Commission Minutes September 22, 2016

For your consideration, please review the minutes for the Commission Meeting from September 22, 2016:

bgjwsc__commission_meeting_minutes_september_22_2016_w

To read the minutes, please open or download the pdf from the link above or you may see more below:

PRESENT:                             

Thomas A. Boland, Sr., Chairman

Donald M. Elliott, Commissioner

Allen Booker, County Commissioner

John A. Cason, III, City Commissioner

Ronald Perry, Commissioner

Robert Bowen, Commissioner

ABSENT:                               

Clifford Adams, Vice-Chairman

ALSO PRESENT:                 

Jimmy Junkin, Executive Director

Charlie Dorminy, Legal Counsel

John D. Donaghy, Director of Administration & Finance

Todd Kline, Senior Engineer

Pam Crosby, Director of Purchasing

Kirk Young, Superintendent Systems Pumping and Maintenance 

Commissioner Boland called the meeting to order at 2:00 PM. Commissioner Booker provided the invocation and Commissioner Boland led the pledge.

PUBLIC COMMENT PERIOD

Jay Roberts, Roberts Tate Law – Jay Roberts, Frederica Development. Wanted to make a few comments on capacity in sewer in Basin 2032 and North.  Frederica Development has obtained records from JWSC on the actual measured flow and has been analyzed.  The engineers for Frederica Development shared the initial measurement indicates capacity in 2032.  The next subject Mr. Roberts discussed was on the Sewer Tap Policy.  Mr. Junkin stated that a draw down test has been performed and does not exceed the some 400 outstanding taps previously purchased that have not been connected to laterals.  A number of changes are being made to the Policy and will provide a more aggressive path to distributing available taps.  Mr. Roberts stated that Frederica Development is against the Tap Fee Policy as it does not provide assurance of tap and does not provide transferability of taps.

There being no additional citizens who wished to address the Commission, the Chairman closed the public comment period.

EMPLOYEE RECOGNITION – Commissioner Boland

Commissioner Boland read a letter from Sapelo Farms, BA Lewis and Gabe Marr. The letter thanked Mike Fields, Senior Inspector, the crew of the BGJWSC, and the Woodard Construction crew for their timely and efficient work on Canal Road this summer.  It continued saying that the installation of water and sewer lines can be inconvenient and cause much contention, they found the workers to be courteous, considerate, and accommodating.  One particular instance a worker came back after hours to install a culvert that had been removed in order to prevent erosion or flooding from heavy rains that were expected.  Mr. Fields worked with Sapelo Farms to insure that customers had access to the farm for their weekly produce although construction had closed the road and driveway at times.

Commissioner Elliott made a motion seconded by Commissioner Cason to excuse Commissioner Adams from the meeting today. Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

COMMITTEE UPDATES

Communications & Customer Service Committee Commissioner Adams

There was nothing new to report.

Economic Development Committee – Commissioner Elliott

There was nothing new to report.

Facilities Committee – Commissioner Perry

There was nothing new to report.

Finance Committee – Commissioner Elliott

Will discuss as part of the meeting today.

Human Resources Committee – Commissioner Cason

There was nothing new to report.

Legislative Committee – Commissioner Boland

There was nothing new to report.

APPROVAL

Minutes from the September 1, 2016 Regular Meeting

Commissioner Cason made a motion seconded by Commissioner Bowen to approve the minutes from September 1, 2016 Regular Meeting. Motion carried 6-0-1 (Commissioner Adams was absent for the vote).

Minutes from the September 1, 2016 Executive Session Meeting

Commissioner Elliott made a motion seconded by Commissioner Cason to approve the minutes from the September 1, 2016 Executive Session Meeting. Motion carried 6-0-1 (Commissioner Adams was absent for the vote).

Minutes from the August 30, 2016 Special Called Tap Fee Policy Meeting

Commissioner Cason made a motion seconded by Commissioner Booker approve the minutes from the August 30, 2016 Special Called Meeting Tap Fee Allocation Hearing. Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

Minutes from the September 20, 2016 Special Called Tap Fee Policy Meeting

Commissioner Cason made a motion seconded by Commissioner Booker to approve the minutes from the September 20, 2016 Special Called Meeting Tap Fee Allocation Hearing. Motion approved 6-0-1 (Commissioner Adams was absent for the vote)

