Northern Westchester Joint Water Works

Transcription

1 Northern Westchester Joint Water Works MINUTES FOR THE BOARD OF TRUSTEES MEETING, March 18, 2016 Location: Catskill Water Treatment Plant, 2065 East Main Street, Cortland Manor, NY Convened at 10:10 A.M. Adjourned at 11:29 A.M. Present: Rick Morrissey, Chairperson Ray Reber, Consultant, absent Michael Grace, Vice-Chairperson Linda Puglisi, Treasurer Tom Wood Esq., Attorney, absent Donna Albanese, Recording Sec y William Dalton, Trustee Steve Ferreira, Town of Cortlandt Catherine Paget, Business Director Matthew Geho, Operations Director Prior to requesting a motion to adopt the minutes of the January 29, 2016 minutes, Trustee Puglisi stated that we had a lengthy discussion on the Montrose Improvement District s water storage tank because it had not been inspected for a long time and requested that specific amendments be made to further detail such discussion. Following the amendments, a motion was made by Trustee Morrissey to accept the minutes of the January 29, 2016 Regular Board Meeting as amended. Motion seconded by Trustee Grace. Motion approved 4-0. Trustee Puglisi also commented that Mr. Geho s report on the Town of Cortlandt s website regarding lead in the water was terrific. When citizens ask Trustee Puglisi about Flint, Michigan, she refers them to her website and mentions that the water is being tested. Trustee Morrissey said that there is a state law that whenever there is a real estate transfer or rentals, part of that sale includes a lead report of the water. Discussion Topics with Resolutions Requested Review and request to approve the 2015 Year End Reconciliation Billing and the 2015 Year End Budget Mrs. Paget provided the financial reports to the Board with a summary of revenue and expenses along with supporting KVS reports. In 2015 on the revenue summary, in overall water sales we had a budget of $7,254,959. Our actual water sales to the members resulted in $7,753,458 which was a positive variance of almost $500,000. Each member exceeded what was projected in water sales with the main driving force being the increase in water demand of member s consumption. In electrical surcharges, we had a budget of $467,600 and the actual billed back to the members was $357,745 a variance of $109,000. We did not incur the electrical charges and thereby we do Friday, March 18, 2016 Page 1 of 6 NWJWW Board Meeting

2 not bill it back to the members. We adjusted the 2015 budget to be more in line with what our expenditure was in 2014 because when we have bad storms, we incur energy curtailment adjustments. When they pass that cost on to us, we have to pass it onto the members whether it be by the rate or in the electrical surcharge formula. In 2015 we did not have that type of exposure. We usually pass on 55% of the total electrical expense which is strictly pumping charges through the electrical surcharges. Mr. Geho said that in 2014, we were hit with the ECA charges due to a cold winter and they had to make adjustments from their suppliers. Since we are in the Demand Response Program and as these events occur we will go offline which means that we will not be buying the power at the elevated price and we will be getting paid by the utility to cogenerate the power. We budgeted $435,963 in Central Garage and Distribution and the actual was $445,899. This section includes the general support of the Joint Water Works operations and any direct services to the members as far as water main breaks and the Montrose Improvement District so the revenues which are incurred and brought in for those charges are reflected here and any direct costs. Fluoride is charged back to Yorktown and it is reflected in the amount of money they are paying. For in-house and outsource lab expenses, the members pay for coliform sampling which is done here with our certified lab as well as the collective RFP we issue each year for the outsource testing. The Administrative Fee and Billing Service are based on the actual expenses incurred. Mrs. Paget stated that we expected the members in the Administrative to pay $736,924, but it was $715,056 with a variance of $21,000. The Administrative Fee is billed back to the members in the same proportion as water purchased. In the Billing service, we budgeted $440,841 and spent $ 329,000 mainly because we had a reduction in staff and some benefit costs had shifted around. The County Bond payment is billed back directly as spent as well as are the water surcharges. In this surcharge category, we budgeted $443,000, billed out $757,000 which is mainly driven by Buchanan s consumption then billed back to Montrose first. The Town of Cortlandt had experienced excess surcharges because of their consumption draw last year. Overall, we took in $588,000 more than what was budgeted. Of that $314,000 were surcharges passed back to the members so this is not an operating revenue excess. Trustee Dalton said that we made a 6% profit and Mrs. Paget said it would be contributable to the water sales itself. In water treatment expenditures, we had an overall budget of $7,746,482 and we paid out $7,470,428 with a variance of $276,054. For water purchases we had a $227,000 overage due to the members consumption which was higher than forecasted coupled with we had planned for an 8% rate increase for New York City yet the increase was 9.8%. Both factors have an impact on the water purchase activity. Mrs. Paget made reference to the electricity costs and said that we were proactive with planning the 2015 budget based on the 2014 actual experience and the fact that we received written information from the suppliers to expect these surcharges going forward. Mr. Geho said that if you look at the 2013 and 2014 jump, it caught us off-guard and when we were doing the 2015 budget, we decided to absorb that more in the budget. In 2016 we did not change our approach. Friday, March 18, 2016 Page 2 of 6 NWJWW Board Meeting

