[This transcript was generated automatically from audio using AI and hasn't been reviewed by a person -- it can contain mistakes, including plausible-sounding sentences that were never actually said. Treat it as a starting point, not a verbatim record.]

[0:00] That's my gavel. Very good. Good morning, everyone. And I'm going to go ahead and call
[0:12] the July 10, 2019 meeting, board meeting of the Cape Fear Public Utility Authority to
[0:18] Order. And our first act of business on the agenda is termination of a quorum. And I'd
[0:24] like to entertain a motion to excuse Mr. Zappel. I move. Second. All in favor say
[0:29] aye. Aye. Opposed? All right. And now we move on to the adoption of our agenda. The
[0:35] agenda's in front of you. And I will entertain a motion to adopt today's agenda.
[0:40] Come on. Second. All in favor say aye. Aye. Opposed? And I will ask our secretary to
[0:48] present the minutes. The minutes of the regular authority board meeting from June 12
[0:53] are in your packet and available for review. Second. All in favor say aye. Aye. Opposed? All
[1:07] right. So we are moving through our agenda pretty quick this morning. I do have a
[1:12] presentation, and I'll ask Mike Brown to please join me at the podium. Bring a
[1:17] seat. Mike was wondering if this day would ever come. And I was going to roast him a
[1:31] little bit and talk about his gray hair. He's got a few gray hairs now for nine
[1:35] years of serving on this board. And then he's come to the end of his term. And
[1:39] Cape Fear Public Utility Authority, you're allowed to serve three consecutive
[1:43] terms, and Mike has certainly done that since 2010. And it's kind of with mixed
[1:49] emotion, because I've really appreciated the leadership that he's given this
[1:53] board over the years. But I know he's ready to hand it over to someone else.
[1:59] So I'm going to read, we always take, read a resolution, and I'm going to
[2:05] read this for Mike. Mike Brown was appointed to New Hanover County in
[2:09] 2010 by New Hanover County in 2010 to serve as a board member of Cape Fear Public
[2:14] Utility Authority. Mr. Brown has served three terms as board member and has
[2:19] shown his support of Cape Fear Public Utility Authority's mission to provide
[2:23] high quality services to the citizens and businesses of the region. Mr.
[2:28] Brown has held several officer positions on the board, serving as chair,
[2:32] treasurer, and secretary. Mr. Brown has served on the Executive,
[2:36] Finance, and Long-Range Planning Committees. He has proven his dedication to
[2:41] Cape Fear Public Utility Authority and its employees through his guidance and
[2:45] involvement as a board member. Now therefore, board and staff do formally
[2:49] recognize and thank Mike Brown for his services as a member of the Cape Fear
[2:53] Public Utility Authority, and this is adopted this 10th of July, 2019.
[2:58] Mike, thank you so much for all your service.
[3:02] I appreciate the recognition.
[3:06] It has been a pleasure to be on this board. Somebody suggested in 2009,
[3:10] I believe, after we've been around for a year or two, that
[3:14] it might be a board I would want to get involved in, and I got involved and we were
[3:18] going through some, I guess, growing pains at the time.
[3:22] And it's been a real pleasure to get involved.
[3:26] I really do believe in this organization. It's a great organization. It has great
[3:30] leadership. Our leadership and Jim and his team, I don't know who's calling me,
[3:34] have a great deal of integrity, and I grew to really respect that.
[3:38] And they also have a thirst for continued improvement and excellence.
[3:42] And I think that's really been the story of CFUA, and that we
[3:46] have a great deal of integrity. And I think that's really been the story
[3:50] of CFUA, and that we have a great deal of integrity.
[3:54] of CFUA, and that we take a little bite of the apple
[3:58] every day and try to improve and improve and improve. And the end result of that
[4:02] is looking back, I think we're in a much, much better
[4:06] position in New Hampshire County and City of Wilmington than we were
[4:10] back in 2006. And how that manifests
[4:14] itself is that we aren't in the news for sewer spills
[4:18] and problems, and staying out of the news is good news. So with
[4:22] that, it's been a real pleasure. And this has been a great board to work on.