Financial Advisor Award Recommendation – P. Crosby/J. Donaghy

Pam Crosby presented the Financial Advisory Services contract recommendation to the Commission. Pam stated the JWSC is looking for a financial advisor with expertise in governmental financing.  This party will help with reviewing, evaluating, planning, developing, and administering our financial operations and capital projects and financing plans to support those areas.  With the recent regulatory changes about 2 years ago this party will act as a separate advisor and will not be able to be our underwriter for bond financing.   The RFP process was issued on August 4th and we received 7 proposals on September 8th.  Four (4) of the top firms that were interviewed were Davenport & Co.; PFM Public Financial Management, Inc.; PRAG Public Resources Advisory Group; and Stephens, Inc.  After the post interview the selection team reviewed notes and reference checks it was decided upon the Davenport & Co. firm was selected and the recommendation to bring before the Commission.  This choice was due to the firm working with and advising similar sized utilities, multiple inter-governmental agencies and using combined financing initiatives.  Davenport & Co. also provides the option of an education program for our Commissioners which would walk them through the bond process and rating agencies to help maintain a good ratings.  They also provided competitive service rates when compared with other proposals.  John Donaghy stated that all of the firms would well serve the JWSC and were excellent firms.  Each of them had several points in common in terms of their recommendations for the JWSC which addressed our current bond issue, debt service reserve concerns, and credit ratings Moody’s and Standard & Poor’s.  They all stressed the importance of our available cash balances to the strength of our credit ratings.  Davenport & Co. did offer a standard alternative to the flat rate pricing.  Commissioner Boland stated the debt when JWSC began was approximately 50M and has been reduced to 39M and it is necessary to keep money in reserve to keep the bond rating.  It was stated that JWSC needs to look at ways to finance all of the repairs and improvements that are necessary and it is imperative to have a Financial Advisor when looking to obtain bonds.

Commissioner Elliott made a motion seconded by Commissioner Cason that the BGJWSC move forward and enter into a contract with Davenport & Company to provide Financial Advisory Services to the BGJWSC. Motion approved 6-0-1 (Commissioner Adams was absent for the vote)

Tap Fee Allocation Policy – J. Junkin

Mr. Junkin presented the Tap Fee Allocation Policy. He stated that some changes have been made to the policy after the meeting Tuesday Public. Sections were added to address the calculated risk of issuing sewer capacity taps ahead of project completion with a hold harmless agreement. Another major change was the issue as to who fits into the larger developer category. As projects come into effect that upgrade our assets and allow greater capacity a lottery will be conducted. It was noted that we will exceed capacity available by the demand that is already requested. So based on the comments from the previous meeting is a need to break the developer and home builders into 2 categories. The larger group that develop 10 or more homes or lots in the last 2 years or have plans approved with the county commission for 10 or more will be considered ‘Category A’ and allocated 85% available of what is available. The other, ‘Category B’, is 15% would go to the single home builders. The policy then breaks the process down to two phases of allocation in which a hold harmless may be necessary for anticipated capacity. Once the engineers have reviewed capacity that is available and for Category A’ larger builders, a date will be set and those interested come in and receive a lottery number and at the next day the drawing takes place and 10% will be issued. Everyone who shows up or requests a lottery number will receive one. Those who had their numbers drawn during the lottery will be contacted and will have 7 days to come in and receive their tap fees. If someone decides they no longer want tap fees then the next drawn number will be contacted. For the single home builders, 15%, everyone will receive a lottery number if requested. The drawing will be completed when that 15% of total available taps are gone. If there are leftovers of the un-allocated tap fees they will be placed in the larger developer, Category A. The second phase (Phase II) occurs when physical changes, upgrades have been completed and tested with drawdowns to verify the capacity that has been freed up. This will be repeated until all available taps are gone but the second time there is no need for a hold harmless agreement. The last piece is Unsolicited Proposals in which people or groups and are willing to become financially involved in fronting projects to make them happen or make them happen quicker. Anyone who wishes to submit a UP will have the allocations that they have paid for ahead of anyone else who wants to tie into the system. The tap fees are transferable only within a basin. The rented and purchased pumps were discussed briefly. It was noted that the discretion is left in the hands of the Executive Director. There was additional discussion on builders and developers that may stockpile the taps and those that actually need more that 10% of that which is allocated. Mr. Junkin asked if the Commission could approve this and further discussion and adjustments will be going on further down the road.

Commissioner Perry made a motion seconded by Commissioner Bowen that the BGJWSC accept the Tap Fee Allocation Policy as it is presented today.

