[0:00] critical issue for our community and state and after being appointed to

[0:04] fill Senator Greg Myers seat earlier this

[0:08] year Senator Garson took this opportunity to

[0:11] dive deeper into the challenges We would just want to say thank you

[0:17] to Senator Garson for spending time with us in Owasco.

[0:21] And to the public, if you're not currently following Owasco

[0:25] on social media like Facebook or Twitter please consider doing so.

[0:31] Steven Winters

[0:34] led a discussion on Monday, August 10th with the Orange County Commission for

[0:39] the environment on Owasco's draft P fast

[0:44] guiding principles. Mary Tiger attended as well

[0:48] to capture the discussion for the board's consideration

[0:51] in finalizing the guiding principles. Number four

[0:57] the Owasco Board of Directors cancelled the effective board governance training

[1:01] that was to take place today. August 13th, this will be rescheduled

[1:07] at a later date so that all board members can attend. We were short board

[1:11] members today.

[1:15] And number five the Owasco Board of Directors and staff

[1:19] communications workshop will be held on August 27th, 2026, but

[1:25] that's tentative pending some board polling results.

[1:31] That's all I have. Are there any other announcements by board members?

[1:37] Hearing none. >> Oh, it's just

[1:39] that next month I'm going to be out. So, I won't be attending next month.

[1:45] » We will continue to miss you. Thank you for giving us a heads up on

[1:49] that. Anybody else?

[1:54] » No, uh we we can talk after the board meeting.

[1:57] That'd be great. >> Okay, thank you.

[2:00] » Can I actually clarify, [clears throat] sorry, for everyone?

[2:03] » Sure, go ahead. >> Can you actually clarify for everyone

[2:05] that so the communications workshop would be pushed to uh September?

[2:12] » Oh, the the effective governance training

[2:15] um proposed to September, do you mean? Or the communications workshop?

[2:21] » I'm not sure. What's what's beyond it in here?

[2:24] » Well, the universal um the universal board of directors and staff

[2:27] communications workshop scheduled on August 27th,

[2:32] 2026. But that's tentative pending on board

[2:36] polling results to make sure we can attend.

[2:39] » So the workshop that was canceled today would not be moved and the other one

[2:42] pushed back. My understanding is they were sequential.

[2:45] » The one that's canceled to those canceled for today, I'm going to poll

[2:50] all the board members to see when we can schedule another date

[2:53] for that. >> date.

[2:54] » Yeah. Thanks for clarifying. Good point.

[2:58] Yeah, so we will hold the effective board governance training

[3:02] session when we can get most of the board here.

[3:06] And I was, you know, thinking September. April's not going to be here in

[3:10] September, so we will arrange a date when the board can be here.

[3:16] » Great. >> All right.

[3:19] Was that good enough? >> Um did you have a question?

[3:21] » Yes, I'm sorry. >> So

[3:24] we will not have the session unless all board members can be present. Is that

[3:29] is that your intent? >> That would be my intent to make sure

[3:32] that all the board members are present. >> Okay.

[3:35] » [clears throat] >> Just want to make sure that that's what

[3:37] we're going to go for and not change. >> Yes, ma'am.

[3:41] » And and they would not go out of order then?

[3:43] » No, that can't happen. They being the follow-up

[3:47] » The three planned workshops. >> staff communications workshop?

[3:51] » Uh all this all three all of the series. >> The series of three, yeah, would

[3:55] continue as a series of three. >> In that order.

[3:57] » Yeah. >> Okay.

[3:59] » [clears throat]

[4:07] » Is that good? >> I have no idea.

[4:10] I don't know what those dates are going to be.

[4:11] » Yeah, neither do we. Yeah, till we pull the board.

[4:15] Pick the dates.

[4:19] » I'm trying to be out of town on the 27th of August. [snorts]

[4:26] » As am I.

[4:29] » Okay. There you go.

[4:32] That's very helpful. Thanks.

[4:36] » I'm trying to be away. >> We will

[4:40] We will duly note it. As we move forward. Thanks so much.

[4:47] Any other announcements by board members?

[4:49] » [clears throat] >> How about announcements by staff?

[4:53] » No, thank you. >> All right.

[4:55] Are there any petitions or requests from the public?

[5:01] If there are any petitions or re- requests to speak,

[5:05] there's any individuals, please approach the podium, state your name, and

[5:08] organize your remarks in a permitted timeframe. We do have a speaker

[5:12] scheduled for a specific item on the consent

[5:14] agenda. This does not include that. All right.

[5:20] Are there any petitions and requests from board members?

[5:26] Hearing none, I actually have a petition to

[5:30] ask with the staff. And the petition would be um

[5:34] would be possible that the staff

[5:38] could sometime in a coming meeting um provide a briefing to the board on

[5:45] the approach and constraints of hiring consulting

[5:49] engineers to do the design projects that we [clears throat] do.

[5:54] » [snorts] >> And um

[5:56] And and I had a briefing on this from the executive group earlier this week

[6:01] and there's several different processes involved that um I think it would be

[6:05] good if we were just aware of them uh considering that uh

[6:10] you know, we do approve some construction

[6:12] contracts. Yes, Todd. >> I'll say that's uh something that the

[6:16] board's interested in, we can certainly get that scheduled.

[6:19] » All right. Can I have a show of hands from the board of everybody that would

[6:22] be interested in it?

[6:26] Good. Thank you very much.

[6:33] Are there any petitions and requests from staff?

[6:36] » Uh thank you. >> The board will move into the consent

[6:40] agenda and we have three items.

[6:44] I have to read them all and then we'll just have a brief conversation about one

[6:48] of them. Item number one in the consent agenda is

[6:52] looking for the approval of the minutes of the July 9th, 2026 meeting.

[6:57] » Wait, Michael, I'm sorry to interrupt, but I think that the appropriate method

[7:00] is to pull something if something's to be discussed um

[7:04] if we're going to have a presentation or discussion about it, we should just pull

[7:07] it from the consent agenda and move it in to a different category on the on the

[7:11] agenda. Um

[7:14] So, is there I'm assuming it's item number two under the consent agenda that

[7:18] perhaps we need to pull and move it? >> That was what I was going to suggest

[7:22] when I got to it just now. >> Okay. Well,

[7:25] then I'd like to make the motion that we pull item C2 from the consent agenda and

[7:31] move that into um

[7:36] discussion into under E for discussion.

[7:40] Uh would you think that that's the appropriate place to put it?

[7:45] » Um, I think that might be the appropriate place to put it and I was

[7:48] going to announce to the public that that was, um, item number two to the

[7:51] word of the galvanized service line replacement contract. And yes, um, I

[7:56] would suggest

[7:58] » it. >> You

[8:00] want to pull? >> Okay, so let's move it to make item C2

[8:04] becomes item E2. >> Second.

[8:07] » All in favor. >> All in favor. [laughter]

[8:09] » All right, yeah. >> Thank you, Susanna. Thank you for your

[8:11] time. Um, [clears throat] item number three is

[8:14] a resolution to adjust the board member compensation.

[8:19] And I'm going to note that we have one

[8:21] member of the public signed up to speak on the award for the galvanized service

[8:26] line replacement construction contract. That would be Mr. Woods.

[8:30] Um, Mr. Woods, please come to the podium.

[8:33] » Uh, may I suggest that that the appropriate time for that is where where

[8:37] it is now on the agenda at E2. That it's that that's then the

[8:42] appropriate time for us to talk about that.

[8:45] » Thank you. >> Starting.

[8:47] » No, it's all it's all good. I appreciate that.

[8:49] Thanks very much. Um, then I would ask, are there any

[8:53] public comments on the consent agenda?

[8:58] Are there any questions or comments or would a board member like to pull

[9:02] another item from the consent agenda? >> I have a question.

[9:05] » Yes, ma'am. >> Um, on item three, I just want to

[9:10] clarify, um, whether or not board attendance at the meeting is required

[9:15] each month in order to receive the compensation.

[9:20] » Could you all talk up a little louder? I I'm not hard of hearing, but with this

[9:24] environment it is difficult to hear. And I can't imagine anybody over there can

[9:29] hear. Can you? Hear what's going on?

[9:32] » let's not address the audience. >> I'm sorry.

[9:34] » It's okay. >> I'll ask for mic help if it's needed. Um

[9:38] Bob >> Well, that's part of what the board

[9:42] might might discuss and decide one way or the other. I think that the uh

[9:48] the idea behind the draft petition the resolution drafted is that the uh

[9:55] regular monthly stipend is for all the work that gets done including attendance

[10:00] to the meetings and including meetings that you cannot attend but that you've

[10:04] had to do the work for to get ready for as if you were.

[10:08] So, the idea behind the resolution was that you'd be paid

[10:12] uh the same monthly stipend

[10:15] » [cough] >> um

[10:15] » [clears throat] >> whether you attended a meeting or not.

[10:20] And it's drafted in such a way that it's quite easy to change if you want to make

[10:25] attendance required. So, that you only are only paid for those months in which

[10:29] you attend a meeting. That could be done but that's um

[10:34] uh the original intent of the resolution was to

[10:37] recognize that board members do a lot of work to get ready for meetings even the

[10:42] meetings that they're not able to attend.

[10:45] And so, the monthly stipend covers that work. The additional

[10:50] meeting stipend covers additional meetings after the first regular meeting

[10:55] of the month. >> [snorts]

[10:56] » Okay, so where it says as each is able to attend that means

[11:00] whether or not we actually attend. >> That's exactly what that means.

[11:04] » And then for the additional meetings, the attendance is required.

[11:08] » That's exactly what that means. >> Okay, thank you. I just wanted to

[11:10] clarify. >> Thanks for asking.

[11:14] » I move [clears throat] that we approve the items on the consent agenda.

[11:17] Items one and three on the [snorts] consent agenda.

[11:20] » Uh I'm sorry, I can't [clears throat] hear

[11:22] » I move that we approve the items on the consent agenda.

[11:26] » I second that. >> Thank you.

[11:30] All in favor, say aye. >> Aye.

[11:33] All opposed, say nay. Okay, cuz a motion was made by Susanna

[11:39] and seconded by Judy. Thank you very much for the

[11:44] So, the board now is going to move on to the action item agenda, which is number

[11:48] one. Resolution honoring Stephanie Glasgow's

[11:53] years of service. Todd Taylor's

[11:57] going to begin this item or provide providing some very brief remarks. Mr.

[12:02] Taylor.

[12:05] » Yeah, thank [snorts] you. Tonight, we do have the privilege [clears throat] of

[12:08] honoring Ms. Stephanie Glasgow, Owasso's director of human resources for 36 years

[12:14] of service. And that kind of milestone is rare these

[12:17] days when people change jobs like they change their clothes.

[12:21] But, those of us that have worked with Stephanie for all these years, we know

[12:25] her dedication and commitment to the work we do,

[12:28] the community we serve, and most importantly, to the people here that get

[12:31] it all done on every day. And retirement is a difficult decision

[12:36] for some people, and I I certainly know it was for Stephanie.

[12:40] Uh She's like an artist whose work is not

[12:43] just a product that she's producing, but that that may something that they

[12:48] poured a piece of themselves into. So, Owasso is part of her, and she is part

[12:54] of Owasso. And we have been so fortunate fortunate

[12:58] to witness a true master at work for these 36 years.

[13:02] Uh Stephanie has built a work environment at Owasso where employees

[13:05] feel like they belong, where they can be their best, and where

[13:09] they are truly cared about. She is a treasure beyond value, and will

[13:13] be missed very deeply by us all. As she transitions to the next phase of

[13:18] her life, we thank her for all she has done for us, and we wish her much peace

[13:23] and happiness in the future.

[13:26] » Thank you, Mr. Taylor. >> [applause]

[13:33] » Abe Curwen, our esteemed former direct executive

[13:37] director of the Wassa, has also requested to provide a brief statement.

[13:42] Thank you, Mr. Curwen. >> You bet. Good evening, board, and thank

[13:46] you for your service on the Wassa board. As you well know, it's a huge

[13:50] responsibility you you have. Um

[13:54] and thanks for those words by Stephanie Todd. Um

[13:57] you know, I join Wassa employees, past and present, and the board

[14:01] [clears throat] of directors in honoring and thanking Stephanie for her 36 years

[14:05] of dedicated and excellent service for our team.

[14:09] She actively and cheerfully embraced her responsibility to all 115 employees,

[14:15] regardless of their rank in the organization, to make sure they all were

[14:19] treated fairly, respectfully, as required in our HR policy.

[14:23] Stephanie always kept those focused on safety.

[14:27] Of her many attributes, I believe her genuine and unending care and support

[14:33] for our employees, who are our most important resource, is what made her so

[14:37] successful and appreciated by all her coworkers. And that was very evident

[14:44] today with the farewell party that the staff had for Stephanie. There were so

[14:49] many retirees like me, older, younger than me,

[14:53] um in addition to the current team. And and I know everybody really had a great

[14:57] time today. Um

[14:59] she worked very well independently and took the initiative to stay on top

[15:04] of and implement HR best practices, as very well documented in the

[15:09] resolution before you tonight. Um Stephanie's provided this and

[15:13] previous boards the information needed for the board to make informed decisions

[15:18] about competitive employee pay and benefits. And and we certainly thank you

[15:23] and prior board for that. True pleasure to work with Stephanie.

[15:28] Um and I enjoyed working with her closely

[15:32] for 24 of her 36 and 1/2 years of service, and I wish her and her family

[15:38] all the best in her well-earned retirement. I really appreciate the

[15:42] board taking this action to honor her. Thank

[15:45] you. >> Thank you, Mr. Board.

[15:47] » [applause]

[15:51] [applause] >> So, I will now read the resolution into

[15:55] the official record, followed by presenting a printed copy to

[16:00] Stephanie Glasgow in attendance.

[16:05] This is a resolution honoring the service of Stephanie S. Glasgow to the

[16:10] Orange Water and Sewer Authority in Carrboro, Chapel Hill, and the Orange

[16:14] County community. Whereas, Stephanie Glasgow has served

[16:20] faithfully and with unwavering dedication for more

[16:23] than 36 years at the Orange Water and Sewer Authority,

[16:28] {parentheses} OWASA, as human resources coordinator

[16:33] from January 1990 to August 22,

[16:38] then safety and training administrator from August 2002

[16:44] to May 2010, and lastly director of human resources

[16:50] from May 2010 until her retirement this August in 2026.

[16:55] Devoting her career to serving the employees of OWASA,

[16:59] the human resources and safety profession,

[17:02] and the people of the Carrboro, Chapel Hill,

[17:06] Orange County community. And

[17:10] whereas, throughout her career, Ms. Glasgow was committed to

[17:15] professional excellence by continually expanding her knowledge and expertise

[17:21] earning the Society for Human Resource Management {hyphen}

[17:26] Certified Professional the Department of Labor Management of

[17:32] Environmental Safety and Health and the Duke University Human Resource

[17:38] Management Certification and Master Project Manager MPM certification.

[17:47] Whereas throughout her career, Ms. Glasgow has committed to protecting the

[17:51] health and safety of the Wasson employees

[17:56] by leading and strengthening Wasson's comprehensive safety program.

[18:01] She championed a culture in which safety was a shared responsibility

[18:07] through employee safety committees comprehensive safety training

[18:13] voluntary OSHA audits the spill response team and through

[18:20] accident investigation. Her leadership extended beyond Wasson

[18:25] through her service as chair and vice chair

[18:28] of the Mid-State Safety Council she was recognized as Safety

[18:34] Professional of the Year and recipient

[18:37] of the Shine Belkham Award for her outstanding contributions

[18:42] to improving work space safety. And

[18:47] whereas Ms. Glasgow provided invaluable guidance to Wasson's

[18:51] leadership and the Board of Directors to help

[18:54] ensure that Wasson's compensation and benefits remain competitive

[19:01] she successfully led numerous classification

[19:04] compensation and benefits studies and championed

[19:08] employee focused benefits including

[19:13] maternity and paternity leave compassionate leave

[19:17] mentoring opportunities and other programs that strengthened

[19:22] employee well-being recruitment and retention.

[19:27] And whereas Ms. Glasgow was committed to

[19:31] fostering a workplace where every employee was treated with

[19:36] dignity, respect, and fairness. She played a pivotal role in developing

[19:42] Alwase's diversity equity inclusion and belonging program

[19:48] and promoted equitable employment practices.

[19:53] Encouraged diverse participation and perspectives in hiring

[19:58] and helped create a workplace where our employees feel welcome

[20:04] valued and supported.

[20:08] She strengthened Alwase's recruitment onboarding

[20:12] and retention practices through diverse interview panels

[20:17] structured onboarding and performance check-ins

[20:21] the new employee welcome team and professionally following up with the

[20:28] new hires throughout their first year of employment

[20:32] to help ensure their long-term success. And

[20:37] whereas knowing that strong organizations

[20:40] are built on meaningful relationships and a sense of belonging

[20:45] » [clears throat] >> Ms. Glasgow for fostered a culture of

[20:48] appreciation connection

[20:51] and engagement by establishing the employee human resources team

[20:57] which meets monthly to share information and identify opportunities to strengthen

[21:05] the workplace culture. She also arranged highly successful

[21:10] employee engagement events, including employee appreciation day,

[21:15] service awards, holiday gatherings, and countless other

[21:19] opportunities that brought employees together

[21:23] and strengthened the morale and culture of Owosso.