[4:26] It's a great example of a board full of people who probably
[4:30] have different political persuasions and points of view
[4:34] who always come together once a month and work together to
[4:38] work through the issues. We rarely, rarely, rarely have any disagreement.
[4:42] And that's because we have good leadership and a good staff
[4:46] and a good working environment. So it's been a real pleasure and I appreciate it.
[4:50] And I'll stick around and bug y'all from time to time
[4:54] about something. I keep promising people.
[5:12] I don't know if it's appropriate or not for me to say anything, but most of you know
[5:16] that I worked for 30 years as a city attorney.
[5:20] In all my time, I don't think I've ever had a
[5:24] board chair or a mayor that spent as much time and
[5:28] effort as Mike did when we started out with the Gen X discovery.
[5:32] And I really want to thank him for that.
[5:36] Well, I was going to just offer this up and I wasn't close to that like
[5:40] you were. But of all the people that have ever been on this board
[5:44] and the ones that are on it presently, I can think of no one that had the correct
[5:48] demeanor that Mike did to put up
[5:52] to be in that whatever you want to call it
[5:56] daily, nightly, personally,
[6:00] board chair. I'd have probably got percent to
[6:04] prison. But Mike, and I work with Mike now and he's the same way
[6:08] at the office. It's just a pleasure to know someone and to have someone
[6:12] sitting in that chair that handled that during the tough times.
[6:16] We didn't put Gen X in the water, but a lot of people made out like
[6:20] that we were the bad guys and Mike was the right person at the right time to be there.
[6:30] Any more comments?
[6:32] All right, we will move on. We do
[6:36] next on our agenda is Oath Office for
[6:40] Briggs, our newest member of the board.
[6:44] Go on up there, Hollis.
[6:48] That's all right.
[6:52] Thank you.
[6:56] Going up there, Hollis. That's all right.
[7:00] Are you writing something back?
[7:04] I, Hollis, you can do that.
[7:08] I, Hollis B. Briggs, Jr. do soundly swear that I will support
[7:12] and maintain the Constitution and laws of the United States
[7:16] and the Constitution and laws of the state of North Carolina,
[7:20] not inconsistent therewith, and that I will faithfully
[7:24] discharge the duties of my position as a member of the Cape Fear Public Utility
[7:28] Authority.
[7:32] Thank you.
[7:36] You sound back up.
[7:40] And then you can take a seat at the table.
[7:44] Thank you.
[7:48] All right.
[7:52] Thank you, Karen.
[8:00] There you go.
[8:04] Thank you.
[8:08] Mr. Briggs, I speak on behalf of the whole board. We welcome you.
[8:12] Thank you. Thank you. Thank you.
[8:16] All right. We now move on to
[8:20] Item 8. It's our public comments time and
[8:24] 7.
[8:28] I'm sorry. I skipped one of the most important things. I apologize.
[8:32] This is our fiscal year 2020 board of officers.
[8:36] The nominating committee is met and they would like to recommend that slate of officers.
[8:40] Yes, and on behalf of the nominating committee, it's my pleasure to
[8:44] put this slate in front of the board.
[8:48] Bill Norris as chair, Wesley Corder as vice chair,
[8:52] Dean Hackney as secretary, and Jennifer Adams as treasurer.
[8:56] I'll entertain a motion to accept that slate.
[9:00] All in favor say aye. Aye. Opposed? All right.
[9:04] Thank you all for serving.
[9:08] Now we move to our public comments. Ms. Polk, do we have any speakers today?
[9:12] Yes, sir.
[9:16] Mr. Newcomb?
[9:20] More minutes. Got it. Yes, sir.
[9:24] And if you would state your name when you get to the podium in your address, please.
[9:28] Good morning. My name is Tom Newcomb and I live on Barksdale Road.
[9:32] I'm going to discuss some of what I learned from the 194 page
[9:36] FOIA document I recently received from Mr. Haggerty.
