PROCEEDINGS OF THE CENTRAL BROWN COUNTY WATER AUTHORITY

Transcription

1 PROCEEDINGS OF THE CENTRAL BROWN COUNTY WATER AUTHORITY Pursuant to Section Wis. Stats, a regular meeting of the Central Brown County Water Authority was held on Wednesday, at the DePere City Hall Board Chambers, 2 nd Floor 335 South Broadway, DePere, WI Present: Excused: Also Present: Allouez-Berndt, Bellevue-Gorall, DePere-Delo, Lawrence-Treml, Ledgeview-Burdette Howard Dave Vaclavik-Manager Gary Rosenbeck-McMahon Joe Murray and David MacGillivray (via phone) of Springsted Mike Harrigan, Dave Wagner and Todd Taves, Ehlers Inc. The meeting was called to order by President Larry Delo at 2:00 p.m. Roll Call: Call the Roll for Attendance. Roll Call was taken as recorded above. Approval of the Agenda: Approve Agenda Motion made by Ledgeview, seconded by DePere to approve the agenda. Approval of Minutes: Approve Minutes: July 17, 2013 Motion made by Ledgeview, seconded by Lawrence to approve the minutes. Appearances: Manager Vaclavik announced that Springsted and Ehlers would be making a presentation to the Board relating to Financial Services Consulting. He stated that Hutchinson, Shockey and Erley have declined to propose as their preference is to act as an underwriter. Vaclavik indicated that given our project, he feels strongly that we need the services of an underwriter as part of the finance team, either with our without a financial advisor. He opined that working directly with an underwriter is a new concept for the Authority presented as an alternative. He pointed out three possibilities for moving forward with a refinancing project to proceed with the selection of a financial advisor and continue with a normal bond sale ; to proceed with the selection of a financial advisor and work jointly to select an underwriter to be part of the team during the preparation process; or to interview underwriters directly and forego the use of a financial advisor. Of these three choices, the Manager would recommend the latter two. He noted that the ability to move quickly may be very important in timing the bond sale where a 1% interest fluctuation could equate to millions of dollars in interest. He

2 2 suggested that questions to Springsted and Ehlers focus on the value they can provide and their experience in working with an underwriter as part of a team. 1. Springsted, Inc. Presentation & Interview for Financial Services Consulting A proposal relating to financial services consulting was made to the Board by Joe Murray and David MacGillivray (via phone) of Springsted Inc. They explained that the goal of this position is to develop a financial plan to refinance the Authority s 2005 Bonds, finance pending new capital projects, and determine proper/adequate bond covenants. Mr. Murray opined that Springsted has the experience and qualifications necessary to accomplish this goal. In addition, Murray explained that Springsted has the financing advisory services, knowledge, and experience in the areas of major water utility finances, operations and revenue obligations; utilities and statutory requirements; comprehensive financial and capital improvement experience, along with debt issuance planning and modeling. They also have a national presence in providing financial advisory and management consulting services throughout the country. The pros and cons between a financial advisor and underwriter were presented. Springsted indicated they could help with the choice of an underwriter. Questions from the Board included: - Treml How is an underwriter compensated was explained to be either on an hourly basis or a not to exceed basis. - Burdette What is the criteria for evaluating an underwriter which was explained to be identified in the issuance of an RFP. - Delo How is the trigger structured was explained to be as where the market is, or on a competitive or negotiated basis. 2. Ehlers, Inc. Presentation & Interview for Financial Services Consulting Mike Harrigan, Dave Wagner and Todd Taves introduced themselves, pointing out that Ehlers has served as the Authority s Financial Advisor since its inception. Their Statement of Qualifications was distributed with Mr. Harrigan stating that this firm is highly qualified to assist the Authority in the refinancing of its existing debt, procurement of new capital for projects, and to restructure its bond covenants and restructures. Questions: - Delo When asked how many other similar sized water utilities Ehlers works with, response was Walworth County Sewer District, Wisconsin Rural Water, Caledonia, Beloit, Oshkosh, Mequon to name a few. - Treml Questions regarding advanced refunding, and basis points. Harrigan indicated that Ehlers has been following this issue and have continued to provide information to the Authority. - Burdette - Questions related to services of underwriter and related fees. Harrigan thanked the Water Authority for past service, indicating they are committed to the needs of the Authority in the future.

