Finance Committee Meeting Minutes Wednesday, August 21, 2019
For your consideration, please read the minutes from the Finance Committee Meeting held on Wednesday, August 21, 2019 at 1:00 p.m. in the Commission Meeting Room.
Finance Committee Minutes 8-21-19 with Attachments
To read the minutes, please open or download the pdf from the link above, or you may see more below.
Brunswick-Glynn County Joint Water & Sewer Commission
1703 Gloucester Street, Brunswick, GA 31520
Commission Meeting Room
Wednesday, August 21, 2019 at 1:00 PM
FINANCE COMMITTEE MINUTES
MEMBERS PRESENT:
Steve Copeland, Committee Chairman
Tripp Stephens, Commissioner
Donald Elliott, Commissioner
Andrew Burroughs, Interim Executive Director
ALSO PRESENT:
G. Ben Turnipseed, Commission Chairman
John Donaghy, Chief Financial Officer
Janice Meridith, Executive Commission Admin.
MEDIA PRESENT:
Taylor Cooper, The Brunswick News
Pamela Permar-Shierling, The Islander
Chairman Copeland called the meeting to order at 1:00 PM.
PUBLIC COMMENT PERIOD
There being no citizens that wished to address the committee, Committee Chairman Copeland closed the Public Comment Period.
APPROVAL
- Minutes from July 24, 2019 Finance Committee Meeting
Commissioner Stephens made a motion seconded by Commissioner Copeland to approve the minutes from the July 24, 2019 Finance Committee Meeting. Motion carried 2-0-1. (Commissioner Elliott abstained due to absence on July 24.)
- North Mainland Smoke Testing Award – A. Burroughs
Andrew Burroughs presented that on July 26, 2019 the Request for Proposals was released for Smoke and Dye Testing Services for the Brunswick and North Mainland Districts. He provided that staff had monitored the pump run times for the various pump stations beginning with a “40” number, and any of those that had a significant increase in pumping during rain events were deemed in need of smoke testing. Mr. Burroughs recalled that for St. Simons Island flow monitoring was done to determine where to do the smoke and dye testing there, however for Brunswick and the North Mainland the pump run times were sufficient to make the determination of which basins to do that smoke and dye testing. An estimated twice the footage will be tested on the mainland as was done on the island. Mr. Burroughs provided a map for the Committee to review the basins that will be tested. He then advised that three firms submitted proposals of which a three person evaluation team reviewed and scored, and he also provided a copy of the RFP Evaluation Summary for review. Based on the evaluations staff recommended awarding the project to Public Utility Management Planning Services, Inc. at the cost of $231,648.81 which is significantly less than the budgeted amount for the project. The full timeframe proposed by PUMPS is 180 days including final reporting. Mr. Burroughs provided that the home office for PUMPS is located in Hollywood, FL.
Commissioner Stephens made a motion seconded by Commissioner Elliott to move that the Finance Committee move the Approval Item – Contract Award with Public Utility Management Planning Services, Inc. (PUMPS), in the amount of $231,648.81 for Smoke and Dye Testing Services for the Brunswick and North Mainland Districts to the Full Commission. Motion carried 3-0-0.
Before moving on to the Discussion items, Committee Chairman Copeland inquired if Mr. Burroughs was planning to bring forth a Resolution to the Commission on the following day for the GEFA Loan. Mr. Burroughs advised that this could be done and that on the prior day the loan approval was received from GEFA. He provided a copy of the letter received from GEFA for review and commented that the loan documents had been received but to move forward there were a few more steps to be completed.
Chairman Copeland suggested that the Finance Committee should approve for the GEFA Loan to be brought forth for approval by the full Commission, and inquired if a motion needed to be made to add the item to this meeting’s agenda.
Commissioner Elliott asked what is required to be approved by the Commission. Mr. Burroughs provided that a Resolution is required from JWSC’s Governing Body that states that JWSC agrees to repay to loan pursuant to the loan agreement and that the money is going to be used for the projects as originally presented to GEFA. This loan will be used for rehabbing Academy Creek Treatment Plant and also Sewer Line CIPP work. Mr. Donaghy advised that in accordance with the JWSC Financial Policies there are also several conditions that must be incorporated within the Resolution. Mr. Burroughs provided that this information and document could be prepared and available for the next day’s Commission Meeting. Committee Chairman Copeland requested a motion to add this to the Finance Committee Approval Agenda in order to move forward to the full Commission on the next day.
Commissioner Elliott made a motion seconded by Commissioner Stephens to add the Resolution of the Governing Body for the GEFA Loan as Approval Item #3 on the Finance Committee agenda. Motion carried 3-0-0.
Chairman Turnipseed added this loan is in the amount of $15M. Mr. Burroughs confirmed that the GEFA Loan is in the amount of $15M at an interest rate of 2.38% which is a blended rate between conservation rates and their normal rates and interest is only paid on the amount of the loan that is drawn down. Mr. Burroughs advised that JWSC is required to start drawing on the money within 6 months of the loan origination date, or a continuation fee is required to be paid. He added that essentially JWSC has 6 months from the previous day (August 20, 2019) which was the date of Board approval by GEFA to approve and execute the loan documents, and then 6 months after that to start drawing the money down.
