Commission Minutes March 16, 2017

For your consideration, please review the minutes from the Commission meeting on March 16, 2017:

Commission Meeting Minutes March 16, 2017 with Attachments

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Brunswick-Glynn County Joint Water and Sewer Commission

1703 Gloucester Street, Brunswick, GA 31520

Thursday, March 16, 2017 at 2:00 PM

 

COMMISSION MINUTES

PRESENT:                             

Donald M. Elliott, Chairman

Clifford Adams, Commissioner

Michael Browning, Commissioner

Cornell L. Harvey, Commissioner

Robert Bowen, Commissioner

Steve Copeland, Commissioner

Dave H. Ford, Commissioner

 ALSO PRESENT:                 

Jimmy Junkin, Executive Director

Charlie Dorminy, Legal Counsel HBS

Thomas A. Boland, Sr., Deputy Director

John D. Donaghy, Director of Administration & Finance

Todd Kline, Senior Engineer

Pam Crosby, Director of Purchasing

Chairman Elliott called the meeting to order at 2:00 PM.  Chairman Elliott provided the invocation and Commissioner Adams led the pledge.

PUBLIC COMMENT PERIOD

Chairman Elliott opened the public comment period.  There being no citizens for public comment, Chairman Elliott closed the public comment period.

COMMITTEE UPDATES

Compliance & Legislative Committee – Commissioner Browning

Commissioner Browning updated the Commission with a briefing from the Compliance & Legislative Committee meeting.  Angela Walker presented information on compliance and reporting.  The Intergovernmental Agreement for SPLOST Funding was also discussed.  He indicated that this item would be scheduled for a work session with the County Commission.

Facilities Committee – Commissioner Adams

Commissioner Adams updated the Commission reporting that the Facilities Committee did meet with four items on their agenda.  Approvals on Landscaping and Surplus Equipment would be brought before the Commission in this meeting.  The approval regarding movement of a generator was directed to be brought back for discussion with the committee.  Two presentations were discussed with the committee.

Finance Committee – Chairman Elliott

Chairman Elliott reported that the Finance Committee did meet the previous day.  The Intergovernmental Agreement was also discussed in this meeting.  The surplus equipment was reviewed and approved to be brought before the Commission for discussion and a vote for approval. The facilities landscaping decision was also discussed and approved to be brought before the Commission for discussion and a vote for approval.  GEFA Loans and the associated process was another point of discussion.  A presentation was given by Courtney Rogers of Davenport & Company. The current banking services with BB&T were discussed and explained by Lance Turpin.  The update on the draft budget was another point of mention, along with the 5 year Capital Improvement Program.  John Donaghy briefed the committee on the February End of Month Financials.

Human Resources & Safety Committee – Commissioner Harvey

No update at this time.

Public Information & Customer Relations Committee – Commissioner Copeland

No update at this time.

APPROVAL

  1. Minutes from the March 2, 2017 Regular Meeting

Commissioner Browning made a motion seconded by Commissioner Copeland to approve the minutes from March 2, 2017 Regular Meeting.  Motion carried 7-0-0.

2. Minutes from the March 2, 2017 Executive Meeting

Commissioner Browning made a motion seconded by Commissioner Copeland to approve the minutes from March 2, 2017 Executive Meeting.  Motion carried 7-0-0.

  3. Surplus Equipment – P. Crosby

Pam Crosby presented the surplus equipment being requested for disposal.  They are 2004 and 2008 Sewer Pumping Trucks (Vac-Cons) models and have already been replaced by newer models.  Both units were in need of some repairs and rather than spend the monies to repair them, it is requested to dispose of the property in a manner most beneficial to the JWSC.

Commissioner Bowen made a motion seconded by Commissioner Ford to recommend declaring the surplus equipment, identified as SPMD-403 and SPMD-402, as surplus and to authorize its disposal in a manner most beneficial to the JWSC.  Motion approved 7-0-0. 