3 3 3. McMahon, Inc. CBCWA Water System Storage Implementation Recommendations Gary Rosenbeck addressed the Board with an audio presentation explaining that the optimization plan completed last year included a number of recommendations, several of which have already been implemented. He stated that the major project in the plan consists of the construction of storage facilities at the site in Ledgeview. The project has been studied extensively by the Technical Committee who has unanimously recommended that McMahon begin design of the recommended storage system in 2013 using surplus bond proceeds which will allow the Authority to submit for the next funding cycle of the Safe Drinking Water Loan Program. President Delo pointed out that construction on Hwy 41 has had significant impact on DePere projects, questioning the timing and asking if there would be an advantage to the Authority in delaying this project until Hwy 41 construction is complete. Delo also questioned the depreciated value offset by value and other assets. Mr. Treml questioned the timing, noting that completion is not scheduled until Mr. Berndt explained the need to apply for funding in order to manage risk and to plan design. Delo pointed out that the Board agreed that McMahon complete the analysis but had asked that design be bid and that competitive proposals be sought. He asked if McMahon could submit the application to the Water Fund without being approved to do the design. The Manager agreed to investigate prior actions of the Board regarding intent to seek competitive proposals. (See #1 Technical Committee Recommendations) Administrative Actions and Reports: Draft Budget, Capital Improvement Program and recommended designation of 2013 Litigation Settlement Funds The Manager introduced the draft budget, explaining there will be modifications before it is presented for adoption. He asked for advice from the Board related to the CIP and the use of surplus bond funds from the 2013 bond anticipation note, the use of projected WDOT rebates on the water main relocation program, the use of litigation settlement funds, along with the potential use of reserves to maintain rates. The Manager stated that at this time, the draft budget assumes that the 2014 CIP of $500,000 will be funded from one of these sources (system storage, cathodic protection, etc.). As is, the budget calls for a $0.07 increase in water rates from the existing $4.11 to $4.18 per thousand gallons. President Delo noted that although there may be several large industrial/ commercial users, they have become more efficient, therefore, causing a decline in water usage.

4 4 No Action. A draft will be sent to members and a public meeting set for comments on the budget at the October 16 th Board meeting. The Manager will be available for budget presentations to member communities upon request. 2. Financial Advisory Services Consultant Selection: This item was discussed above - # s 1 & 2 Appearances President Delo shared that although Ehlers knows the Authority and has prior knowledge and experience, they do not have the experience that Springsted has with large volume accounts and national base. Further discussion resulted in the opinion that large issuance is critical and that Springsted has a better scope of services. Motion made by Allouez to retain Ehlers, Inc. for Financial Advisory Services. No Second. Motion Failed Motion made by Lawrence, seconded by Bellevue to retain Springsted, Inc. for Financial Advisory Services. Ayes: Bellevue, Howard, DePere Nays: Allouez, Ledgeview MOTION APPROVED Village of Howard, Water Use & Expenses during Water Main Relocation. Proposed Policy & Compensation: (Ledgeview excused) The Engineer explained that Howard has incurred expenses to produce well water during the project and the contractor used water from the Authority for flushing the system. There is a possibility that these costs would be eligible for reimbursement and he will prepare a change order to the contractor and submit the request to WDOT for consideration. 4. Request from Word Works Transcription Service for Increase in Fees: A request from Rae Knippel of Work Works Transcription for an increase in hourly rate over the period of 2014 to 2018 was addressed. A previous contract with Word Works will expire at the end of Motion made by Allouez, seconded by DePere to approve the request of Word Works Transcription Service for an increase in fees. Ayes: Allouez, Bellevue, DePere Nays: Lawrence MOTION APPROVED Financial Reports: The Manager indicated that finances are on track. Motion made by DePere, seconded by Lawrence to approve the Financial Reports.

