For your consideration, please read the minutes from the Commission Meeting held on Thursday, March 15, 2018 at 2:00 p.m.

Commission Meeting Minutes 3-15-18 with Attachments

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Brunswick-Glynn County Joint Water and Sewer Commission

1703 Gloucester Street, Brunswick, GA 31520

Thursday, March 15, 2018 at 2:00 PM 

COMMISSION MINUTES

PRESENT:                             

Donald M. Elliott, Chairman

Mike Browning, Vice-Chairman

Cornell L. Harvey, Commissioner

Steve Copeland, Commissioner

Tripp Stephens, Commissioner

G. Ben Turnipseed, Commissioner

ALSO PRESENT:                 

Jimmy Junkin, Executive Director

Joe Emanuel, Legal Counsel HBS

Andrew Burroughs, Deputy Executive Director

Todd Kline, Director of Engineering

Pam Crosby, Director of Procurement

John D. Donaghy, Director of Finance

Jay Sellers, Director of Administration

ABSENT:                               

Clifford Adams, Commissioner                                                 

Chairman Elliott called the meeting to order at 2:02 PM.

Chairman Elliot provided the invocation and Commissioner Turnipseed led the pledge.

PUBLIC COMMENT PERIOD

Chairman Elliott opened the public comment period.

Peter Patel, LaQuinta Hotel – Water and Sewer – Peter Patel inquired about tap fees he paid in June 2017.  After hearing that these fees would be increased on July 1, 2017, he paid $142K for tap fees in June.  Construction began around January 10, 2018.  He noted that had he known that the tap fees were to be lowered in 2018, he could have saved approximately $50K if he had waited until this year to purchase the taps.  The cost would have been about $86K had he waited. However due to word he received about the increase on tap fees in July 2017, he had purchased them back in June 2017 to avoid the increase.  Mr. Patel asked to be reimbursed for the difference of what he paid for tap fees in June 2017 and what the fees are now set at. Chairman Elliott asked Mr. Patel to prepare a letter advising what he is asking for and send it to the Executive Director, so that it could be reviewed with legal counsel.  He noted that it is a fee and JWSC does have the option to change these fees, but he does want to look at this with the status of fairness and what is equitable in this situation. Mr. Junkin and legal counsel will review, research and bring it to the Commission for review and approval of what is decided.

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

 Chairman Elliott requested a motion to excuse both Commissioner Adams and Commissioner Harvey from this meeting.  He noted that Commissioner Harvey will be late and is being excused in the case he does not make it.

Commissioner Browning made a motion seconded by Commissioner Stephens to excuse Commissioner Adams and Commissioner Harvey from the meeting.  Motion carried 5-0-2.  (Commissioner Adams and Commissioner Harvey were absent for the vote.)

 APPROVAL

1. Minutes from the March 1, 2018 Regular Commission Meeting

Commissioner Browning made a motion seconded by Commissioner Turnipseed to accept the minutes from the March 1, 2018 Regular Commission Meeting.  Motion carried 5-0-2. (Commissioner Adams and Commissioner Harvey were absent for the vote.)

2.  Minutes from the March 1, 2018 Executive Session

Commissioner Browning made a motion seconded by Commissioner Copeland to accept the minutes from the March 1, 2018 Executive Session.  Motion carried 4-0-3.  (Commissioner Adams and Commissioner Harvey were absent for the vote.  Commissioner Stephens abstained from the vote due to his absence from the March 1 Executive Session.)