[9:40] It deals with the exchange of the GAC and the Sweeney filters.
[9:44] As you know, I think this exchange took far too long.
[9:48] 13 months passed from the time Mr. Fletcher knew that the absorption was occurring until
[9:52] the first tank of GAC was exchanged. This caused the
[9:56] necessary exposure of your customers to a long list of PFAS chemicals
[10:00] while you dithered about trying to figure out how to fix the
[10:04] desorption problem and actually reduce the PFAS levels without drawing too much attention
[10:08] to what you're up to. While there is no scientific evidence
[10:12] to suggest that any meaningful harm was done to your customers,
[10:16] it illustrates the lengths to which you have gone to manage public opinion
[10:20] regarding your ability to treat water and to make rational financial decisions.
[10:24] Your actions and inactions have obscured the significant reduction
[10:28] in the PFAS levels in the finished water resulting from this exchange of GAC.
[10:32] My water today contains substantially less than 1%
[10:36] of the PFAS that was in it as recently as 2017
[10:40] and is far less affected by PFAS than many other
[10:44] water treatment systems around the world. Yet you are held bent on spending
[10:48] $215 million to fix the problem that is being dealt with
[10:52] quite effectively by your current treatment process and the
[10:56] NCDEQ Consent Agreement with Camelers. I also
[11:00] learned that in May 2018 Calgon provided a quotation for
[11:04] replacement of the old GAC. The quoted price
[11:08] was $981,000. The old GAC had been
[11:12] analyzed and found to be non-hazardous. That meant it could be disposed of
[11:16] in three different ways. It could be used as a co-fuel
[11:20] incinerator at no extra charge or disposed in a landfill
[11:24] which you had said you did not want to do. Or by paying an extra
[11:28] $285,000 it could be trucked to New York
[11:32] state for disposal at a certified incineration facility.
[11:36] You chose this expensive option
[11:40] apparently to avoid the risk of being accused of quote,
[11:44] smokestack dispersal, unquote, by for example a local
[11:48] environmental expert. We all know how well that worked out.
[11:52] I also learned that it typically takes the Calgon workers
[11:56] only one eight hour shift to replace the GAC in one of the filters.
[12:00] Remaining three days are spent waiting on test results
[12:04] to see if the brand new GAC created in a high temperature
[12:08] process and containing nothing for a bacteria to thrive on
[12:12] is somehow creating a bacterial hazard.
[12:16] One thing I did not learn was the labor and equipment cost for the GAC
[12:20] installation services. That's because Mr. Steyer specifically
[12:24] requested a lump sum quotation for this single source project.
[12:28] That way the cost of the material cannot be separated from the cost for
[12:32] labor and the GAC material price cannot be
[12:36] compared to the market rates for similar GAC. In my
[12:40] opinion this exchange could easily be done by properly trained and equipped
[12:44] CFPUA employees. Instead of changing seven tanks over
[12:48] a five week period twice per year you could be changing one tank every
[12:52] two or three weeks. This could be done on a very flexible schedule to
[12:56] accommodate any seasonal issues that might arise. This would provide a
[13:00] far more stable operation and would be more cost effective.
[13:04] Despite Mr. Fleckner's repeated claims that large parts of the
[13:08] operation go down during the exchange of a single tank
[13:12] the plain truth is that your recent capacity expansion from 35
[13:16] to 44 million gallons per day will cause those 44
[13:20] million gallons to pass through the existing 14 tanks.
[13:24] Those filters do not represent any sort of
[13:28] capacity constraint now nor in the mid-term outlook. Meanwhile
[13:32] the Kenworth crisis is coming to a quiet end.
[13:36] You board members should do the right thing and wait until the outcome of your
[13:40] civil suit against Kenworth is known. Then let the people
[13:44] decide what they want you to do. Thank you. Are there any
[13:48] questions or comments?
[13:52] Mr. Fleckner. I'd just like to mention that this topic was discussed
[13:56] with long-range planning last month and the presentation from that meeting
[14:00] is in the board packet and if there are any questions we'd be glad to answer them.
