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2025 08 27 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY August 27, 2025 The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular Meeting on August 27, 2025, at 4:30 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Brenda Bradley Smith Frank McKay III Jimmy Smith Alyssa Linares David Start, Jr. Carol Flynt Scott Lemond Miriam Hernandez President Vice President Secretary Director Director Assistant General Manager General Counsel Acting Assistant Secretary President Brenda Bradley Smith convened the August 27, 2025, BAWA Board Regular Meeting with a quorum present at 4:31 P.M., all members were present. 1. CITIZEN COMMENTS President Brenda Bradley Smith announced no one signed up to speak. 2. MINUTES a. Consider approving the minutes of the Baytown Area Water Authority Regular Meeting held on June 25, 2025. A motion was made by Director Alyssa Linares, and seconded by Secretary Jimmy Smith to approve the Baytown Area Water Authority Regular Meeting minutes held on June 25, 2025, as submitted. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Frank McKay III, Secretary Jimmy Smith, and Director Alyssa Linares Nays: None Other: Director David Start, Jr. (Abstain) Approved BAWA Board Regular Meeting Minutes August 27, 2025 Page 2 of 8 b. Consider approving the minutes of the Baytown Area Water Authority Regular Meeting held on July 16, 2025. A motion was made by Vice President Frank McKay III, and seconded by Director David Start, Jr. to approve the Baytown Area Water Authority Regular Meeting minutes held on July 16, 2025, as submitted. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Frank McKay III, Secretary Jimmy Smith, Director Alyssa Linares, Director David Start, Jr. Nays: None Approved 3. PROPOSED RESOLUTIONS a. Consider a resolution authorizing the execution of a Financing Agreement between the Baytown Area Water Authority (BAWA) and the Texas Water Development Board (TWDB) under the State Water Implementation Fund for Texas (SWIFT) Program. Chief Financial Officer Teresa McKenzie summarized Item 3.a. and stated the proposed resolution authorizes the Baytown Area Water Authority (BAWA) to enter into a Financing Agreement with the Texas Water Development Board (TWDB) related to the $69 million loan to BAWA. The Bond Counsel, Mr. Jonathan K. Frels with Bracewell LLP was introduced to the podium to provide further explanation of the item. Mr. Jonathan K. Frels stated that the Baytown Area Water Authority and the City of Baytown applied for a loan through the Texas Water Development Board SWIFT Program for the East Surface Water Treatment Plant for a $69 million loan, and in order to execute on the $69 million loan, the Water Development Board requires we enter into a financing agreement with them. The reason for it being that they sell the debt they are going to loan based on how many people they get signed up for these financing agreements. Therefore, they want commitment to the program because they are going out to borrow money based on the commitments they get from the program. The document indicates we are agreeing to move forward, and requires certain deadlines. Additionally, this agreement states that if you wanted to back out, you could; however, the closer you get to the sale date of their debt, there are penalties that would have to paid in order to get out. Lastly, Mr. Frels stated once this item is approved, they will take it to the next City Council meeting for consideration. The City of Baytown is ultimately the entity that is responsible for making any payments under this agreement. Once approved the agreement will be submitted to the Water Development Board, and we can move forward with financing. In conclusion Mr. Frels offered any questions from the Board. Director David Start, Jr. questioned Section 2 of agreement which makes note of prepaying the bond and asked for clarification on whether there are any pre -payments with this loan and Mr. BAWA Board Regular Meeting Minutes August 27, 2025 Page 3 of 8 Frels responded that they can be prepaid on any date beginning on or after the first scheduled interest payment date that occurs no earlier than ten years from the date that the authority issues the bonds. Therefore, in other words there's no prepayment in the first ten years. A motion was made by Director David Start, Jr., and seconded by Director Alyssa Linares to approve Resolution No. 2025-10, related to Item 3 .a. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Frank McKay III, Secretary Jimmy Smith, Director Alyssa Linares, Director David Start, Jr. Nays: None Approved RESOLUTION NO. 2025-10 RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF A FINANCING AGREEMENT BETWEEN THE TEXAS WATER DEVELOPMENT BOARD AND THE BAYTOWN AREA WATER AUTHORITY; AND APPROVING CERTAIN OTHER MATTERS RELATING TO THE FOREGOING. b. Consider a resolution to amend the Fiscal Year 2024-2025 budget for the Baytown Area Water Authority (BAWA) by authorizing a transfer of $4,000,000 from Working Capital Reserve to the Untreated Water Supplies account (35007030-52031) to provide sufficient funding for current and anticipated untreated water costs. Public Works and Engineering Assistant Director of Utilities, Sterling Beaver, presented Agenda Item 3.b. and provided the Board Members with an overview of previous billing issues with the City of Houston stating the City of Houston was at one point under and overbilling the Baytown Area Water Authority ("BAWA") for raw water. As such, Staff called a meeting with the City of Houston to discuss the issue and at the meeting it was determined that the meters that the City of Houston installed to calculate billing usage had failed several years prior and as such, they were utilizing average billing. However, this amount was not an accurate reflection of usage and it was agreed at that time that the amount billed moving forward would be the amount of water that flows into the four -bay. However, some of the water entering the four -bay is recycled back into the four -bay; therefore, the City of Houston agreed to bill at a rate of 97% of what flows through the four -bay. At the time of budget submittal for Fiscal Year 2025, Staff utilized the information that they had at the moment; however, now the City of Houston is billing according to the 97% four -bay amount, the consumption amount has increased. Therefore, this item is to transfer monies to cover this increase now that the City of Houston has implemented more accurate billing based on the four -bay meter reading. Mr. Sterling noted, as a long-term solution, they are to install meters on the pumps that will be owned and operated by BAWA in order to have control and autonomy over those meters. This will allow for an accurate meter reading. However, this project will not BAWA Board Regular Meeting Minutes August 27, 2025 Page 4 of 8 likely go online until late 2026 or early 2027. In conclusion Mr. Beaver stated that Staff recommends approval or this item and offered questions from the Board. Secretary Jimmy Smith asked if this is an issue solely with the BAWA facilities and is it specific to only one facility and Mr. Beaver responded he is not preview to any other entities that might have billing issued with the City of Houston; however, he did clarify that this issue was specific to the Thompson Road facility and not the BAWA East Facility. Additionally, Alyssa Linares questioned if the meters will be installed at all facilities and Mr. Sterling responded that they are only planned to be installed at the Thompson Road location, as thus far there has been no billing issues at the other facilities. Lastly, Mr. Beaver further clarified that this item is not a contract price issues, but a billing issued based on volume consumption. President Brenda Bradley Smith and Director David Start, Jr. requested to discuss this agenda item further in executive session. At 4:48 P.M., President Brenda Bradley Smith recessed and convened into an Executive Session. 1). Recess into and conduct an Executive Session pursuant to Section(s) 551.071 and/or 551.090 of the Texas Government Code to seek the advice of the City's attorneys and/or to deliberate regarding economic development negotiations. At 5:21 P.M., President Brenda Bradley Smith reconvened the meeting and announced that in accordance with Section 551.102 of the Texas Government Code, no action was taken in the Executive Session. A motion was made by Director Alyssa Linares, and seconded by Secretary Jimmy Smith to approve Resolution No. 2025-11, related to Item 3.b. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Frank McKay III, Secretary Jimmy Smith, Director Alyssa Linares, Director David Start, Jr. Nays: None Approved RESOLUTION NO.2025-11 A RESOLUTION BY THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING AN AMENDMENT TO THE BAYTOWN AREA WATER AUTHORITY'S FISCAL YEAR 2024-2025 BUDGET BY AUTHORIZING A TRANSFER OF FOUR -MILLION DOLLARS ($4,000,000.00) FROM WORKING CAPITAL RESERVE TO THE UNTREATED WATER SUPPLIES ACCOUNT (35007030-52031) FOR THE PURPOSE OF PROVIDING SUFFICIENT FUNDING FOR CURRENT AND ANTICIPATED UNTREATED WATER COSTS; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BAWA Board Regular Meeting Minutes August 27, 2025 Page 5 of 8 c. Consider a resolution authorizing the Seventh Amendment to the Water Supply Contract with the City of Baytown to extend the Contractual Term. Public Works and Engineering Assistant Director of Utilities, Sterling Beaver presented Agenda Item 3.c. and provided the Board Members with an overview and stated that this proposed resolution authorizes the execution of the Seventh Amendment to the Water Supply Contract between the City of Baytown and the Baytown Area Water