5 5 6. Pay Authorizations: Vouchers: Invoices were reviewed and approved for payment. Motion made by DePere, seconded by Lawrence to approve the Pay Authorizations/Vouchers. Technical Committee Recommendations: 1. Proposal from McMahon, Inc. for Engineering Services associated with System Storage Design and Loan Application The Technical Committee has reviewed the proposal of McMahon Inc for engineering services associated with system storage design and loan application and are recommending that the CBCWA contract with McMahon Inc. to begin design of the recommended storage design in 2013 using surplus bond proceeds which will allow the Authority to submit for the next funding cycle of the Safe Drinking Water Loan Program. See Above. No Action. The Manger will investigate prior actions of Board regarding intent to seek competitive proposals. 2. Proposal from McMahon, Inc. for Engineering Services associated with Corrosion Protection of Air Relief Valves: Manager Vaclavik and Gary Rosenbeck of McMahon explained that funds have been budgeted this year to waterproof the air relief valves using a petroleum based tape wrap. The proposal from McMahon is for engineering /construction services to prepare, design, and services for this project under their normal rate structure. Motion made by DePere, seconded by Allouez to approve the Proposal from McMahon, Inc. for Engineering Services associated with Corrosion Protection of Air Relief Valves. 3. Change order #3 for DeGroot Construction, Water Main Relocation Project reducing project cost by $5,416.01: Gary Rosenbeck explained that this request involves connections to the 48-inch steel water main for the air release and vacuum valves on the pipe line which are located in concrete manholes. The original construction of these manholes prevents any structural modifications to the manhole assembly. It is proposed to provide a water displacing, corrosion-inhibiting product o protect the exposed steel surfaces from corrosion and potential failure. The surfaces requiring protection are proposed to be provided with a surface preparation followed by a series of petroleum products to provide a protective coating system that is designed to inhibit further corrosion of the exposed area. Rosenbeck further explained this change order increases cost for the required extension of the water main relocation pipeline to avoid a conflict with a gas main

6 6 with a deduct resulting as a result of savings on the wetland crossing approved in Change Order #2. Motion made by Lawrence, seconded by Allouez to approve Change order #3 for DeGroot Construction, Water Main Relocation Project reducing the project cost by $5, Pay Application #1, DeGroot Construction in the amount of $434,265.80: The Manager explained that this pay application to DeGroot Construction in the amount o f $ represents the first partial payment on the water main relocation project which ha been restored to service. Motion made by DePere, seconded by Lawrence to approve Pay Application #1 to DeGroot Construction in the partial payment amount of $434, for work performed through July 31, Pay Application #1, R. Cleveland Corp. in the amount of $70,730.00: The Manger explained that although R. Cleveland has a few punch list items to complete on this project, it is otherwise finished. This payment of $70,720 represents the majority of contract value. Motion made by DePere, seconded by Allouez to approve Pay Application #1, Construction in the amount of $70, Project Update and Status Reports: 1. Engineer s Report - DeGroot Construction Project has been complete - R, Cleveland Work has been completed on 48 pipe line for relocation of test stations to monitor corrosion. There are two additional stations to inspect. 2. Manager s Report The Manager highlighted the following activities as included in his written report: - CDM Smith Valve Replacement Protocol should be wrapping up with information for review by Press Release on Settlement has resulted in little response. - A meeting with Michaels for potential settlement is expected to conclude in early October. Payments have been received form both CTE and Dorner/Joski concluding litigation. Old Business: 1. None New Business 1. None Next Meeting 1. Suggested Agenda Items for next meeting September 18, 2013 Lawrence Accounting for hours with Sensus from Manager

7 7 Adjourn: Motion made by DePere, seconded by Allouez to adjourn at 4:52 p.m. Respectfully submitted, Rae G. Knippel Transcription Secretary