[14:04] Thank you.
[14:08] Speaker update from
[14:12] June 12th. Thank you. We had one speaker last month who spoke
[14:16] about PFAS issues and there was no additional follow-up to that discussion.
[14:20] Thank you.
[14:24] Bring this to our consent agenda. We have six items on the consent agenda.
[14:28] I am going to go ahead and pull number one from that and
[14:32] I'll entertain a motion for two through six.
[14:36] All in favor say aye. Opposed?
[14:40] Number one, the ordinance related to the interlocal agreement regarding raw water pipeline
[14:44] design and construction. I'm going to ask our CFO Mr. McClain.
[14:48] We've got some changes
[14:52] to that. Good morning.
[14:56] What this budget ordinance does is it squares up the
[15:00] All water line project budget to reflect the actual proportions or percentages that are
[15:05] in the ILA. Originally, the cost for design and bidding were split 50-50. Those proportions
[15:12] are now something different. It's 36.585 percent for CFUA and 63.415 percent for Brunswick County.
[15:22] The other thing that this ordinance does is it appropriates Brunswick County's portion
[15:26] of the construction costs. So if you'll remember, CFUA is going to be the project manager. We
[15:34] will be paying 100 percent of those construction invoices and getting reimbursed from Brunswick
[15:40] County. So this gives us the budget authority. We had the budget authority for our portion
[15:46] that was appropriated in FY20 CIP, and this just squares it up to appropriate Brunswick
[15:54] County's portion. When this budget ordinance was presented to the finance committee, there
[16:01] were some costs that were omitted, some bidding costs. So this is just a little correction.
[16:11] It doesn't change the amounts too much, and it certainly doesn't change the substance
[16:16] of the budget ordinance. And I'd be glad to walk through the math. You have a couple
[16:22] of handouts. This is the amended budget ordinance in front of you, and there's a little Excel
[16:27] spreadsheet that supports those amounts that are in that budget ordinance. So I'll entertain
[16:34] any questions. If there are none, we are requesting approval.
[16:48] Second. All in favor say aye. Aye. As opposed? All right. Passes. That completes our consent agenda
[16:57] for the day, and we'll move on to... We didn't vote on the whole consent agenda. Yes, we did.
[17:04] Did I miss that? No, y'all were fast. All right. It was quick. Got to keep up around
[17:13] that. Yeah, I meant that completely. We're going to move on to new business, our administrative
[17:18] reports, and Linda, our attorney's report. I do not have a report, but we will go into
[17:23] closed session. Mr. Halas is here to discuss CFPUA versus Camores and DuPont and exactly
[17:31] where we are. And our executive director's report. Thank you. In the packet this month
[17:39] we have our quarterly CIP status report. There's a lot of good information about our efforts
[17:46] to continue our investment in infrastructure. Also the key indicators, the environmental
[17:51] report and safety report are also included. And you also see the customer service report
[17:56] is included as well, and the executive committee discussed this and recommended that we include
[18:04] the customer service report as a written report like the others monthly and have quarterly
[18:09] presentations from our customer service director. But in the meantime, if you have any questions
[18:15] as always about the report or anything in between those presentations, please let us know
[18:20] and we're more than happy to get you that information. And that's it. All right. Thank
[18:24] you very much. Move on to committee reports. Executive committee met those minutes
[18:31] in your package as well as the nominating committee. Those minutes are also in your packets. If
[18:37] there's no questions, we'll move on to long-range planning. Long-range planning met on June
[18:45] 27. We had some very good informational presentations which we asked that be included in the package.
[18:54] I don't believe we're doing a presentation on those at this meeting, but certainly
[18:59] look over those and contact staff, you know, if there's any questions, but very, very good
[19:04] informational presentations on the PFAS reduction and equal order demand that we've experienced
[19:14] over the last month or two. Okay. Great. Thank you, Ms. Sneed. And we now move on
[19:21] to our finance committee and our new treasurer, Ms. Jennifer. So the finance committee met
[19:30] on July 3rd and those meetings, those minutes are in the meeting packet agenda. And then
[19:37] we've got Mr. Clean with an update. Okay. So taking us through our summary statement
[19:45] of revenues and expenditures, these numbers are as of June 30th. You can see that our expenditures
[19:55] have exceeded our revenues system-wide both from the operating and the capital side by
[20:02] about $9.2 million. And that brings that unrestricted fund balance number to around $90 million.
