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2022 09 21 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY September 21, 2022 The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular Meeting on Wednesday, September 21, 2022, at 4:31 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 Frank McKay III Secretary Jimmy Smith Director Alyssa Linares Director Angela Jackson Assistant Secretary Jason Reynolds Assistant General Manager Scott Lemond General Counsel President Brenda Bradley -Smith convened the September 21, 2022, BAWA Board Regular Meeting with a quorum present at 4:31 P.M., all members were present. 1. MINUTES a. Consider approving the minutes of the Baytown Area Water Authority Regular Meeting held on August 17, 2022. A motion was made by Secretary Frank McKay III and seconded by Director Jimmy Smith to approve the meeting minutes of the Baytown Area Water Authority Regular Meeting Regular Meeting held on August 17, 2022, as submitted. The vote was as follows: Ayes: President Brenda Bradley -Smith, Vice President Mike Wilson, Secretary Frank McKay III, Director Jimmy Smith, and Director Alyssa Linares Nays: None Approved 2. ELECTION OF OFFICERS a. Consider the election of officers for President, Vice President, and Secretary; and the appointment of an Assistant Secretary. A motion was made by Director Jimmy Smith, and seconded by Vice President Mike Wilson to elect the same slate of officers, in the form of Brenda Bradley -Smith as President, Mike Wilson as Vice President, Frank McKay III as Secretary, and the City Clerk as Assistant Secretary for a term of one year to commence immediately and expire on August 31, 2023. The vote was as follows: BAWA Board Regular Meeting Minutes September 21, 2022 Page 2 of 5 Ayes: President Brenda Bradley -Smith, Vice President Mike Wilson, Secretary Frank McKay III, Director Jimmy Smith, and Director Alyssa Linares Nays: None Approved 3. REPORTS a. Receive a report on future expansion of BAWA East Surface Water Treatment Plant. Director of Public Works and Engineering Frank Simoneaux opened agenda item 3.a. by introducing himself and representatives Vice President Meera Victor and Paul Walker of Carollo Engineers, Inc., which is the firm that completed a planning study for the expansion of the BAWA East Plant. Mr. Simoneaux relayed the agenda of his presentation is to look at the following topics: water demand projection and capacity; raw water contract; expansion options; cost for expansion; delivery method options; and recommendations. On the water demand and expansion forecasts, Mr. Simoneaux exhibited the graph on the right and stated that the current capacity for the BAWA Main Fritz Lanham SWTP (West Plant or Main Plant) is twenty-six million gallons per day (MGD) and the capacity of the BAWA East SWTP (East Plant) is six MGD, for a total capacity of 32 MGD. 44 40 0 36 d o. N 0 32 u 8 26 .a 24 ----------- -------------- ------------ ------- -------------- -------------- ------------- -------------- -------------- -------------- _8ba pl*l —ExUvq Pr WC ---esxaEawro —w. aoMn sc«uro —GMODEXWWn--- 83%d9 MOD Expo n —12MOOExpxmbn--- 83%d Q MOD Exp"M 20 2020 2025 2030 2035 2040 The capacity requirement at their plants was based on two components: fixed contracts and the number of connections. BAWA has fixed contracts and the City of Baytown was their biggest customer. However, the City did not have a fixed contract with BAWA, so their requirement for water was based on the number of connections. Mr. Simoneaux explained that was why there were different scenarios for growth. The graph displayed the scenarios of a six MGD expansion and a twelve MGD expansion. The dashed lines on the graph represented 85% capacity of the two scenarios of expansion. Mr. Simoneaux relayed that indicated the time when they would need to plan for their next expansion. Secretary Frank McKay recalled there was previously three expansion phases and noted the graph only showed two. Mr. Simoneaux clarified the Plant was initially built at six MGD and was planned to expand in six MGD increments up to a total capacity of twenty-four MGD. Furthermore, BAWA had a contract to buy raw water from the City of Houston through Coastal Water Authority Canals. The contract was structured for two different take points: one for each BAWA Board Regular Meeting Minutes September 21, 2022 Page 3 of 5 plant - twenty MGD for the West Plant and six MGD for the East Plant. Per the contract, BAWA did not have to buy more capacity from the City of Houston until the average usage consumption exceeds the set amount. At that time, the plants' average usage was around fourteen MGD. Mr. Simoneaux relayed they had enough water to buy from the City of Houston; however, the problem is that if they expand the East Plant, they would need to take more than six MGD from the East Plant. BAWA has sent an application to the City of Houston to remove the take point restrictions; however, Mr. Simoneaux warned it may take a while to receive a response, but it will be required for the expansion so that the City has the water that needed for the expansion. Vice President Mike Wilson questioned if the City of Houston had the capacity to provide the City more capacity and Mr. Simoneaux responded that he was not aware of their reasoning to restrict the MGD to specific locations, but he had been told that it might be due to the limitations of the canal, but that more discussions with the City of Houston needs to be made in order to verify that information. Further Mr. Simoneaux stated that his hope was to remove the take point restriction and leave their overall contract at twenty-six MGD. Mr. Simoneaux then displayed a blueprint of the two expansion options (6 MGD vs. 12 MGD Expansion). Under the six MGD option, there would not be a need to build a new forebay unlike the twelve MGD option. Mr. Simoneaux stated that the different components went into creating the cost estimates for each cost option. Carollo looked at the East Plant bid items that were constructed last year and applied escalation factors to come up with the cost estimates displayed on the table below. Secretary Frank McKay III expressed his concern with the amounts, so Carollo Representative Paul Walker further spoke on the price escalation environment of the market. Opinion of Probable Project Costs (OPPC) COST ELEMENT 6 MGD OPPC 12 MGD OPPC Estimated Construction Costs $39,200,000 $87,00000 Forecast Escalation to Project Midpoint $4,800,000 $10,700,000 Contingency At 25% $9,800,000 $21,8001000 Administration/En ineerin Le al (At 20%) $7,800,000 $179400,000 TOTAL ESTIMATED COST $61,6009000 $136,900,000 1. AACE Level 5 Planning Estimate w/ 40% accuracy. 