[21:28] And whereas throughout her career, Ms.

[21:31] Glasgow never lost sight of the fact that an organization's

[21:36] greatest strength is its people. She was a trusted advisor,

[21:42] thoughtful listener, mentor, and advocate who approached every

[21:47] employee with kindness, respect,

[21:51] compassion, and integrity. Whether welcoming a new employee

[21:58] or helping someone navigate a difficult situation or

[22:03] celebrating an important milestone, she made people feel valued,

[22:07] supported, and genuinely cared for. And

[22:12] whereas through her leadership, compassion, professionalism,

[22:17] and unwavering commitment, Ms. Glasgow has earned the admiration and respect of

[22:23] her colleagues. Her influence extends far beyond

[22:27] policies and programs. It lives in the people she has mentored,

[22:34] the careers she has helped shape, and the workplace culture she helped create

[22:38] and nurture. She leaves behind an enduring legacy

[22:43] of compassion, respect, and service to Owosso and the community

[22:49] as she retires from Owosso on August 19th, 2026.

[22:56] Now, therefore, be it resolved by the Orange Water and

[23:00] Sewer Authority Board of Directors that the Board of Directors of the

[23:06] Orange Water and Sewer Authority, OWASA, hereby honors and expresses

[23:12] its sincere appreciation for the distinguished public service

[23:15] of Stephanie S. Glasgow to OWASA and the people of Carrboro, Chapel Hill,

[23:20] and Orange County. And the Board of Directors congratulates

[23:25] Ms. Glasgow on her extraordinary career

[23:29] and extends our best wishes for a long, healthy, and fulfilling retirement.

[23:35] Adopted and presented on this 13th day of August, 2026.

[23:40] May I have a motion and a second to adopt Stephanie Glasgow's resolution?

[23:45] » I. >> Second.

[23:47] » Great. We have a motion by Pedro and a second by Karen. All in favor, say I.

[23:52] » I. >> I.

[23:54] » Opposed? You're of course we're not going to hear any.

[23:57] The motion passes with

[24:00] seven affirmative votes. I think three six, seven.

[24:07] Thanks.

[24:10] » [applause]

[24:16] [applause]

[24:24] [applause]

[24:27] » Can I go again? >> Okay.

[24:29] » [laughter]

[24:40] [applause]

[24:48] » Very nice.

[24:52] » [clears throat] >> Mr. Chair, could I make a um suggestion

[24:57] or a change to my suggestion about moving the um

[25:01] uh the item from the consent agenda that perhaps we have it as the first item

[25:07] under discussion rather than the second so

[25:11] that uh since we have a guest to

[25:14] » Yeah. >> who'd like to comment so that he doesn't

[25:16] have to so we don't feel rushed during our

[25:18] discussion of item E1.

[25:22] » We have the guest speak first. >> Oh, yeah. I'm reversing.

[25:26] » Yes, that's what I'm suggesting. >> Great

[25:29] suggestion. So, we're going to now take on the item that was on the

[25:34] consent agenda. Am I correct?

[25:37] » Yes. Yes, that's what I'm suggesting just to spare him our um our discussion

[25:43] later and also so that we don't feel rushed to get to him.

[25:47] » [clears throat] >> Thank you.

[25:47] » You're welcome. I apologize for not having that foresight before.

[25:51] » It's all good. So, we're now going to move on to

[25:55] discussing and taking action on agenda item on the

[26:01] consent agenda item that we moved to now.

[26:03] And Mr. Woods

[26:06] » Might I suggest Mr. Chair, might I suggest that Steve

[26:10] Bailey maybe come up and explain >> Better yet.

[26:14] » project to the board and give you all some context.

[26:17] » Thank you. >> public comment.

[26:19] » Of course. >> Thank you.

[26:20] » Um then we're going to have Steven Bailey come and explain the

[26:23] background to the project. Yes.

[26:26] » Nothing. Nothing.

[26:29] » Okay. Good evening, board. I'm Steve Bailey, capital projects manager.

[26:34] Tonight, we're requesting approval for contract award for the galvanized

[26:38] service replacement program. Um I believe the last time I was before

[26:42] you for this project was back in January when we described the

[26:46] lead and copper rule program as well as the GRR galvanized requiring replacement

[26:50] project that we were planning to proceed with.

[26:53] Um since that time, the contract documents have been completed and we bid

[26:57] the project. Um at the initial bid date, we did not receive three bids that were

[27:02] required to open at the initial bid opening. So, we had to re-advertise. On

[27:07] the second bid opening on January on June 23rd, two bids were received and

[27:11] opened. Following that opening, we followed our

[27:14] normal procedure of reviewing the bids. On the initial review, we did see that

[27:19] the apparent low bid by BBUDC Incorporated was less than half of the

[27:25] engineer's estimate for the project. That raised some concerns about whether

[27:29] the bid adequately accounted for all of the work including replacements,

[27:34] restoration, and coordination with property owners, Owassa, and the towns.

[27:39] And if you remember, this project is the replacement of the galvanized services

[27:45] from the water meters to the residents and connecting either under the house or

[27:49] just outside the house, but most of them will be done actually under the

[27:52] residents. So, all of this work is going to be taking place on Most of it's going

[27:57] to be on private property. There'll be some work in the public right-of-way at

[28:00] the connection point at the meters, but it's going to require coordination with

[28:04] each of those individual property owners to schedule the work

[28:08] and determine the location for the line of the replacement and working through

[28:12] those issues on each individual property.

[28:15] Um During our review, BBUDC had not

[28:19] performed a CIP project for us in the past. So, we did not have direct

[28:23] knowledge knowledge of the company's capabilities or job performance.

[28:27] So, in order to gain some knowledge about the company, we reached out to

[28:31] Owassa staff to see if they had worked with them. Our distribution and

[28:35] collection staff did recall working with them on a couple of projects and that

[28:39] there had been some issues on those projects including other utilities or

[28:43] our utilities being hit. They also let us know that one of those

[28:47] recent projects, uh the town of Chapel Hill, had some issues.

[28:51] So, I reached out to town staff to discuss the project with them. Um they

[28:56] let us know that there were some issues there, including

[28:59] what from what they told me, work beginning before the town was notified

[29:04] that they were working within the right of way.

[29:06] They also, after the project had started, they worked with them to

[29:09] continue it, trying to finish it, but that they had notified the contractor

[29:13] and asked them to let them know when they were going to do the backfill in

[29:16] the right of way so that they could observe the work being done there. That

[29:20] did not happen, um and it was done without the town's

[29:23] notice. And then since then they say that the

[29:26] pavement repair in that area has failed in the road, and they've had to try and

[29:30] work with the contractor to get it repaired, and they've not been

[29:34] successful with that, and the communication has been difficult.

[29:38] The galvanized service replacement project is unique for OWASA because it's

[29:41] requiring this work on private property and within homes, and will require

[29:46] require a great deal of communication with the property owners, tenants, as

[29:50] well as OWASA and the towns. Being that the bid was less than the

[29:54] half the engineer's estimate and the references that we received, we

[29:57] determined that the bid was non-responsible.

[30:00] We want this project to be successful for everyone, and we do not believe that

[30:04] accepting the bid will be by BBUDC will be in the best interest of OWASA.

[30:11] For those reasons, we're recommending that the bid be awarded to Stonewall

[30:14] Construction. And I'll be glad to answer any questions

[30:17] after the public comment.

[30:21] » Thank you, Mr. Bailey. >> [clears throat]

[30:23] » So, um as uh the some of the board members know, I printed out a a list of

[30:28] the protocol that the chair should follow, and uh and I did that for my own

[30:32] benefit, um because occasionally I have a hard time uh keeping us on track. Um

[30:39] and so, you know, theoretically some clarifying questions would come now, but

[30:43] I think Mr. Bailey, we're going to go ahead and uh with a comment from our

[30:47] citizen. So, please uh Mr. Woods, come on up.

[30:59] » Good afternoon, Mr. Chair, board members.

[31:02] I appreciate your time and I will try to be brief.

[31:07] Uh my name is Isaac Woods. I'm the chief executive officer for B Buxey. Some

[31:11] people spell it out B B U D C. We've been

[31:15] contractors. I've been doing this over 30 years.

[31:18] Um we're licensed.

[31:21] Uh we submitted the bid as he stated. The part that concerns me is the false

[31:26] information that he just mentioned to you.

[31:30] And I outlined that in my letter to Mr. uh

[31:35] Bailey. And I'm going to just be brief.

[31:40] First, we were the lowest bidder. B Buxey is the lowest responsible and

[31:46] and responsive bidder. There is mathematical errors in the in

[31:50] the engineer estimate. B Buxey bid was 24% of the engineer

[31:56] estimate, not 54 as falsely stated in your report.

[32:02] The The Stonewall bid

[32:06] is 1.2 million. B Buxey bid was 140,000. The engineer

[32:11] estimate is 977,000. So, I'm not going to go through the

[32:16] fifth grade math. You can do the math. The The

[32:20] summary also states the engineer estimate was 1. 1,602,000

[32:25] and some change. Well, if you do the big tab and do the

[32:28] math, it comes out to be 977,077.

[32:34] So, false information, you can't make a good decision on false information.

[32:40] And we we're not going to go mathematics cuz a fifth grader can figure this out.

[32:45] Now, let me get to these false accusations

[32:49] Mr. Bailey just made and what he put in his letter.

[32:52] Uh First of all,

[32:56] we work with OWASA. As any problems,

[33:01] we resolved it. We didn't like the results, but

[33:06] underground utilities is something you can't see.

[33:11] You expect OWASA and any other utility company to locate

[33:14] them. When they don't locate them, it's documented.

[33:18] Then you have a problem. You lines may be

[33:23] hit, but the point happens is what did you do to correct the damage?

[33:27] What he didn't tell you, if you look at our supported documentation, is

[33:32] everything was corrected. We paid for things that we didn't think we need to

[33:36] pay for. But for 30 years, you want to give me four items.

[33:40] You want to talk about four items over 30-year period.

[33:44] And and let me just be clear.

[33:46] He states he talks to people with Town of Chapel Hill as shown

[33:52] in in the documents that I supported. Town of Chapel Hill, you got the built

[33:56] you got the traffic control plan, you got the permit, it was paid. Who he

[34:00] talked to, we've been trying to figure out who all these people he got this

[34:03] information from. I asked for names, addresses because when I talked to Town

[34:07] of Chapel Hill, they don't know what the heck he Mr.

[34:10] Bailey's talking about. And so I like the math.

[34:13] They're all making it all up. The same thing applies with the work we

[34:18] did in OWASA. When you drive down, let me just clear this up. When you go down

[34:22] Cameron Avenue today, you won't see no at 506, the road's been

[34:27] paved. There's no deal There's no problems. There's no written notice from

[34:31] Town of Chapel Hill saying B Boxley you did defective work. That's what you

[34:35] don't have. All you have is some false accusations written up by engineering

[34:39] and staff member for some odd reasons to deny

[34:45] equal access on a bidding contract with a lower price.

[34:49] In other words, they're telling you to pay somebody $500,000 more

[34:54] to do the work than the person that had the lowest bid

[34:58] and is qualified.

[35:01] His his his accusations are lacking names, notices, or anything.

[35:09] And And the >> [bell]

[35:11] » And to sum up this is on one

[35:15] we did like 40 sewer taps, Rogers Road. I mean, we all the way back from 2020.

[35:23] I mean, yeah,

[35:25] he he filed his statement damaged waterline. Yeah, waterline was damaged,

[35:28] wasn't marked. Well, Orange County, if you look in the documentation that I

[35:32] provided, they gave us a change order that said it

[35:35] wasn't marked and confirm it and paid us like you're supposed to do. It's actual

[35:39] work. Now,

[35:42] what concerns me is

[35:45] is the first lovely town of Chapel Hill and Carrboro and Orange County.

[35:52] Your diverse staff that I work with in the field

[35:55] said they have made no comments in regards to defective work on B Boxley.

[36:01] What you don't have is is I asked Mr. Bailey

[36:05] and the engineers, "Who are you talking to so I can approach them? Where are

[36:10] they names? Where are the written notices that they gave B Boxley that the

[36:14] work was defective or substantial? Where is that documentation at?"

[36:18] Without that, what you have is a bunch of hearsay. What you have in the

[36:23] paperwork before you is you have documentation.

[36:26] I can give you email change from Q and A to Chapel Hill town.

[36:31] I gave you a permit which contradict like he said, we didn't

[36:34] even give a permit. Now, we have the same thing with Orange

[36:39] County. I gave you where they wrote up the change order. I ask that you reject

[36:44] this offer to Stonewall who I don't know.

[36:47] You need to make decision on correct, accurate information.

[36:52] Not false information that they normally falsified for some odd

[36:58] reason. And I appreciate your time. And if you have any questions, I'll be glad

[37:02] to answer them. >> Mr. Wood, let me just say on behalf of

[37:05] the board, thank you for coming forward and and what you have said. And the

[37:10] board is going to have some questions of Mr. Bailey,

[37:13] maybe you, and then we'll have a discussion after that. But thank you.

[37:17] » Thank you. >> All right.

[37:20] Well, this is the section where I'd like for the board to ask clarifying

[37:23] questions. And we might start with Mr. Bailey.

[37:28] Would be my suggestion.

[37:33] And of course, I'll call on any board member that

[37:36] has a question to ask. Yes.

[37:39] » Uh a few I have a few questions if I may.

[37:42] » A few questions are okay. >> Okay. Uh

[37:45] Mr. Bailey, Steve. >> Yes, ma'am.

[37:47] » Um Have we ever worked with the alternate,

[37:52] the $1.2 million bidder? >> Yes, ma'am.

[37:55] » Uh have we been successful with them? >> Yes, ma'am.

[37:59] » Um have they always been uh the lowest or highest uh how many times would you

[38:04] say we've worked with them? >> Um

[38:10] The one project they just completed at the waste at the water plant for us.

[38:15] Uh I'm trying to think of another. They bid several projects for us. They have

[38:18] not been the lowest price on all projects. Um I don't have an exact

[38:23] number for how many they've done, but they they actually did a couple of

[38:26] projects for us during the recovery from Hurricane

[38:30] Chantal or from Tropical Storm Chantal as well.

[38:33] » So, you're familiar with working with them and you're satisfied with the work

[38:37] they performed. >> Yes, ma'am.

[38:38] » What do you think is the disparity between the the bid of the of

[38:44] Mr. Woods' company and the this other company?

[38:48] » That I don't I would hate to hazard a guess I

[38:51] guess about that. >> That's a lot of money, half a million

[38:54] dollars. >> I do want to clear up one thing about

[38:56] the estimate. The number that Mr. Woods quoted from the bid tabulation,

[39:01] those two columns on the right far the right-hand side are not the engineers'

[39:05] estimate. They're the average of the two bids that were received. We never

[39:10] published the engineers' estimate. Typically, when

[39:14] we're bidding a project, we don't publish the engineers' estimate unless

[39:18] it's asked during the bidding process. And I went back and reviewed the addenda

[39:22] and we never that question was not asked, so we did not publish the

[39:26] estimate. But back in our January presentation to the board for the

[39:30] project, we had the estimate of 1.6 million dollars in the presentation as

[39:34] well as the board agenda packet. >> Why do you think there were only two

[39:39] bids on this particular project? >> It's a unique project

[39:45] because it is something that typically a plumber would do. Doing a service line

[39:51] like this, you actually have to be a plumber to be able to pull the permit

[39:54] and do it. But with the number of locations we're

[39:58] doing, it's not the type of work that a typical that a plumbing contractor

[40:02] typically bids. I think the number of sites that are

[40:07] involved discourage Well, I know it discouraged

[40:10] one contractor. We had another general contractor that has done work in the

[40:14] past for Owassa was interested in the project and asked a lot of questions,

[40:19] but they ended up not bidding it and the feedback they gave me was that their

[40:23] insurance company was not comfortable with them bidding the project and being

[40:28] on that many different properties. >> How um

[40:32] how long is the duration of the services that are to be provided? Your best

[40:37] estimate. Is it 1 week, 6 weeks, 6 months?

[40:41] » Uh for each replacement or the total >> total the entire project.

[40:45] » Uh I think we provided 310 days

[40:51] uh for the work to get done because there's

[40:54] we're estimating up to 90 sites if we get everybody

[40:57] » 90 sites? >> to agree to let us do it. So, yes.

[41:00] » Which takes two or three days per site perhaps?

[41:02] » Yes. And and part of that is the coordination of trying to get it

[41:06] scheduled and work out all the details. >> Uh Mr. Woods uh indicated that you he

[41:13] didn't know who you had spoken to at the town of Chapel Hill. Can Can you en-

[41:19] enlighten us, please? >> They have told me that we can use their

[41:23] names. I don't know if um it's uh Jason Staley, Greg Ling, and Michael

[41:29] Wright. >> And what are their roles at the town of

[41:32] Chapel Hill? >> Public Works Department

[41:34] uh within the Streets Department. >> And so, they weren't happy with the

[41:38] results. They wouldn't recommend is what your

[41:42] analysis is. So, how do we

[41:47] uh the disparity of a half a million dollars is significant given the cost of

[41:51] the project. >> Yes.