3 Contractual expenses were budgeted at $515,676 and we spent $383,000 with a variance of $132,000. At the last Board meeting, the Board recognized the fact that the cleaning of the Catskill waste washwater tanks was planned in 2015 for $50,000. Operationally, we were not able to perform it so it will be a carryover in The residuals costs to remove and pump out the tanks was lower by $47,000. Heating oil was lower by $16,000. In equipment maintenance, we had a reduction in expenditures for compressors and generators. Mr. Geho said that the work was done in-house so we did not have to utilize contractual services to get it done. The chemical costs were budgeted for $289,000 and we paid out $209,000 with a variance of almost $80,000 due to operational changes of the chemical systems feed. We utilized the Catskill Plant more than the Amawalk Plant. Mr. Geho said that Amawalk will be utilized more as a seasonal and emergency backup. Employee benefits were budgeted for $690,000 and we spent $ 640,000. A combination of level of benefits and a reduction in the retirement bill not because the rates changed but an implication of the 12 hour shifts resulted in the variance. The Central Garage and Distribution section is direct service to the members as well as in house support of Joint Water Works operations. We budgeted $450,000 and spent $466,000. On the Administrative expenses, we saved about $20,000 mainly in the contractual line as a result of better price quotes on supplies and in house costs. Overall on the expenditure end, we spent almost $70,000 less than we had budgeted for. Audit field work is done and we are in the process of finalizing reports. Mr. Dominick Consolo and Mrs. Leslie Tillotson from O Connor Davies will present their reports at the April board meeting. We will see the impact of depreciation, net pension liability and OPEB. We had generated $520,000 in capital revenue through the additional 20 cents per thousand rate in We expected to generate about $490,000 and we spent $920,000 in capital projects which were approved by the Board. We anticipated we were going to spend $1.3 million. The carryover money was approved at the January board meeting when we did the schedule of capital projects for 2016.It was an additional $500,000 from the prior year and $1 million on the capital plan to be spent this year so it is $1.5 million exclusive of the tank. In terms of the Year End Reconciliation Billing, we take the Administrative and Distribution expenses and bill back to the members based on their percentage of water they bought that year. In 2015, Montrose Improvement District bought 16% of the water, Town of Cortlandt bought 40%, Town of Yorktown bought 41% and Somers bought 3%. Those percentages were allocated to the Administrative costs and the support of general distribution of operations. In October 2015, we billed back the Administrative costs as per budget what we planned for and that becomes an adjustment plus or minus, and arrive at an amount due. We segregate any costs that the members incurred for direct outside services. Montrose is $97,577 for their direct service for managing their district and any other direct contractual expenses. This is if we made purchases or had to fix something based on the members which are reflected under the direct contractual expenses. In addition, we have an employee who acts as Friday, March 18, 2016 Page 3 of 6 NWJWW Board Meeting

