MINUTES. Commissioners present were Mses. Barnes and Bilanchone and Messrs. Blanton, Lynch, Montgomery, White, and Whitlock. No one was absent.

Transcription

1 MINUTES Spartanburg Sanitary Sewer District Commission, Regular Meeting, held at 200 Commerce Street, Spartanburg, SC,, at 2:15 p.m. Copies of the agenda were forwarded to the following news media: Spartanburg Herald-Journal, The Spartan Weekly, Greenville News, The Greer Citizen, Hometown News, WSPA-TV 7, WYFF-TV 4, WLOS-TV 13, WHNS Fox Carolina, WORD News Radio, WOLT-FM Radio, Tribune Times, and the Times Examiner. Commissioners present were Mses. Barnes and Bilanchone and Messrs. Blanton, Lynch, Montgomery, White, and Whitlock. No one was absent. The meeting was opened with the following statement: This is a regular meeting of the Spartanburg Sanitary Sewer District Commission. Written notice of the date, time, and place for this meeting, along with the agenda, has been posted on the bulletin board, and copies mailed to local and nearby news media, at least 24 hours prior to this meeting. All motions were unanimously approved unless otherwise indicated. 1. PRAYER Mr. Lynch called the meeting to order and Mr. Jackson opened with a prayer. 2. APPROVAL OF MINUTES OF REGULAR MEETING OF JANUARY 22, 2013 Mayor White moved and Mr. Montgomery seconded the motion to approve the minutes as written. 3. MONTHLY FINANCIAL REPORT Newt Pressley presented a financial summary of SSSD expenditures and revenues for the seven-month period ending January 31, An explanation was provided for the favorable and unfavorable budget variances. The above was provided as information. 4. INTRODUCTION OF HUMAN RESOURCES MANAGER

2 Page 2 Ms. West introduced Jan Dominick, the new Human Resources Manager. Ms. Dominick has over eighteen years of experience in Human Resources, some of which has been here in the Upstate at various manufacturing facilities. 5. RESOLUTION PROVIDING FOR THE ISSUANCE OF SEWER DISTRICT REFUNDING REVENUE BONDS Mr. Robert Galloway of Haynsworth Sinkler Boyd, P.A., SSSD Bond Counsel, presented a resolution authorizing the issuance of refunding revenue bonds. The Sewer 1999B Bonds and all or a portion of the Sewer 2003A Bonds and the Sewer 2003B Bonds will be refunded in connection with this transaction. Mr. Galloway summarized the Resolution and stated that if the bonds were issued today that the gross savings over the life of the bonds would be approximately 9.6 million dollars and a present value savings of 6.1 million dollars. As a guideline, if there is a savings of 3% or more, then refunding may be a good option. Currently, the refunding of SSSD Revenue Bonds results in net present value savings of 9.3%. The Resolution authorizes the Chairman and the General Manager to proceed with the issuance of the refunding bonds, with a cap on the amount of the bonds of 70 million dollars. There is also a threshold of 3% net present value savings. This would authorize the General Manager and Chairman to sign the bond purchase agreement. Mr. Blanton asked how these savings compare with six or nine months ago. Mr. Lynch said when SSSD first started watching this in the fall it was 7.4% to 7.8%, the high point was reached in November at 11.32%, and back down to 9.45% in January, and now it is 9.3%. Mr. Galloway stated that it does vary and therefore the 3% guideline is used. Mr. Lynch asked Mr. Galloway to address the affects of calling these bonds early. Mr. Galloway stated that because the bonds to be refunded will not be redeemable, or retired until March 2014, SSSD would accomplish what is called an advanced refunding. SSSD would borrow the money, purchase U.S. Treasury Obligations, put that in an escrow account, and that escrow defeases the old bonds and they are deemed to be legally paid at that point.