DISCUSSION

1. Wastewater Treatment Plant Flows Update – M. Ryals

Mark Ryals presented the monthly Wastewater Treatment Plant Flows Update to the Commission.  He noted line item five and seven on the report, which reflect the percent removal for BOD and TSS, referring to the Academy Creek report, Dunbar Creek, and then Southport, all current for month ending February 2018.  Chairman Elliott asked about the average flows for the years 2013, 2014, and 2015 for Dunbar Creek, and noted that it appears that from the chart presented, the Effluent Average Flow is rising at a fairly consistent rate.  Mr. Ryals responded that for the year 2017, the average was about 3.0 MGD and the permit is 4.0 MGD, meaning that this plant is at 75% of the maximum allowed Effluent Flow.  Chairman Elliott inquired as to at what point should there be concern as to increasing the permit level or increasing the capacity, and Mr. Ryals responded that they are currently performing the I&I study to decrease the I&I, and they are at the range now that they need to either upgrade or expand, but the I&I study should help to decrease the flow.  Chairman Elliott asked when the I&I study would be finished, and Mr. Junkin responded that staff has received the feedback and the final report should be available by the beginning of April.  He added that Mr. Burroughs has been pushing to review the report to get an idea of where there may be problems and where the I&I issue can be addressed.  Additionally he noted that there will be still be some needs for the plant to increase capacity, but staff will address the I&I issues first based on the results of the study.  Chairman Elliott asked if the I&I was a part of the flow increase, and Mr. Junkin replied that in some of the months the rain was a factor in the amount of flows at the plants, but noted that the level of groundwater infiltration was relatively constant.  He added that the first concerns would be the areas where the worst I&I is occurring.  Commissioner Turnipseed asked Mr. Ryals what the average Influent BOD was at Academy Creek and Dunbar.  Mr. Ryals noted that the average Influent BOD was about 150 for both plants.  There was additional discussion relating to the I&I flow rate and plant capacity at the treatment plants.

2. FY2018-19 Budget Calendar – J. Donaghy

John Donaghy presented the Budget Calendar for Fiscal Year 2018-2019 to the Commission.  He provided a copy of the calendar for the Commissioners to reference and explained the process and schedule for the preparation of the Budget and Rate Resolution, which are tentatively scheduled to be approved at the second Commission Meeting of June 2018. He provided that the division superintendents are finalizing the drafts for their budgets, and meetings will be scheduled with each of them to discuss and review the details of their requested budgets.  Mr. Donaghy added that the compilation of the internal budgeting is expected to be made ready by March 30^th to provide to the Commissioners for their review prior to the Budget Workshop scheduled for April 4^th.  He noted that the budget draft is expected to be released to the City and County on April 19^th for their review and comment by May 1^st as per the Operating Agreement.  He further explained the schedule for newspaper publication and inserts in customer bills for the rates, as required by the Enabling Legislation.  Commissioner Browning asked about the rate consultants being present for the Budget Workshop on April 4^th, and Mr. Donaghy replied that Raftelis would be present as well as Davenport.  He added that the time set for the workshop was from 1:00 p.m. to 4:00 p.m.  Chairman Elliott requested that the agenda for the Budget Workshop be such that the discussions for the budget and rates are kept segregated for the Commissioners to have a clear understanding of the expenditures being requested, and a clear understanding of the rates and the revenues necessary to support the budget.  He further noted that the matter of the Rate Structure continues to be an issue since neither the City nor the County have passed the resolution to support the change to the Operating Agreement that will allow us to change the Rate Structure, and he added that this needs to be done.  Mr. Junkin responded that during the meeting earlier in the week with the rate consultant, Raftelis, the numbers were provided which are to be forwarded to the City and County Managers.  He also noted that the attorneys have already reviewed the language revisions and had discussions.  The intentions are that the revisions to the Operating Agreement will be passed by the end of June.