[41:52] » Is there a way to um if you How long you've How long have you

[41:58] been at WSACC? >> Um

[42:01] Less than a year and a half. About 17 months.

[42:04] » Okay. Um so, you're familiar with all the

[42:07] operations and you have excellent management to oversee and discuss with

[42:11] you all these issues. Um

[42:16] Your concern is that you will have problems. My concern is is there any way

[42:21] with the higher bidder that we can negotiate for a lower price?

[42:28] » I >> All right, Mr.

[42:31] » Yes, sir. >> think that's allowable in the bidding

[42:33] process. >> Okay. Okay.

[42:35] I got you. Okay. >> Yeah, and uh let me let me go around the

[42:38] table. >> Okay, I just wanted to

[42:41] get something clear cuz I'm totally unfamiliar with

[42:44] Thank you. >> Thank you for asking them.

[42:46] Um now I see Todd and Elmira. Elmira, please.

[42:51] » I have a couple of questions. >> Yes, ma'am.

[42:53] » First one is um do you investigate all of the

[42:57] contractors in the same way that you did B Budsy

[43:02] in terms of the quality? Do you go looking to see, check references?

[43:07] » We do if we're not familiar with their work personally. And I think that's the

[43:11] difference here is that with Stonewall, they have performed work for us in the

[43:15] past. So, we're familiar with their work.

[43:18] » Next question. Is there as a public utility, are we

[43:23] required to go with the lowest bidder? Why do you have a lowest bidder process

[43:29] and are required to get three bids? >> The The general

[43:32] The general statute states that we're required to award the contract to the

[43:37] lowest responsive responsible bidder.

[43:42] And so, the responsive part is did they complete all of the paperwork

[43:47] appropriately and are they licensed? The responsible part it gets to

[43:53] are they capable of performing the project in

[43:58] your best estimation? Um and it's in I think there's language there about

[44:03] making the award that's in the best interest of the agency that's providing

[44:07] it. And so, that's why we our determination was that they were

[44:11] non-responsible based on references and their price.

[44:15] » And have you ever had that type of response? Has anybody ever done a

[44:20] perfect project? >> [laughter]

[44:23] » Probably not. >> Okay, so I'm I'm just wondering why that

[44:26] one the this one was particularly um

[44:32] troubling. >> Based on the reviews and the references

[44:35] that we had, we do not think that it'll be a successful project. That with the

[44:41] amount of property owners that we'll have to coordinate with and the amount

[44:45] of places the different properties we'll have to work um

[44:48] cuz they there's going to be unknown utilities on these individual

[44:53] properties. The further out of the right-of-way you get and the smaller the

[44:56] utility lines are, the harder they are to locate.

[45:00] Each one of these houses a lot of these houses will probably you know they'll

[45:03] have an electrical line. It may be underground or maybe overhead. They'll

[45:06] have a water service. There'll be a gas line, probably potentially cable or

[45:11] internet. There's a lot of different things we'll have to work around and

[45:16] the history that I have from the references I've got is that um they're I

[45:21] would expect a lot of utility hits and that's just more impacts for our

[45:25] customers when we're on their properties.

[45:27] » Okay, just from experience so the utilities come out and mark the lines. I

[45:31] mean even the cable people come out and mark all the lines before they come in

[45:35] and even put in Google you get three or four different lines. So,

[45:39] why would that be trouble for a contractor rather than for a homeowner?

[45:43] Are you thinking that the homeowners aren't going to cooperate? But that's

[45:46] not >> Um well, we we don't know yet if all the

[45:50] homeowners will cooperate with us or not. Um we're still working on that

[45:53] getting their permission to be on the properties to be able to do these.

[45:57] Um as far as utilities that say like a irrigation line. If somebody has

[46:01] irrigation in their yard, that's not a public utility that somebody marks. So,

[46:06] it's up to the homeowners to do it or either the contractor has to kind of

[46:09] look and figure out what it is and where it is.

[46:12] But, that's that's my concern is is working on the all these different areas

[46:17] with each individual property owner. If we're going to have issue a lot of

[46:21] issues and it's difficult to get those resolved, it's going to take a lot of

[46:25] our staff time and it's going to it it's not going to be a positive situation for

[46:30] our customers. >> Okay, so I want to go right back to back

[46:33] to the question I asked about the lowest bidder.

[46:35] » Mhm. >> So, it's a hearsay thing really about

[46:38] whether or not you think they can do the work

[46:41] at the price that they quoted. And if they can't do it at the price

[46:45] that they quoted and they quoted you the price, but they're going to do it at

[46:48] that price, why is that a problem? >> Well, if the problem is

[46:54] in my experience, if a contractor has underbid a project, then they'll either

[46:59] look to cut corners to get it done as cheaply as possible or there'll be

[47:04] issues with change orders coming in trying to add cost to it.

[47:09] And there's things we we don't want this to be a project where

[47:13] maybe the line is done, but it's not restored the way we want it, the way the

[47:17] property owner wants it. It's just it's it'll take a lot of it's

[47:21] it's much more effort from both the

[47:23] homeowners and from Owasso staff to make sure the project is completed

[47:26] appropriately. >> Okay, so if what a person that overbid

[47:30] and is overcharging you is not a problem.

[47:33] » I don't I don't know that and they're the the second bid was also below the

[47:37] engineer's estimate. >> Okay, thank you. Let's go to Todd.

[47:41] » Yeah, I think one thing that would have been helpful in this is to have that um

[47:46] actual engineer's estimate like right up front. Um so, the other bid is 25% under

[47:54] uh the engineer's estimate. So, and mean, was kind of responding to you like

[47:59] it's it's already lower than the the engineer's estimate.

[48:02] » Yeah, I I my my reaction is I look at this and

[48:07] how often do you have bids that are less than half of the engineer's estimate?

[48:16] » Not not too often. It it it may happen occasionally. You

[48:20] usually we have the other problem is that they're coming higher than the

[48:23] engineer's estimate. >> So, that I I remember when we first

[48:26] started talking about this project um I think it was the estimate was

[48:34] around this is going to cost probably $10,000 a property minimum. So, I do I

[48:39] do the math on um

[48:43] the DEDC's bid and it's like $8,000 a property um something like that. So,

[48:50] yeah, I I I'm very confused as to how that could actually

[48:54] work at that price.

[48:58] That's that's the perspective I have. >> Cool. Any other questions before we move

[49:02] into comments and board discussion?

[49:08] Pedro. >> Yes. Um

[49:11] I would like to know if when you spoke Mr. Bailey, when you spoke with the town

[49:17] of Chapel Hill, did they provide documentation or or was it verbally it

[49:22] was coming verbally? >> Yes, sir.

[49:25] » Okay. Um so, did were you or were you supposed

[49:30] to contact Mr. Woods, is that the last name?

[49:35] to conform or or or see or if the information that it was given to you was

[49:41] accurate or did you try to clarify that with them with the

[49:45] company or him? >> No, I did not contact Mr. Woods with

[49:49] those specifics. Um that was in initial conversations. It's somewhat

[49:54] confidential with the town staff and getting their opinions on those. Um, and

[50:00] so no, but I did not request documentation from them or email chains.

[50:04] Um, there are partners that we work with. Um, but it's also based off of our

[50:08] own staff's um,

[50:11] observations from in the field as well. >> So, you also had people from the inside

[50:17] of Wasatch that provided >> Yes.

[50:20] » information. >> Yes.

[50:21] » That lead you to believe that? >> Yes.

[50:27] » Um, >> I would

[50:28] » Go ahead. >> Wouldn't you think that it was

[50:31] probably important to see more documentation from the town?

[50:37] » It's I'm A lot of times it's not the town I'm not

[50:41] sure what documentation they may have some email chains.

[50:45] But they're not typically grading the contractors like putting together a

[50:49] reference material. Typically is not I mean, I don't even think we do that

[50:54] typically now. Great at so it's it's sometimes there's not a tremendous

[50:58] amount of documentation on that. >> The the the next question that I have if

[51:05] we have a situation like this is there a was it proper for the board

[51:10] to know or have some discussion about this

[51:14] uh, items or the before we we uh,

[51:18] do a contract with that another company. Would it be proper to

[51:25] talk to the board before in a situation like this to

[51:30] » Let me answer the question before >> Okay.

[51:32] » for the board staff. No, that's not the process that we have followed previously

[51:38] or or necessarily would make sense to follow at this point because of the

[51:43] bidding process that we go through with the sealed bids being delivered being

[51:47] opened and then they're analyzed by the staff. So, just just the way the

[51:50] protocol works. This is the This is the moment when we have to make a decision.

[51:55] » Okay. >> Yes, ma'am.

[51:57] » My concern, following up with what he was saying, is influencing the decision

[52:01] process is is important for us to know if others outside of Owosso are

[52:06] influencing the decision process on who gets the award.

[52:10] » And I'm not going to disagree with you. I was just going to suggest

[52:12] » Cuz that seems to be what happened here. >> We move that to the discussion section.

[52:15] » Oh, okay. Well, I thought we were talking.

[52:17] » I'm with you. >> [laughter]

[52:19] » Um this is still questions central to the um proposal. Judy.

[52:24] » Thank you for the clarification. Um that was going to be my next question. Is

[52:29] what was the uh um engineer's estimate? And the second bidder, Stonewall, is it?

[52:35] » Yes. >> Uh is is still below is 25% below.

[52:38] » Yes, ma'am. >> Okay. So,

[52:41] I believe that you've done your due diligence. I

[52:45] believe that's your role, and you've done what you're supposed to do to to

[52:48] verify and validate who we're going to select. So,

[52:53] um I and and you have worked with this this

[52:56] the other bidder, the higher bidder, and it's still below. So, I think our role

[53:01] is to >> Is this still a public discussion?

[53:03] » What's that? >> Is that a question?

[53:04] » I'm going to ask a question. >> Okay.

[53:06] » Somewhere in there. >> [laughter]

[53:09] » Okay. Your Honor, I I will get there.

[53:13] Okay. Um

[53:16] So, I thank you for doing your due diligence. This is very difficult for

[53:20] you to come before us and to present this because there's a conflict. Um I

[53:26] I'm respectful of your role and the due diligence you've done. I think you've

[53:30] verified, and so given I think that we have to go with your I'm going to be in

[53:35] favor of your suggestion. And my question is

[53:40] » I'm waiting. >> Okay. Because I can't ask if you can

[53:42] negotiate it. Do you feel that their bid they can

[53:46] deliver on the higher bidder can deliver at the

[53:50] rate without coming back with change orders? I got there.

[53:54] » Yes, ma'am. >> Okay.

[53:57] Thank you. >> Thank you for your questions.

[54:01] » Mr. Chair, I think Mr. Karen's light is on.

[54:05] » You can go first if you want. >> I want to know if change orders are

[54:09] allowed in a contract. And if it is, why is there a problem

[54:13] with that? If it's not, it should be specified in

[54:17] the contract and there should not be any work orders change of work orders. So,

[54:23] is it allowed? >> Yes, but they have to have First of all,

[54:27] you have to enter into a contract. What you're doing tonight is approving

[54:32] entering into the contract. Then the work has to begin. In the course of the

[54:37] work, sometimes unanticipated circumstances

[54:42] or conditions are encountered that require work that was not specified

[54:47] or additional work than that specified in the contract. When that happens, the

[54:52] contractor notifies the project owner and says, "Look, we have found

[54:57] this. It's going to require extra work. Our calculation is we'd be entitled to

[55:02] this much extra compensation." And there's a negotiation about what pay for

[55:07] that change order bid. There's only a change order because

[55:11] there's discovered along way a change of

[55:14] circumstance. It's

[55:16] You shouldn't uh

[55:19] I don't I hope you will not conclude from what you've heard so far tonight

[55:23] that a change order is something that is anticipated from the time you sign the

[55:29] contract. It is not. Your Your duty tonight as the board is

[55:34] to determine whether or not the board's recommendation

[55:38] is appropriate and if so, then to approve the execution of the contract.

[55:43] Uh the board has determined that the has has made a recommendation to you

[55:50] about the lowest responsive responsible bidder.

[55:56] Responsive and responsible are judgments ordinarily made in the professional

[56:01] judgment of the staff of the engineering department. It's usually done in

[56:06] accordance with the uh the recommendation of the project

[56:12] engineer, that is the consulting engineer.

[56:15] And [clears throat] uh one of the things I've been listening to hear is for you

[56:18] to be told uh what the project engineer's recommendation was in this

[56:22] case. >> If there's a follow-up to Peter, can we

[56:25] save that for discussion? >> Of course.

[56:27] » Sorry that I went on and on. >> No, it's

[56:29] » Thank you. Thank you both. >> Um I had a question, I think, going back

[56:33] to what Todd had mentioned earlier. Is there anything after the bids are opened

[56:37] to prevent you from publishing the engineer's estimate?

[56:41] » You know, no, there's not. I don't think so.

[56:44] » Okay, and in a situation where there is negative feedback about a contractor, is

[56:50] is there any reason we can't provide that feedback before it's made public in

[56:56] material such as these? It might affect reputation moving forward.

[57:01] » Um as far as the providing the engineer's estimate to

[57:05] » And and feedback on what areas of underperformance you are worried about?

[57:12] » Um we could we could have more discussions with the contractor with

[57:16] that. >> Okay, those are my questions.

[57:19] » Cool. Should we go to the door?

[57:22] » Yeah, I mean, again, I don't know when the opportunity if we want to dig into

[57:26] this, but as I'm looking at the two bids,

[57:29] um the origin

[57:32] » Is that a question? Oh, this is a question.

[57:34] So like how much does a pitcher filter and replacement cartridges cost?

[57:41] » Um >> Cuz one of them says it's $145 and the

[57:45] other says it's a thousand and there's a hundred of those. So that's the

[57:49] difference of a hundred thousand dollars versus fifteen thousand dollars. And you

[57:53] see a lot of these. So I guess I'm

[57:56] it seems like you know

[58:00] I I don't know how much they cost.

[58:03] » [laughter] >> I don't I don't know the answer to that

[58:06] exactly what they cost. Um but I do know that probably the bigger more than the

[58:11] cost of the material is probably the labor if we're providing those.

[58:17] » [clears throat] >> I think there was a certain time frame

[58:18] where we had to provide them the length of time.

[58:22] » So I mean a lot of these you know it's it's valves or

[58:27] there's one line access not provided. Okay.

[58:30] » [snorts] >> Do you know access not provided?

[58:33] » That is if we schedule the way I remember the contract being written that

[58:37] if we if a homeowner has agreed to allow a replacement to happen

[58:43] it gets scheduled and then when the contractor

[58:46] [clears throat] shows up to do the work the homeowner either no shows or then

[58:51] changes their mind and say nope you can't do it. It's it's somewhat like a

[58:54] scheduling fee but it's basically a way of

[58:57] trying to build we tried to build some line items in here to take out some of

[59:02] the unknowns for the contractor if things changed if we could because some

[59:06] of a lot of the some of the access is outside of a

[59:09] Wasa's control.

[59:15] » Mr. Bender are you good? >> Uh yeah.

[59:21] » Any other further qualifying questions before we

[59:25] We'll on? See if we can get public comment and

[59:29] engage in a board discussion. Seeing none.

[59:33] Any further comments from the public? Seeing none, we're now going to close

[59:39] that period and enter into board discussion.

[59:45] And I got to look at my notes.

[59:49] We're going to go around the table and I'll recognize members as we can. If

[59:54] there is a follow-up questions, perhaps we'll ask the chair to um

[1:00:00] uh the chair will ask somebody to come back to answer it. So, let's open up for

[1:00:04] discussion.

[1:00:07] Anybody want to go first?

[1:00:10] » I

[1:00:12] I'm looking at the process that it was being done when they were investigating

[1:00:17] Mr. Woods. I do not agree that

[1:00:22] the best procedure was being done because

[1:00:26] one, they did not ask the town of Chaparral for documents.

[1:00:31] So, I don't think that that should be done

[1:00:36] that way. I think it should be more um

[1:00:39] investigated. Uh in my opinion because um

[1:00:45] it was taken their word uh

[1:00:49] to to null

[1:00:52] a contract. And um

[1:00:57] even though there was some some uh comments from the inside of

[1:01:02] WASA, I think the exterior uh comments were not being supported. I

[1:01:07] don't know if what uh documents we have from the

[1:01:11] interior from inside of WASA,

[1:01:14] but from the outside, I think it wasn't done properly and I

[1:01:20] I I wouldn't recommend to follow up this the same procedure for the for the

[1:01:26] future. I think we need to do more investigation when we award a contract.

[1:01:33] » Thank you, Pedro. Can I move on to Mr. Bender?

[1:01:35] » What level of evidence? What what's >> Documentation, pictures, documents that

[1:01:40] proves that the person that is submitting their bid is not qualified

[1:01:45] and and the reasons why because if the if the town is saying that they

[1:01:50] he didn't fulfill his word, then they should have documents. And if

[1:01:55] they don't have documents, I think it should not be allowed to

[1:02:00] to proceed those comments if they wouldn't support it.

