Valley Forge Sewer Authority

June 11 th Meeting Minutes

Amended July 9, 2007

The Valley Forge Sewer Authority meeting was held on Monday, June 11, 2007, at 7:00 pm. The following people attended the meeting: Board members: Daniel Reese, William Hochwind, Michael Rodgers, Marilyn Randolph, Norman Vutz, and Charles Melle; Staff, Leonard Pinchok and Martin Goldberg; Consultant: Lawrence Lutter.

Several employees, as well as, Jock Rowe, the Teamsters Principal Officer and Gene King of King Financial Advisors attended the meeting.

Mr. Reese called the meeting to order with the Pledge of Allegiance.

Public Comment

Mr. Rowe requested to have public comments deferred until the report from the Personnel committee was presented. Mr. Reese declined but allowed Mr. Rowe to comment during the time designated for public comment. Mr. Rowe addressed the Board with concerns regarding the two correspondences he had submitted, but had not yet received a response to, regarding the request to meet and discuss the health care issues and the General Manager position being deleted from the organization. He inquired as to whom this correspondence should be addressed and also stated that he felt the Board did not fully disclose broker information, referencing the Sunshine Law. The Board informed Mr. Rowe that all administration inquiries be directed to Mr. Pinchok and explained that specific details are discussed at the committee meeting level. The Board also stated that the minutes include the details and are made public after they are approved at the monthly meeting. Mr. Rowe stated that the union feels the current broker is more than sufficient and requested an opportunity to discuss before a vote is taken. The Board thanked Mr. Rowe for his input and comments and assured him that his inquiries would be addressed in the response letter currently being prepared.

Tina Nelson stated that she understood the right to other brokers, but inquired why the Board was spending time, monies and effort to do so. Mr. Reese explained that the Board has a fudiciary responsibility to the ratepayers and employees to find an unbiased broker they can work with and that will provide the best service available.

Mr. King stated that the Personnel committee did not interview anyone from the current broker staff nor provide an opportunity for comments to be submitted to them. He stated his goal was to make sure that both the management and union received the same level of service and consideration. The Board informed Mr. King that Mr. Rosenfeld of Modell Consulting had in fact attended the May monthly meeting and presented his comments to them at that time. All Personnel committee members are provided a transcript of the meeting minutes.

Mr. Reese then informed the public that the time allotment for public comment had expired and proceeded to the next topic on the agenda.

Meeting Minutes

The May meeting minutes were presented to the Board for approval. Ms. Randolph made a motion to approve the minutes as presented. Mr. Vutz seconded and the Board unanimously approved.

Reports

Operations Report

Mr. Goldberg reported that the Authority was in compliance with all permit requirements for the month of May and that there were zero odor complaints for the month. He also stated that the chlorine disinfectant was under control and that no further problems had occurred. Mr. Goldberg informed the Board that one thickener would be taken out of service this month and efforts were being taken to keep odors non-existent during the operation of the project. The Board thanked Mr. Goldberg for his report.

Financial Report

Mr. Pinchok presented the May 2007 combined statement of operations to the Board and noted that there were three payrolls in the month, as well as, a market adjustment. He reviewed Funds 10 and 20 and reported that all the pump stations had been hit hard by heavy rains over the past month thereby significantly increasing their monthly usage. He also reported that the overage in the budget was due to a contract that is not scheduled to begin until September 2007. With regards to Fund 20, Mr. Pinchok reported that the septic dump has started to recoup costs and thus bringing account back on track with budget. He also stated that electricity still a little higher than normal and that lime prices have doubled since last year, however, chlorine was back on budget. The Board thanked Mr. Pinchok and accepted the report as presented.

The A/P invoices presented for payment equaled $230,700. Mr. Hochwind made a motion to pay the invoices as presented. Mr. Rodgers seconded and the Board unanimously approved.

The Treatment Plant Construction Fund presented for payment equaled $1,267. Mr. Rodgers made a motion to pay this requisition. Mr. Melle seconded and the Board unanimously approved.

The Capital Improvement Fund presented equaled $3,691. Mr. Rodgers made a motion to pay this requisition. Mr. Vutz seconded and the Board unanimously approved.

The Imprest /Petty Cash Fund presented for payment equaled $270. Mr. Rodgers made a motion to pay the expenses. Mr. Vutz seconded and the Board unanimously approved.

The Debit Card purchases presented for payment equaled $492. Mr. Vutz made a motion to pay these expenses. Mr. Rodgers seconded and the Board unanimously approved.

Mr. Pinchok also reviewed the Payroll Account report with the Board.