3. February 2018 Month End Financial Statements – J. Donaghy

John Donaghy presented the February 2018 month end financial statement, including the information for the first eight months of the current fiscal year.  First he reviewed the Balance sheet and noted that under the Capital Assets, Construction in Progress about $5M had been added to the projects account since July 1, 2017.  He reviewed the various asset balances, liabilities and the net position on the Balance Sheet as of February 28, 2018.  Mr. Donaghy then continued to discuss the supplemental schedule of cash balances and transfers that had been made, and noted that all of the JWSC Operating Reserve Capital, Repair and Replacement, and Expansion Reserves were all fully funded as of February 28^th. He further explained the details of the transfers between accounts as noted on the Supplemental Schedule of Cash Balances to the Commissioners.  Commissioner Copeland inquired if the $1.5M which was transferred into the Repair and Replacement Reserve account was due to the savings from the bond refunding that was done at the end of 2017.  Mr. Donaghy replied that it was partly due to that, and then he provided more details as to the monies involved from the savings which resulted from the bond refunding. Commissioner Stephens asked how the customer deposit reserve works, and Mr. Donaghy explained that these are the outstanding deposits from the customers which is shown as a liability, and there is also a cash balance to fund that liability.  Commissioner Stephens then inquired as to the possibility of putting those funds into a type of minimal risk investment to where interest could be earned, and it was advised that this could be researched for possibilities including the fiscal law aspect.  Mr. Donaghy noted that this fund is not included as part of the “Days Cash On-Hand” because it is not available for use by the Commission.  There was some additional discussion pertaining to this matter and possibilities for consideration.  Mr. Donaghy continued on to review and explain the Combined Revenue Statement.  He noted the YTD budgeted amounts as compared to the YTD actuals for the operating revenues and operating expenses.  He then explained that the net revenue before capital fees and SPLOST balance and after encumbrances balance was at $153K, for a near breakeven point for YTD.  Mr. Donaghy noted the revenues from Capital Improvement Fees, SPLOST revenues, and contributed capital and grant income, and he explained the details regarding the commercial and residential REU’s information that was added to the report.  Chairman Elliott asked if REU’s could be tracked back by year from 2012 to current, and Mr. Burroughs provided he had the information and would provide it by broken down by commercial and residential.  Commissioner Turnipseed inquired as to the higher YTD actual amount for sewer revenues as compared to the YTD budgeted amount, and expressed concern to ensure that this information was being presented to the rate consultant.  Mr. Donaghy explained that this variance was due to higher flows than what was expected and budgeted for, and he confirmed that that this information was provided to the rate consultant.  Mr. Burroughs added that this variance was also likely caused due to having large customers who only have sewer services, such as Sea Island, and that it could be possible that they may have I&I issues which would not show up on the water side.  Mr. Donaghy moved on to review the Overtime Report and noted that the net total overtime reported is at about $39K under the budgeted amount YTD.  Next, he discussed the Cost and Price per 1,000 Gallons report for the eight months ended February 28, 2018.  Commissioner Copeland readdressed the Combined Revenue Statement to make an observation and further discuss the operating expenses YTD actual as compared to the YTD budget and also the outstanding purchase orders.  There was discussion pertaining to the types of purchase orders that were included in this amount outstanding, if they were discreet purchase orders or blanket purchase orders, and the net effect there could be on the budget. Commissioner Stephens readdressed his question of the possibility of investing the amount on the reserve account for customer deposits.  He inquired if it was possible by the next meeting for this to be researched as to if it can be done and if so, what the staff recommendation would be for how to invest it and when. Mr. Donaghy noted that the bankers were always eager to assist in that respect. Joe Emanuel noted that this could be done by the next meeting, but that he expected it would be very highly regulated, if it is permissible at all.  Mr. Donaghy added that the financial policies also restrict what investments can be made, but this will be researched.  Next, he reviewed the project report and advised that this was a revised report, has been a collaborative effort by staff, and there may still be a few adjustments to be made.  This is a very detailed report containing information regarding all of the JWSC projects in progress.  He explained the layout and basic components of the report, and then provided additional descriptive details relating to specific sections and financial aspects of the report.  It was clarified that for each project listed, the “Budget” amount under the “Project to Date” section is the total project budget amount and equals the approved original project budget plus any and all approved change orders to date for that project.  Commissioner Copeland inquired if a “Percent Complete” column could be added to the report for the purpose of knowing how much of the budget has been spent in comparison to how much of the project is complete, and it was noted to be added.  There was additional discussion and clarifications pertaining to the financial information such as project budgets, reserves, current year funding sources and amounts, etc.  Chairman Elliott asked the Commissioners to send an e-mail after they have had the opportunity to more closely study the report with any suggestions or improvements for it.  Commissioner Stephens readdressed the budgeted amount for each project on the report and inquired about this amount being adjusted as change orders were made, as compared to a “contingency” budgeted amount for each project for tracking purposes.  Mr. Junkin provided that as change orders are approved by the Commission they become a part of the budget for the specific projects, but the amount noted on this report reflects the amount approved to be spent on each project.  Mr. Donaghy advised that the details of original project budgets and amounts for change orders are historically kept, but not visible on this report at this time.  There was further discussion as to project budgets and tracking.