[1:02:04] » So, there's one the pavement repair of the sex evasion is since failed and

[1:02:10] today town staff has not been successful at getting uh the repair

[1:02:15] to repair the the failed pave pavement to the town's requirements. It seems

[1:02:20] like that should be something that's >> It should be documented and it should be

[1:02:26] some proofs that whatever the town says is true.

[1:02:31] For for us to to adopt it, their testimony it should be documented.

[1:02:38] » Okay. I think we understand that position,

[1:02:41] yes, Tony. >> So, I mean regardless of any of the past

[1:02:45] performance, um

[1:02:50] You know, you you try to get something repaired and

[1:02:53] somebody gives you a bid for half of what you say you know it's going

[1:02:59] to cost. >> Or expect.

[1:03:01] » Is it half? >> It's less than half. It's 46% of the

[1:03:07] engineer's estimate. So, I I'm coming at this from how could

[1:03:13] this possibly be? We're seeing order of magnitude difference in

[1:03:19] estimates. And again, this is rolling together

[1:03:21] labor and actual materials, but you know, one person is saying this is going

[1:03:27] to be you know, this is a $1,600 valve and the other is saying this is $250.

[1:03:33] So, >> Um

[1:03:36] » Who's inflated? >> Which line is it?

[1:03:39] » Uh this is line G pressure pressure reducing valve, for example.

[1:03:44] » Can I I >> Can I go to uh Elmira? Did you have a

[1:03:48] comment? >> Just [snorts] a simple uh I guess uh

[1:03:52] comment about how you evaluate >> [snorts]

[1:03:57] » the quality of the proposal and not investigating the other people

[1:04:01] cuz you just give them a pass because you know them.

[1:04:04] » Mhm. >> Is inappropriate when it comes to

[1:04:06] comparing uh bids on a project. You look at the

[1:04:10] project for what it's worth. The people are qualified to do the work and

[1:04:13] everybody's qualified to look at what they offer. Rather than unless you were

[1:04:18] going to investigate everybody that put in a bid to see whether or not their

[1:04:22] work is quality, then why are you going to investigate one? That's the concern

[1:04:27] that I have about it. So, and and to take

[1:04:33] and I'm going to call it hearsay following up on what Pedro said because

[1:04:37] unless you see the documentation, it is hearsay. To a point where in any project

[1:04:43] and any any construction, people have change orders all the time. If a project

[1:04:47] is completed to the satisfaction of the town of Chapel Hill or any other town or

[1:04:51] any other project, if it's completed to the satisfaction of the people that you

[1:04:55] contracted with, whatever change orders that took place and whatever it cost, if

[1:04:59] the contractor completed it, then they completed it. End of story to me. I

[1:05:04] don't have to go and investigate how many hours it took them to complete it

[1:05:08] when I when they completed it when I asked them to complete it. So, that's

[1:05:11] what I thought we doing here was trying to get this project completed and done

[1:05:14] at the least amount at the least cost. If that's not what we're doing and we

[1:05:19] can just give a contract to anybody, we shouldn't have a low bid process. We

[1:05:22] should just give it to who that whomever we choose to give it to.

[1:05:26] Based upon whatever evidence that we are it's not an

[1:05:31] evidentiary process. So, clearly it's a hearsay and who I like to give it to or

[1:05:35] who I want to give it to cuz everybody's got friends.

[1:05:39] » [clears throat] >> Thank you very much for the perspective.

[1:05:41] Going to call on somebody that hasn't spoken yet.

[1:05:44] Susan? >> Sure. Um

[1:05:48] the I as I follow through you know, as I as I

[1:05:52] follow the steps on this, I I I can have um I have sympathy for all parties. Um

[1:05:58] uh our staff has looked at the taken the

[1:06:00] bids. The even the highest of the two bids is still below what the engineer

[1:06:06] estimate is. The low bid looks too low to be a

[1:06:11] um perhaps a correct bid or an an adequate

[1:06:15] um uh understanding of the project. Uh so,

[1:06:19] I'm just kind of walking through the the process that if if I had been in in um

[1:06:23] Mr. Bailey's position, I would be looking at. I think that um so, I

[1:06:27] understand how he got and so, he checked has anybody else worked with these

[1:06:31] people and got some feedback. Um I think that where I feel like

[1:06:38] some perhaps something was missing in this

[1:06:41] process was the conversation is then looping back to um to bid package number

[1:06:47] two and talking with them about why am I seeing some discrepancies that are very

[1:06:51] different from what we got from our engineers regardless of what this is. Um

[1:06:57] I I'm bothered. I'm not sure that my thoughts are very organized here. Um I'm

[1:07:02] bothered that we're having this discussion in public because of the um

[1:07:07] because of the damage that it can be doing to to reputations. And so

[1:07:13] I'm I'm very bothered that this is a public conversation.

[1:07:18] But [clears throat] I also understand the desire for answers about why

[1:07:21] why the lowest bid was not awarded. So I I'm struggling with this a bit.

[1:07:26] And I I think that I mean I have some

[1:07:30] questions as as Todd has pointed out about the discrepancy on these items. Um

[1:07:37] on some of them being very significant. Miscellaneous concrete.

[1:07:46] 100 cubic yards at 900 100 cubic yards at 245.

[1:07:52] Concrete is a commodity. It shouldn't have that much of a difference in

[1:07:57] in in the cost in the cost difference. So I have a bunch of questions, but I

[1:08:01] don't have the technical background to be able to interpret them. So that's

[1:08:04] where we depend on our staff to be able to do that. So I'm I'm

[1:08:08] rambling a little bit right now. I'm >> All good.

[1:08:10] » So I will sum it up by saying I understand how staff why staff is

[1:08:16] making this recommendation. I am concerned at

[1:08:23] I'm concerned that that an opportunity a conversation didn't happen with this

[1:08:27] lowest bidder to find out why his bid was so out of

[1:08:33] out of sync with what was expected. >> Okay.

[1:08:38] » [clears throat] >> Chair, can I call on you?

[1:08:40] » Yes. I think with some of the communication

[1:08:45] failures here, it's important for us to take a period of time to repair the

[1:08:49] communications. And so I I feel like what would be really important and

[1:08:52] helpful for us to see is the comparison of this with the actual engineer's

[1:08:56] estimate and commentary on the discrepancies.

[1:09:01] And I also think that we are not here just to make a decision about this

[1:09:05] contract today, but how is Owasso best served by nurturing good relationships

[1:09:10] with contractors in the future? Um and to that end, I think it's important

[1:09:14] to provide a little bit of mentoring and feedback when things don't meet

[1:09:18] expectations and um really repair that communication so that

[1:09:23] this isn't the end of the road. So that there is, you know, if something came up

[1:09:26] short here and it doesn't work out this time that there are future opportunities

[1:09:30] to work together and collaborate. Um so that's that's my

[1:09:34] position. >> Thank you very much.

[1:09:36] Judy, turn your phone off, please.

[1:09:39] » I believe uh that it is up to the staff to

[1:09:45] assess each bid. On all levels, both responsible uh and

[1:09:51] price and uh reputation or, you know, for having done

[1:09:55] other work. And in this case, um um Owasso is familiar with the work of

[1:10:01] the higher bidder. Number one. So, my main

[1:10:06] that this point is that I think sta- it's up to staff to look at the bids and

[1:10:10] make a decision. And it is our job to rely upon the assessment of staff.

[1:10:17] Unless we have, you know, it being out of whack what the bids are, that's not

[1:10:21] my job. My I've done this stuff before as a developer and as a person who's

[1:10:27] done bids. It's up to staff to go through this. But they they went through

[1:10:31] the legal process. I believe that Steve did his due

[1:10:37] diligence. I don't think you have to write it down. I don't think people like

[1:10:41] writing it down who work for governments uh and and towns and you don't want to

[1:10:46] hurt anything and put it in writing. I think it's more damaging.

[1:10:50] Mr. Woods probably repaired everything and did everything right and concluded

[1:10:54] the job. But how much stress was it in the estimation of the town's people? And

[1:11:00] that I think that's what Steve's trying to

[1:11:03] assess. How much grief is this going to be?

[1:11:08] That's the first point. I think he did his due diligence. I think he's made his

[1:11:12] assessment and I think he prefers the other company because he has experience

[1:11:18] with successful work from them. And that was one of the questions, the first

[1:11:22] question I asked. Have we worked with them? Has it been successful? Were we

[1:11:26] satisfied? And his answer was yes. Mr. Woods is new to this process and hasn't

[1:11:31] worked with the Wassa. Hopefully he will in the future and he'll be open to other

[1:11:35] bids. We're not here to hurt his reputation. He's come and he's presented

[1:11:41] a contra information saying that's not accurate and we've heard that and we

[1:11:45] respect that. But you also have to take into account that the bid is so low.

[1:11:50] It's less than half of the bid by the

[1:11:55] engineer what they thought it would cost.

[1:11:59] » [clears throat] >> The second thing is um

[1:12:01] uh that it's the regardless of the details

[1:12:06] in the bid, that's up to staff. I'm I'm for awarding this

[1:12:11] this to be two things. To be awarding to as as our staff has recommended with

[1:12:17] recommendations on future processes that uh which I don't know. Do we allow

[1:12:23] somebody who's bid to come in and sit down with the Steve and say, "Okay, tell

[1:12:27] me about this." Do we allow that process?

[1:12:30] » I suggest that's a great thought. And that maybe we hold that

[1:12:34] » Well, I'm I'm I'm sharing it with staff now as a potential policy. You would

[1:12:39] mention this. There needs to be communication. It can't be just blind

[1:12:42] bidding. Here's a thing because you want to know that you're going to meet if

[1:12:46] you're bidding, you want to meet the the needs of the company that you're going

[1:12:49] to work for that you're going to contract with. That's what I would do.

[1:12:54] But in anyway, in conclusion, I think we need to trust staff to do what's

[1:12:59] appropriate. I don't think change orders are part of this unless something

[1:13:03] unusual happens. And you're going out to people's 90 yards. You don't in yards,

[1:13:09] you don't know what you're going to find when you dig underneath.

[1:13:12] Okay? So, I'm in in these bids there's always contingencies. And then if it

[1:13:17] goes beyond contingencies, that's where you get into change orders. I think our

[1:13:21] job is to decide um whether we support Steve's

[1:13:26] recommendation and the process or not. And I think he's done his job.

[1:13:31] » Thank you. So, what I'd like to do is um before we

[1:13:34] have a chance to uh um >> to share?

[1:13:36] » Say again? >> I think you you haven't had a chance. Do

[1:13:38] you want to share? >> You.

[1:13:39] » Well, I was going to share when I wrap up the discussion I heard from everybody

[1:13:43] else. >> Okay.

[1:13:44] » But that's okay. Um I'm all right. >> You're it.

[1:13:47] » Okay. I mean, do we have to make a decision tonight? Can we take this until

[1:13:51] we get more information or get more analysis done?

[1:13:56] » Um yes, we have to make a decision tonight. Um all I guess let's leave that

[1:14:00] open for um a motion.

[1:14:04] And so, what I'd like to do now is just kind of following um

[1:14:07] the protocol is to wrap up the discussion, just kind of repeat what I

[1:14:10] heard from everybody, and then ask for a motion from the floor.

[1:14:16] So, I've I've heard a a variety of opinions.

[1:14:20] Um and a couple of them resonate with me.

[1:14:24] Um I understand the And I And y'all, I've been part of the bidding process

[1:14:29] for decades. And I've seen um situations just like

[1:14:33] this. And it's a tricky project.

[1:14:36] And unfortunately, we only had two bids. And so, you know,

[1:14:41] on staff's part, you know, they followed a protocol that I've seen done before.

[1:14:46] Um um to one comment you noted on

[1:14:50] Todd about the pavement repair, you know, one of the

[1:14:54] homework we might have us done on that is whether that was in the warranty

[1:14:57] period or not. And the extent to which that was part of

[1:15:01] the scope that uh should have been done. I know that's pretty tricky from having

[1:15:05] done a lot of it. And you know, Pedro to to your comments and

[1:15:11] others about the equity and the way the homework was done,

[1:15:16] you know, I think those are valid comments. So, I'm not

[1:15:19] going to stake out a position until [snorts] um

[1:15:23] until we call for a motion. And after the motion, we can have a discussion

[1:15:28] about the motion. There can be amendments to it. But that's what I'd

[1:15:31] like to do next. And we just need to move this on. So,

[1:15:37] would anybody like to make a motion? >> I mean, we accept Steve's

[1:15:40] recommendation. Steve Valley's recommendation.

[1:15:43] » Great. Is there a second? I hear a second from Mr. Van Doorn.

[1:15:49] So, [snorts] all in favor of that >> Discussion. Discussion.

[1:15:53] » Say again? >> Discussion.

[1:15:54] » Oh. >> Any additional discussion?

[1:15:56] » I appreciate that. That's why I made the motion.

[1:15:59] » Sorry. >> No, no, no. I need help here.

[1:16:01] Any additional discussion? >> Oh, Mr. Voter, I have to go. I'm sorry.

[1:16:06] But you keep on with the discussion. >> Can you stay to vote here now?

[1:16:13] » I can't. But I don't want to rush the voting.

[1:16:18] So.

[1:16:21] » All right. >> Because I really have I have to go.

[1:16:23] » So, is there any further discussion? >> Um sorry, what is the alternative if we

[1:16:29] » The alternative would be an amendment or to not vote for it.

[1:16:33] » And what would happen if we don't vote for it?

[1:16:35] » Then we would have another motion to decide what to do next.

[1:16:41] » Do we wait? >> Do we table it? Do we

[1:16:46] » Do you have to have five votes for this? >> I believe if I look at the counselor,

[1:16:51] he would affirm that we have five votes. >> I I'd like to make a motion, but I need

[1:16:57] to wait until after we vote on the first motion.

[1:16:59] » Okay, yes, that would be correct. >> [clears throat]

[1:17:03] » All right, we have a motion and a second. It would be time to vote.

[1:17:07] All in favor of the motion, raise your hands and say I.

[1:17:14] There's three. The motion four. The motion does not pass. The four were

[1:17:19] Judy, Michael,

[1:17:22] Todd, >> and Susanna. And Susanna. Four. So, the

[1:17:25] motion does not pass. Would you like to make an alternate

[1:17:29] motion, Karen? >> Yes, I would motion that we come back at

[1:17:32] the next boarding board meeting with um complete information that was requested

[1:17:37] tonight and um decide at that time. >> I second that.

[1:17:42] » All in favor Oh, any more discussion?

[1:17:49] All in favor of the second motion to bring it back at the next meeting with

[1:17:55] additional information that we discussed tonight and wanted to look for.

[1:17:59] Um all in favor of that motion, say I. >> I.

[1:18:02] » I. That was one, two,

[1:18:06] three, four, five. >> It's actually six. One, two, three,

[1:18:11] four, five, six. >> Oh, sorry. I missed your hand.

[1:18:14] Six. Thank you, Susanna. >> Thank you, sir.

[1:18:17] » The motion passed. >> Thank you, Mr. Chair.

[1:18:20] » Sure. Thank you, all. >> Is uh

[1:18:24] Pedro excused so that his vote is not counted as yes on any further business

[1:18:29] what tonight? >> Pedro, yeah.

[1:18:32] » Pedro, if you want your vote not to be counted

[1:18:36] as yes on anything else that happens tonight. You should you should ask to be

[1:18:39] excused. And I think the board is willing to

[1:18:42] excuse you, but >> May I be excused?

[1:18:45] » [laughter] >> May be excused. And we do not have

[1:18:47] another item >> I I I motion that Pedro be excused.

[1:18:52] » All in favor, say aye. >> Aye.

[1:18:54] » Aye. >> See you, Pedro.

[1:18:55] » Good night. >> Good night.

[1:18:58] » We're going to move on now to our discussion to general item.

[1:19:01] It's going to be a review of our financial management policy by Mr.

[1:19:06] Steven Winters. Provided 20-minute overview.

[1:19:11] » [snorts] >> Jesus.

[1:19:11] » Thank you, Steven. >> Maybe I can do it even faster than that.

[1:19:15] » In advance. >> Thank you.

[1:19:17] » Hi, everyone. So, um as you know, we've got a financial management policy and uh

[1:19:24] that Sorry.

[1:19:27] Um And it includes performance measures

[1:19:30] that help us stay financially stable and um and sustainable. And each year, when

[1:19:35] we develop our budget, we take into account these financial measurements and

[1:19:39] we typically design our budget to be to where we meet these these uh

[1:19:44] objectives. At one of our budget work sessions, you

[1:19:47] all asked us to uh um

[1:19:51] to to have a discussion with you all about

[1:19:54] what if we change some of the parameters of the uh

[1:19:58] of the performance objectives. So, how would that impact the rates that we

[1:20:01] charge our customers? How would it impact our

[1:20:04] uh ability to borrow, you know, all of that sort of stuff. So, tonight I'm

[1:20:08] going to go through the what the performance measures are.

[1:20:11] Uh and then at our next meeting, we'll come back and talk about, you know, if

[1:20:15] we change them, what the impacts of those might be. Um and if there's

[1:20:19] anything you know, as we go through tonight,

[1:20:22] please feel free to interrupt with the questions if you have them. Um but if

[1:20:25] there's anything that we go through tonight and you think, "Hey, I'd really

[1:20:28] like to see you you model a changing this thing, you

[1:20:32] know, we'd I'd be happy to take that into account.