Commissioner Elliott request that Mr. Junkin also look at the number of homes that an individual builder or developer has constructed be it lots developed and homes built within a 5 year period to determine their size. By reviewing the historical perspective of their marketing efforts and what has been actually sold. It was stated that JWSC should not get into the ethics of what builders and developers are doing with the tap fees. The market will settle things where they need to be. There are some areas in Glynn County where there is no problem getting capacity.

Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

It was noted that more time is needed to prepare for a lottery as it is not ready. It will most likely be ready until after the next commission meeting.

SR 99 Easement – T. Kline

Mr. Kline presented the SR99 Easement subject before the commission. This project includes construction of potable water system and fire protection improvement in the Sterling and Hwy 99 area. There are (4) easements as part of this project.  The Acquisition Group, Inc. (Ronnie Lewis) was hired to go out and negotiate those easements and the land appraiser was performed by Driggers Commercial Group.  The purchase of the easements was approved by the Executive Director and the transactions were completed with the property owners.  This project will help the Sterling Industrial Park and the surrounding area.  It was noted this was to be done 8 years ago and has finally come to completion.  The map was presented and explained that this gives fire protection down Green Swamp Road, the Spur Ext. north of  99, all the way back down to the front of Sterling Industrial Park.  The river bores are in place to come down the easement down 341.  This new line will also go down Grants Ferry Road and extend to the residents there and in front of the fire department and finally provide water for them.  This also relieves the school board on water pressure.

Commissioner Elliott made a motion seconded by Commissioner Bowen that the BGJWSC authorizes the Executive Director to proceed with recording the above referenced water utilities easements. Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

Commissioner Boland stated this will be the first time a fire station in the area that will have a fire hydrant to utilize.

Property Purchase Contract – C. Dorminy

Commissioner Boland updated the Commission regarding the property on S. Harrington next to the Harrington Water Production Facility on St Simons Island. This property provides additional space for projects and allows laydown of equipment if needed, additional parking for staff, and to protect the interest in the facility. The appraisal was performed and the price is lower than the appraisal value and is in compliance.

Commissioner Perry made a motion seconded by Commissioner Elliott to move forward with the purchase of the property and authorize the Chairman to sign the contract. Motion approved 6-0-1 (Commissioner Adams was absent for the vote)

Vac-Con Capital Lease – P. Crosby/K. Young

Pam Crosby presented before the Commission requesting the additional Vac-Con truck to be added into the total making it (4) vehicles. As part of the fiscal year 2017 budget process this Commission previously approved the purchase of (2) Vac-Con trucks form capital reserve funds.  Based on recent repair issues, and critical operational needs identified during staff’s response to conditions from the recent storm, Hermine, the need for additional Vac-Con capacity has been identified.  After assessing these incidents, staff looked at different options to re-align current spending to optimize operational capacity and minimize initial cash outlay and overall impact to the organization’s finances.  Another crew has been added to the Vac-Con staff which brings it to four (4).  Staff would like to increase the number of Vac-Con trucks to be purchased to from (2) to (4).  Instead of making a direct purchase staff would like to enter into a capital lease finance program.  The initial cash outlay would be a lesser amount than what was originally approved for (2) trucks.  The payments could be spread out for 5 years.  This will allow less repair costs.  John Donaghy stated the annual cash flows should come out of the reserves this year but will be built into the operating budgets in years going forward.  This allows the repairs costs that was planned will go towards lease payments.  Kirk stated for fiscal year 2015 a total of approx. $50K was spent on maintenance.  This last fiscal year approx. $60K+ was spent on repairs to the Vac-Con.   Commissioner Boland explained the use of these large vehicles and their importance and constant use in the community.  This item will be brought before the Commission at a later date to discuss alternate capital lease programs and determine the best option.  It was stated by Commissioner Elliott for the Executive Director to review and notify at the next Commission meeting and provide the information all together.

Commissioner Elliott made a motion seconded by Commissioner Bowen that the BGJWSC move forward and to purchase (4) Vac-Con trucks via a Capital Lease Finance program with the condition that staff will seek alternative provider options and that the Executive Director to make the final decision as to which Capital Lease program to use. Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

Unsolicited Proposal Policy – C. Dorminy

Charles Dorminy updated the Commission on the Unsolicited Proposal changes in section III (4). The proposed modification is to change the word ‘shall’ to ‘may’. He stated it has come to our attention after having project discussions with developers that they may not want the vote to occur within 30 days.  This provides more latitude to take it beyond 30 days.