Commissioner Stephens asked if before executing the loan documents shouldn’t JWSC confirm that the 6 months fits within the schedule. Mr. Burroughs provided that the design portion for Academy Creek Rehab is due back to JWSC in March 2020. Six months from now would be February 2020. He added that the loan will need to be approved by JWSC’s Governing Body and then the City and County would need to add to their agendas to approve and sign off. JWSC has 6 months from the date of execution of the loan documents to start drawing funds down. Commissioner Stephens asked when it is realistically planned to start drawing funds down. Mr. Burroughs responded that construction is expected to begin in May or June of 2020. Commissioner Stephens noted concern as to timing of drawing funds and having to pay a continuance fee for the loan. Mr. Burroughs provided that not all of the funds have to be drawn at once; they can be drawn as needed.
Committee Chairman Copeland then commented that JWSC needs to look at reserves, pulling off of reserves anticipating draw down, and see where the GEFA Loan fits in the schedule. Commissioner Elliott suggested that to make an informed decision a “waterfall” chart needs to be prepared to show how the money can be used and when. Chairman Copeland noted that this is a part of the first discussion item on today’s agenda. Commissioner Stephens commented that if the Committee pushes this item through the full Commission on the next day, it could cause more harm than good by starting the clock when it is not ready to be started. He added that it is not known what the continuation fee is, it could be very high, and suggested holding off until the schedule has been further discussed.
Chairman Copeland recommended deferring this item until the September 18th Finance Committee meeting to have a detailed discussion with approval.
Commissioner Stephens made a motion seconded by Commissioner Elliott to defer Approval Item #3 until the next Finance Committee Meeting. Motion carried 3-0-0.
DISCUSSION
- Project Funding Cash Flow Projections Update – A. Burroughs
Mr. Burroughs provided the Committee with the requested Project Cash Flow Report. Part one of the report contained financial data for all current projects and future anticipated projects including the funding sources for each as projected through Fiscal Year 2025. Part two of the report provided anticipated balances for the reserves and SPLOST funding of which were all projected through Fiscal Year 2025. Mr. Burroughs explained the supporting details and calculations of each section of the full report to the Committee. There was very detailed discussion regarding the possible benefits and forecasting that can be provided through the use of this report which will be a continued work in progress.
- Investments Update – J. Donaghy
Mr. Donaghy advised the Committee that a meeting was held the prior week with an investment advisor. Discussion from that meeting included sources of funds for investments, where they are now, how the monies for investment are determined, etc. Mr. Donaghy summarized that the discussion came down to two main issues: the first issue being how much money does JWSC have to invest at a given time and how much should be held as liquid cash; and the second issue being the rate of return on those investments and what the actual securities are. To focus on the first issue of keeping as much of the money working as possible some substantial transfers have been made from cash accounts into investment accounts to start earning more interest there. Also a discussion was held with BB&T Bank to change the format of the general receipts account. Mr. Donaghy and the Committee further discussed the various investments and possibilities for earnings, as well as the upcoming Banking RFP. The Committee requested to review the Banking RFP prior to its release, and made some suggestions as to what they would like to have included in the Banking RFP.
- Financial Statements Month Ending July 2019 – J. Donaghy
Mr. Donaghy presented the financial statement for month ending July 31, 2019 to the Committee. He reviewed the Balance Sheet and noted that in the Current Assets the cash and cash equivalents were at $2,968,775.00. The Current Liabilities indicated that the accounts payable on July 31, 2019 were $896,717.00. The Supplemental Schedule of Cash Balances, Investment Account Report and Combined Revenue Statement were also reviewed.
- FY 2020 Strategic Plan – Step 1: High Level Goals – A. Burroughs
Committee Chairman Copeland indicated that for the FY 2020 Strategic Plan he would like to start with Step 1 over the next month, and that by the end of the year all of the steps can be reviewed and discussed before actually looking at the numbers. For example, Step 1 would look at what are the high level goals. Step 2 would be to take those high level goals and break them down into goals for each department and include what their contribution would be towards that high level goal. Step 3 would be for those departments to generate a list of strategies, i.e. things that they would do to try to accomplish their portion of those goals. After reaching that point then the numbers would be applied. Commissioner Copeland noted that along the way there would be a self-checking process and the Commissioners would be looking at this as a review process in looking at the budget to determine strategies in accomplishing all of those high level goals that the Commissioners wanted. Mr. Burroughs commented that he believed this would be a very beneficial approach, and added that typically the way municipal budgeting goes is that you look at what last year’s budget was and work off of that. Mr. Burroughs noted that doing this would require us to take a deeper dive into what we are actually budgeting. Commissioner Copeland stated that what he would like to do for the next committee meeting is take the high level list that Mr. Burroughs already has and have him to review those high level goals with the Committee, then modify them into a recommended list for the next budgeting process. Mr. Burroughs advised that for the previous budgeting process they went into it with four goals of which he believes progress is being made in all four areas and it would benefit to continue making progress in those four areas. Mr. Burroughs then listed those four goals: to raise the level of professionalism in project execution, improve and enhance preventive maintenance, improve customer service, and improve resource management.
There being no further business, Chairman Copeland adjourned the meeting at 2:33 p.m.