[1:20:35] So, um the financial management policy is available on our website. Anybody can

[1:20:41] access it. It's also included in the budget. We call it a budget book, the

[1:20:46] document that that you all have I'm sure you've seen and it's on the website as

[1:20:49] well. The policy was last modified in 2012.

[1:20:54] Um no prejudice in that. There's there's

[1:20:58] been no reason to change it. I'm not saying anything, but that previous

[1:21:01] boards have been derelict. So, um there's nine performance

[1:21:06] measures. The first three have to do with our reserve funds.

[1:21:10] The first is our working capital reserve and these are all defined in the policy.

[1:21:17] The balance in the working capital reserve should be the greater of either

[1:21:21] a third of our operating budget or 20% of the next 3 years CIP budget,

[1:21:27] whichever's higher. Um you know what our CIP budget is. It's

[1:21:32] definitely the next 3 years, 20% of the succeeding 3 years CIP currently is

[1:21:36] higher than a third of our operating budget.

[1:21:39] Um and so for fiscal year 2027, the budget is um for this reserve is 32

[1:21:46] million. The purpose of it is uh you know, it's kind of like a savings

[1:21:50] account if you um you know, it's it's meant to be able to

[1:21:54] cover your operating expenses in case something bad happens, you know, we

[1:21:59] don't not getting revenue or you got expenses that went way up or pandemic

[1:22:03] happened, uh things like that. The second reserve is a capital

[1:22:08] improvements reserve and it is um the the calculation on that is it's 2%

[1:22:14] of depreciated capital assets. Our depreciated capital assets are in the

[1:22:19] hundreds of millions and for fiscal year 27, the balance in that account um is

[1:22:24] budgeted to be 6.9 million. The purpose of this reserve is if we

[1:22:29] have um you know, a big oops. Um a few years

[1:22:33] ago, probably 10, we had a project in the CIP to inspect our the dam uh

[1:22:40] gates out at Cane Creek. And we're we're just going to like uh do some

[1:22:44] maintenance on them, oil them or something. I don't remember exactly

[1:22:46] what, but when they did the work, they noticed there was a problem and it was a

[1:22:49] million-dollar problem. We didn't have to dip into the

[1:22:52] fiscal reserve then, but that's kind of the purpose of it.

[1:22:56] For things like that. And we've had And you you uh Rogerson Drive pump station

[1:23:00] was before you all, but that was a $7 million uh an

[1:23:05] uh an emergency happened that we had to deal with right away. So, these are the

[1:23:08] kinds of things that that that reserve's for. The final one

[1:23:11] is called a rate revenue stabilization reserve. Um it's to be 5% of our

[1:23:18] budgeted annual water and wastewater revenue for fiscal year '27. That's $3

[1:23:23] million. And it's intended to provide uh cash

[1:23:27] flow when either

[1:23:30] expenses are higher or revenues lower than than what we had uh anticipated.

[1:23:35] Um and this is the purpose of this one is to is to allow some flexibility if uh

[1:23:41] so you don't have to raise rates in the middle of the year, you know, it so you

[1:23:44] so you're not running that that tight. There is some overlap in these in this

[1:23:49] particular set of policies. It's probably obvious that between working

[1:23:53] capital and rate revenue stabilization. So, without any of you asking, uh when I

[1:23:57] come back next month, we'll we'll have some information or some analysis around

[1:24:01] this this this subject. >> I have a question.

[1:24:05] » Yes. >> So, in this scenario, the minimum

[1:24:10] balance is 32 million plus 6.9 million plus 3

[1:24:15] million. >> Yeah, about What's that? 42 41 42

[1:24:19] million. >> 42 million. Okay, thank you. So, they're

[1:24:22] all So, it's belt two belts and suspenders.

[1:24:27] » I wouldn't characterize that way. >> [laughter]

[1:24:31] [snorts] >> Okay.

[1:24:32] » Uh >> [clears throat]

[1:24:33] » Yeah. >> All right, thank you. So, all of all of

[1:24:37] these things would have to go wrong. >> For us to spend We'd have to

[1:24:41] » For us to use all of that that's in reserve. All of them would have to go

[1:24:45] wrong in the same year. >> Well,

[1:24:47] um you know, you you

[1:24:51] Let's say that happened. If it did, we we'd have zero balance in

[1:24:56] our reserves, and so for the next several years we we'd be looking to

[1:25:00] build that back up. So, you know, you really wouldn't you wouldn't it's not

[1:25:04] reasonable to anticipate that all would go wrong, right? It's that this is the

[1:25:08] level of cash based on this, you know, set of

[1:25:12] formulas that you would need to be able to be prepared to deal with all these

[1:25:15] things. >> Okay.

[1:25:16] All right, thank you. >> You're welcome.

[1:25:19] Uh the next five of the performance measures have to do with debt

[1:25:23] management. Um you know, debt is a um

[1:25:28] a necessary thing, especially in a business like ours. I think I've said

[1:25:32] this to you before, but we you know, we're about to invest in a in

[1:25:36] an asset over at the Clearwell that hopefully is going to last another 100

[1:25:38] years. Um it that wouldn't make sense to pay

[1:25:42] cash for that and burden today's rate payers with all that money. And

[1:25:45] that's you know, that you could carry that philosophy to other examples.

[1:25:50] Um the first one on this in this bucket is the debt service coverage ratio, and

[1:25:56] I would submit that this is the most

[1:25:58] critical one. The way it's calculated is it the we

[1:26:02] need to have in net income twice what our debt

[1:26:06] service is. So, you may recall that our budget for

[1:26:09] fiscal year 27 in debt service is 12 and 1/2 million. This means this means that

[1:26:15] our net income revenue less operating expenses, should

[1:26:19] be 25 million. Um and just to remind everyone, you

[1:26:22] know, off who I'm talking about income, OASIS is a nonprofit, so what that that

[1:26:27] money that's left over after paying operating expenses is used to fund

[1:26:31] capital improvements programs, debt service, and uh to replenish reserves to

[1:26:35] the extent that's needed. And the purpose of this one is just to

[1:26:39] make sure you have enough cash to be able to pay your

[1:26:41] pay your principal interest on debt. The next one um is debt serve debt

[1:26:47] burden to asset value, and it says that our amount of debt should be no more

[1:26:53] than uh half of our depreciable assets for fiscal year 27, we're at 30%, so

[1:26:58] we're you know, we're comfortably under that limit, and this measures our debt

[1:27:02] capacity. So, theoretically, you know, we could borrow uh more than we're

[1:27:06] borrowing now. That would increase our debt service,

[1:27:10] which would affect that first uh issue. Happy to explain that if that's not

[1:27:14] clear.

[1:27:17] Um the next is sufficiency of revenues above debt requirements. This says our

[1:27:22] debt service should be no more than 35% of our revenues, and again, we're

[1:27:26] comfortably under that, and this is another one that's just meant

[1:27:30] for us to to make sure that we've got enough cash to pay our debt service.

[1:27:34] Uh this one is cash financing of capital.

[1:27:38] Over a 5-year period, this this policy means that we'll pay at least 30% of our

[1:27:43] CIP uh expenditures with cash. In other

[1:27:46] words, you won't borrow more than 70%. Uh and this is just to prevent us from

[1:27:51] becoming too overburdened with debt. And then finally, our credit ratings.

[1:27:55] The the uh policy in uh says we should have no

[1:28:00] less than eight the the uh

[1:28:05] ratings that are listed there, AA2, AA+, and AA+ from three rating agencies,

[1:28:10] Moody's, Fitch, and Standard & Poor's. We're actually slightly better than that

[1:28:14] um in two of the with two of the the rating agencies. And this is measures

[1:28:18] credit worth- worthiness. It affects how popular your bonds are when you go to

[1:28:22] sell them. It impacts your um the amount of interest that you pay, but admittedly

[1:28:29] going from an AA one to an AA2 wouldn't have a big impact

[1:28:33] on our interest rates.

[1:28:37] The final um

[1:28:41] performance measurement has to do with our service affordability. We talked

[1:28:44] about this in one of our budget meetings. Karen, you may remember asking

[1:28:46] some questions about this. The um

[1:28:50] the the formula in our policy mirrors what kind

[1:28:55] of the industry average is for the affordability ratio.

[1:28:58] And it's a measure of what is how how big a percent of the median household

[1:29:03] income is our annual water and sewer bill.

[1:29:07] So, for our policy, if you take a year's worth of our water

[1:29:11] and sewer bills, they ought not be one and a half per- more than one and a half

[1:29:14] percent of median household income. So, currently, based on the

[1:29:19] budget you all just passed recently, these are the projected

[1:29:23] um for service affordability ratios when comparing the average bill to median

[1:29:29] household income. You know, we're slightly above it in 2027. We get a

[1:29:32] little bit further away as we go go out further.

[1:29:36] A few years ago, the board asked us to start tracking

[1:29:40] instead of average bill, what's the median bill?

[1:29:44] And so, as the but that's not what the policy said. This is just something you

[1:29:48] all wanted us, you know, to to use. So, um

[1:29:53] if you use the median bill compared to median household income, you know, it's

[1:29:56] a lot less percentage of of household income.

[1:30:00] We might feel good about this because we're Either way, we're either almost

[1:30:04] meeting it or meeting it. Um but 20% of our

[1:30:09] fellow residents in this community make $25,000 a year or less.

[1:30:14] So, uh

[1:30:16] the percentage of their annual income, you know, our bill is a much higher

[1:30:20] percent. In fact, um it's above 5%. So, it doesn't make sense

[1:30:27] and it's not feasible for us to lower our rates for everyone in the community

[1:30:32] low enough to make it affordable for folks that are having a hard time paying

[1:30:35] it. They don't, you know, make enough money to

[1:30:38] uh to completely pay their water bills. And

[1:30:40] this is why we have the Care to Share program, which helps people, you know,

[1:30:44] pay their bills. And which is why we're also

[1:30:47] uh pursuing a sustained uh

[1:30:51] customer assistance program. The Care to Share is meant to cover kind of an

[1:30:54] episode episode. Like, if I am without a paycheck for a few months

[1:30:58] for whatever reason or have a big medical bill, then this is meant to help

[1:31:02] Look, here's some money that that uh that can help out.

[1:31:06] Folks that are in this lower category here, um it's our opinion that they need

[1:31:10] more sustained assistance. They need help with their bill every month, not

[1:31:14] just once every now and again. So, again, that's why we've gone to the

[1:31:16] towns to to look for money. Uh you know, for support for the

[1:31:21] program.

[1:31:23] So, um just to summarize, you know, I think

[1:31:27] our our uh policy has served us well, kept

[1:31:30] us financially sound, in good shape. Um I know people are always asking

[1:31:35] [clears throat] about debt, but I can assure you we're um you know, not

[1:31:39] overextended. Uh

[1:31:41] our We have really good bond ratings. Our financial condition is well. And we

[1:31:45] we uh our bonds are usually very popular in the market. And, you know, the terms

[1:31:49] of those are usually good. So, again, at our next meeting, we'll talk about what

[1:31:53] some changes to any of these might mean. Back to you for questions.

[1:31:58] » Thank you.

[1:32:01] My next question would be, are there any public comments?

[1:32:05] Seeing none.

[1:32:08] So now we're going to facilitate a board discussion. There's no motion for

[1:32:11] tonight. And so I'd like to just go around the

[1:32:15] room and have a discussion.

[1:32:17] » I have some more questions. >> What questions?

[1:32:21] » Yeah. >> Of course.

[1:32:22] » Sorry. >> Excuse me.

[1:32:24] The next set would be

[1:32:27] clarifying questions. >> Yes. Uh

[1:32:28] » Thank you. >> Thank you very much for the

[1:32:30] presentation. That's helpful. It's good context. Um [snorts]

[1:32:33] I am uh

[1:32:36] as you know, I I was looking forward to this because I feel like we have a um

[1:32:41] the the root of some of this is with the the

[1:32:44] projected uh the projected increases over the next 8

[1:32:48] or 10 years that um complying with these policies um

[1:32:53] necessitate and that is related to the the large capital projects that we have.

[1:33:00] Um to your

[1:33:03] was this when the when these policies were created

[1:33:08] had OWASA seen any uh large projects oh I'm curious, you know, it's the it's the

[1:33:16] clearwell, the hundred million dollar clearwell that we're trying to pay for

[1:33:18] now. That's an 80-year lifespan or the last one was 80 years.

[1:33:22] So this next one we hope will be another 80-year project. Um and it's kind of I

[1:33:28] think of it as like the um the boa the boa constrictor that

[1:33:33] swallows the elephant. It's a big lump. Um and has lots of kind of but sorry,

[1:33:38] setting up my question is this. Has there ever been an expenditure as large

[1:33:43] as this that these that these financial policies have been applied to?

[1:33:50] » Um I think this policy was original originally adopted in 2010 and I don't

[1:33:56] know what was in place before then. I think there probably was something it

[1:33:59] just wasn't this. >> When was the Cane Creek waste water

[1:34:03] done? >> Earlier than that, in the '80s.

[1:34:05] » Okay. >> But there was a

[1:34:07] » Sorry. >> There was a big project down at the

[1:34:09] waste water plant when it was expanded. It was like $50 million. I don't

[1:34:13] remember maybe somebody else will whether that

[1:34:15] was before or after 2010. Before.

[1:34:20] So I I think the answer to your question is

[1:34:22] probably no. >> Okay. Because that's where my question

[1:34:25] is coming from is that are we applying policies that were created for normal

[1:34:31] circumstances and this is an abnormal circumstance.

[1:34:35] » So first of all, the first thing I want to

[1:34:37] say is I think it's a good idea to to take a look at these policies every now

[1:34:41] and then and previous boards have talked about it but

[1:34:45] we for whatever reason haven't done it. Um but I would argue that having a $100

[1:34:50] million you know, facing a $100 million project

[1:34:54] is exactly why we need these these policies. Or or you

[1:34:58] know, I'm not necessarily have to be exactly this, it can change.

[1:35:01] Um but it's to be able to we're we're in the

[1:35:05] one reason we're in the position we are now to be able to deal with this is

[1:35:08] I think because of adherence to policies like this.

[1:35:14] » Okay. Let's go to the we'll get back to questions.

[1:35:17] » Sure. >> Oh, sorry.

[1:35:20] No, I I have a follow-up question. >> All right.

[1:35:24] » The um If [clears throat] you could go back on

[1:35:26] your on your screen to the debt coverage ratio and the bond

[1:35:31] ratings. >> Yeah.

[1:35:33] » Yeah. What are the requirements of the bond agencies for debt coverage ratio?

[1:35:38] » Um it Well, it depends on what rating you

[1:35:41] want. Um but generally for the ratings that we're

[1:35:44] in, somewhere between Oh, I'm sorry. Bond debt service

[1:35:48] coverage or I was getting ready to say cash cash on hand. Um what we have about

[1:35:52] two. >> Really? Cuz the information that's been

[1:35:55] in our packets is 1.4. Or not in our packet, I have seen

[1:35:59] elsewhere 1.4 referenced as the um, debt coverage ratio for public

[1:36:04] utilities. >> That may be an average, I don't know.

[1:36:09] Um, >> I

[1:36:10] it would be helpful to know that information.

[1:36:13] » What? The average? Or like what the typical?

[1:36:16] » more have more references to what the debt coverage ratio requirements are.

[1:36:21] » Okay. >> Um,

[1:36:23] » would it >> But

[1:36:25] » Go ahead, sorry. >> Just it's the information that I've seen

[1:36:29] elsewhere is that it's significantly below the 2.0.

[1:36:34] » Could could we maybe Could I ask for some structure to this whole thing? So,

[1:36:39] what I would like to see, um,

[1:36:42] when we have a broader discussion on this,

[1:36:45] is I'd love to know one,

[1:36:48] what are the actual legal requirements for any of these?

[1:36:53] Two, what are peers doing? Um,

[1:36:59] and then three, uh, to what extent are we seeing

[1:37:05] overlap? Um, if you go to the previous slide, all

[1:37:09] of these different buffer funds, um,

[1:37:13] » Oh, oh, oh, the previous slide. >> I I I look at the

[1:37:17] Is it Did you want to go there?

[1:37:19] » Yeah.

[1:37:23] Um, I I kind of look at this and it's it's like the the adage, you know, have

[1:37:28] uh, is it six months of emergency funds?

[1:37:31] And it's like, want to have six years. It seems to me like even the example

[1:37:37] that you gave where there was an emergency, we didn't even use the fund.

[1:37:41] Now, I'm absolutely for having large emergency

[1:37:46] funds, but $42 million in around money. Um what I would love to understand is

[1:37:53] what are the costs of having this as cash essentially

[1:37:59] relative to having it I don't know in other investment vehicles or spending it

[1:38:05] on you know, but what are the what are the ultimate

[1:38:08] impacts of this level of working capital relative to

[1:38:14] um rates.

[1:38:17] Um the

[1:38:21] I I I think that would be very handy to understand.

[1:38:25] Um So, that's maybe number four. And number

[1:38:28] five, how long does it take to borrow money?

