and received prior to, on or prior to June 30th still. And also this doesn't reflect
the last payroll of the year, this operating expenditure number right here. So that means
that this number will go down the actual final number, but I do anticipate having an operating
surplus of somewhere around $3-4 million. On the capital side, this reflects our deliberate
decision to spin down our fund balance to that optimal level, that $50 million. So
this is all in accordance with our financial plans. Part of that operating surplus that
I mentioned, that $3-4 million that we'll likely have is due to outperformance in our
water and wastewater volume and fixed charges. And you can see it's, again, that continued
trend where our number of equivalent residential units, basically customers, we've exceeded
our actual customers have exceeded our budgeted estimates on both the water and the wastewater
side. You can see here on the water side and here on the wastewater side. And also that
consumption or usage per customer has also exceeded what we budgeted or what we assumed
in the budget. So that brings, this is kind of a look at our revenues in total.
You can see that with the water and the wastewater side, there's our outperformance there. So a
large portion of that surplus that we will likely have is due to outperformance on the
revenue side. Just a quick update on the Gen X numbers. We've spent around $7.9 million
incident to date. And we've received $635,000 in state grant funding. So the rest obviously
has been funded from our rate payers. I did want to talk a little bit about the bond
issue that's coming up. We're issuing bonds, revenue bonds, to finance the raw waterline
project in partnership with Brunswick County and also the Sweeney enhancements project.
So we have a working group call today that consists of underwriters, bond counsel, our
financial advisors to talk about next steps and the different action items that each
party has to do. At the August meeting, we will be bringing a preliminary findings
resolution to the board. And all that does is it expresses the board's intent to issue
the bonds and what the purpose of the bond issuance is. In late August, we'll have
bids due for the raw waterline and the Sweeney project. We will be on the docket in, I
think it's the September 1st, LGC meeting where we will seek approval for the bond
issuance. And after approval at the September meeting, the board will be presented with a
bond resolution and a bond order. That's the formal document where we're actually ordering
the bonds. And that will be presented for adoption at the September meeting. We will
price the bonds, planning on pricing the bonds in mid-October and closing and actually
receiving the bond proceeds in late October or early November. So that's just a kind
of a quick update of the calendar and the next steps for that bond issuance. With
that, I'll take any questions. Thank you.
Thank you, John.
One item of note also from the Finance Committee, we used to, Ms. Eric used to
present the customer service report. We're going to move that to just as a
presentation item within the Executive Director's Report rather than have a
monthly presentation.
All right. Thank you very much.
All right. That brings us to the end of our regular agenda. Any old business that
we need to discuss today?
If not, I want to thank everybody for being here and we are going to go
into...
We need a motion to go into closing session to discuss CFPA versus D-Pont
Incomolence.
All in favor say aye.
Opposed?
All right. We'll take about five minutes.
Thank you.