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WATER AND SEWER AUTHORITY OF CABARRUS COUNTY MARCH 21, 2013

5:00 P.M.

The Board of Directors of the Water and Sewer Authority of Cabarrus County (WSACC) met on Thursday, March 21, 2013 at the Administrative Offices.

The following Board members were present:

Mr. Troy Barnhardt Mr. Jonathan Marshall Mr. Phil Cowherd Mr. David Phillips Mr. Brian Hiatt Ms. Elizabeth Poole Mr. Darrell Hinnant Mr. Robert Ritchie Mr. Michael Legg

Also present were: Mr. Coleman M. Keeter, Executive Director; Ms. Tammy Garifo,

Executive Secretary/Secretary to the Board; Ms. Robin Moore, Deputy Executive Director/Administration; Mr. Michael Wilson, Deputy Executive Director/Finance; Mr. Tim Kiser, Engineering Director; Mr. Mark Fowler, Facilities Director; Mr. Tom Bach, Utility Systems Engineer; Mr. Chad VonCannon, Assistant Engineering Director; Mr. Chris Carpenter, Maintenance Manager; Mr. Van Rowell, Special Projects Coordinator; Mr. Rich Wise and Mr. David Pugh, Town of Midland; and Mr. Chuck Willis, Willis Engineers

Chairman Barnhardt called the meeting to order.

UNFINISHED BUSINESS Request for Approval of the Minutes of February 21, 2013 The minutes of February 21, 2013 were presented for approval. Mr. Cowherd made a motion to approve the minutes of February 21, 2013. Ms. Poole seconded the motion and the Board approved by unanimous vote. PUBLIC HEARING Public Hearing on the Proposed Annual Operating Budget for Fiscal Year 2013-2014

Chairman Barnhardt opened the Public Hearing on the 2013-2014 Budget. Having no

public comments, Chairman Barnhardt closed the Public Hearing on the 2013-2014 Budget.

WORK SESSION Discussion as Necessary of the Fiscal Year 2013-2014 Proposed Budget.

Mr. Keeter stated that WSACC’s budget contains no increase in fixed charges and no increase in variable rates for wastewater treatment and transportation for the fiscal year 2013-2014. This is WSACC’s 8th annual budget with no rate increase.

Mr. Wilson stated that WSACC’s total budget revenue for the fiscal year 2013-2014 is $15,287,893.

A brief discussion centered on the fact that: the Budget Ordinance has an increased

amount of $300,000 in the Inflow and Infiltration Capital Project Ordinance. This is to continue the efforts in assisting WSACC and member jurisdictions with identifying the Inflow and Infiltration issues on their lines.

Consideration of Approval of the Annual Budget Ordinance for the Fiscal Year July 1, 2013- June 30, 2014

Mr. Phillips made a motion to approve the Annual Budget Ordinance for the Fiscal Year July 1, 2013 - June 30, 2014. Mr. Ritchie seconded the motion and the Board approved by unanimous vote.

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Water and Sewer Authority of Cabarrus County BUDGET ORDINANCE

For the Fiscal Year July 1, 2013 through June 30, 2014

BE IT ORDAINED by the Board of Directors of the Water and Sewer Authority of Cabarrus County (WSACC), North Carolina, meeting in open session this 21st day of March, 2013, that the following fund revenues and departmental expenses, together with certain restrictions and authorizations, are adopted.

SECTION I- GENERAL OPERATING FUND

A. Revenues totaling $15,287,893 are hereby approved, comprised of the following components:

Flow Treatment Operation and Maintenance Flow Interceptor Operation and Maintenance Fixed Shares-Treatment Fixed Shares-Interceptor Surcharges Program, Sample & Lab Fees Raw Water Charges-Lake Howell Wholesale Treated Water Charges-Mt. Pleasant Muddy Creek WWTP Charges Biosolids Disposal Tipping Charges Liquid Sludge Septage Haulers' Fees Investment Earnings Contributions from CMU-Debt Reimbursement Other Retained Earnings Appropriated

Total Revenues

B. The following rates and fixed charges have been established:

Wastewater Treatment Operation and Maintenance: Treatment Rate/1 ,000 gallons

Treatment Fixed Share

Wastewater Interceptor Operation and Maintenance: Interceptor Rate/1 ,000 gallons

Interceptor Fixed Share

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$6,433,475 999,453

2,213,374 1,463,558

350,000 I 93,600 428,903 288,466

22,176 100,000 60,000

110,000 128,000 387,320

43,862 2.065.706

$15.287.893

$1.066

$2,213,374

$0.166

$1,463,558



Lake Howell Reservoir: Raw Water Pennitted Capacity Rate/1,000,000 gallons

Annual Charge for Pennitted Capacity City of Concord $ 352,523 City of Kannapolis$ 76,380

Mt. Pleasant Wholesale Water: Treated Water Rate/1,000 gallons Fixed Charge-SRF Loan Debt Service

$ 29,377

$428,903

$2.83 $ 76,216

These rates, fixed shares, and other user fees are shown in detail within the Operating Budget document.