EXECUTIVE DIRECTOR’S UPDATE

Mr. Junkin updated the Commission on the execution of the property insurance.  He gave the recent background that initially a 10% increase was proposed with the current insurer Ace; then a competitive quote was received from Lloyd’s of London for a smaller amount over what is currently being paid; and after some negotiating by the broker for JWSC, Ace came back and agreed not to increase premium from that of this last year, therefore the property insurance coverage will remain with Ace.  Mr. Junkin next updated that the cyber insurance premium was quoted at $5,781.  Pam Crosby explained the various types of coverages and examples of situations the cyber insurance included, and she added that the premium quoted was an annual premium.   Mr. Junkin noted that with recent events and the types of coverages provided this was a recommended policy to execute for the protection of our customers and also JWSC from cyber security threats.  He then updated on the SPLOST projects and noted that the staff is working on an innovative change to the Brunswick Sewer Improvement SPLOST project to help keep at or under budget for this project.  He provided that the current plan was to replace Lift Station 4003 with gravity lines and convert it to an all gravity system.  In looking at the costs to do that and the additional funds JWSC would have to provide to finish that project, staff came up with an innovative concept to rehabilitate this lift station which will allow for a savings from the original budget.  More information will be available after evaluations are completed.  Mr. Junkin noted that the North Mainland Sewer Improvement SPLOST project is substantially complete on Phase I, and JWSC is contracting with an inspection company to look at the key downstream line for the Phase II.  He added that Phase III is the larger part of the project overall, and JWSC is waiting on the County SPLOST project that deals with the intersection at Canal Road and Glynco Parkway.  Staff spoke with EMC Engineering during the week and was informed that the County should be provided with some alternatives within the next few weeks for the County to make a decision on their project.  After that is finalized, JWSC should be able to move forward with the detailed engineering on Phase III.  Mr. Junkin’s additionally updated the Commission on the Board of Education case, and noted that the BOE did file an appeal, and it could be a year for it to be heard by the Court of Appeals.  This will affect the revenues owed to JWSC and there will be late fees added to the $359,000 currently owed by the BOE.  He gave final update notes that staff is working on the upcoming budgets and the divisional budgets will be reviewed.  There is a Budget Workshop scheduled for April 4^th, in which the budgets will be discussed separately from the Rate Structure, and he added the Operating Agreement changes will be required in order to operate with a new rate structure.  He also noted that Pam Crosby will review possible grants for hopeful additional funding sources for JWSC.

Chairman Elliott opened the floor for any of the Commissioners to comment. Commissioner Stephens opened discussion regarding the public comment made by Mr. Patel, and noted that he agreed with Chairman Elliott asking for a letter to be written by Mr. Patel with his request.  Commissioner Stephens also noted his concerns as to the downstream effect of this and the cumulative effect if everyone who had purchased taps during that timeframe came back and asked for the same thing.  Mr. Junkin provided that he had met previously with Mr. Patel regarding the issue and advised that the rates were set at the time of his purchase. Chairman Elliott added that he agreed with Commissioner Stephens, and would like to have the process set for this issue whereby a request letter is to be written to the Commission, and a response letter returned.  He noted that the Commission needs to know in a policy sense what impact their decision would create for JWSC on this matter.  The Commission will await recommendation from staff.

 CHAIRMAN’S UPDATE

Chairman Elliott had no further update at this time.

EXECUTIVE SESSION

There was no business requiring an Executive Session.

There being no additional business to bring before the Commission, Chairman Elliott adjourned the open meeting at 3:43 p.m.