[20:10] I want to caveat these numbers. It says as of June 30th and 100% through the year, but we
[20:18] are still paying invoices and recording invoices for goods and services that were rendered
[20:24] and received prior to, on or prior to June 30th still. And also this doesn't reflect
[20:33] the last payroll of the year, this operating expenditure number right here. So that means
[20:37] that this number will go down the actual final number, but I do anticipate having an operating
[20:45] surplus of somewhere around $3-4 million. On the capital side, this reflects our deliberate
[20:53] decision to spin down our fund balance to that optimal level, that $50 million. So
[21:01] this is all in accordance with our financial plans. Part of that operating surplus that
[21:08] I mentioned, that $3-4 million that we'll likely have is due to outperformance in our
[21:14] water and wastewater volume and fixed charges. And you can see it's, again, that continued
[21:20] trend where our number of equivalent residential units, basically customers, we've exceeded
[21:28] our actual customers have exceeded our budgeted estimates on both the water and the wastewater
[21:35] side. You can see here on the water side and here on the wastewater side. And also that
[21:41] consumption or usage per customer has also exceeded what we budgeted or what we assumed
[21:50] in the budget. So that brings, this is kind of a look at our revenues in total.
[21:57] You can see that with the water and the wastewater side, there's our outperformance there. So a
[22:03] large portion of that surplus that we will likely have is due to outperformance on the
[22:12] revenue side. Just a quick update on the Gen X numbers. We've spent around $7.9 million
[22:20] incident to date. And we've received $635,000 in state grant funding. So the rest obviously
[22:30] has been funded from our rate payers. I did want to talk a little bit about the bond
[22:37] issue that's coming up. We're issuing bonds, revenue bonds, to finance the raw waterline
[22:42] project in partnership with Brunswick County and also the Sweeney enhancements project.
[22:50] So we have a working group call today that consists of underwriters, bond counsel, our
[22:57] financial advisors to talk about next steps and the different action items that each
[23:02] party has to do. At the August meeting, we will be bringing a preliminary findings
[23:10] resolution to the board. And all that does is it expresses the board's intent to issue
[23:18] the bonds and what the purpose of the bond issuance is. In late August, we'll have
[23:24] bids due for the raw waterline and the Sweeney project. We will be on the docket in, I
[23:32] think it's the September 1st, LGC meeting where we will seek approval for the bond
[23:38] issuance. And after approval at the September meeting, the board will be presented with a
[23:44] bond resolution and a bond order. That's the formal document where we're actually ordering
[23:51] the bonds. And that will be presented for adoption at the September meeting. We will
[23:57] price the bonds, planning on pricing the bonds in mid-October and closing and actually
[24:03] receiving the bond proceeds in late October or early November. So that's just a kind
[24:08] of a quick update of the calendar and the next steps for that bond issuance. With
[24:14] that, I'll take any questions. Thank you.
[24:18] Thank you, John.
[24:19] One item of note also from the Finance Committee, we used to, Ms. Eric used to
[24:27] present the customer service report. We're going to move that to just as a
[24:31] presentation item within the Executive Director's Report rather than have a
[24:34] monthly presentation.
[24:36] All right. Thank you very much.
[24:41] All right. That brings us to the end of our regular agenda. Any old business that
[24:47] we need to discuss today?
[24:51] If not, I want to thank everybody for being here and we are going to go
[24:56] into...
[24:56] We need a motion to go into closing session to discuss CFPA versus D-Pont
[25:02] Incomolence.
[25:03] All in favor say aye.
[25:06] Opposed?
[25:08] All right. We'll take about five minutes.
[25:32] Thank you.