1995 01 18 BAWA Minutes MINUTES OF THE REGULAR MEETING
OF THE BOARD OF DIRECTORS
• OF THE BAYTOWN AREA WATER AUTHORITY
January 18, 1995
The Board of Directors of the Baytown Area Water Authority, Harris County, Texas,
met in regular session on Wednesday, January 18, 1995, at Baytown City Hall in the Don
M. Hullum Conference Room with the following attendance:
Peter R. Buenz, Secretary
Knox Beavers, Board Member
Roy L. Fuller, Board Member
Absent: Robert L. Gillette, President
Dan Mundinger, Vice-President
The meeting was called to order with a quorum present, after which the following
business was transacted:
Consider Minutes for the Meeting Held on September 21, 1994
Board Member Beavers moved for approval of the minutes for the regular session
held on September 21, 1994. Board Member Fuller seconded the motion. The vote
follows:
Ayes: Board Members Beavers, Buenz and Fuller
Nays: None
Receive Audit Report and Financial Statements for Period Ending September 30, 1994
Bill Shireman with the firm of Deloitte & Touche stated that the firm had given the
authority and unqualified opinion. He briefly noted that the Authority had changed the
estimated remaining depreciable lives of certain equipment and facilities in 1993 to better
reflect the remaining economic lives of these assets, but there is nothing unusual as far as
1994 is concerned. Cash is down from last year because last year the City of Baytown
paid the Authority after September 30; therefore, the cash is as expected for 1994. The
Authority's equity has increased by about $700,000.
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Minutes of the BAWA Meeting - January 18, 1995
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Revenues are up about 11% due to an increase in the price of water; however,
there was a slight decrease in water sales. Operating expenses are comparable to 1993.
There is about $100,000 decrease in supplies and a decrease in appreciation because of
the adjustment last year. Cash flows reflect approximately $850,000 for this year versus
approximately $2,000,000 last year which is a result of the settlement of cash between
BAWA and the City of Baytown after September 1993. This is the only non-comparative
transaction in the statement of cash flows.
Monte Mercer, Finance Director, explained when one looks at the net change in
cash and cash equivalents, comparing a negative on September 1994 of $524,729 to
positive on September 30, 1993 of$739,168 and taking that timing change into account,
last year there was an increase in cash of $112,000 and this year an increase in cash of
$102,000. Page seven of the document reflects debt service requirements through 2002.
Page eight addresses cash and cash equivalents. In order to maximize interest earnings,
approximately $900,000 of BAWA's cash was pooled with City of Baytown cash; the
remainder is invested with TexPool. There has been some concern with TexPool due to
the situation in Orange County. Orange County finances were handled differently than
TexPool. TexPool's investments are short and liquid. The state treasurer has guaranteed
that for every dollar invested, the entity will get that money back plus interest. On Page
five reference is made to BAWA being a component unit of the City. The Board will see
this terminology used frequently in the future. What has happened is that the Government
Standards Accounting Board has issued standards for reporting. In the past there have
been entities that impact the financial condition of the primary government unit, but no one
would know that until something went wrong. Therefore, recording standards now require
component units to be included in the primary government's reporting statements.
However, Mr. Shireman emphasized that BAWA is a separate entity and will continue to
function as such.
The Board complimented the Finance Department for their excellent work in
producing the financial statements. Mr. Mercer introduced Donna Sams, Controller for the
City of Baytown, who was responsible for the project.
Board Member Fuller moved to accept the audit report and financial statements for
period ending September 30, 1994. Board Member Beavers seconded the motion. The
vote follows:
Ayes: Board Members Beavers, Buenz and Fuller
Nays: None
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Minutes of the BAWA Meeting - January 18, 1995
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Consider Request of Lake Municipal Utility District for Reimbursement
Bawa has received a request for reimbursement from Lake MUD for the amount of
$1 ,421 .25. During the period July 17, 1994 through October 10, 1994, the MUD
experienced color tinted water which resulted in complaints from the residents. The
district's insurance company handled claims, but the district also incurred additional
expenses of$1,421.25. The administration felt that BAWA was selling safe drinking water,
although there were times the water was off-color. A contract with this customer, as well
as all other customers states that possession and control of water shall remain with seller
and its assigns to the point of delivery. The point of delivery for Lake MUD is the master
meter along IH-10. The contract further stipulates that possession and control of water
delivered under this agreement shall pass from the seller to the buyer at that point of
delivery and buyer shall take such title possession and control at that point. Therefore, the
administration did not feel that BAWA is responsible for what occurs after delivery and
recommended no reimbursement be made. The reimbursement is basically for labor costs
associated with Tebco coming out to flush lines during that period.
Board Member Fuller moved to deny the request. Board Member Beavers
seconded the motion. The vote follows:
Ayes: Board Members Beavers, Buenz and Fuller
Nays: None
Discuss Engineering Services Contract with Wayne Smith & Associates
Presently, BAWA has no engineering contract in place. With the ground storage
tank project coming up, and the possibility of future needs, the administration feels that
having an engineering contract in place will give the Authority flexibility. The proposed
contract which will be brought to the Board in February for consideration is patterned after
the engineering contract with the City of Baytown.
General Manager's Report
Building Maintenance - Funds were budgeted to effect building maintenance at the
plant which extensive roof work has been completed and carpeting has been replaced.
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Minutes of the BAWA Meeting - January 18, 1995
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Plant Superintendent - Gordon Leeks, previously employed with the Public Works
Department of the City of Baytown, is now plant superintendent. He has extensive
background in the water business and laboratory techniques. Fred Pack is now overseeing
utilities for the City of Baytown, as well as BAWA. Angelo Vitullo is the new Director of
Engineering and Inspections for the City of Baytown. He came from the private sector and
has many skills that will be beneficial to both the City of Baytown and BAWA.
Adjourn
There being no further business to be transacted, the meeting was adjourned.
i1 4tAtPt
Peter R. Buenz
Secretary