2. Escalated from May 2018 to August 2022 using Dallas ENR index. 3. Based on forecasted inflation of 6% per year for two years. Next, Mr. Walker touched on the different delivery options as allowed by Texas Statute 2269 and provided the pros and cons of each option listed below: Design -Bid -Build (DBB): The Design -Bid -Build method called for BAWA to contract separately with a designer and a contractor with no contractual relationship between the two. The two contractors come together during the construction working through issues via the RFI, Claims process, etc. One entity, thereby making it faster to deliver results. However, on design control, the Design -Bid -Build model calls for the hiring of a designer. From a cost perspective, the Design -Bid -Build model has no cost certainty. BAWA would have their designer, engineers, and would bid it out. The cost would not be known until the project is finished because oftentimes there are change orders. BAWA Board Regular Meeting Minutes September 21, 2022 Page 4 of 5 Construction Manager at Risk (CMAR): For Construction Manager at Risk, BAWA would hire a designer at the beginning of the design phase and additionally hire a contractor at 30-60% of the design phase to collaborate, provide input to the process, and give an indication of pricing. BAWA would enter in to a Guaranteed Maximum Price (GMP) near the end of the design or sooner and would move forward with that firm and designer. Thus, there would be an established relationship between the two until the Guaranteed Max Price (GMP) is issued. However, Mr. Walker noted it would not be a contractual relationship, but a working relationship; however, this working relationship helps limit the number of claims. Progressive Design -Build (PDB): The Progressive Design -Build method has one entity with one contractual relationship to work with which would handle the design and construction. The advantage to PDB is that you have one entity that is responsible if an issue were to arises and you have a guaranteed max price under this method. Secretary Frank McKay III questioned the previous methods used and Mr. Simoneaux responded that they have used the DBB for the past expansion project and CMAR is being used for the Public Safety Building; however, the current expansion project can utilize the PDB method as the population of the BAWA service area meets the population requirements of 100,000. Mr. Walker further explained that on the PDB method you select a progressive design team, which includes the designer, engineer, and contractor, at 1-5% of the design completion and you work with the team to develop the scope, schedule and price through 60-90% of design completion, and then the GMP is negotiated, and if terns are reached, then you can start construction. If terms are not reached you have the option to take what design you paid for to the market to select a different contractor. In conclusion Mr. Walker provided the below scale of the options and offered to answer any questions from the Board: Delivery Method Comparison: CMAR Build Early Cost Certainty p Schedule Flexibility O BAWA Design Control 0 0 (D Risk Allocation Q 41) Project Quality C • Relative Ranking Legend Best meets criteria 4) Partially meets criteria O Least meets criteria Director Alyssa Linares questioned if with the Progressive Design -Build, if you get to a certain point and you want to bid it out and if that at that point it would be a Design -Bid -Build and Mr. Walker responded that the situation would be accessed at that point on how they would like to proceed and that typically it does take it out of the Design -Bid -Build. Mr. Simoneaux closed the presentation by stating that it is staff s recommendation to design and construct a 6 MGD expansion using the Progressive Design -Build delivery method, and that the preferred time frame would be to begin plans for the expansion in early Fiscal Year 2023, with a BAWA Board Regular Meeting Minutes September 21, 2022 Page 5 of 5 Request for Qualifications (RFQ) being issued for a Progressive Design -Build (PDB) team and another RFQ being issued for an Owner's Advisor to help be a check point for the design build team to ensure that we get what we want. Secretary Frank McKay III questioned the ability to finance the project and Mr. Simoneaux responded that this would need to be a discussion for a later date. Additionally, Secretary McKay questioned the rate increase for the City of Houston and Mr. Simoneaux introduced the Assistant Director for Public Works/Utilities, Sterling Beaver, and Mr. Beaver responded that historically there has been a 3% increase yearly and as a best guess, they expect to see future rate increases. 4. MANAGER'S REPORT a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, October 19, 2022, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. Assistant General Manager Jason Reynolds reminded the Board Members of their next Baytown Area Water Authority meeting, which is scheduled for Wednesday, October 19, 2022, at 4:30 P.M., in the Council Chamber at City Hall. 5. ADJOURN With there being no further business to discuss, a motion was made by Secretary Frank McKay III and seconded by Director Alyssa Linares to adjourn the September 21, 2022, BAWA Board Regular Meeting at 5:17 P.M. The vote was as follows: Ayes: President Brenda Bradley -Smith, Vice President Mike Wilson, Secretary Frank McKay III, Director Jimmy Smith, and Director Alyssa Linares Nays: None Approved Angela Jack�n, Assistant City of Baytown