Michael M. Hughes

The Board of Directors discussed and approved the executive director's compensation, including salary adjustments for cost of labor and merit. They also approved the engagement of General Counsel for the upcoming fiscal year. Additional actions included adopting the schedule of rates, fees, and charges, approving the annual budget, and authorizing the capital improvements program and budget for future years. Finally, the Board reviewed updates on the employee classification and compensation schedule and received an informational report regarding the water shortage response plan due to current drought conditions.

The Board discussed internal conflict of interest policies and celebrated receiving the 2026 North Carolina Outstanding Tree Farmer of the Year Award for forestry stewardship practices. A presentation was provided regarding the town of Chapel Hill's everywhere program, in which the utility is participating. Staff reported on current drought conditions, noting that water supplies are at 78% and potential water restrictions may be required. A public hearing was held regarding the fiscal year 2027 budget and proposed rate increases, featuring a detailed budget overview, projections for capital infrastructure projects, and feedback from a public speaker expressing concerns regarding the financial burden of rate hikes on residents.

The Board of Directors held a meeting where several organizational updates were provided, including announcements about potential conflicts of interest, the appointment of a new member, and reports on guiding principles and engineering projects. The Board approved a consent agenda covering financial reports, bylaw amendments regarding annual meeting dates, and the setting of public hearings for the budget and rate schedule. Additionally, the Board recognized students from the youth water academy and held a significant discussion regarding a proposed reimbursement policy for system development, including receiving stakeholder feedback on infrastructure costs, housing affordability, and policy implementation mechanics.

The board meeting focused on several key items, including a report on community feedback regarding recent flooding, presentations on current agency collaborations with local government and inter-agency working groups, and an announcement regarding the potential placement of emergency responder equipment on an elevated tank. Additionally, the board conducted a kickoff session for the budget season, discussing the budget development process, the capital improvements program, and the prioritization of future infrastructure projects.

The Board meeting served as a study work session focused on the authority's rate structure. Key discussion topics included an overview of general rate-setting guidelines and pricing strategies, the role of revenue targets in long-term financial planning, and a comparison of existing rate structures with peer utilities. Presentations were provided by the UNC School of Government Environmental Finance Center and Stantech consultants to assist in determining the scope and goals for a future comprehensive rate study.