[1:38:34] » 6 months or so. >> 6 months. Okay.

[1:38:37] Um I'm curious as to like

[1:38:41] you know, a lot of the

[1:38:44] you know, the uh capital improvement line here. So, um

[1:38:49] so, unplanned CIP expenditures I don't know what kind of like

[1:38:55] time horizon that concerns, right? So, this is stuff that would be planned and

[1:39:00] implemented immediately. Um

[1:39:04] is that specifically for what would be planned and implemented immediately?

[1:39:08] » Yeah, it these they'd be like stuff that's not in the CIP plan or it's in

[1:39:12] the CIP plan years years from now something like that, yeah.

[1:39:15] » Okay. It'd

[1:39:17] be useful to see when these have been used or what they

[1:39:23] like situations where they would be used.

[1:39:26] » Okay.

[1:39:30] Can I go to Elmar? Thank you.

[1:39:33] There's couple of things I can respond to you

[1:39:36] real quick. So, I don't have to uh

[1:39:39] hold you up with the answers to that. Uh there there is no we don't have any

[1:39:44] legal debt limits. Towns do, we don't. Um, the

[1:39:49] regarding the debt service coverage ratio,

[1:39:52] our policy says what it says, 2.0. Um, it says we could go down to 1 and

[1:39:58] 1/2 if unusual circumstances and we've done that recently in in your tenure.

[1:40:03] Um, and then our bond order is probably the closest thing to a legal uh,

[1:40:07] commitment that we have and it says it needs to be 1.2. And that's pretty

[1:40:13] bare bones. I I you I don't know how many people we feel

[1:40:16] comfortable operating there. But anyway, that's

[1:40:20] the legal. And now, I don't know you said something about your uh,

[1:40:23] the peers, so I'll have to look that up. >> Sure. Just to understand

[1:40:29] like are these right down the middle and

[1:40:33] these still totally make sense or is this like

[1:40:36] you know, we're the only ones doing this. They're so

[1:40:40] » Yeah.

[1:40:43] Yes, ma'am. >> Elmira.

[1:40:44] » Okay. Thank you very much. >> Your report is the one I understand the

[1:40:48] most. So, thank you very much for keeping up with the state financial

[1:40:53] standards of the industry. I did want to know, first of all, simple

[1:40:57] question. Who's giving us the AAA? >> Um,

[1:41:01] Standard & Poor's. >> Oh, okay. That's pretty

[1:41:04] » [laughter] >> Uh,

[1:41:06] another one is the money the working capital that you have that's sitting

[1:41:11] there is invested, right?

[1:41:14] Uh, what do you got it in? Money What do you got it in?

[1:41:17] » We're very limited in what we can invest in. It's in something called a North

[1:41:21] Carolina Capital Management Trust and then we're around around 3%. 3%.

[1:41:28] » I didn't even hear what you said. >> No. Okay, so it's in the North Carolina

[1:41:32] Trust. >> Yeah.

[1:41:35] » Yes, we are limited to that today.

[1:41:38] » Um >> not limited.

[1:41:40] It has to be at a bank that's and it's got to be fully collateralized with cash

[1:41:44] and if there's just just some banking weird banking stuff that we have to

[1:41:48] » Because of the Republic Utility >> Yeah, we can't invest in

[1:41:52] » Korea Korea >> AI stocks and that kind of thing.

[1:41:54] » [laughter] >> Well, we don't want them, but okay.

[1:41:58] Thank you. That's That's all I had. That's all I just wanted to know what we

[1:42:01] were doing. Thank you.

[1:42:03] » You're welcome. >> Here are the changes we're going to do.

[1:42:05] » Okay, go ahead.

[1:42:09] » [clears throat]

[1:42:12] » Uh in in addition to considering um the policy whether it should be 1.2,

[1:42:19] 1.3, 4, 5, you know, um how conservative it it should be to

[1:42:25] have this cash. If we don't have the cash,

[1:42:30] uh if we then we either lower rates or spending it on more capital improvements

[1:42:35] and we have this unique circumstance now this $100 million clearwell. So, in

[1:42:40] setting the new policy when we have our full conversation, I guess it's next

[1:42:44] month and we really look at all this stuff.

[1:42:47] How much do we borrow on that? Our conversation the other day when I had my

[1:42:50] orientation with you um the state has a fund that we may be able to borrow

[1:42:57] against at no interest. >> Or the

[1:42:59] » We may not be a good candidate for that cuz a lot of people going to want some

[1:43:02] of that money. Um is that right? You know.

[1:43:05] » Yeah. >> And and so we're going to go out for a

[1:43:07] bond issue for anywhere up to $100 million.

[1:43:12] If that's the whatever the figure is Is that the figure on clearwell?

[1:43:15] » Yes, but but we're only allowed to borrow $50 million of that under the

[1:43:19] current policy. >> Now, um if it was just that one project,

[1:43:23] we could have we could have our 70. >> Uh-huh.

[1:43:25] » We could do what? >> 70

[1:43:27] under the current >> So, that that is I'm bringing that into

[1:43:30] the mix as to what we need to consider in the policy. I don't have an opinion

[1:43:35] yet. I'm I'm totally open to learning about

[1:43:39] this because, you know, the trade-off, you know, do you keep more cash

[1:43:43] or do you borrow more money? And the And you indicated the current rate for bonds

[1:43:47] at about 3.2%. And is it a 30-year, 40-year, you know,

[1:43:53] how long is the bond, etc. And do you You obviously need to keep cash reserves

[1:43:57] for that. Um

[1:44:00] in regular business and in commercial business,

[1:44:04] at those rates, you want to borrow as much money as you can cuz that's like

[1:44:07] free money. Zero is free money and 3.2 is very, very low, as well.

[1:44:13] » It's 3 and 1/2 to 4, but >> Oh, it's up. Okay. Um so, whatever it

[1:44:18] is. And then but in with a public utility when you're dealing with, you've

[1:44:22] got to You've got to [clears throat] pay. That would be if we borrowed 100%

[1:44:26] of it. If that were our policy to borrow 100%

[1:44:29] of it, we'd be paying 3.2 million or 4 million a year interest on the bonds,

[1:44:36] correct? Whatever the bond rate was, that's be

[1:44:40] our annual and we'd certainly have to have those cash reserves. What's the

[1:44:44] trade-off? How does it affect the rate payer? How does it affect the rates or

[1:44:50] the raising of the rates? And if those are the things we're talking about, that

[1:44:54] financial planners, and they all They have all kinds of formulas. So, I'd like

[1:44:58] to see as much of that how much because it will help in establishing our policy.

[1:45:04] Do we not borrow enough? In other words, if it's very low interest, let's borrow

[1:45:09] all we can. Um if it's I mean, that's that's an assumption. And if it's higher

[1:45:16] interest, you know, we borrow less because we have to service less. And all

[1:45:20] of that is How does it affect the rates? How does it affect your reserves? Do you

[1:45:25] need all of that on reserve, you know, in case of all of that happening at

[1:45:30] once? And I think that Is that not what our consideration is?

[1:45:35] » that's where we're going on the September 10th

[1:45:36] » Yeah, and I'm glad we're now considering this. I You know, I've heard about this

[1:45:40] since I came that you know, the one the first meeting I was at was at one point

[1:45:44] you know, it's one we keep >> [clears throat]

[1:45:46] » really high. What are we at two? At two point 2.0?

[1:45:52] » Yes. Yeah. >> Um

[1:45:54] And so there's room, do we want to uh have a policy to make more room?

[1:45:59] » Let's hold that to September 10th. >> Okay. Okay, so I am sharing the

[1:46:04] conversation I had with Steven that you the other day on all these issues for

[1:46:09] consideration. >> That's great.

[1:46:11] Um go ahead, Steven. >> Yeah, two quick points I'm I keep

[1:46:14] thinking of these things that someone else has asked that I want to get to.

[1:46:18] Um first of all, and I know we talked about this the other day, we don't we

[1:46:22] don't and we can't borrow for working capital. It's got to be secured by a a

[1:46:27] capital improvements program. or project. Um so that could affect I

[1:46:32] said six months. If you got everything lined up ready to go, it takes six

[1:46:35] months. A lot of times it depends on where

[1:46:39] projects are in the bid process and how many do you have and can you can you

[1:46:42] bundle enough with 100 million it's not a problem, but a lot of times we're

[1:46:46] bundling up several different projects to make a bond issue. So that can affect

[1:46:50] the timing as also.

[1:46:53] » You know, go ahead, Karen. >> Um

[1:46:57] it sounds like we're kind of opening up the discussion to how do we want to

[1:47:01] benchmark ourselves in the future? And when I think about benchmarking, you can

[1:47:04] compare yourself to your past performance, you can compare yourself to

[1:47:07] others, and you can compare yourself to an ideal scenario that you would like to

[1:47:11] have in the future. Um so I think what we may not be as aware of here for

[1:47:16] context is the comparison to others. Um and so I am curious if AWWA or IB Net

[1:47:23] might have numbers on these specific indicators or indicators

[1:47:27] that are similar that would give us a little bit of context to how others see

[1:47:31] it. >> Yeah.

[1:47:31] » They might and and I was I was meant to ask something earlier and I was afraid I

[1:47:34] was interrupting. Um so another way to get at this is to

[1:47:39] talk to the rating agencies and and you know, they'll tell you

[1:47:44] for a rating of this, this is what you need to have and I've got some of that

[1:47:48] information from previous discussions that we have. So I don't know if that

[1:47:51] would be helpful or if you know, cuz [clears throat]

[1:47:54] peer comparisons can be a little tricky, you know, maybe somebody else has a

[1:47:59] lower rate, but their financial condition is is not what we would want

[1:48:02] or there's something about their system or where they are in the process.

[1:48:06] I'm happy to get it. I'm just posing the question.

[1:48:09] » Is that a >> I just have so many questions about how

[1:48:12] these things ripple,

[1:48:15] » [clears throat] >> you know, how they one one affects you

[1:48:17] turn you turn a knob and you move a lever and multiple things can happen. If

[1:48:21] you do both or one or the other, different things happen. Um

[1:48:26] I'm thinking about things like as

[1:48:30] as this

[1:48:33] given the parameters that we have that we are growing our budget significantly

[1:48:38] so that we can eat this great big swallow this big elephant that is the

[1:48:42] hundred million dollar uh

[1:48:46] clear water critical infrastructure uh piece of equipment that's going to

[1:48:50] last 80 years, we hope. Okay, so we're going through all of these rate

[1:48:54] increases to make this to be able to swallow this big thing.

[1:48:58] And then once that's done, we've established rates that are really high

[1:49:04] and we don't have the capital needs after that.

[1:49:07] » Now, I >> Or are you expecting that we're going to

[1:49:11] have hundred million dollar projects moving forward?

[1:49:13] » So I I we do do 15-year financial plan. So we're looking 15 years out in the

[1:49:18] future and you know, that's a lot of estimates in there. So, you have to

[1:49:21] consider that. But, um if you look at the

[1:49:26] I I showed you 10 years in the budget process and at some point towards the

[1:49:31] end of that 10-year period, we come back to where we're 3 or 4% 4% I think rate

[1:49:36] increases. Um when you get into the years 11

[1:49:40] through 15, it's around the 3%. Um so, you know,

[1:49:46] there are other that that the CIP pipeline doesn't go away. There's still

[1:49:50] things in there, not $100 million projects, but um

[1:49:53] it's not a situation where we've raised rates so high, we're going to be sitting

[1:49:56] on all this cash and we're going to not know what to do with it or have to lower

[1:50:00] the rates or anything like that. It's just that's not the way this works.

[1:50:04] » There are also two components here that Thank you. That that is helpful. And if

[1:50:09] we were to um

[1:50:13] And we're Well, we'll get into that later cuz we're

[1:50:16] talking about policy right now. The um it seems that there are two parts here.

[1:50:21] That there's this these this working capital or this these reserves that you

[1:50:25] need to have in the bank, okay? And there's the debt coverage ratio in

[1:50:30] the budget that is um And I Are those two I'm trying to figure

[1:50:37] out how those two are related to each >> Sure.

[1:50:39] » Cuz they seem independent to me. >> No, they're very they're very related.

[1:50:42] And in fact, the the debt service coverage ratio this

[1:50:46] is not 100% true, but if you

[1:50:50] hit what your target is there, almost all these others fall into place.

[1:50:56] Not not always. The reserve sometimes doesn't doesn't work out, but those

[1:51:00] other ones the other debt ones the fit you know, no more than this or that for

[1:51:05] these. If you get the debt service coverage right here,

[1:51:08] you're pretty much going to be okay on everything else.

[1:51:11] » Our biggest year ever

[1:51:15] how close were we to the having to

[1:51:19] take on the a project of this size in the biggest year ever in your in your

[1:51:24] time here. Have we ever come close to a hundred million dollar project?

[1:51:27] » Mhm. No.

[1:51:29] » Okay. And so these these policies have been applied

[1:51:34] in uh

[1:51:36] in a world in which we were not taking on a project of this size.

[1:51:41] » Yes. But I'd like to add that I

[1:51:45] these numbers are pretty agnostic uh to stuff like that. I mean

[1:51:50] they they scale up and down, right? So whether you're

[1:51:54] um

[1:51:57] Let me qualify that a little bit. So a couple of years last year or year before

[1:52:03] um I recommended that we not meet the 2.0 debt service coverage ratio. I think

[1:52:08] we budgeted it one and a half. Um because

[1:52:12] everything else looked good, our reserves looked good and uh

[1:52:17] we were we would have been raising rates just to meet that debt service coverage

[1:52:21] ratio. Um

[1:52:24] I'm not sure where I was going with that I but I just do want to point out, you

[1:52:26] know, it's not something that we've rigidly or or must rigidly stick to, but

[1:52:30] it was something we need to be smart about if we want to take an exception.

[1:52:33] » Okay. I agree.

[1:52:36] The fifth the fifty million dollar project back in before 2010 is

[1:52:41] comparable almost to I mean it's close to a hundred million dollar project now,

[1:52:45] but that's before this policy. So, you know, it's just it's a different price

[1:52:50] tag, but proportionately it was serious. Yes, and were there financial problems

[1:52:56] that that it that were created because of that that

[1:52:59] perhaps led to this policy? I because we're we're looking at this policy in a

[1:53:04] vacuum that it was created in at some point and

[1:53:07] » I mean these are I think what you'll find and I'll

[1:53:11] give you some information about it or they're pretty

[1:53:15] mom and apple pie type things. You know, you might tweak with a different, you

[1:53:18] know, formulas and all that kind of stuff, but the elements are pretty

[1:53:22] common. Um

[1:53:25] There were I mean you're you're you are mentioning something that did happen

[1:53:30] when right about before this policy went into

[1:53:33] place and this is where that rate revenue stabilization fund came from and

[1:53:36] a lot of utilities did that still have it is that's when people was doing

[1:53:41] conservation. You remember that graph that I show you guys of

[1:53:44] the water sales when it started heading down a lot of utilities

[1:53:49] couldn't predict the conservation that was coming so they were missing their

[1:53:52] revenue targets every year. So this was one of the reasons

[1:53:56] that these went into place. >> That was right after the major drought

[1:54:00] of 2007-2008. >> I remember it.

[1:54:02] » Don't So maybe I can clarify what I asked for

[1:54:06] before. I would like to understand

[1:54:13] legal requirements and peers on

[1:54:18] these figures. Right? What are what are their like working capital and

[1:54:23] you know, general what what are their goals? What are their

[1:54:26] Do we have legal requirements on this? Um and then I would like to understand

[1:54:33] the effect of this working these working capital goals on rates. So how is this

[1:54:38] affecting our decision making? >> Okay.

[1:54:40] » Um

[1:54:44] I mean I look at this you know, 20% of next 3 years uh CIP budget.

[1:54:49] So all of a sudden our CIP budget is spiked

[1:54:52] quite a bit. I mean so how is that affecting working capital which is

[1:54:56] affecting rates >> [snorts]

[1:54:58] » when maybe like I think that would be very useful.

[1:55:02] Um, I'd also like to understand how these might overlap.

[1:55:09] I mean again, it's it's the question of are we being double triple conservative?

[1:55:15] And this cuz all of this money is not beating inflation. If it's sitting there

[1:55:20] at 3% in this I mean we're losing money with with this much cash essentially on

[1:55:26] hand, it seems like. Um, I'm not saying we shouldn't have

[1:55:30] cash. It's just I I I got to ask if it's wise to have $40 million in the other.

[1:55:36] Um, and then I guess it's it's

[1:55:40] if we were to change the policies on this reserve piece,

[1:55:46] how does that then affect so you know, the the second slide, all

[1:55:51] of these different indicators of that. I guess um,

[1:55:56] I I don't get a sense of how much these actual indicators change

[1:56:01] the board the the policy.

[1:56:04] So like, you know, oh okay, this is going to be the investment, this is

[1:56:07] going to be the rates. Here's how the indicators play out.

[1:56:13] » I'm not sure I follow that last. >> So,

[1:56:16] we're going to have X rate, X borrowing, and our debt service ratio is Y.

[1:56:25] Okay, we're we're we're allowing it to go low enough, you know, lower than it

[1:56:29] was in another year. It's a it's a internal goal.

