Finance Committee Meeting Minutes – October 18, 2017
For your consideration, please read the minutes from the Finance Committee Meeting held on Wednesday, October 18, 2017 at 2:00 p.m.
Finance Committee Minutes 10-18-17 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, October 18, 2017 at 2:00 PM
FINANCE COMMITTEE MINUTES
PRESENT:
Donald M. Elliott, Chairman
Steve Copeland, Commissioner
Mike Browning, Commissioner
Jimmy Junkin, Executive Director
John Donaghy, Director of Finance
ALSO PRESENT:
Thomas A. Boland, Sr. – Interim Deputy Director
Pam Crosby, Director of Procurement
Jay Sellers, Director of Administration
Chairman Elliott called the meeting to order at 2:00 PM.
PUBLIC COMMENT PERIOD
There being no citizens that wished to address the Committee, Chairman Elliott closed the Public Comment Period.
APPROVAL
- Minutes from September 20, 2017 Finance Committee Meeting
Commissioner Browning made a motion seconded by Commissioner Copeland to approve the minutes from the September 20, 2017 Finance Committee Meeting. Motion carried 3-0-0.
DISCUSSION
- Customer Service & Payments – J. Sellers
Jay Sellers presented to the Committee with an update on customer service. He began by noting that the customer service standard is 100% satisfaction, which doesn’t mean that every customer contact results in their happiness. Customer satisfaction level is a percentage of all calls offered versus answered, not call resolution rate or overall customer service satisfaction level. He added that the call volume more than doubled from the first of this year through the summer, and the service level over the last two periods reviewed dropped from 65% to 28%, through no apparent fault of the customer service representatives. That customer service level does not tell us how happy our customers are, it’s only a reflection of well we are able to handle the surge in call volume. He provided a graph indicating the “Walk-ins Processed” and the “Call Volume”, along with a Customer Service and Payments Executive Summary. Mr. Sellers noted that in preparation for the next HR meeting, he is in the process of developing a history of the call volume increase in aiming to project the future demand. The data for the call history was gathered from the Mitel Phone system. He mentioned that out of 28,000 customers 16% walk-in to the lobby to make their payments, which has been consistent with little deviation since 2014. He indicated that payments presently performed in person would be unlikely to drop even if the credit card processing fee were absorbed. With respect to the call volume, Mr. Sellers said he would like to see JWSC move towards staffing a dedicated call center, and suggested that hiring 2 employees to handle the incoming calls who would also have to become familiar with the billing system. There was some discussion pertaining to payment by credit cards. It was confirmed that when a customer pays over the counter by credit card, JWSC does pay a charge for that transaction. The customer is not charged that fee, JWSC absorbs that cost. Mr. Junkin asked if the Kiosk was still being checked into, and Jay is still researching that and after being asked by Mr. Junkin, advised that the drop box for the front of the building has not been ordered yet, but can be ordered soon. Chairman Elliott questioned if new customers have to come in to open a new account, and John Donaghy confirmed that they do have to come in, be identified with photo ID and also provide a Social Security Card. Once activated, a customer can then process transactions without having to come inside the building. There was some additional discussion pertaining to the history of incoming calls and that the data indicated dropped calls increasing from 3 out of every 10 up to 6 out of every 10. Mr. Sellers noted that some of these calls could have been trouble calls relating to outages or main breaks in the systems. He added that with not knowing when the call volume could drop, he recommended starting out with two employees for a call center to take on the higher volume of incoming calls, along with a suggestion of staggering the call center staff. Additional advantages of having a call center staff was also mentioned. Mr. Junkin noted that he would like to see the breakdown of walk-ins by cash, checks and credit cards. He is interested in what kind of impact a Kiosk could make on walk-ins and payments. Chairman Elliott suggested looking at part-time positions rather than full-time positions, since there are often people who are looking for a part-time job. He also advised that before taking this subject matter to HR, to also have a list of responsibilities that they will have. Jay indicated that he does have the job description drafted. It was noted that hiring part-time persons might be the better solution in order to reduce the overall costs since no benefits would be provided. The training period and use of the software products was also briefly discussed, along with additional discussion on hiring of local persons.
- Water Production Report – J. Donaghy
John Donaghy presented to the Committee a visual chart on the OpenGov website showing the billed and unbilled water production for each month of the Fiscal Year 2016-2017. The unbilled amount on the charts represented water measured as produced, but not going through a meter for billing purposes. It was noted that there are erratic differences caused by when the meters are read versus the production reports being ran at the end of the calendar month. This can cause some overlapping on the charts. Mr. Donaghy indicated that normally 90% of the water produced should be able to be accounted for. The portions that are not accounted for are the amount that is flushed out each month in line flushing, the estimate for firefighting, fire hydrant water used by the city and county in street sweeping, etc. There are other pieces that are sometimes hard to obtain for the measure of unaccounted water. He explained that the mag meters on the production wells is where the readings are taken for the accounting for the total water production. Leaks, water main breaks, inefficiencies in the field, inconsistencies in the billing system, fire department use are all examples of the portion of the variables in the water produced and unbilled. After the numbers and information is refined, these charts are planned to be placed on the JWSC website.
