City Council Work Session – PWC Study

Fayetteville City Council
Work Session
August 5, 2013

Present: Full Council & PWC Commissioners

Other 2013 Candidates in Attendance: Nat Robertson (mayor), Kirk deViere (mayor), Jerry Reinoehl (district 1)

What Happened: DavenportLawrence (DL) is a consultant firm in Aberdeen, NC hired by the City of Fayetteville to examine the business relationship between the Public Works Commission and the City.  The cost to hire the firm was $100,000.  The consultants were commissioned to analyze information including the PWC charter and make recommendations on possible consolidation of services.  At this initial stage, the information disseminated was for discussion purposes only. Of the various items discussed, the Fort Bragg water agreement with PWC was the most concerning to Council.

Below are some of the recommendations from DL.  Please visit the city website to view the 51 page document in its entirety www.cityoffayetteville.org

Recommended Changes (from city memo):

  • The Commission (PWC) should transfer all legal services to the City’s internal Legal Division, as well as the associated legal support funding allocated in the FY14 budget
  • The City should fulfill its responsibilities as “Parent Municipal Corporation” of Fayetteville PWC as detailed in the City Charter, including Treasury functions
  • The City should lead all communications involving Fayetteville PWC and the process by which communication is managed and delivered
  • The City should amend its 2006 Fort Bragg water agreement with the Commission to revise the interest rate, apply historical pre-payments to the balance and modify the agreement to allow a pre-payment of balance

Consultants’ Observations:

  • Fayetteville PWC operates effectively and efficiently in the delivery of electric, water and sewer services with competitive rates to other regional utilities
  • Fayetteville PWC autonomy (operational independence) has expanded beyond what we believe to be was originally granted (or intended) by Charter and what is typical for a municipal utility
  • PWC has created an internal control culture and “private company” philosophy that reduces public transparency and support to the City as a Commission of the City

Power Point Talking Points:

  • PWC is tightly controlled and limited transparency
  • PWC has broad financial flexibility
  • Provisions of the Charter – PWC has to come to the City and this has NOT been happening for a long time
  • Anything over $10,000…the City Council must approve
  • There is ineffective coordination with capitol planning
  • There is separate strategic planning goals
  • Budget process is often conciliatory
  • Communication between the City and PWC is extraordinarily limited
  • The City of Fayetteville was not a party to the Fort Bragg water agreement modification of 2008, the missing party is the City of Fayetteville

What Was Said:

Andy Honeycutt (DL Consultant) – “We have collected six months of information.  We are not looking at people but organizations.”

regarding the Fort Bragg water agreement  (PWC Commissioner) – “I don’t know how we could have done that without them.”

Karen McDonald (City Attorney) – “I was involved in the original agreement in 2006 but was not aware of 2008.”

Councilwoman Applewhite – “Do you (city manager) drill down in the PWC’s budget?”

Ted Voorhees – “I haven’t looked at their budget.”

regarding Phase V annexation (DL consultant) – “.3 cent of the city’s property tax rate is not a typical arrangement…in our city we used a city fund to pay for services.”

Next Steps:

Additional discussions and eventual adoption of a resolution

 

 

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