4 the operator in charge of the Montrose Improvement District and we segregate out that additional charge and applicable benefit costs and add that into the money that Montrose pays as well. For the billing expenses, we bill back to the members based on the number of accounts serviced. The billing costs were $329,000 and were allocated. Montrose s accounts are 4% of the total, Town of Cortlandt is 42% and Town of Yorktown is 53%. Mrs. Paget also requested the Board for approval on related budget transfers to make the budget whole in areas that needs it. A motion was made by Trustee Puglisi to approve the 2015 Year End Reconciliation Billing and 2015 Year End budget transfers necessary to reconcile the 2015 budget. Motion seconded by Trustee Dalton. Motion approved 4-0. Request to increase spending authorization for the Amawalk Chemical System Upgrade Project Mrs. Paget reported that they received information from Hazen and Sawyer for working with shop drawings and submittals submitted by McNamee Construction, the contractor onsite for the chemical containment project at Amawalk. Mr. Geho said that the project is complete and as a result some shop drawings were reviewed multiple times by Hazen and Sawyer for materials submitted by McNamee Construction. In our contract with McNamee it stated that anything over the third submittal would be charged back to the contractor. As a result of this, we are over our shop drawings review and submittal process with Hazen and Sawyer by $32,000. We have outlined what we can charge back to McNamee which we will do in a letter that was discussed with Mr. Tom Wood. We are holding their retainage and we can charge back $12,000 to McNamee and an additional charge of $6,000 for a DEC permit which we had to pay due to a chemical spill they had. We have the mechanism in place so that we can recoup 50% of the overage. A motion was made by Trustee Grace to pay the increased costs to Hazen and Sawyer for Supplemental Agreement #2A in the amount of $32,000 for the Amawalk chemical containment project. The total amount not to exceed $72,000. Motion seconded by Trustee Puglisi. Motion approved 4-0. Attorney s Report Mr. Wood was absent. Business Director s Report Mrs. Paget has further items to discuss in Executive Session Operations Director Mr. Geho stated that we put out a third bid for the oil sand under the 3mg tank. He received an indication from the contractors that any uncertainty with regards to the contamination would have exorbitant costs. We pulled that part out and bided it out costing us $3,000 a day to remediate and the soil will be tested. The reason we delayed the award for the bid was because Mr. Geho did not get a confirmation from the DEC. He requested from them to deem this area nonhazardous for the lead. The uncertainty of that could mean an additional cost of $200,000 to Friday, March 18, 2016 Page 4 of 6 NWJWW Board Meeting

5 $500,000. If the DEC will not give us that confirmation, we will pull that out as a separate contract so we have more control over it. Trustee Puglisi stated that there was a leak at Indian Point on January 17, 2016, in which she was immediately apprised. She had subsequent conference calls and meetings at the site. NRC, Entergy and the DEC are doing an investigation regarding the Hudson River depending on the results. One tenth of one percent of tritium was leaked from a pipe which went into a floor drain at a filtration system. There are 43 wells on the site and 3 of the wells were affected. There is no impact of drinking water or any health risks. The DEC and the Entergy are battling it out on the wiring drains into the river for the big cooling tank. Both we and Entergy are against the tank and the DEC is in favor of it. A motion was made by Trustee Morrissey at 10:50 AM to enter into Executive Session for personnel issues. A motion was seconded by Trustee Dalton. Motion approved 4-0. A motion was made by Trustee Morrissey at 11:20 AM to exit Executive session. A motion was seconded by Trustee Grace. Motion approved 4-0. After exiting executive session, the Trustees adopted the following resolutions: A motion was made by Trustee Puglisi to appoint Ms. Barbara Marshall as Senior Office Assistant Automated Systems with a salary of $52,000 a year. Motion seconded by Trustee Grace. Motion approved 4-0. A motion was made by Trustee Puglisi to authorize temporary appointment of Mr. Mark Rowe to Water Treatment Operator 2A effective February 29, Motion seconded by Trustee Dalton. Motion approved 4-0. A motion was made by Trustee Dalton at 11:29 AM to adjourn the meeting. The motion was seconded by Trustee Morrissey. Motion approved 4-0. Summary of Resolutions Adopted complete wording available upon request Resolution # A motion was made by Trustee Morrissey to accept the minutes of the January 29, 2016 Regular Board Meeting as amended. Motion seconded by Trustee Grace. Motion approved 4-0. Resolution # A motion was made by Trustee Puglisi to approve the 2015 Year End Reconciliation Billing and 2015 Year End budget transfers necessary to reconcile the 2015 budget. Motion seconded by Trustee Dalton. Motion approved 4-0. Resolution # A motion was made by Trustee Grace to pay the increased costs to Hazen and Sawyer for Supplemental Agreement #2A in the amount of $32,000 for the Amawalk chemical containment project, with the total amount not to exceed $72,000. Motion seconded by Trustee Puglisi. Motion approved 4-0. Friday, March 18, 2016 Page 5 of 6 NWJWW Board Meeting

6 Resolution # A motion was made by Trustee Puglisi to appoint Ms. Barbara Marshall as Senior Office Assistant Automated Systems effective March 18, 2016 with an annual salary of $52,000 a year. Motion seconded by Trustee Grace. Motion approved 4-0. Resolution # A motion was made by Trustee Puglisi to authorize temporary appointment of Mr. Mark Rowe to Water Treatment Operator 2A effective February 29, Motion seconded by Trustee Dalton. Motion approved 4-0. Friday, March 18, 2016 Page 6 of 6 NWJWW Board Meeting