[1:56:34] The question is are we actually then changing rates or changing CIP goals in

[1:56:39] service of the metric? I can't remember the paradox. It's when the metric

[1:56:44] becomes the goal, >> Yeah.

[1:56:46] » then it's a bad metric. >> That's what we're doing.

[1:56:49] » And that's I think that's the fear, right? Is

[1:56:52] um, to what extent are these metrics the the next slides this metrics, actually

[1:56:57] determining you know, what gets prioritized, the IP,

[1:57:01] what gets I mean, cuz I think that's the thing we want to stay away from. I don't

[1:57:05] know if it's implicit or explicit. >> If I could begin to wrap up

[1:57:10] just uh and just you know, to the point that um

[1:57:14] suggest we might want to consider moving on and

[1:57:17] um and the question would be have you

[1:57:21] gotten enough information at least to lead us on the temp and the direction to

[1:57:27] answer the questions and Susanna, you raised your hand.

[1:57:31] » I feel like we're not going to have um

[1:57:34] I I don't I feel like we've been presented this information and we're

[1:57:37] going to come back in a month and we're going to say do we want to keep them the

[1:57:40] same or do we want to move them different?

[1:57:42] And I feel like we're going to need information, we're going to need to

[1:57:44] understand scenarios and concept risks and consequences and all of those things

[1:57:49] in order to know whether anything and and benefits as well, whether these are

[1:57:53] worth reconsidering. Um without without

[1:57:58] turning the knobs and moving the levers, we don't know whether there's any

[1:58:02] benefit to changing the policy or what the risks might be or how that affects

[1:58:07] the rates and that's the whole reason we're having this conversation to begin

[1:58:10] with. >> Sure.

[1:58:11] » So >> What can I make one comment?

[1:58:13] » Sure. >> This is the industry standard across

[1:58:17] not just public utilities but across government.

[1:58:20] The stuff that he's presenting with regard to with these rates at the end of

[1:58:24] the reserves is industry standard. It doesn't have to be a public utility, the

[1:58:28] university has the same similar standards as far as reserves and so does

[1:58:32] most other public organizations. >> [clears throat]

[1:58:35] » I mean, it's just normal it's bi- it's just business as usual. This is not

[1:58:39] exceptional. That's probably why they got voted in

[1:58:43] years back. People have I'm just saying, it's just industry standard.

[1:58:47] » Do we know that? >> I know it, he knows it and you can

[1:58:50] probably look it up in the financial planning book and try the same thing

[1:58:53] out. >> So, if I could come back to your point

[1:58:56] since if >> I'm just saying.

[1:58:58] » What Yeah, I hear you. And I think we all do. So, what what how would we get

[1:59:03] to where you want where we need to be? With your thought process. Todd, and and

[1:59:09] I'm not trying to diss you. I'm just trying to say how do

[1:59:13] we How do we get to where you guys want to

[1:59:15] be? >> Well, I guess I I'm asking for the for

[1:59:17] information. Um it's basically since >> sensitivity analysis.

[1:59:21] » Yeah, it's what I It was what I would love to see.

[1:59:22] » And then I think if we get that and I don't know before the next meeting, then

[1:59:27] then we'd have the information to make decisions.

[1:59:29] » Well, that's helpful. >> I I agree. That's That's exactly what it

[1:59:33] what where it comes from. It's that well, let's say

[1:59:37] And again, each of them are different components to it, but if if you go to a

[1:59:41] 1.4, if you aim for a 1.4 as your standard debt coverage ratio, what does

[1:59:47] that do to the you know >> looking for models, financial models.

[1:59:52] » Yeah, sensitivity analysis. >> I'll put it in the models.

[1:59:54] » Yes. >> [laughter]

[1:59:55] » Yes, exactly. >> Which is a lot of work, but it we need

[1:59:58] to have the input and some assumptions made.

[2:00:02] That which is modeling. >> Yeah, so my [clears throat] plan was to

[2:00:06] come back next time with may not meet your expectations, but with

[2:00:12] attempting to meet those expectations. Sitting here tonight and having this

[2:00:16] conversation, I've become a little skeptical that it can be done in

[2:00:19] one meeting, next meeting, but um let's get as far as we can and see what

[2:00:24] questions remain. >> Would there be an opportunity that you

[2:00:28] could provide us requested some information to consume

[2:00:33] for the board to consume before the next meeting?

[2:00:35] » Um well, you'll for sure have it in the as in the a week ahead in the budget

[2:00:40] package. And if I can get some stuff together beforehand, I don't I sure

[2:00:43] don't mind sharing it. I I Sitting right here, I'm not sure

[2:00:48] I can promise that but >> Okay.

[2:00:52] Board?

[2:00:56] » Can I have Can I have a show of hands that we can

[2:00:59] » Oh, I just want to move on to the next item. I wanted to make a comment

[2:01:03] if I may shift Mr. Chairman. See, in taking from for staff to take a

[2:01:10] look if we spent more money on capital improvements to in preventative

[2:01:16] maintenance, how much longer could we keep some of the equipment going and all

[2:01:20] those kind of things is in part of the planning. And so do we want to increase

[2:01:25] capital improvements every year? I have you know cuz

[2:01:29] constantly need work. So it's it in the modeling that

[2:01:36] It's okay. In the modeling, I mean well that's a

[2:01:38] consideration for me. Um you know, you keep stuff pieced together

[2:01:43] but this is an old system that has been >> And that's what our capital improvement

[2:01:47] plan takes into account for. >> Right.

[2:01:50] » That that our staff has done a remarkable job in in in evaluating and

[2:01:55] planning out the capital improvement plan over time. I don't think anyone is

[2:02:00] questioning that. >> Okay.

[2:02:01] » The what we're asking about what I'm asking about what I hope others are

[2:02:05] considering is whether given the circumstances that we have

[2:02:10] with this large this large 80-year project

[2:02:15] project coming on board whether it is worth making an exception to these

[2:02:21] policies or changing these policies so that it has a lesser impact on our

[2:02:26] ratepayers. >> That is the point.

[2:02:29] » Yes. It's not I that I agree. They have a capital

[2:02:32] improvement plan that that staff has done a remarkable and and detailed job

[2:02:39] not kicking the can down the road. >> But they in consideration of that plan,

[2:02:43] they're always using this as the measurement how far they can go. Would

[2:02:47] they go further if these numbers were different?

[2:02:51] And that's what the modeling is. >> Um sorry, I just want to point out I I

[2:02:56] think we're unfortunately going to be losing you at the end of the year with

[2:02:59] your retirement. And so um it may not be the best timing to go to

[2:03:04] sort of a very technical um fancy solution um at this point. So I'd love

[2:03:09] to just hear your perspective on that at the next meeting, too, on whether you

[2:03:13] think any proposed changes are going to be

[2:03:16] sustainable and recommended given the staff transition as well.

[2:03:19] » You mean right now do I think that? >> You don't have to answer now.

[2:03:22] » Um well, I think that there's um some duplication in the reserve area and

[2:03:29] I would you know

[2:03:32] I think it's worth taking a look at, yes.

[2:03:34] Um

[2:03:37] So >> I don't anticipate anti- uh being

[2:03:41] uh in favor of making drastic changes, but um

[2:03:45] tweaks, yeah, I think I think that's possible and and could be warranted.

[2:03:48] » Thank you. >> Let me see if we can have a show of

[2:03:51] hands about moving on to the next item, please.

[2:03:57] Thank you. >> I had so much more to say.

[2:04:00] » [laughter]

[2:04:03] » All right, team. Thank you very much. Um

[2:04:08] we're [clears throat] going to do a section where uh Mr. Taylor is going to

[2:04:10] review the board work schedule. >> Yes.

[2:04:13] » Request. >> Yes.

[2:04:18] What happened to number two? >> Is it time for requests?

[2:04:21] » Is it time for what? >> Requests.

[2:04:23] » No. >> Yes.

[2:04:24] » What happened to number two? >> Requests from board members.

[2:04:27] » Okay. Um

[2:04:30] » The policy review is not happening. >> Excuse me.

[2:04:36] I'm sorry, Joe. Picking it up in my ears. Say again.

[2:04:40] » 82 >> Thank you, Mr. Woods.

[2:04:44] » That was the bid process. You're already there.

[2:04:50] » [snorts]

[2:04:56] » We're on F1, correct? >> We are on

[2:05:00] on What do you say? F1 what?

[2:05:03] » Um the board work schedule. >> Yes.

[2:05:07] Review for board work schedule.

[2:05:09] » Okay. Okay, so I would like to formally

[2:05:12] request that the board approve development of an informational memo by

[2:05:16] the Owasso staff prior to our discussion and action item that's scheduled for

[2:05:21] September 10th, 2026 titled review draft developer reimbursement policy.

[2:05:26] And the following winter 2025 the Owasso board and staff co-developed a memo

[2:05:29] template to be used in future instances of requests for new or expanded

[2:05:33] services. The draft policy proposes creating a new

[2:05:36] financial management service to be fully implemented and overseen by Owasso staff

[2:05:40] as well as levying substantial fees on newly connected customers moving forward

[2:05:44] to reduce the financial burden on housing construction companies that

[2:05:48] install new water and sewer pipes in our area.

[2:05:51] In line with the agreed upon procedure, I have requested an informational memo

[2:05:54] to accompany the draft developer reimbursement policy via our internal

[2:05:59] written correspondence on June 4th, 2026.

[2:06:02] No board members raised any objections at that time. The proposed subheadings

[2:06:07] included alternative approaches, the overlap with existing policies, examples

[2:06:11] from other locations, estimated implementation costs and fees, impact

[2:06:16] projection including pros and cons, and ethical considerations, and a monitoring

[2:06:20] strategy. Following extensive conversations with

[2:06:23] the Owasso staff, thank you Monica and Fishman who's not here, um I believe

[2:06:28] that the limited information consisting of the draft policy itself and the

[2:06:31] endorsements that we've received today um have been incomplete and balanced and

[2:06:36] potentially misleading in a few of these categories.

[2:06:39] So, I would briefly remind the board that we have all sworn an oath to fairly

[2:06:42] represent the interest of current and future WASA ratepayers when taking

[2:06:45] decisions, and I don't believe that we can achieve our common value of robust

[2:06:49] and defensible processes to ensure community confidence in our

[2:06:52] decision-making without having access to the supporting evidence.

[2:06:56] My request is that the members of the board make the collective will of the

[2:06:58] board known at this time by verbally indicating their support or their

[2:07:01] reasons for declining support for the memo preparation. Thank you for your

[2:07:05] consideration.

[2:07:11] » So, I think you're asking us to show of hands

[2:07:16] to support what you're proposing. >> What what are you asking for?

[2:07:20] » I'm asking for the staff to prepare an informational memo prior to the

[2:07:23] discussion and action item at the next meeting.

[2:07:29] » That includes the your

[2:07:33] That sounds like a simple request. The detail that you've just discussed sounds

[2:07:36] like a lot of information. >> Yeah. There's some categories in the

[2:07:39] memo just like the other memo templates that we adopted previously.

[2:07:46] » [clears throat] >> Can you go through the line items in the

[2:07:49] memo you're requesting? >> Yes.

[2:07:50] » I think you're I think your request is fair. I just want to enu- if you

[2:07:54] enumerate what you're asking for. >> Okay. So, alternative approaches to this

[2:07:59] specific policy. So, this policy um being compared to other alternatives

[2:08:03] that might be available. >> Do you Do you know of other

[2:08:06] alternatives? I mean, I'm just asking. >> Yes. So, alternative could be the status

[2:08:10] quo that there is no new policy. Another alternative could be a coalition among

[2:08:14] developers that works on creating private contracts. So, there are several

[2:08:18] other alternatives that need >> Didn't we vote that we were going to

[2:08:22] have this new policy? That they were going to work on the reimbursement

[2:08:25] policy, and we were going to We've already voted I think.

[2:08:28] » No, the vote failed. >> Oh.

[2:08:29] » Huh? >> The vote failed.

[2:08:31] » No, the prior vote is to there was a

[2:08:35] previous vote that we adopted a reimbursement policy.

[2:08:40] » No, we did not. >> We didn't adopt the actual policy, but I

[2:08:45] thought we voted on >> to proceed into draft one. That's what

[2:08:49] we voted on. >> the the go ahead to staff

[2:08:52] » to draft one. >> to to redraft it and

[2:08:54] » So, we didn't include in that alternatives. We just said come up with

[2:08:58] a policy that meets what we passed in our motion.

[2:09:01] » Yes, so we received a draft policy and we received endorsements from specific

[2:09:06] people. We haven't received a memo that analyzes the effects of the policy.

[2:09:14] Do you want me to go through >> Yeah, go ahead. I'd like to. Thank you.

[2:09:17] » So, alternative approaches, the overlap with existing policies, so specifically

[2:09:22] um the excess capacity credit policy that

[2:09:24] we have in place right now. Uh examples from other locations,

[2:09:29] estimated implementation costs and fees, the projection of the impacts, the

[2:09:33] magnitude of the impacts including the pros and the cons, ethical

[2:09:36] considerations, and a monitoring strategy.

[2:09:39] » See, I thought that's what we discussed. All of these

[2:09:45] that you're talking about were part of the conversation should we have a

[2:09:48] reimbursement policy? That was the initial threshold question I thought.

[2:09:53] And we decided we should if a developer down the road, you know, was there going

[2:09:58] to be mechanism for a reimbursement to them.

[2:10:04] Okay, and and I think what we had asked them to come up with is a is the

[2:10:08] mechanism, but we already approved prior what failed was their proposed

[2:10:15] mechanism I thought. I could be very confused. Council, do Do

[2:10:20] what I'm talking about? >> Yes, I do.

[2:10:22] » Thank you. Somebody does. >> [laughter]

[2:10:26] » The board has decided to

[2:10:31] task the staff with coming back with a reimbursement policy.

[2:10:37] That that decision by the board

[2:10:40] I think was based on a judgment that there should be a reimbursement policy.

[2:10:46] The specifics of that policy were were not set out in that vote.

[2:10:50] » And that's what failed. >> that's why the

[2:10:55] the staff was tasked with going out and bringing you back a draft

[2:10:59] reimbursement proposal that would include the things the staff understood

[2:11:05] the board agreed about. And the staff has been hard at work on

[2:11:10] that, and there is such a document that would would come before the board.

[2:11:16] I understand that Karen is asking for further analysis of the impacts

[2:11:23] and the alternatives before the board votes on

[2:11:28] the the draft that the staff has been

[2:11:31] working on. And

[2:11:33] you know, that more information is certainly always beneficial. It's up to

[2:11:37] the board as to whether you want to do that or whether you want to

[2:11:40] proceed to consider the the

[2:11:44] draft from the staff. I assure you that in conjunction with general

[2:11:48] counsel, the staff has worked very hard to come up with a draft that

[2:11:53] incorporates what I'm going to say we

[2:11:57] understand the board has said they approved.

[2:12:01] Uh and with that said, uh I absolutely

[2:12:04] agree that the things that Karen is asking

[2:12:08] be done further before the board votes would be helpful to the board's analysis

[2:12:13] of the issue. Is that fairly stated?

[2:12:17] » So, let me ask staff. >> Mr. Taylor,

[2:12:21] do you think that's achievable? >> Not in a month.

[2:12:25] » It requires considerable research.

[2:12:29] » All right, Mark. >> How much research are you envisioning?

[2:12:34] » Well, Monica, do you want to speak to that? I know we've had several

[2:12:37] conversations about your previous requests.

[2:12:42] That information may not be as readily available as you would think.

[2:12:48] » So, Monica Dotson, Deputy Executive Director. Um

[2:12:52] we've done research on similar policies uh for uh water and sewer utilities and

[2:12:59] we've looked at other towns' policies. What we haven't done is look at have

[2:13:04] done conversations with them about the application of it. Um you know, what's

[2:13:09] the success rate of it? You know, have there any been any other unintended um

[2:13:14] consequences to the policy or again, what's been the success rate? So, we

[2:13:18] would need to reach out to towns and the other agencies to get more of that more

[2:13:22] in that information. Um

[2:13:26] the effects of the policy. So, for the alternatives analysis, it would

[2:13:30] definitely be helpful uh

[2:13:33] to understand what other alternatives that the board's aware of. Um we looked

[2:13:37] at other ways that the mechanisms that we

[2:13:41] looked at meet the growth pace for growth principle. So, um if there other

[2:13:46] mechanisms that the board wants to pursue us or other alternatives that you

[2:13:51] want us to look at within that, we know we can certainly do that. So, you said

[2:13:53] that sound like you said there's like a status quo. There's partnerships with

[2:13:58] other developers. I guess maybe when we do our research, we can we can also see

[2:14:02] if there's other ways that that towns or cities are accomplishing this, but um we

[2:14:07] weren't readily aware of any other alternatives. So, to answer the

[2:14:11] question, I think we're going to have to do more research on uh what other

[2:14:15] alternatives might be out there. Certainly, do some more extensive

[2:14:19] research with the application of the policy within

[2:14:22] towns and and other water and sewer utilities.