Commissioner Elliott made a motion seconded by Commissioner Perry to accept the wording change made to the Unsolicited Proposal. Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

Rate Resolution Revision – C. Dorminy

Charles Dorminy updated the Commission on the Rate Resolution. He stated in discussion regarding the Allocation Policy it has come to our attention that some language in the Rate Resolution needs to be changed.  It appears the current resolution directs developers with paying the tap fees up front.  Currently we do not have the correct language and ask that this be deferred until the next Commission meeting on October 6th.

Commissioner Elliott made a motion seconded by Commissioner Booker to defer the Rate Resolution Revision to the meeting on October 6, 2016.   Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

Public Information Officer – J. Junkin

Mr. Jimmy Junkin presented to the Commission the position of Public Information Officer. Mr. Junkin stated the new position was allocated in the budget for this year and have researched similar positions with other utilities.  The basic needs have been covered in the job description and duties presented and the salary compensation range of $54 – 85k.  The budget will be reviewed to see where we are in the range.  This person will be under the general direction of the Executive Director and serves as a spokesperson for the JWSC to direct and manage a comprehensive program of public information and education.  This position will help to promote and educate so that folks can understand the value that this utility is to the overall well- being of the community.  The duties will include customer service and develop a program which can educate the schools and proactive in social media and keep the website updated.

Commissioner Booker made a motion seconded by Commissioner Perry to authorize the position of Public Information Officer and authorize the Executive Director to go forward with the advertising and hiring for the position. Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

DISCUSSION

End of Month Financials – J. Donaghy

John Donaghy updated the Commission on the end of August Financials. John stated the packet information includes Balance Sheet, Supplemental Schedule of Cash Balances, Project Report, and the Revenue and Expenses statements for the end of June and August 31 2016.  It was noted that in the Balance Sheet end June 30 that there will be further audit adjustments to be posted before the audit is completed.  In the August column the cash and cash equivalents have increased by approx. 1M.  There is also 1.74M in accounts payable.  In liabilities the current long term debt is 37M and will be paid 2M payment within the next 12 months.  The current fund balances are close to 121M.  John discussed the supplemental cash balances and explained the details showing on the balance sheet.  The project report ending June 30, 2016 which has not been capitalized yet shows costs for are projects that are in progress of 10.5M.  Much of the 3M is shown as encumbrances and purchase orders for further work.  The revenue and expense report was discussed and that the first two months of the fiscal year showing we are running ahead of schedule for total revenues.  It was noted that we are running somewhat behind in the budget for dispersing monies for expenditures and there is $704 thousand of purchase orders outstanding that we have not received good or services for yet.  The money is committed but not yet expended.  The final page reflected that we are running $337 thousand of revenue over expenditures for the year.  These reports were discussed in the Finance Committee earlier this month.  Commissioner Boland explained that JWSC has many more projects than previous years and asks everyone to get behind the SPLOST 2016.

 Project Update: Urbana and Mansfield St – T. Kline

Todd Kline updated the Commission on the Urbana and Mansfield projects. These projects were updated at the City Commission meeting last evening.  The map and pictures of the Urbana area were reviewed as well as the conditions of the streets that the residents are having to cope with.  Todd explained that this is a very invasive project with 1 ½ miles of new gravity sewer installation.  This is replacing old infrastructure that was found to be in poor shape, undersized, and some points blocked and/or collapsed.  It has been a difficult project and Washington Machine out of Macon, GA has been the contractor on site.  When you have existing infrastructure it is necessary to maintain service throughout and a lot of unknowns have been uncovered and undocumented lines, etc.  The road condition and the storm drain was in fairly poor shape and the City approached JWSC to tag onto the project for storm drain improvements.  The City is waiting on materials and may be about 2 weeks.  The paving will be finished once the storm drains are completed.  There was additional discussion on learning from previous projects and paving the roads in stages.  The residents in the area have been appreciative of what is being done.  The project will improve the storm drainage, provide replacement of aged water lines down Talmage, Macon, G Street and will include much needed fire hydrants.  The Mansfield project maps were presented and discussed.  The sewer work is getting completed and tied in.  The project is only a ½ mile of gravity sewer installation and the contractor is Stone Construction.  There have been Change orders and other issues have caused delays.  Most significantly has been debris that has washed through the Lift Station from the storms.  The pictures showed lines that were pulled out of the ground.  There was additional discussion on the laundry business that has been affected by this project.  It was requested to have timelines presented for projects.  The JWSC has recently obtained Microsoft Project and will be tracking with scheduling and measuring and will be part of the production report.   Commissioner Cason asked if the staff could get with the businesses affected by this project and communicate this information.

