2022 06 15 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
June 15, 2022
The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular Meeting
on Wednesday, June 15, 2022, at 4:32 P.M., in the Council Chamber of the Baytown City Hall,
2401 Market Street, Baytown, Texas with the following in attendance:
Brenda Bradley Smith President
Mike Wilson Vice President
Jimmy Smith Director
Brandon Benoit Director
Rick Davis General Manager
Trevor Fanning General Counsel
Raquel Martinez Deputy Assistant Secretary
President Brenda Bradley Smith convened the June 15, 2022, BAWA Board Regular Meeting with
a quorum present at 4:32 P.M., all members were present with the exception of Secretary Frank
McKay III, who was absent.
1. MINUTES
a. Consider approving the minutes of the Baytown Area Water Authority Regular
Meeting held on April 20, 2022.
A motion was made by Vice President Mike Wilson, and seconded by Director Brandon Benoit to
approve the minutes of the BAWA Regular Meeting held on April 20, 2022, as submitted. The
vote was as follows:
Ayes: Vice President Mike Wilson, Director Jimmy Smith, Director Brandon Benoit
Nays: None
Other: President Brenda Bradley Smith (Abstain), Secretary Frank McKay III (Absent)
Approved
2. BAYTOWN AREA WATER AUTHORITY FY 2022-23 PROPOSED BUDGET
a. Receive and discuss the Baytown Area Water Authority's Fiscal Year 2022-23
Proposed Budget.
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June 15, 2022
Page 2 of 4
Finance Director Victor Brownlees presented the draft of the Baytown Area Water Authority's
Fiscal Year 2022-23 Proposed Budget and thanked staff for their work on this item. He reminded
the Directors of flux and transition over the last year due to the COVID Pandemic in terms of water
consumption, and the new plant that came into operation. As such assumptions were made last
year to the best of staff s ability, due to the degree of uncertainty, and numbers presented today
are a better reflection of the reality of the current positions of the revenues and expenditures. Mr.
Brownlees further provided the following overview of the proposed budget and offered any
questions from the Board:
Revenues:
Revenues are due to go up a little over $15 million, which is largely due to a 6% increase in rates
that are going into effect in the next fiscal year, which these numbers are included in the budget as
presented.
Expenditures:
Expenditures are seeing an upward turn, which is due to increased inflation rate pressures. Also,
some of those cost increases include, Raw Water Supply Costs from the City of Houston, and Debt
Services for a program of investment that is in place for Capital Projects. He noted that equates to
a little under $1 million in cash going into the Capital Improvement Pro j ect Fund ("CIPF") for
next year to increase the debt payments to a little under a million to pay for bonds, which will be
issued for the Raw Water Rehabilitation and East Surface Water Plant Phase 2 Expansion Projects.
Working Capital:
The budget, as presented, will result in Working Capital of all other things being equal of up to 51
days of operating expenditures at year end, and as a conservator, it is a little low, but reasonable
as we are in the business of providing services and not to hoard money. However, Mr. Brownlees
noted he would not like it to go below the current amount, and as such staff will be watching for
any need to increase water rates for the following fiscal year of 2023-24.
Vice President Mike Wilson questioned the differences in the numbers for the budget presented in
their packet, compared to the attachment that was before the Board at the dais and Mr. Brownlees
responded that the budget had been amended since the posting.
President Brenda Bradley Smith noted the City of Houston untreated water rates for the last entry
on the table is for April 2021, and asked if they had increased for April 2022. Mr. Brownlees
noted on page 4 of the Expenditures under Raw Water Supply Cost, it was highlighted that the
cost went up from $0.7573 to $0.90 on April 1 ", 2022. Further President Bradley Smith questioned
the proposed expansion of the BAWA East Surface Water Plant Phase 2 Expansion and the
relatively low amount of $5.4 million to design and construct such a project. Assistant Director
of Utilities Sterling Beaver answered that this was misstated in the description of the budget and
clarified that this item is not for the construction, but only for the Engineering of the project.
Furthermore, General Manager Rick Davis clarified that it is expected that an expansion for
BAWA East might cost similar to the new construction, and that Carollo Engineers, Inc., is
currently conducting an analysis on this project to determine potential use of technologies that
could be included in the expansion project, and that this information is needed in order to move
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June 15, 2022
Page 3 of 4
further with financial figures. Mr. Brownlees further stated that once this assessment is complete,
staff would bring that information before the Board with how to fund the final expense, as this
amount is just to get them started.
Director Brandon Benoit questioned the transfer of $1 million from the Working Capital to the
Capital Improvement Project Fund ("CIPF"), which is down from previous years, and asked for
clarification for the reason for this transfer. Mr. Brownlees responded that on page 5 of the
proposed budget it outlines the Capital Programs that will funded, which are the Backwash and
Decant Pump Replacement Project, as well as the Administration Building Project, and that his
earlier statement for Working Capital was to watch it and ensure that it does not get lower. General
Manager Rick Davis further clarified that it was not a what -if number, but what they will actually
do.
b. Consider a resolution calling for a public hearing regarding the Baytown Area Water
Authority Fiscal Year 2022-23 Proposed Budget.
A motion was made by Director Jimmy Smith, and seconded by Vice President Mike Wilson to
approve Resolution No. 2022 -08, related to Item 2.b. The vote was as follows:
Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Director Jimmy
Smith, Director Brandon Benoit
Nays: None
Other: Secretary Frank McKay III (Absent)
Approved
RESOLUTION NO.2022-08
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY ESTABLISHING THE DATE, TIME AND
PLACE FOR A PUBLIC HEARING ON THE FISCAL YEAR 2022-2023
PROPOSED BUDGET; AND PROVIDING FOR THE EFFECTIVE DATE
THEREOF.
3. REPORTS
a. Receive the Baytown Area Water Authority Quarterly Financial and Investment
Reports for the Quarter Ending March 31, 2022.
Finance Director Victor Brownlees presented the Baytown Area Water Authority Quarterly
Financial and Investment Reports for the Quarter Ending March 31, 2022, and stated that they are
slightly behind on Revenues for the half way point, as reflected earlier. Expenditures match dollar
for dollar, and slightly behind on personnel and supplies. However, overall tracking was within
expected areas. On the Capital Improvement side, the spending is being invested in infrastructure
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June 15, 2022
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and the slightly lower Revenue figures are reflected in the estimates that were just presented, along
with next year's budget as well.
4. MANAGER'S REPORT
a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, July
20, 2022, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street,
Baytown, Texas 77520.
General Manager Rick Davis stated that this year, they entering into a different environment and
that things will get tighter with inflation; labor markets with pools of fewer qualified applicants;
and pressing needs to further the City's infrastructure. As such, there will be weighted decisions
that the Board and staff will have to make in the future. Likely, to consider an expansion to the
BAWA East Treatment Plant. Also, another headwind will possibly be for rate increases, as the
City of Houston had a rate increase of 14%, and the demand for water for a continually growing
community expands. Furthermore, Mr. Davis stated that he was optimistic as the Revenues have
not come in yet for the next fiscal year, therefore, a lot was left to be seen. Lastly, Mr. David
announced the next meeting was scheduled for July 20"', and thanked the Board for their service.
5. ADJOURN
With there being no further business to discuss, President Brenda Bradley Smith adjourned the
June 15, 2022, BAWA Board Regular Meeting at 4:51 P.M.
City of Baytown