  1. Facilities Landscaping Services – P. Crosby

Pam Crosby also presented a recommendation to award the contract for outsourced Landscaping Services. The contract provides coverage that includes 181 water and wastewater pumping and/or storage facilities and one administrative location.  Pam discussed the current contract which was nearing its end and the fact that an Invitation For Bid was issued on January 13, 2017. Out of the 6 firms that attended the Pre-Bid Meeting, 4 firms submitted bids on February 14, 2017.  A four person team of JWSC staff performed a Bid Evaluation on March 6, 2017.  The submittals were evaluated using weighted criteria that included quality of services offering, staff experience and equipment resources to perform the service as well as a cost component.  The combined scores were evaluated and based on the staff’s evaluation a recommendation of award to Coastal Greenery was proposed.  The scope of services and qualifications were on a comparable level, with price savings opportunity annually estimated at $29,760.00 (as compared with the current Landscaping Services Cost) being the most significant factor in the evaluation of scores.  This information was presented to the Facilities Committee on 3/9/17 and to the Finance Committee on 3/15/17 with both committees voting to send to full commission for final approval.

Commissioner Copeland made a motion seconded by Commissioner Harvey that the Brunswick Glynn County Joint Water & Sewer Commission award the contract for 2017-2018 Landscape Services to Coastal Greenery.  Motion approved 7-0-0.

  1. Pump Finance Resolution – P. Crosby

Pam Crosby presented the approval of the loan resolution document regarding 10 Sewer Bypass Pumps.  At the commission meeting held on January 19, 2017, approval was granted to JWSC staff to enter into a capital lease agreement for the purchase of 10 Sewer Bypass Pumps from Key Finance Equipment Corporation.  The terms of the agreement include a 2.32% interest rate, with quarterly payments and a payback period of 7 years. JWSC staff, legal and bond counsel have worked with Key Finance legal staff to finalize the loan documentation, of which the resolution is a component of that package and a requirement of the loan closing set for Monday, March 20, 2017.

Commissioner Browning made a motion seconded by Commissioner Ford that approval be granted to the attached resolution in order to facilitate the loan closing for 10 Sewer Bypass Pumps from Key Finance Corporation.  Motion approved 7-0-0.

  1. Intergovernmental Agreement – C. Dorminy

Charles Dorminy explained that the purpose of the Intergovernmental Agreement was an agreement regarding disbursement of the SPLOST Funds from Glynn County to JWSC for 2 JWSC projects.  This is to help to facilitate project management of those projects and to allow more efficient execution of projects as compared to previous SPLOSTs.  Upon execution, JWSC can begin to work on the North Mainland Improvements project and reduce North Mainland problems.  He explained that the County will receive the SPLOST funds from the State, and then will first disperse 20% to the City, and 25% of the remaining 80% will be dispersed to the JWSC directly.  The JWSC will then hold the funds in a separate account and being the projects.  If the expenses of one project does not add up to the estimated total, then the remaining balance can be added to the funds for the second project.  If that project comes in under budget, any excess money will then be returned to the County and disposed of according to SPLOST law. If the SPLOST money does not meet the anticipated $70 Million, then the amount that the JWSC will receive will be proportionately reduced.

Commissioner Browning made a motion seconded by Commissioner Harvey to approve the Chairman to execute the SPLOST VI Intergovernmental Agreement with Glynn County Board of Commissioners for management of all aspects of the BGJWSC projects.  Motion approved 7-0-0. 

DISCUSSION

  1. February End of Month Finance Report – J. Donaghy

John Donaghy presented the February End of Month Financial Report to the commission. Two items he pointed out on the Balance Sheet were that under Current Assets, Cash and Cash Equivalents were at $2.9 Million as of February.  He noted that during the first week of March, $2.2 Million were transferred to the account funding the R & R Reserve, the Capital Reserve, and the Capital Improvement Fee Reserves, reducing the Cash and Cash Equivalents amount to about $700K.  John then noted that the Bond Sinking Fund shows an increase, but that is due to the upcoming interest and principal payment that was due on March 1st.  He continued to note the JWSC Reserves have decreased from the beginning of the year due to Construction in Progress having increased.  Following the balance sheet he addressed the expenditures and revenues for the year and noted that JWSC is running ahead in revenues for the year.  Operating expenditures were also lower than anticipated by the budget. John then addressed the Project Report indicating the projects that are in progress at the time, the budget, the expenditures year to date and the encumbrances year to date for the projects.  He concluded with an explanation of the funding available for the R & R Projects.