Authority (BAWA). The amendment extends the contract term through December 31, 2055, to align with the terms of the financial assistance to be received from the Texas Water Development Board (TWDB) under the State Water Implementation Fund for Texas (SWIFT) program. The amendment also ensures the City's obligation to make all required principal and interest payments associated with the bonds issued, and incorporates additional provisions required by the TWDB in connection with the receipt of financial assistance for the BAWA East Surface Water Treatment Plant Expansion Project as previously explained by Mr. Jonathan K. Frels on Agenda Item 3.a. A motion was made by Director David Start, Jr., and seconded by Secretary Jimmy Smith to approve Resolution No. 2025-12, related to Item 3.c. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Frank McKay III, Secretary Jimmy Smith, Director Alyssa Linares, Director David Start, Jr. Nays: None Approved RESOLUTION NO. 2025-12 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY, APPROVING AN AMENDMENT TO THE WATER SUPPLY CONTRACT TREATED WATER BY AND BETWEEN THE CITY OF BAYTOWN, TEXAS AND THE BAYTOWN AREA WATER AUTHORITY; AND MATTERS RELATED THERETO. d. Consider a resolution authorizing the first renewal of the As -Needed Zinc Sodium Polyphosphate agreement with Shannon Chemical Corporation. Public Works and Engineering Assistant Director of Utilities, Sterling Beaver presented Agenda Item 3.d. and provided the Board Members an overview of this item and stated that this proposed resolution authorizes the 1 st renewal of the Annual As -Needed Zinc Sodium Polyphosphate contract with Shannon Chemical Corporation and that this particular chemical does not typically receive a lot of attention when it's sent out for bid; therefore, Staff has determined it best to renew this contract. A motion was made by Vice President Frank McKay III, and seconded by Director Alyssa Linares to approve Resolution No. 2025-13, related to Item 3 .d. The vote was as follows: BAWA Board Regular Meeting Minutes August 27, 2025 Page 6of8 Ayes: President Brenda Bradley Smith, Vice President Frank McKay III, Secretary Jimmy Smith, Director Alyssa Linares, Director David Start, Jr. Nays: None Approved RESOLUTION NO.2025-13 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING THE FIRST RENEWAL OF THE AS -NEEDED ZINC SODIUM POLYPHOSPHATE PURCHASE AGREEMENT WITH SHANNON CHEMICAL COPORATION; AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY FOR SUCH RENEWAL IN AN AMOUNT NOT TO EXCEED THREE HUNDRED SEVENTY-ONE THOUSAND SIX HUNDRED SEVENTY AND 28/100 DOLLARS ($371,670.28); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. e. Consider a resolution authorizing the first renewal of the As -Needed Hydrofluorosilicic Acid agreement for Shannon Chemical Corporation. Public Works and Engineering Assistant Director of Utilities, Sterling Beaver presented Agenda Item 3.e. and provided the Board Members an overview of this item and stated that this proposed resolution authorizes the 1 st renewal of the Annual As -Needed Hydrofluorosilicic Acid contract with Shannon Chemical Corporation and that this chemical ("Fluoride") is a specialty chemical and also does not receive much attention when sent out to bid; therefore, Staff recommends that the contract be renewed. Director David Start, Jr. questioned if the quantities requested remained the same as previously awarded and questioned if the increase in cost is due to the cost of living. Mr. Beaver responded stating the quantity remains the same, but he cannot answer the question as it relates to the increase for the cost, but if they send this item out for bid they would potentially receive the same bid for the same company again, since it's a specialty chemical. Director Start, Jr. confirmed that this company bided much lower in 2024 compared to other submittals received. A motion was made by Secretary Jimmy Smith, and seconded by Vice President Frank McKay III to approve Resolution No. 2025-14, related to Item 3.e. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Frank McKay III, Secretary Jimmy Smith, Director Alyssa Linares, Director David Start, Jr. Nays: None Approved BAWA Board Regular Meeting Minutes August 27, 2025 Page 7 of 8 RESOLUTION NO. 2025-14 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING THE FIRST RENEWAL OF THE AS -NEEDED HYDROFLUOROSILICIC ACID PURCHASE AGREEMENT WITH SHANNON CHEMICAL CORPORATION; AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY FOR SUCH RENEWAL IN AN AMOUNT NOT TO EXCEED SEVENTY-NINE THOUSAND SEVENTY-EIGHT AND 44/100 DOLLARS ($79,078.44); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 4. REPORTS a. Receive a report on the status of the Baytown Area Water Authority East Expansion Project. Senior Project Manager Ms. Lindsay Kovar, with BGE, Inc. presented the status report for the Baytown Area Water Authority