1997 12 17 BAWA MinutesMINUTES OF THE REGULAR MEETING
OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
December 17, 1997
The Board of Directors of the Baytown Area Water Authority, Harris County,
Texas, met in regular session on Wednesday, December 17, 1997, at 7425 Thompson
Road, in the BAWA Conference Room with the following in attendance:
Robert L. Gillette, President
Dan Mundinger, Vice President
Knox Beavers, Board Member
Roy L. Fuller, Board Member
Absent: Peter R. Buenz, Secretary
The meeting opened with a quorum present, and the following business was
conducted.
Consider Approval of Minutes for the Special Meeting Held on November 6, 1997 and
the Regular Meeting on November 12, 1997.
Board Member Beavers moved for approval of the minutes for the special
meeting held on November 6, 1997 and the regular meeting held on November 12,
1997. Board Member Fuller seconded the motion. The vote follows:
Ayes:
Nays:
Board Members Beavers, Fuller, Gillette and Mundinger
None
Consider Acceptance of Financial Statements for Fiscal Years Ending September 30,
1997, and 1996.
Monte Mercer, Assistant City Manager/Director of Finance, acknowledged the
work of Donna Sams and Sherry Majors in compiling the financial statements. He
noted that Mrs. Majors would soon be leaving the city to take a position with industry.
This is the first year that a Letter of Transmittal has accompanied the financial
statements. The letter gives an overview of the financials, along with key information
about Baytown Area Water Authority.
971217-2
Minutes of the BAWA Meeting — December 17, 1997
For the twelve-month period ending September 30, 1997, a decrease in net
income of $84,396 (9.1%) compared to the 1996 year is reflected. The decrease in
operating revenues, $303,502 (6.2%) from the prior year was attributable to lower sales
from the high amount of rainfall experienced during the year. Operational expenses
decreased $153,619 mainly due to the decline in variable cost items. Raw water
purchases declined $81,999 and chemical supplies declined $63,818, while fixed costs
remained constant reducing operating income. Non -operating revenues (expenses)
declined $65,487 primarily due to lower interest expense on long-term debt.
One of the things that was key to this year and will impact BAWA in future years
is the plan developed by Herb Thomas and his staff for capital expenditures to the year
2010.
Statement of Cash Flows, page 4, reflects a $135,000 reduction in cash.
However, under Capital and Related Financing Activities, Fixed Asset Acquisitions, of
the $292,759 shown only $28,000 of that was actual capital expenditures out of the
operational budget, the remainder ($260,000) came out of the $815,000 Bond Issue
which has a final payment in 2004. Therefore, BAWA actually put $125,000 toward the
working capital. Keeping the working capital strong is the key to BAWA's stability.
BAWA's working capital is 80 days as of September 1997.
Mark Tiller, Tiller and Company, stated the Auditors' role is not to judge financial
performance, but whether the financial statements are presented on a consistent basis
and within certain guidelines to provide reliable and accurate records.
Mr. Tiller compared BAWA to Southwest Airlines. Both have been born of a
special need with adequate and consistent leadership from the beginning. They have
had to be innovative and have had to adjust to changing expense involvements. All of
those things go into the mix to have an outside auditor render an opinion that the
financial statements present fairly, in all material respects the financial position of
BAWA as of September 30, 1997 and 1996, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted accounting
principles.
Board Member Beavers moved to accept the Financial Statements and
Supplemental Information for the fiscal years ended September 30, 1997 and 1996.
Board Member Fuller seconded the motion. The vote follows:
Ayes: Board Members Beavers, Fuller, Gillette and Mundinger
Nays: None
971217-3
Minutes of the BAWA Meeting — December 17, 1997
Manager's Report
Recognition of Staff — Herb Thomas, Plant Manager, recognized and thanked his
staff for the excellent work they do. He asked Fred Pack, Director of Utilities for the City
of Baytown, to report concerning a recent line failure. Mr. Pack reported that the failure
occurred at Wade and Cedar Bayou Lynchburg on a 6" blow -off line. During the
excavation, the whole line blew out; therefore, about 1 1/2 miles of the 30" BAWA line
was shut down which left District 27 without water. The top of the pipe was over 15 feet
deep and the line that blew out came off of the bottom of the BAWA line which meant
the crew had to dig almost 20 feet deep. The hole was probably 30 feet in diameter
and 20 feet deep. The line blew out at about 8:30 p.m. and was back in service at 1:00
a.m.
Adjourn
There being no further business to be transacted, the meeting was adjourned.
Robert L. Gillette
President
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