3 Page 3 In the current market SSSD s interest rates on debt is low, but what is even lower is the interest rate on investments. So when you buy these U.S. Treasuries to put into this escrow, to pay out March 2014, they are not going to yield much at all, so that is what we call negative arbitrage, but these refunding numbers that I gave you, both the dollar amounts and the percentage amounts already reflect the negative arbitrage. Mr. Lynch asked if the debt schedule is in the Resolution. The total of the bonds that SSSD is refunding is million, but in the refunding paperwork it has , but that is at March 1, 2014, is that the reason for the difference. Mr. Galloway said yes, that is right. Mr. Montgomery said does SSSD have to borrow more to buy treasuries to offset the interest income. Mr. Galloway said that is right, but the interest rate is so much less on what SSSD will buy that it is absorbing that and giving you much more savings. Mr. Montgomery asked is that the only new indebtedness. Mr. Galloway said this is all refinance. Mr. Lynch asked what the total of the new indebtedness will be. Mr. Galloway said the total principal amount of indebtedness will go up slightly, but the debt service payment will go down. Mr. Lynch said presumably the length of the term will get spread out too, and then the other negative is you are reducing bonding capacity. Mr. Galloway said the length of the term will not change; no new debt is being taken on, it is purely a lower interest rate. Mr. Lynch said okay. Mr. Galloway said these are revenue bonds; there is also general obligation bonds, which is impacted by the principal amount you can have outstanding at any one time. That is not the way revenue bonds work on any of your tests, they all work on your debt service load, not on your outstanding debt. Mr. Lynch said that helps with that concern. Mr. Blanton asked what the cost of issuance would be. Mr. Lynch said that figure is $650,845. Mr. Pressley said that is reflected in net present value savings. Mr. Blanton asked what makes this the right time. Will it change in the near future? Mr. Galloway said that is a really good question. If there is some significant tax reform, let s say in the next six months, then the rates on the bonds could go up. Mr. Pressley said that the savings on this refunding

4 Page 4 appeared to have peaked in November at about 11% and seem to be trending down in early Ms. Schneider said the goal that she and Mr. Pressley talked about was to get the lower debt service, and get some budget relief. Ms. Bilanchone moved and Ms. Barnes seconded the motion to authorize the issuance of the refunding revenue bonds. 6. WORKERS COMPENSATION INSURANCE Workers compensation insurance renews on April 1, The current carrier, Liberty Mutual has submitted a renewal quote of a 31% increase. Staff has requested quotes from other carriers. Several carriers declined to provide a quote for Workers Compensation Insurance. The following quotes were received. Berkshire Hathaway $304,000 Key Risk $253,000 Liberty Mutual $246,000 Amerisure $217,000 Management recommended selecting Amerisure as the carrier for Workers Compensation Insurance. The allocation between companies is $56,420 for SSSD and $160,580 for SWS. Mayor White moved and Ms. Barnes seconded the motion to accept management s recommendation. 7. PROPOSAL FOR FAIRFOREST RECLAIMED WATER TREATMENT ANOXIC ZONE ADDITION

5 Page 5 On October 31, 2012, Malcom Pirnie/Arcadis finalized the Wastewater Facilities Assessment and Master Plan. One recommendation from this plan was to prepare a Preliminary Engineering Study to establish an anoxic zone in both Aeration Basin No. 1 and Aeration Basin No. 4 at the Fairforest Reclaimed Water Treatment Plant to improve operational efficiency, reduce energy costs, reduce chemical costs related to alkalinity, and provide a treatment strategy for future nutrient removal. The objective of this Preliminary Engineering Study is the development of this concept into a tangible, cost-effective project that can proceed to detailed design engineering. Malcolm Pirnie/Arcadis proposes to complete the Preliminary Engineering Study for a lump sum fee of $73,000. Management recommended approving a professional services agreement with Malcom Pirnie/Arcadis for the above mentioned services at a cost not to exceed $73,000. Funding will come from SSSD bond funds. Mr. Tuck explained that the anoxic treatment process uses less oxygen which means less energy costs. This process will increase efficiency, reduce energy, and assist with preparation for future regulatory limits. Mr. Blanton moved and Mayor White seconded the motion to accept management s recommendation. 8. PROPOSAL FOR LOWER NORTH TYGER RIVER RECLAIMED WATER TREATMENT RE-RATING On October 31, 2012, Malcom Pirnie/Arcadis finalized the Wastewater Facilities Assessment and Master Plan. One recommendation from this plan was to prepare a Preliminary Engineering Study to evaluate the feasibility of re-rating the Lower North Tyger River WWTP for a capacity of 3.3 MGD and 4.1 MGD, as approximated in the Master Plan. This study would include both hydraulic and process evaluations of the facility and recommended upgrades to support these increases in plant capacity.