Lift Station Bypass Pump Update – K. Young

Kirk Young updated the Commission on the Bypass Pump. It was stated that the order has been placed for the HL200 for 2032.  In place are the 2 rented pumps currently.  The purchase has been received and should be placed in order of importance to be Lift Station 2032, 4005, 4048, 4110, 2003, 4105, 2001, 2002, 4039, and 4107.   It was requested of the Executive Director to place pressure on Data Flow asking based on their lack or responsiveness that we are looking for alternatives.   It was also questioned if project 2030 was completed, which it is but SCADA is still not completed.

 Lift Station Back-up Pumps/Capital Lease Payment Options – P. Crosby/J. Donaghy

Pam Crosby presented to the Commission on the Capital Lease Options and different options. With the recent purchase of the pumps at 1.5M the financial team has provided and analysis with a schedule of 1, 10, and 12 month for financing.  An option could be taken to spread out the cost of this purchase and is brought before as a discussion.  The pumps have already been on order and would want to know if the Commission would consider this type of program.  The actual pumps will be net 30 after the receipt of them.  It is recommended to run through the Finance Committee first and see what the lease option is as well as run through another lease option like GMA or GFA.  It was recommended to compare to other options.

 Sea Island Road Line Break Update – K. Young

Kirk Young presented the Sea Island Road Line Break to the Commission. The staff was on site to determine the size of the force main on 2030 and discovered the ditch water was very dark with no fish swimming.  On the other side the water was green with fish around.  The discovery prompted a call to EPD.  It was noted that a culvert header was placed directly atop the force main.  There was many fiber optic lines in the same area and took a while to make the connection.  The existing was completely bypassed and the connection was made at both ends.  The leak was addressed in the paper as required for public notification and was classified as a major spill.  It was noted that JWSC could not provide an exact quantity or volume that hit the waterway it is listed as a major spill.  A good thing was there were no fish spill noted.  Mr. Hawthorne was present at the site and all was documented to EPD.  Work was previously done on this area months ago.  The flow data was compared to see if it was measurable and it was considered a relatively small leak and the right of way permits have been requested.  A time line is being researched as to when this occurred.  The cost in time and equipment of personnel is approx. $20,000.  The concerns remain as it appears to be county work and we are looking to back bill for expenses.  When an SSO hits a major category it falls into a year of monitoring and is mandated and sampling by JWSC staff is required.  There is no ecological damage.

EXECUTIVE DIRECTOR’S UPDATE

Mr. Junkin updated the Commission on the meeting with the Legislative Delegation to seek their advice and support. JWSC faces an expansive Master Plan and Capital program.  Hurricane Hermine update was provided and was stated that JWSC staff did a very good job responding. There were no sewer overflows.  The Vac-Con trucks were available and kept things running.  The water supply was not interrupted.  There are always follow-up in cases like this.  The emergency operations plan has been drafted and needs to be finalized.  IT Tech needs has been identified and will be brought before the commission again at a later date.  A meeting will be held next week to discuss Capital Projects Prioritization, finalizing the Master Plan projects, and financial options with the assistance of the Financial Advisor.   Mr. Junkin stated he will be coming back to the Commission for a discussion on Construction Management Field Engineer for internal and external construction needs and internal staff Engineer to manage design and contract over sight.

There was additional discussion on the capacity readings and providing accurate data to verify capacity.

CHAIRMAN’S UPDATE

EXECUTIVE SESSION

Commissioner Perry made a motion seconded by Commissioner Booker to adjourn into Executive Session to discuss Potential Litigation. Motion approved 6-0-1 (Commissioner Adams was absent for the vote).

The Chairman stated there will not be vote afterwards when the Commission reconvenes.

Executive Session ended

Commissioner Cason made a motion seconded by Commissioner Elliott to adjourn the Executive Session and adjourned the Regular meeting. Motion approved 5-0-2 (Commissioner Adams and Commissioner Bowen were absent for the vote).

There being no additional business to bring before the Commission, Chairman Boland adjourned the open meeting at 4:44 pm.