[2:14:29] Yeah, I didn't get all of the things that

[2:14:32] you're looking for in that. So, I think what what I would want to do is take

[2:14:36] some time to kind of go through that, better understand if this is something

[2:14:39] the board would like to pursue, what would the board members want to see out

[2:14:44] of that so then we can give a better estimate. So,

[2:14:47] based on what I see now, I don't think we could do it within a month. But, I

[2:14:50] would want to make sure that whatever we did met all the board members'

[2:14:53] expectations. >> So, I think

[2:14:56] what we need to do as a board is to agree to go ahead

[2:15:01] with Harris' proposal to defer it past the September 10th

[2:15:07] meeting. >> Yeah.

[2:15:10] » So, again. >> I'm sorry. I'll wait till you're done.

[2:15:11] I'm going to ask respond to what you're saying.

[2:15:14] » Okay, great. Um >> Mr. Chair, normally requests and

[2:15:18] petitions from board members would follow a process

[2:15:24] where you all decide if So, it would take five members to decide

[2:15:28] you want to advance that request and then it's referred to staff to do

[2:15:32] exactly what Monica suggested, which would be to to try and

[2:15:37] determine how long it would take us to address the request. So, I think the

[2:15:41] first item is to determine if there is a majority of the board that wants to

[2:15:47] pursue the request. >> Exactly where I was going, but thank you

[2:15:50] for saying it better than I did. Appreciate that. So, that's where I was

[2:15:54] going to go. I was going to suggest now we have a vote and see

[2:15:59] from the board members that are here >> Well, there's no second Is this a

[2:16:02] motion? It's a request.

[2:16:04] » Okay. >> If If I respond to that, we have

[2:16:08] already, in my opinion, said that we're going to have a reimbursement policy.

[2:16:13] Considering alternatives or considering status quo is opposite to what we've

[2:16:18] already agreed to move forward. What And I think more information is great. I

[2:16:23] don't oppose that. But but the how expansive it is is making an

[2:16:28] assumption that we would actually reverse what we have already decided to

[2:16:32] do, which is to create a reimbursement policy and not maintain the status quo.

[2:16:37] So, I would oppose those portions of it that you're requesting that are so broad

[2:16:42] to because we have a development community. Our job

[2:16:48] is to Our job is to represent the ratepayers, not the developers,

[2:16:53] not the town of Chapel Hill or Carrboro, the ratepayers in the 22,000 people uh

[2:16:59] uh accounts and the people involved. That's our job.

[2:17:03] And they're paying a lot of money, and I've asked the question many times, if

[2:17:08] we have more ratepayers, we certainly have the capacity, can we uh if we have

[2:17:13] more development, are there more people to share in these rates and to pay the

[2:17:18] bills? Cuz that's our only source of money. And we, based on the

[2:17:22] conversation, we passed the threshold issue. So,

[2:17:28] I think that delaying this is not fair to the ratepayers, nor to the developers

[2:17:34] who are sitting there wanting to spend tens of millions of dollars to bring

[2:17:39] utilities. How do they get fairly reimbursed? How do other towns, other

[2:17:44] communities deal with it? And that was the mechanism we've asked the staff, and

[2:17:50] we voted on to have the staff pursue for us. We did when we did the threshold

[2:17:54] issue. So, I'd like to keep that moving forward. I don't represent developers.

[2:18:00] I am represent taxpayers, and things get stalled here so long with so much study

[2:18:06] and then looking for counter and counter. You voted against

[2:18:10] moving forward with any mechanism and I'm respectful of that. But I don't want

[2:18:15] this recommendation

[2:18:18] to be a way to stall the process cuz I don't think that's fair. There were four

[2:18:22] votes for, it would have passed but we needed five. By September there will be

[2:18:28] five votes is my guess. And it will pass under some mechanism that's recommended.

[2:18:33] And I'm just saying I I'm for some of your proposal and others I oppose

[2:18:37] because it's down a rabbit hole we've already decided not to go.

[2:18:42] » All right. How many of us would vote to move

[2:18:45] forward with Terrence's recommendation and allow the staff time to

[2:18:51] do some more research. I'm likely not meet the September 10th

[2:18:55] deadline and bring it back.

[2:18:59] » [snorts] >> Show of hands, please.

[2:19:03] » To What what are we voting on exactly? Like

[2:19:06] the problem is >> The The request that the staff have

[2:19:08] permission to prepare a memo. >> Right, but you read off like there's

[2:19:12] like 20 points on the memo. >> There are not 20 points. There's seven

[2:19:16] subheadings which is similar to the memo template we've already adopted last

[2:19:20] fall. >> So so are we talking about all seven of

[2:19:22] those that we're voting on including the the status quo?

[2:19:27] » Judy has suggested that she does not want to consider any alternative

[2:19:30] approaches besides this policy or no policy. She She believes those are the

[2:19:34] only two approaches we need to be considering.

[2:19:35] » I think we are >> I think she was not saying that. I think

[2:19:38] she was saying um

[2:19:40] a pol- this policy or another policy, but no change in policy has already been

[2:19:44] voted on. >> What's wrong with asking providing

[2:19:49] clarification? What's the problem? Oh, there's what's the problem with

[2:19:53] getting clarification? >> Yeah, none. For a decision for a

[2:19:56] decision that we not have been made later.

[2:19:58] » Well, >> cuz that's what she's asking for.

[2:20:00] » I've I've objected to including in that the status quo or alternatives. We've

[2:20:06] already decided on a policy. So, why would we

[2:20:09] » We decided to move forward with a policy. That doesn't mean this specific

[2:20:12] policy is the only policy that could exist.

[2:20:14] » Well, the we did say we do a what is it called? A reimbursement

[2:20:19] policy. We voted on a reimbursement policy, not an alternative and not a

[2:20:23] status quo. A a a moving forward establishing a mechanism. That is what

[2:20:29] we voted on in my recollection or maybe my memory's gone.

[2:20:34] » There's no room for this policy to change at this point.

[2:20:36] » can't No, no, we have no policy as far as

[2:20:39] what the mechanism is. That's what we've asked them to do is come back with lots

[2:20:44] of information. What's the mechanism that is fair that we proposed to the

[2:20:49] developers and they came in with various things that had to do Did it include

[2:20:53] interest? Did it include a variety of things? And we looked at it and we said,

[2:20:58] "Go back, you know, talk to all these stakeholders and come back with a

[2:21:02] mechanism that we can then address and vote on."

[2:21:07] And so, an alternative to it that mechanism for

[2:21:11] reimbursement or status quo having no mechanism is not it

[2:21:17] would be going backwards to asking for something we've already that isn't on

[2:21:21] the table.

[2:21:24] » There there's no guarantee of approval of this.

[2:21:27] Though, I I have to point that out. So, the status quo is a future possibility.

[2:21:31] » I I would say that when we voted for a mechanism,

[2:21:35] more than five people voted and and we we know that developers want to put

[2:21:41] infrastructure in at their expense with a reimbursement policy, a mechanism to

[2:21:46] be reimbursed. >> Wait, if you believe there's no

[2:21:48] information in the world that exists that could possibly change your mind

[2:21:51] about what's in that policy. >> What I know in the world Oh.

[2:21:55] I I don't need to use AI and I know there's not an alternative or a status

[2:22:00] quo that will work for putting in infrastructure and

[2:22:03] reimbursing >> Okay, that's how you feel. That's fine.

[2:22:06] » That's how I feel. Now, the other >> for the future and that's all

[2:22:09] » No, yeah, and I don't think we we're reversing That would be reversing it, in

[2:22:13] my opinion. Those two particular points. The other

[2:22:16] information, let's research it. >> So, we have

[2:22:20] multiple polar perspectives.

[2:22:24] » I I don't understand We aren't talking about voting. We're

[2:22:27] talking about getting information. >> Correct. That informs our ability to

[2:22:32] make a decision. >> Moving forward

[2:22:34] » Yeah. >> with the request

[2:22:36] » Yeah. >> for more information

[2:22:40] to thereby defer a vote on September 10th.

[2:22:45] So, the >> What's the rush?

[2:22:47] » I We've >> I could do it like rappers say, "What's

[2:22:49] the rush?" >> We've had a single memo

[2:22:51] without any memo informing our discussion. And I've had to ask for

[2:22:54] hours conversations questions to Monica over and over

[2:22:58] because we have not had a well-prepared memo going into a discussion yet.

[2:23:02] » But, they're going to give us one next >> I would like this not to be wasting my

[2:23:05] time, either. >> But, okay.

[2:23:08] It is interesting that the people who've already voted no against having any

[2:23:12] policy are for stalling this and delaying it. And I think it's a delay

[2:23:17] » accusation, but it's not an attack. >> I'm actually I spent years studying

[2:23:22] evidence-based policy and I don't think that's what we're doing here. And and I

[2:23:25] have an issue with it and that's my ethics and that's my values that I have

[2:23:28] to uphold for myself. So, I don't appreciate that.

[2:23:30] » And I'm respectful of that. >> You're not.

[2:23:32] » But, I am saying the two things you said >> There's a proposal

[2:23:37] uh before the board and you asked for votes

[2:23:40] and I think people started to vote. But, uh I suggest that

[2:23:46] arguments at this level are not useful and that you go ahead and vote and see

[2:23:51] if there five votes for proceeding

[2:23:56] uh with Karen Turkquist or not. If they are

[2:23:59] not then the matter is not still on the table.

[2:24:04] » Let's proceed with the vote. All in favor of Karen's request, raise

[2:24:09] your hands, please. Say aye. >> Aye.

[2:24:13] » Three Three votes for it.

[2:24:15] All opposed, say nay.

[2:24:19] Three votes against. So, Karen, it did not pass.

[2:24:22] » Mhm.

[2:24:25] » Thank you for suggesting it.

[2:24:27] Pat Taylor is now going to review the board work schedule.

[2:24:30] » Yes. Uh reflecting back on the board's earlier discussion about the um

[2:24:36] effective governance training that was canceled for today

[2:24:40] um and trying to determine what needs to happen next

[2:24:45] with the August 27th. I would like some direction

[2:24:49] from the board on whether we're proceeding with a training on August

[2:24:54] 27th or we pursuing [clears throat] other dates. And I would remind you all

[2:24:59] that uh we also have to coordinate those

[2:25:02] dates with the consultant uh to be able to have their availability as well.

[2:25:10] » I think that if it is important for these three sessions to happen in order

[2:25:16] that uh you just have to go back to the drawing board and ask the consultants

[2:25:20] what the next three dates are for um if they don't have to be in order

[2:25:25] then you know, the 20 then poll the

[2:25:31] the rest of the board for whether they're available on the 27th or not. Um

[2:25:36] » Well, we can all we know several board members will not be available. And the

[2:25:40] requirement for non-board members to be there is going to present a

[2:25:46] » It's going to be a challenge regardless. >> That is almost insurmountable.

[2:25:50] » Well, that's what the chair said. >> I'm sorry, say it again, please.

[2:25:53] » You said it. All nine people had to be there.

[2:25:56] » I think that I I cannot understand moving forward with a series like this

[2:26:01] without all nine board members. >> So, that there isn't a rule?

[2:26:05] » Say again? >> I said that's the rule then, right? I

[2:26:08] nine nine of nine. >> I would gently push back on that. I mean

[2:26:11] » Push back? >> I I'm not going to be on the board after

[2:26:14] a year. So, like I mean we're we're we're spending months making, you know,

[2:26:18] doing workshops. Like I I'm term limited out. So, like we're nine board, you're

[2:26:23] going to have a new board eventually. So, I think it we we could relax that

[2:26:27] requirement. I mean, I can't remember the last meeting where all nine people

[2:26:30] were here. >> [laughter]

[2:26:31] » How do you all feel about >> I think it's unrealistic to to try to

[2:26:36] schedule three events with all nine board members.

[2:26:40] » Okay. >> And I think that it that we just need to

[2:26:43] get this we need some training, we need some materials, and and we need to

[2:26:49] collectively move forward. So, I would encourage you not to have that as your

[2:26:53] bar. >> Okay, I would accept the encouragement.

[2:26:56] What's the minimum threshold?

[2:27:00] » Majority rule. I Well, I would >> [laughter]

[2:27:03] » I would say goal the goal would be seven.

[2:27:06] Um seven of nine seems like a a significant amount. The goal would be

[2:27:11] seven. I'm not saying that's a hard fast rule,

[2:27:15] but um you know, if you get less than six, then you know, you really are

[2:27:20] dwindling in terms of the ability of the organization of the of the board to

[2:27:25] to gain knowledge and work together and learn how to be more productive.

[2:27:29] » Okay, I I accept that.

[2:27:32] » Oh.

[2:27:35] » So, between the six of us, we'll set a threshold of

[2:27:42] » [laughter] >> seven? Six.

[2:27:45] » Right.

[2:27:48] I'm I'm just kidding. Cuz we could have had the meeting today.

[2:27:52] » Yep.

[2:27:57] » Help me with this and stay on schedule. >> I I would

[2:27:59] » Seven. >> Seven.

[2:28:00] » Seven. >> Aim for seven. And if you can't get

[2:28:03] seven, see if six will I mean, it's just like with this many people

[2:28:08] » We'll get what we can. >> You get the most you can. And if it's

[2:28:12] important for those three things to happen in order, then

[2:28:16] the 27th could be one of the dates or

[2:28:20] move onward. >> Okay, can you also video it so that the

[2:28:24] people that miss can go back and see what happened?

[2:28:27] » I think the material I don't know. I don't know. I I was

[2:28:30] » If If you really care about them learning it,

[2:28:33] why not video and let them see? >> I would defer that to others. I wouldn't

[2:28:37] make that >> I would say participation

[2:28:39] would be critical in the actual conversations

[2:28:44] rather than just observing. >> But some knowledge is better than none.

[2:28:48] » [laughter] >> I mean, it wouldn't be a bad idea to

[2:28:49] have it videoed if we could, just even for memory.

[2:28:52] » We can do that. >> So, Todd, I think we have marching

[2:28:56] orders. >> So, August 27th,

[2:28:59] we will see if we have seven board members available for that date and then

[2:29:05] go from there. >> The 27th of August.

[2:29:08] » Yes. >> Yeah, I'm trying to be Fs.

[2:29:11] » [laughter] >> Just kidding.

[2:29:14] » Thanks. >> Um September 10th, we do have uh quite a

[2:29:19] quite a lengthy agenda there. As was discussed earlier,

[2:29:23] uh we will uh move the um the uh

[2:29:28] galvanized service line replacement item to that agenda for further discussion

[2:29:33] and bring back the information if board asked for.

[2:29:36] At that same meeting we also have the just talked about the draft development

[2:29:41] reimbursement policy. We'll continue the discussion on the financial management

[2:29:45] policy. We also are going to have a review for

[2:29:49] you all on University Lake extension of services policy. And just briefly on

[2:29:54] that we do expect that we're going to receive a petition from the

[2:29:58] state. There are some billing wells out in the

[2:30:03] area of the old Towers gas station out on 54 that have

[2:30:08] become contaminated from some of that. And we do expect that the state

[2:30:12] approaching us about extending services out there. So we're thinking that might

[2:30:16] be coming in October. And I wanted to give you all an overview of the policies

[2:30:21] that dictate extension of services in that area.

[2:30:26] » And who pays for them? >> Yes, this would be a state funded

[2:30:30] project, but there are specific policies we have on development out in the

[2:30:35] University Research Park. So we have that on there. We'll have an

[2:30:38] update on our developer community engagement.

[2:30:43] And then 12-month calendar if you all look ahead

[2:30:47] having questions on that it's in your packet as well.

[2:30:50] » Okay.

[2:30:54] Any questions from board members about the schedule?

[2:30:58] If not summary of our board meeting on your schedule.

[2:31:02] » Yes, I I mentioned one about moving on the gallon service line replacement to

[2:31:07] the next meeting. We also had a request to schedule board presentation on

[2:31:11] professional services procurement. And we will look for an appropriate time to

[2:31:17] get that scheduled as well.

[2:31:21] » I don't think you missed anything. Thank you.

[2:31:24] If there are no other business for the board,

[2:31:28] are there any other business for the board?

[2:31:30] If not, without objection, the board of

[2:31:33] directors will be in a closed session to discuss confidential information

[2:31:37] regarding cybersecurity in accordance with NC General Statutes 143-318.11.a.9.

[2:31:47] Following the closed session, we will reconvene in open session

[2:31:50] after completing any other business. The board was planning to enter a second

[2:31:55] closed session to discuss personnel matters. However, I'm going to suggest

[2:31:59] we cancel that on the fact there's just not enough board members here tonight to

[2:32:05] have a conversation.

[2:32:07] I think we need more than six.

[2:32:12] All right.

[2:32:15] So, we're going to enter closed session. >> Yes.

[2:32:17] » Excellent. >> Thank [clears throat] you.

[2:32:19] You're going to stick around and Tim and you're going to be here for the

[2:32:24] This is the cyber >> I'm sorry. I'm glad I missed that. Yes.

[2:32:31] » This is closed session on cyber? >> Yes. Closed session on cyber security.

[2:32:34] Do you want to stay? >> Yes, so you'll stay.

[2:32:35] » So, me, Monica, and Stephen will stay as well as Tim and Simon.

[2:32:39] » Great. >> I need a shirt.

Board of Directors

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