Water Board

ALBANY WATER BOARD MINUTES OF GOVERNANCE COMMITTEE MEETING November 22, 2024 A Governance Committee meeting of the Albany Water Board was officially convened at 8:33am, in the Conference Room at the Albany Water Department, 10 North Enterprise Drive, Albany, NY on Friday, November 22, 2024. PRESENT: Charles Houghton, Chair; Rachel Johnson, Vice Chair; Karen Strong, Secretary; James Frezzell, Assistant Secretary EXCUSED: Anthony Owens, Treasurer STAFF PRESENT: Joseph E. Coffey, Jr., P.E. Commissioner; William Simcoe, P.E., Deputy Commissioner; Christopher Powers, Director of Fiscal Operations; Michael Ruede, Operations Manager – Water; Steve Mercier, Communications Coordinator; Sarah Terrill, HR Generalist II; Karen Wilkes, Administrative Assistant BOARD ADVISORS PRESENT: William Kahn, UHY Advisors; Laura Gulfo, Attorney at Law, MCL&C, PLLC Approval of Meeting Minutes Ms. Johnson introduced the minutes of the Governance Committee meeting on January 26, 2024. With no objection, the reading of the minutes was dispensed; and Ms. Johnson called for a motion to approve the minutes. A motion was offered by Ms. Strong, seconded by Ms. Johnson, and passed unanimously. Annual Policy Review Ms. Johnson confirmed that all Board members completed their annual review of the Board’s policies and discussed whether additional Governance Committee meetings would be necessary for 2025. Policy Revisions by Laura Gulfo, Attorney at Law, MCL&C, PLLC Ms. Gulfo recommended revisions for the following policies:  AWB Procurement Policy: o Change dollar limits to match the thresholds within the City of Albany’s procurement policy  AWB Property Disposition Policy: o As outlined in the AWB’s Operations Agreement, add a footnote that the Board will obtain prior written approval from the Mayor prior to the “sell, lease, sublease, assign, transfer, encumber or otherwise dispose of any part of the System, or any other real or personal property.” Ms. Gulfo confirmed that there is no threshold applicable to the  property disposition policy. All property transactions will follow the same procedural requirements, regardless of value. o Add a footnote that the Board will, “to the best of its ability, shall comply with the New York State Authorities Budget Office (ABO) reporting requirements.”  AWB Property Acquisition Policy: o Add a footnote that the Board will, “to the best of its ability, shall comply with the New York State Authorities Budget Office (ABO) reporting requirements.” o Ms. Gulfo recommended keeping the definition of “property” separate in the Property Disposition Policy and the Property Acquisition Policy. Ms. Gulfo advised that the definition of “property” within the Property Acquisition Policy should be consistent with the definition of “property” in the Procurement Policy as it reflects the standard statutory definition. With respect to the By-Laws, Mr. Houghton recommended a correction to the meeting frequency of the Audit Committee from “at least two times a year” to “at least one time a year.” Mr. Houghton noted that the Audit Committee may need to meet as many as three times a year (e.g., review audit findings, follow ups, review of audit service providers, etc). Ms. Johnson recommended tabling the resolution that acknowledged completion of the annual review of policies to the Regular meeting in December 2024, to give Members more time to review proposed changes. Approval of Resolution 24-64 Adopting Amendments to Certain Policies in the Regular meeting immediately following the Governance Committee meeting was proposed by Ms. Johnson, moved by Mr. Frezzell, seconded by Ms. Strong and passed unanimously. Mr. Powers discussed updates to the Internal Controls Program policy, including issues highlighted by the Independent Audit of 2023:  Line of credit access (e.g., difficulties accessing the line of credit and underlying statements)  Segregation of duties (e.g., authorizing, posting, reviewing journal entries), therefore more active oversight by the Board may be needed. Mr. Powers has initiated a review of permission levels by employee function.  Elimination of the use of the suspense account. Per Mr. Powers, use of the suspense account as a catchall for some transactions (e.g., payments from EFC, principal payments, interest payments) may  have contributed to misstatements in the prior year’s financial statements. Mr. Powers has stopped this use of the suspense account in 2024. Ms. Gulfo will confirm his recommended changes to the Internal Controls Program Policy with Mr. Powers prior to submitting a finalized version for all Board members to review prior to the next Regular meeting in December. Board Self-Evaluations Ms. Johnson lead a discussion on the compiled Board Self-Evaluation results to determine if follow on actions were necessary. Two areas highlighted for room for improvement included the following:  The Board sets clear and measurable performance goals for the Authority that contribute to accomplishing its mission.  The Board has identified the areas of most risk to the authority and works with management to implement risk mitigation strategies before problems occur. Mr. Houghton noted that these two areas were the same from previous Board self-evaluations. Members discussed concerns, risks and strategies to improve, including, but not limited to the following:  Generating enough revenue to complete all the necessary capital improvement projects needed to maintain high quality and reliable service  Better and more frequent forecasting, including usage of WaterWorks model (e.g., input separate charges for lead service line replacements, stormwater, etc.) to better understand the cost of doing business.  Mr. Coffey and Mr. Mercier drafted a pie chart to be included on customers’ bills to illustrate components of operational and functional costs of providing water and sewer services.  Ms. Johnson suggested seeking expertise with the WaterWorks model with rate consultants.  More frequent discussions on rate adjustments throughout the year  Resilience and risk mitigation efforts in response to climate change and aging infrastructure (e.g., emergency action/response plans, dam safety).  Maintaining compliance with new regulations and/or changing regulations (e.g., fluoridation)  Ms. Strong commended Mr. Coffey for keeping the Board well-informed on new/changing regulations and their potential impact on the AWD.  Developing a forward-thinking proactive approach to address future challenges   Mr. Coffey suggested inviting a “futurist” to speak to the Board to help adapt thinking  Ms. Strong suggested “scenario planning,” specifically about uncertainties 2025 Meeting Schedule Ms. Johnson lead a discussion to set the 2025 meeting schedule for the Board. The updated schedule will be shared with all members and posted on the Member site. Ms. Johnson noted that the terms of the current Chair, Mr. Houghton and Secretary, Ms. Strong have expired and the need to address these vacancies. Executive Session No Executive Session was held. Adjournment Being no further business, Ms. Johnson called for a motion to adjourn the meeting. A motion was made by Mr. Frezzell, seconded by Ms. Strong and passed unanimously. The meeting was adjourned at 9:04am. The next Governance Committee meeting of the Albany Water Board will be Friday, January 24, 2024 at 8:45am.