  1. North Mainland Improvement Project Update – J. Junkin

Mr. Junkin gave a brief update on the North Mainland Project indicating that this was a critical project that was identified in the SPLOST VI. As soon as the Intergovernmental Agreement is executed, the staff will begin working on a conceptual plan that the staff has put together to help expedite some of the needs and issues being faced at the North Mainland. A copy of the conceptual schedule was presented. The schedule is expected to start on the first day that both parties have executed the Intergovernmental Agreement. The plan is to help to get some of the immediate demands that are out there for taps in the North Mainland and to help in building homes in that area. Mr. Junkin indicated that staff is looking at multiple ways to front the money until the funds from the intergovernmental Agreement are received. 

  1. Rate Structure – J. Donaghy

Commissioner Elliott gave a brief introduction to the purpose of the Rate Structure presentation, planned rate increase, and process of preparing and presenting to customers and stakeholders. He explained that the process is a lengthy one and that it is a very deliberative process.  John Donaghy then took over the presentation.  He began by explaining that the rate calculation methodology has several components:  administrative costs, debt services, operations and maintenance, and reserve fund based on long-term capital planning requirement. Under the Current rate structure, the base rate consists of administrative costs and debt service which is a fixed fee per account. The administrative costs are divided up by the number of bills that are presented to the customers through the year.  The debt service is distributed by the total number of REU that are anticipated through the year. The consumption rate consists of operation and maintenance and the reserve funds.  An example of a current water & sewer bill was provided. He explained that when looking at the budget there are costs that are fixed over a period whether there is usage or not, for example the maintenance that is required on those facilities.  There are variable costs such as chemicals, and additional power for pumping sewage, pumping water out of the ground and treat it. It was shown that a quick review of the O & M budget indicates $15.8M in fixed costs and $2.7M in variable costs.  The O & M portion of the bill is based on water consumption.  A chart was provided showing the current rate structure. Methodologies of rate structure are being reviewed.  It was noted that there are customers that do not receive a bill for consumption each month since they are not yearly residents (seasonal residents).  These customers are not contributing sufficiently to meet the O & M fixed costs. One methodology would be to structure a base rate that all customers pay to more adequately cover fixed costs.  The base rate may include a number of usage gallons at no additional charge.  The benchmark being considered is the total water bill would not exceed the median water usage of 4,000 gallons.  Based on current 2017 water and sewer rates, this would be a bill of about $50.00.  Based on the current analysis, 15% of the residential customers have zero consumption in any given month.  Extrapolating to the full customer population a base rate may generate as much as $1.5M in additional revenue to cover O & M cost and add to reserves.  Additional rate structure changes for consideration were noted such as the following.  Removal from the rate structure for services provided to special classes of customers.  Removing $1M from the administrative portion of the rates for planning and construction services.  These services would then be paid for by fees paid by developers and builders for plan reviews and construction inspections.  This action would ensure existing customers are not subsidizing development.  In the upcoming weeks. The financial staff will be working with our rate consultants, Stantec to develop options for the commission to consider.  John also noted that additional methodologies may be considered.

  1. Davenport & Company – Courtney Rogers

Courtney Rogers presented the functions and purposes of the relationship between JWSC and Davenport & Company, and the services that they provide to the JWSC.  Davenport & Company is the Commission’s financial advisor, and provides advising on financial planning and rate setting with a focus on positioning the Commission to be in the best financial position possible.  He noted that this is important so that when the Commission needs to borrow funds for capital projects the creditors see a financially strong credit.  The stronger the credit the lower the interest rate available.  He discussed various financing options, and explained credit ratings.  Courtney also compared and discussed the revised revenue bond methodologies of Moody’s, Standard & Poor’s, and Fitch’s.  Davenport & Company’s staff will be working with JWSC’s staff and Stantec in the upcoming months to generate the strongest credit rating and financial position for the JWSC.

EXECUTIVE DIRECTOR’S UPDATE

There was no update at this time from the Executive Director. 

CHAIRMAN’S UPDATE

There was no update at this time from the Chairman. 

EXECUTIVE SESSION

No Executive Session.

Chairman Elliott adjourned the open meeting at 3:07 pm.