East Plant Expansion Project (Exhibit "A"), and noted there might need to be a Special Baytown Area Water Authority meeting called to approve the sell of bonds to the Texas Water Department Board ("TWDB"). Director Alyssa Linares questioned if they could approve this item at their next regular scheduled meeting on September 171h and Bond Counsel, Mr. Jonathan K. Frels with Bracewell LLP approached the podium and responded the interest rates will not come in until the beginning of October; therefore, they will not have this information in time for that meeting. b. Receive the Baytown Area Water Authority Quarterly Financial and Investment Reports for the Quarter Ending June 30, 2025. Director of Finance Teresa McKenzie presented the Baytown Area Water Authority's Quarterly Financial and Investment Reports for the Third Quarter that ended June 30, 2025, as follows: • Revenues are at $16 million which is approximately 75% of projected for the year, which is on target. • Expenditures are close to target at $15 million which is at approximately 77% over what was budgeted; thereby, leaving a Working Capital Balance of 11.3 million. • Capital Improvements with Revenues at $3.3 million offset by Expenditures of $1 million leaving an Ending Working Capital balance at $4.7 million • Investment Earnings ended the quarter at $3 51,000 with a Book Value of $31,3 54,256. 5. MANAGER'S REPORT a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, September 17, 2025, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. BAWA Board Regular Meeting Minutes August 27, 2025 Page 8 of 8 Assistant General Manager Carol Flynt introduced Mr. Chris Wallace to the Board, and announced that he is the new Superintendent of BAWA to replace Mr. Michael Gay and reminded the Board of their next meeting which is scheduled for Wednesday, September 17, 2025, at 4:30 p.m., in the Council Chamber. 6. ADJOURN A motion was made by Director Alyssa Linares, and seconded by Secretary Jimmy Smith to adjourn the August 27, 2025 Baytown Area Water Authority Board Regular Meeting at 5:32 P.M. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Frank McKay III, Secretary Jimmy Smith, Director Alyssa Linares, Director David Start, Jr. Nays: None Approved \�;�irrrrr�iii A VVgT��%,: y'�<<Qri�i�i�`� EXHIBIT "A" PROGRESS REPORT Project: BAWA East Surface Water Treatment Plant Phase 2 Expansion Owner's Advisor Date: September Progress Report 1. Previous Months Activities A. TCEQ Exception Request approved B. Full bid package submitted to TCEQ and TWDB. C. 70% Design Submittal Received, and comments returned 2. Upcoming Progress Items and Discussion Items. A. 90% Design Package — October 17, 2025 B. Guaranteed Maximum Price Proposal — October 31, 2025 C. Texas Water Development Board SWIFT Funding 1) TWDB will provide interest rates on October 2, 2025. 2) Special BAWA meeting will be scheduled prior to the October 9 City Council meeting to approve the sale of Bonds to TWDB. 3) City Council confirm bond sale on October 9, 2025. 4) The closing date is scheduled for November 14, 2025. BAWA East Water Plant Progressive Design Build September 17, 2025 Partnering Workshop Alternative Analysis Workshops I Permitting Plan pc I Field Investigations f 60 — 90% Design Phase Cost and Schedule Modeling I GMP Development A Finalize Design Procurement Main Portion of Construction r/OA/Design Build Team Collaboration on Isst Quality Assurance Startup/Testing/Training Current Design Phase 1 Baseline Schedule • TWDB SWIFT Abridged Application Submittal — Due February 3, 2025 (Submitted Jan 31, 2025) • Draft Preliminary Design (30%) — Due March 2025 (Received Mar 04, 2025) • TWDB DWSRF Emerging Contaminants Application — Due April 4, 2025 (Submitted Apr 01, 2025) • Base Cost Estimate — April 2025 • 60% Design Package —June 13, 2025 • 70% Design Package — August 8, 2025 • TWDB Design Submittal — August 2025 • TCEQ Design Submittal — August 2025 • 90% Design Package — October 2025 • Guaranteed Maximum Price Proposal — October 31, 2025 2024 2025 202 O N D J F M A M J J A S O N D J 70% Workshops Preliminary Design 60% Design Design GMP Proposal Negotiation/Contract July 2025 o TWDB Board approved the funding. August 2025 o BWP will submit the design package including plans, specifications and front-end documents to TWDB for review. o Approval of Financing Agreement on August 27, 2025 with City Council approval on August 28, 2025. October 2025 o TWDB will provide interest rates on October 2, 2025. o Special BAWA meeting will be scheduled prior to the October 9 City Council meeting to approve the sale of Bonds to TWDB. o City Council confirm bond sale on October 9, 2025. November 2025 *1 Closingdate schedule for November1 DWM �NF Preliminary Layout Future Layout FT If �[ 6 �� cl) f ---------------------- T. "I EAST WATER SURFACE TREATMENT KANT PRASE 2EXPANSION F80MOOMGD 20MG0 OVERALL SIYE PLAN