6 Page 6 The objective of this Preliminary Engineering Study is the development of this concept into a tangible, cost-effective project that can proceed to detailed design engineering and meet SCDHEC requirements. Malcom Pirnie/Arcadis proposes to complete the Preliminary Engineering Study for an estimated cost of $187,000. Management recommended approving a professional services agreement with Malcom Pirnie/Arcadis for the above mentioned services in an amount not to exceed $187,000. Funding will come from SSSD bond funds. Mr. Lynch asked what the current capacity is for the Lower North Tyger River facility. Ms. West said capacity is 2.5 mgd. SSSD is preparing for future growth. Mr. Blanton asked what the total capacity of all SSSD facilities is. Ms. West said approximately MGD. Mr. Montgomery moved and Mayor White seconded the motion to accept management s recommendation. 9. PROFESSIONAL SERVICES AGREEMENT(S) FOR OUTSIDE LABORATORY SERVICES Laboratory Services utilizes select outside vendors to perform a variety of required analytical and consulting services to meet regulatory monitoring requirements and evaluate water quality conditions over a variety of programs. These professional services include analytical testing for parameters in which the Water Quality Laboratory is currently not certified or does not have the technical capability, and associated consulting. Services include sampling and monitoring design, results interpretation and historical evaluation/trending, regulatory and reporting services, and event investigation and characterization. The following vendors are currently utilized in FY12-13:

7 Page 7 Rogers and Callcott Environmental: General analytical, engineering, and consulting services to support drinking water, wastewater, biosolids, groundwater, and watershed monitoring programs. Shealy Consulting: Toxicity testing, biological assays, investigations, special consulting, and regulatory services. Microbac Laboratories: General analytical support services for all programs. Eaton Analytical: Taste and odor analysis and special studies. Underwriters Laboratories: Disinfection by-product analysis and general analytical services. General Engineering: Radiological and specialized sampling and associated analytical consulting. A&L Laboratories: Biosolids analysis and special characterizations. ASI Laboratories: Cryptosporidium and Giardia analysis, biological consulting, program design, and regulatory consultation. Management recommended the continued use of selected vendors for professional services for the remainder of FY12-13 at costs not to exceed $68,000, to be paid out of existing SSSD operational funds. Ms. Bilanchone moved and Ms. Barnes seconded the motion to accept management s recommendation. 10. NOTIFICATION OF ENACTMENT OF EMERGENCY PROCUREMENT LAWSON FORK TRANSFER PUMP NO.1 ROTATING ASSEMBLY While investigating maintenance issues on Pump No. 1 at the Lawson Fork Pump Station, extensive damage was discovered throughout the rotating assembly. On December 18, 2012, the rotating assembly for Pump No. 1 was shipped to Underwood Inc., for evaluation and recommendations.

8 Page 8 Underwood concluded that the packing shaft sleeve was worn in half by the packing. Due to the extensive lead time of 13 weeks for the impeller it was critical to expedite this re-build as soon as possible, as Pump No. 2 is showing the similar maintenance signs that were identified in Pump No. 1. The General Manager approved the request for the emergency procurement to repair the Lawson Fork Transfer Pump No. 1 rotating assembly for an estimated cost of $28,900. The above was provided to the Commission as information. 11. EXECUTIVE SESSION Mr. Whitlock moved and Mr. Montgomery seconded the motion to go into executive session to discuss contractual matters at 3:04 p.m. Ms. Bilanchone moved and Mr. Whitlock seconded the motion to come out of executive session at 3:31 p.m. Ms. Bilanchone moved and Ms. Barnes seconded the motion to authorize the General Manager to negotiate and consummate wastewater service agreements and infrastructure improvement agreements discussed in the Executive Session, including ancillary agreements thereto. 12. NEGOTIATIONS AND MISCELLANEOUS ADMINISTRATIVE MATTERS A. Bags of Love Project Ms. Schneider updated the Commission on the Bags of Love volunteer project for the United Way. These bags are contributed by employees and are delivered with the Mobile Meals program. B Recognition Program Ms. Schneider reminded the Commission that the Recognition Breakfast will be held on Wednesday, March 6, 2013, and Thursday, March 7, 2013.

9 Page 9 C. Health Insurance Work Session Ms. Schneider confirmed the Health Insurance Work Session will be held on Wednesday, March 13 at 11:45 a.m. and a menu will follow. Ms. Schneider also provided the Commission with a notification summary of the preferred drug list changes. D. Large Line Cleaning Project Ms. Schneider shared a few photos of the staging area for the large line cleaning project. The communication letters have been distributed. Meeting adjourned at 3:36 p.m. tbh G. Newton Pressley Secretary-Treasurer