Act 537 Plan

Mr. Goldberg reported on the status of the Regional Act 537 Plan. He reported on the May activity of passing resolutions and stated that the Authority had approved resolutions from five of the eight townships. He also reported that the three remaining townships were in various states of approval and that he would be speaking to each of them this week. He did not foresee any major setbacks to the plan and stated that the next step is to submit all eight resolutions to DEP by the July 1 st deadline. He reported that the Plan is in pretty good shape and adhering to the timeline schedule. The Board thanked him for his report.

Chapter 94 Flow Projections

Mr. Goldberg reviewed the flow and EDU projections with the Board. He stated that the Authority has the right to agree they have capacity for projections, but can also reject if the community gets more aggressive than the projections filed. He reported that the Chapter 94 projections were submitted to DEP in March 2007 to verify capacity for the next five years and that the Chapter 94 report needed approval from the Board. Mr. Vutz made a motion to approve the Chapter 94 report. Mr. Rodgers seconded and the Board unanimously approved.

2006 Engineers Report

Mr. Lutter reviewed the 2006 Engineers report with the Board. He reported that the restructured information from the executive summary was put into measures in the report. He also reviewed the recommendations being made with regards to Safety and Training, Capital Budget, Capacity, I & I Monitoring and Odor Control. Following a lengthy discussion of the recommendations, as well as, the I & I monitoring procedures and checks and balances in place for the entire system, Mr. Rodgers made a motion to approve the engineers report. Mr. Melle seconded and the Board unanimously approved. It was also noted that no items needed to be followed-up with committee, since the majority are already part of Mr. Goldberg and Mr. Pinchok's job assignments.

2006 Preliminary Audit Statements

Mr. Pinchok reviewed the audit statements with the Board. He explained that the financial report covers the VFSA as a whole and that the treatment plant is strictly for operating expenses. The auditors verified that the Authority financials were presented fairly. Mr. Pinchok also stated that upon acceptance and approval of the statements, the monies would either be returned to the partners or reinvested for them, whichever preference they decide to choose. Mr. Reese made a motion to approve the 2006 Preliminary Audit Statements as presented. Mr. Rodgers seconded and the Board unanimously approved.

Committee Reports

Personnel Committee

Mr. Reese reported that the personnel committee meeting was held on May 23, 2007 and discussed health care, brokers and engineer personnel. It was reported that the Odell presentation was reviewed and that three other brokers, BDG, MEA and V F Benefits Consulting, were also reviewed for consideration with the committee discussing pros and cons of each broker. The committee validated that service was the key driver and reviewed costs, ideas, service, market trends and conditions. Following this discussion, the committee came to the consensus and made the recommendation that V.F. Benefit Consulting would best serve the Authority's needs as broker of record.

Mr. Reese stated the following: “The Board has a fiduciary responsibility to the stakeholders of the Valley Forge Sewer Authority. One responsibility dictates that the Board hires a broker who identifies new and innovative strategies based on factors such as service to its employees, market conditions, and plan design trends. Based on the interviews conducted, the Personnel committee believes that Valley Forge Benefits Consultants can serve as the Authority's broker and provide information consistent with the responsibilities of the Board.” Mr. Reese then made a motion to obtain the services of Valley Forge Benefits Consultants as the broker of record to service the current Health Insurance Plans and employee benefits, with the staff reporting to the Board over the next 6 months through email and updates via the Board meeting, on the transition and quality of the service the new broker is providing. Mr. Hochwind seconded the motion. Mr. Vutz stated that he was wary given the touchiness of the broker situation and the date of the request made from the union. Mr. Melle had a legality issue concern; however Mr. Pinchok verified that the solicitor had determined no meeting was necessary as the contract states that after two years, the Authority has the right to choose another broker and does not have to remain with the broker of record. The motion passed 5-1.

Mr. Reese reported that the engineering personnel issues were discussed and that Mr. Goldberg gave an informative presentation outlining need, hours, future, and benefits. The committee recommended moving one employee from part-time to full-time. Mr. Goldberg verified that this change has been implemented.

Administration and Finance Committee

Mr. Melle reported that the administration and finance committee meeting was held on June 6, 2007 and discussed 2006 audit reports, TPC audits, Act 537 Partner requirements, infrastructure management and trucked waste profitability. The committee accepted the 2006 audit report as presented and Mr. Pinchok stated that the TPC audits are still in progress and that all audits will be presented to committee upon completion. Mr. Goldberg presented a table identifying each partner's obligations and noted that each partner has received a copy as part of the Act 537.