C. Expenses totaling $15,287,893 are hereby approved, comprised of the following program budgets:

Administration Engineering Rocky River Regional Wastewater Treatment Plant Heat and Energy Recovery Laboratory Pretreatment Muddy Creek Wastewater Treatment Plant Interceptors Lake Howell Reservoir Mt. Pleasant Wholesale Water Debt Service - Treatment Debt Service - Interceptor Non-departmental

Total Expenses

$1,411,025 422,662

4,642,152 1,738,428

457,004 104,395 175,750

1,171,986 428,903 402,756

1,961,241 1,850,865

520.726

$15.287.893

D. The following compensation adjustments have been incorporated:

Salary Administrative Adjustment 2.0% Pay Scale Adjustment 2.0%

Perfonnance Allocations: Developmental Merit

Board Members

O%to 0% 0% to 0%

Compensation as allowed by State Statute.

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SECTION II- CAPITAL RECOVERY FEE FUND

A. Revenues totaling $1,800,000 are hereby approved, comprised of the foUowing components:

Capital Recovery Fees $ 1.800.000

Total Revenues $ 1.800.000

The Capital Recovery Fees (CRF) are authorized by ordinance, and collected by Cabarrus County on WSACC's behalf

B. The following fees have been established:

Capital County

Meter Size Rated Flow Recovery Collection Total in Inches {grun)_ Fee Fee Charges

5/8 & 3/4" 20 $ 1,397 $ 34.93 $ 1,431.93 1" 50 $ 3,492 $ 87.30 $ 3,579.30

1.5" 100 $ 6,985 $ 174.63 $ 7,159.63 2" 160 $ 11,176 $ 279.40 $ 11,455.40 3" 320 $ 22,352 $ 558.80 $ 22,910.80

4" 500 $ 34,925 $ 873.13 $ 35,798.13 6" 1,000 $ 69,850 $ 1,746.25 $ 71,596.25

8" 1,600 $ 111,760 $ 2,794.00 $ 114,554.00

10" 2,300 $ 160,655 $ 4,016.38 $ 164,671.38 12" 4,300 $ 300,355 $ 7,508.88 $ 307,863.88

Apartments, Condos & Duplexes per unit $ 978 $ 24.45 $ 1,002.45 70% of EDU 175 gpd

C. Expenses totaling $1,800,000 are hereby approved, comprised of the foUowing components:

Contribution to CRF Reserve $1.800.000

The Board of Directors will authorize all CRF transfers to a Capital Project Fund for each specific capital project.

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SECTION III -ENCUMBRANCES AS OF JUNE 30, 2013

Funds appropriated in the FY 2012-2013 Budget and encumbered on June 30, 2013, shall be authorized as part of the Budget Appropriation by adoption of this Budget Ordinance.

SECTION IV- SPECIAL AUTHORIZATIONS-EXECUTIVE DIRECTOR AND DEPUTY EXECUTIVE DIRECTORFINANCE

A. The Executive Director or the Deputy Executive Director-Finance shall be authorized to transfer monies within program budgets to carry out the objectives of each program, without limitation.

B. The Executive Director or the Deputy Executive Director-Finance shall be authorized to transfer monies between program budgets as necessary for the efficient operation ofWSACC without action by the Board of Directors.

C. The Executive Director or the Deputy Executive Director-Finance shall be authorized to transfer monies from the Nondepartmental program budget to other program budgets, to reflect:

1. The difference in the actual percentage increase authorized by the Board of Directors for administrative adjustment increases, and the amount budgeted within the programs.

2. To carry out the results of any personnel action taken by the Board of Directors.

3. The difference in actual insurance premiums and the amount budgeted within the programs.

4. The cash out of up to 40 hours of earned vacation for all employees who make this election.

D. The Executive Director or the Deputy Executive Director-Finance shall be authorized to reallocate monies among the various objects of expenditures for Capital Project Ordinances.

E. The Executive Director is hereby authorized to transfer monies from the contingency designation into program budgets as necessary for the efficient operation of the WSACC organization.

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F. The Executive Director and the Deputy Executive Director-Finance are authorized to select financial institutions approved by the NC Department of State Treasurer using the Pooling Method of collateralizing public funds for the purpose of opening depository accounts. The Executive Director and the Deputy Executive Director"Finance are authorized to execute, and the Secretary to the Board of Directors is authorized to attest, Corporate Resolutions or other documents required by the financial institutions for the opening depository accounts.

G. The Executive Director is hereby authorized to make transfers from the Rate Stabilization Reserve due to the highly volatile fuel and chemical pricing in the current economic climate, to cover fuel and/or chemical costs in excess of 110% of the prices budgeted. This safeguard is being put into place to avoid over budgeting costs while providing a mechanism to address uncontrollable price mcreases.

H. The Executive Director is hereby authorized to make transfers from the Ash Disposal Reserve to cover the expenses of ash disposal as various opportunities anse.

SECTION V- INSTRUCTIONS-EXECUTIVE DIRECTOR AND DEPUTY EXECUTIVE DIRECTORFINANCE

The Board of Directors authorizes adoption ofthe General Operating Fund budget on the program budget level.