- Hurricane Irma Storm Expenses – J. Donaghy
Regarding the expenses incurred by BGJWSC during Hurricane Irma, John Donaghy advised the Committee that there was an estimated $400K paid for personnel expenses. Additional direct out of pocket expenses during the storm are estimated at $108K. There was some additional discussion pertaining to the specifics of reporting to the insurance, and then to FEMA for reimbursements. Hagerty Consultants are working with BGJWSC on the FEMA reimbursement.
- Bond Issue Calendar – J. Donaghy
John Donaghy presented the Bond Issue Calendar to the Committee. John introduced Courtney Rogers of Davenport & Company, the financial advisors for JWSC and noted that the schedule as provided was prepared with their assistance. He advised that the Bond Counsel RFP Proposals were received on Tuesday October 17. They are to be reviewed. He added that the Pre-Qualification meeting was held on Tuesday for the Underwriting RFP, of which the proposals are due on October 31, 2017. Courtney Rogers gave a brief introduction to the presentation he will be making at the Commission Workshop on Thursday morning (October 19). Items such as financial policy guidelines, recommendations, the calendar, etc. will be discussed. Chairman Elliott asked Mr. Rogers if there can be some discussion regarding the decisions the Commission needs to make regarding the bonds and advantages and disadvantages of taking the old bonds and rolling into new bonds. He indicated that this can be done. He continued that perhaps by breaking down into two, some now and maybe in 2018 and then depending on how the spending goes to come back in 2020 or 2021 with a second piece. There will be some numbers provided by Raftelis as they are working through the modeling. Mr. Rogers suggested that as the Bond Resolution is brought to them, perhaps Davenport and Raftelis could do presentations at the same time as the numbers start formulating. Chairman Elliott commented that this is something that all the Commissioners need to be comfortable with and well versed on when they vote and make their decisions.
- September End of Month Financial Comparative – J. Donaghy
John Donaghy presented the end of month financial report for September 2017 to the Committee. The complete packet included the Balance Sheet, a summary and detail by GL description Combined Revenue Statement, the Overtime Report, and the Project Report. He noted on the Balance Sheet that cash balances and cash equivalents have decreased, and that corresponding to offset that under liabilities, accounts payable also went down significantly. He then reference the Combined Revenue Statement for the first three months of the year which includes some of the hurricane costs that will hopefully be reimbursed. Net income before Capital Fees and SPLOST YTD were at $26K net revenue over expenditures, which puts it right at breakeven in terms of actual expenditures. He noted $795K in encumbrances, which would put the balance short. Total SPLOST collections to date are at $1.276M. Chairman Elliott noted a concern that there we are not generating any fees in Planning & Construction, and there was a lot expected from that. Mr. Donaghy noted that there have not been developer’s coming in since the budget was adopted to build new projects. He advised that we are still doing County reviews. Mr. Junkin noted that some of these were holdovers from before the policy was implemented. John added that there should be some capitalization of wages in there too for in house labor spent on projects. Those numbers do need to be obtained from Planning & Construction and added in to the report. Commissioner Copeland asked about the “Other Revenues” on this summary page and where they come from. John advised that this included items such as rent received by CVS, fees (rents) collected from cell phone companies for their antennas on the water towers, monies paid for meters and installation of meters, interest income, monies from scrap or surplus items sold, and things that don’t fit into rates charged on a monthly basis to users. He added that the details of exactly what is in those accounts is in the GL detailed section of the report. Chairman Elliott requested for this report to be e-mailed to the Commissioners before the Finance Committee and the following Commission Meeting for their review and ability to formulate questions. Mr. Donaghy indicated that his goal is to have it ready and sent out by the 10th day of the month. The Overtime report was then reviewed. It was noted that much of the overtime on the report was caused by overtime due to the hurricane and some overtime due to billing. There was some additional discussion concerning reserves and emergency situations. The Project Report was then reviewed for the projects that are still remaining open. Chairman Elliott asked if it can be determined what portion of the tap fees are from residential and what portion is from commercial, and from restaurants. He then also asked for a chart that shows the expectation of fees to be received and the progression towards that number. He then asked for the make-up of that number, residential, restaurants, etc.
- Tap Fee Cap – D. Elliott
Chairman Elliott discussed that there is a concern that tap fees could possibly be too high for restaurants. There was also some additional discussion on the possibility of financing tap fees in the future. It was requested for this to be something that the staff researches and looks at. Chairman Elliott would like some policy suggestions for the Commission to consider to help alleviate some of the burden placed on restaurants. He asked for the Finance Department to take a look at a way to cap tap fees based on water pipe, or meter size coming into restaurants. Mr. Donaghy indicated this was something that could be looked at as the technicalities of setting up financing are not difficult. There was discussion on concerns about a reduction of new restaurants coming in because they cannot afford to build. With the variety of fees that are concerned (not only from BGJWSC), hardship is placed on new restaurants in their financing. Mr. Junkin indicated that he has tried to consider what can be done, and does want to do what can be done as he understands that new jobs are created, but that does not do anything to help improve the situation for JWSC. This will be looked at, but tap fees are what they calculate to be. There was some final discussion between the Committee on this matter.
EXECUTIVE DIRECTOR’S UPDATE
There was no further update at this time.
Meeting was adjourned at 3:55 p.m.