Regarding the infrastructure management involving major pump station upgrades, the committee made the following recommendations:

1.) Upgrade all four large pump stations as part of a single large construction project, implemented beginning in the 2 nd half of 2007 for engineering and construction through approximately 2008. This would be done instead of having four separate smaller projects being spread out over a four-year period.

2.) Committee noted that the first pump station engineering contract was competitively bid and awarded to Buchart-Horne. Of the remaining three pump station upgrades, the committee discussed economy to scale and recommended the engineering be done on all three together. There was also discussion of whether to put out to bid competitively or negotiate with the incumbent. The Operations and Construction committee meeting takes place on June 14 th and will discuss and make recommendations as well.

Following a lengthy discussion, Mr. Melle made a motion to approve the committee recommendation to upgrade all four large pump stations as one single large construction project. Mr. Vutz seconded the motion. During discussion of the motion, Mr. Reese made an amendment to the motion to have the Operations and Construction committee discuss at their upcoming meeting and proceed with the recommendation made by the majority consensus of the committee. Ms. Randolph seconded the amendment. The Board voted unanimously to accept the amendment. The Board then voted unanimously to approve the motion.

Mr. Melle made a second motion to defer to the Operations and Construction committee to discuss and provide a recommendation on whether to competitively bid out the engineering contract or negotiate a price with the incumbent, and that the Board would approve the recommendation. Mr. Reese seconded the motion and the Board unanimously approved.

The committee reviewed the report on the trucked waste profitability and noted that because of changes made in the first four months of the year, the yield has improved from 10% to 27.7% profit. Mr. Pinchok stated that the partners would be notified at the upcoming Joint Board and Partners meeting.

The committee was also notified that the current treatment plant agreement expires in 2010 and reviewed the document for informational purposes. The Board instructed the staff to seek information on a different solicitor to review the current agreement and to report their findings back to the Board.

Old Business

Pump Station Upgrades

Mr. Goldberg updated the Board on the progress of the Pothouse Pump Station upgrade. He reported that there were minor comments and that the job went very well. He also reported that the only major surprise was that the ventilation requirements in the drywell needed to be updated because of carbon build-up. He stated that this was being accomplished by replacing with a new style of motor that reduces these emissions and would remain as an unclassified code. Mr. Goldberg also reported that the old generator at the Whitehorse Pump Station was scheduled to be replaced with an emergency pump, which is similar to the Pothouse Station and that replacement of a little bigger pump was scheduled for the French Creek Pump Station.

Other-Scholarship Drive

Jock Rowe, representing the Local Union 77, inquired as to whether the Board would be interested in participating in their 2007 Annual Scholarship Drive by purchasing an ad in their Ad Book. The monies raised enable the union to award four scholarships at their annual picnic to four union members' children. The deadline to participate is June 29 th , 2007. The Board directed the request be sent electronically to the Public Relations and Intergovernmental committee for a response.

Other-Emergency Exit Route

Mr. Reese inquired on the progress being made to create an additional emergency exit route out of the plant. Mr. Pinchok reported that they are working with Delaware Valley Paving to open up the access road behind the plant, as well as, the provisions to create an emergency exit using the road behind McAvoy's.

New Business

Trucked Waste Profitability

Mr. Pinchok reported that the trucked waste restructure to take in less industrial sludge or pay more for with changed pricing schemes to haulers has significantly reduced the solids waste. This improvement has reduced costs for electricity, as well as, overtime figures and has increased profitability from less than 10% to 27.72%. Mr. Pinchok also reported that they will continue to monitor and review again at the August or September meeting and then again at the end of the year. The Board complimented the staff for a job well done and indicated their appreciation for the work involved.

Executive Session

The Board entered into Executive Session at 9:20 pm.

Mr. Reese resumed the monthly meeting at 9:36 pm and reported that the Board discussed 2007/2008 reviews processes and forms for the two managers.

Other-Rate Reduction

Mr. Reese stated that he would like to target giving the ratepayers a reduction in rates in the near future of approximately a $50.00 savings per year. The Board instructed both Mr. Pinchok and Mr. Goldberg to evaluate the costs and bonds figures and determine the ratio between them, in addition to, allocation recommendations for the leftover monies in the capital improvement fund. It was stated that sewage processing, pump stations, infrastructure and bonds are all factors in determining the sewer rates.

Other-Scholarship Drive

Mr. Rodgers made a motion to purchase a $100.00 ad from the Local 77 for their 2007 scholarship fund drive. Mr. Melle seconded and the Board unanimously approved.

Adjournment

Mr. Reese adjourned the monthly meeting at 9:50 pm.