SECTION VI- REAFFIRMATION OF RESERVE POLICIES

The Board of Directors reaffirms the following reserve policies adopted as part of the overall Principles of Sound Financial & Operational Management ofWSACC. Amounts shown represent current reserve amounts.

A. Rate Stabilization: $4,93 7,602 Minimum of5% and maximum of20% of Annual Gross Operating Revenues.

B. Repair. Upgrade and Replacement: $4,300,000 Minimum of5% and maximum of35% of Annual Gross Operating Revenues.

C. Expansion: $2,432,983 Amount to be determined by the Board of Directors in conjunction with the Capital Improvement Program.

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D. Contingency: $ 538,704 Minimum of 1% and maximum of 5% of budgeted appropriations for operating fund.

E. Operating Capital: $ 1,200,000 Equal to 45 days operating expenses.

F. Health Care: $ 224,217 The amount of unallocated health care premiums from the Nondepartmental budget plus accrued interest will be added to this reserve each year.

In addition, the Board has established the following reserves:

A. Capital Recovery Fees: $ 9,633,948 Restricted for the use of expanding capacity in the plant or transmission lines.

B. Heat and Energy Recovery Project-Capital Reserve: $ 3,001,121 Monies currently encumbered to complete the Heat and Energy Project.

C. Employee Recruitment and Retention Reserve-(Heat and Energy Start-Up Monies): $ 2,556,607 Monies set aside to cover operating costs during the start-up of the project to avoid impacting the rates ofWSACC.

D. Ash Disposal: $ 123,210 Monies set aside as required by generally accepted accounting principles to fund the future liability of ash disposaL

SECTION VII - CONTINUATION OF THE EMPLOYEE RECRUITMENT AND RETENTION RESERVE-(HEA T AND ENERGY START -UP)

The Board authorizes the continuation ofthe Employee Recruitment and Retention, Heat and Energy Start-Up Reserve (Reserve). The purpose of this Reserve is to provide/offset start-up operating costs associated with the Project. The Executive Director is authorized to transfer monies from the Reserve and amend the operating budget to cover the start-up costs for the Project. The Executive Director is also authorized to establish new positions and fill these positions in conjunction with the construction and subsequent start-up of the Project.

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SECTION VIII - REPLENISHMENT OF INFLOW AND INFILITRA TION REDUCTION CAPITAL PROJECT

The Board authorizes the amendment ofthe annual budget ordinance and the transfer of $300,000 from undesignated reserves and amends the Inflow and Infiltration Reduction Capital Project to reflect the replenishment of the balance to continue efforts to assist member jurisdictions with this endeavor.

SECTION IX - UTILIZATION OF BUDGET AND BUDGET ORDINANCE

This Budget Ordinance and the Operating Budget document, which is on file with the Executive Director and incorporated fully as part of this Budget Ordinance, shall be the basis of the fmancial operations of WSACC during the Fiscal Year. The Deputy Executive Director-Finance shall administer the Budget and shall ensure that the Board of Directors is provided sufficient financial information to allow the setting of appropriate financial policies. The Deputy Executive Director-Finance shall establish and maintain records, which are in agreement with the Budget, the Budget Ordinance, and the appropriate statutes of the State ofNorth Carolina.

THIS ORDINANCE IS HEREBY approved and adopted this 21st day ofMarch, 2013.

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BOARD OF DIRECTORS Water and Sewer Authority of Cabarrus County, North Carolina

.J~. B.A...-ii Tro~m·dt, Chairman

NEW BUSINESS Request for Approval of New Atlantic Contracting, Inc. as a Qualified Bidder for the Heat Recovery and Power Generation Project Mr. Kiser stated that New Atlantic Contracting, Inc. submitted their qualified bid for the Heat Recovery and Power Generation Project on February 28, 2013. The bid achieved a passing score from the evaluation by CH2M Hill. He then made a recommendation that the Board approve New Atlantic Contracting, Inc. as an approved prequalified bidder for the project. Upon approval, the prequalified bidders will be: Mid-Atlantic Infrastructure Systems, Inc.; Acorn Industrial; and New Atlantic Contracting, Inc. Mr. Kiser stated that he is working extensively with Attorney Todd Phillips to assure that WSACC is conforming to the North Carolina statutes on bids for public contracts. He concluded that WSACC’s goal is to provide the Board with a bid recommendation for the project at the May 16, 2013 Board meeting. Mr. Hiatt made a motion to approve New Atlantic Contracting, Inc. as a Qualified Bidder for the Heat Recovery and Power Generation Project. Ms. Poole seconded the motion and the Board approved by unanimous vote. PUBLIC COMMENTS There were no Public Comments. REPORTS Lake Don T. Howell Reservoir Buffer Property Status Report Mr. Kiser provided a copy of the Lake Don T. Howell Reservoir Buffer Property Status Report that was completed in June 2003. There was no further discussion on this report, due to the fact that the Board discussed and reviewed the report at the Board Retreat. Mr. Phillips made a motion to adjourn. Mr. Marshall seconded the motion and the Board approved by unanimous vote.

The Board meeting adjourned at 5:11p.m.

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