2014 07 16 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
July 16, 2014
The Board of Directors of the Baytown Area Water Authority (BAWA) met in a
Regular Meeting on Wednesday, July 16, 2014, at 9:00 A.M., in the Council Chamber of the
Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance:
Brenda Bradley Smith
Mike Wilson
Brandon Benoit
Frank McKay
Robert D. Leifer
Karen Homer
Leticia Brysch
President
Vice President
Director
Director
General Manager
Assistant General Counsel
Assistant Secretary
President Bradley Smith convened the July 16, 2014, Baytown Area Water Authority (BAWA)
Board Regular Meeting with a quorum present at 9:00 A.M., all members were present with the
exception of Director Wayne Baldwin who was absent.
1. MINUTES
a. Consider approving the minutes of the Baytown Area Water Authority Board
Regular Meeting held on June 18, 2014.
A motion was made by Director Brandon Benoit and seconded by Vice President Mike Wilson
approving the June 18, 2014, BAWA Board Regular Meeting minutes with the amendment to the
acronym CWA. The vote was as follows:
Ayes: Director Brandon Benoit, President Brenda Bradley Smith, Director Frank
McKay III, Vice President Mike Wilson
Nays: None
Other: Secretary Wayne Baldwin (Absent)
Approved
2. DISCUSSIONS
a. Receive and discuss the Baytown Area Water Authority's FY 2014 -15 Proposed
Budget.
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July 16, 2014
Page 2 of 6
General Manager Lciper presented the agenda item and stated that BAWA continues to move
forward with the new BAWA East Plant, make improvements to the Fritz Lanham Plant on
Thompson Road, as well as, provide for inspections and possible repairs on the major
transmission line on Thompson Road. He stated that the development of the new plant continues
with the focus on design and land acquisition anticipating closing on the property within 60 to 90
days. He stated that there is an agenda item for Jones & Carter, Inc., to do some wetlands
delineation on the land and that the design costs was split over two years; the current year for
$2.5 million and the proposed budget for 51.4 million to complete the design. General Manager
Leiper stated that construction should begin next summer and in anticipation of that; the budget
includes $15 million in bonds for the initial phase of construction and as construction progresses,
bonds would be sold as needed. He further stated that the budget also includes $565,000 for plant
repairs and improvements which includes $100,000 of repairs to the fluctuator equipment in
basins three (3) and four (4) and $465,000 for improvements to the chemical feed systems. He
stated that there's $350,000 to do an assessment inspection to the BAWA line on Thompson
Road and that the preference is to slip line this line after the new East plant is operational. He
stated that there's a 1.2% rate increase in raw water from the City of Houston, therefore the rates
will increase from .6158 to .6232 per thousand gallons. He stated that the budget includes a 3%
rate increase and estimates sales of $12,211,698, an average of daily sales of 12.25 million
gallons bringing in about $355,000 in additional revenue. He further stated that the rate structure
will go from 253 to 261 the City of Baytown and 257 to 265 to others.
General Manager Lciper stated that the total expenditures for the budget were $5,968,072 which
is about a $475,000 increase. He stated that this includes a transfer of $350,000 to the City for
indirect expenses for engineering administration which is a $100,000 increase from current due
to more personnel involvement for the new plant. He stated that there is a $50,000 increase in
personnel services, a $561,000 increase in supplies, a $24,000 increase in maintenance, a
$160,000 decrease in services, a $126,000 increase in capital outlay, a $100,000 increase in
general funds, and $905,000 transfers out for capital improvement.
General Manager Lciper stated that debt service in this budget was $2,947,903 for payments on
both current debt and the initial payment on the $15 million borrowed on next year for the new
plant. He stated that they anticipate at the end of the year setting 128 days for fund balance to
operate with no income and that the contingency line item was $75,000. Additionally, he stated
that there is $4 million in the capital fund to do capital improvement projects for cash.
Director Benoit inquired for clarity if the expenditures were over the revenues. General Manager
Leiper stated that the expenditures were over the revenues but it included capital. General
Manager Leiper further stated that the budget is generally brought in under budget and if
continued in that way, the fund balance increases and is kept to a reasonable healthy savings.
3. PROPOSED RESOLUTIONS
a. Consider a resolution calling for a public hearing regarding the Baytown Area
Water Authority Fiscal Year 2014 -15 Proposed Budget.
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July 16, 2014
Page 3 of 6
General Manager Leiper presented the agenda item and slated that Resolution 2014 -11 calls for a
public hearing regarding the Baytown Area Water Authority Fiscal Year 2014 -15 Proposed
Budget for August 20, 2014, during the regularly scheduled BAWA meeting, commencing at
9:00 A.M., as required by state law.
A motion was made by Vice President Mike Wilson and seconded by Director Brandon
Benoit approving Resolution No. 2014-11. The vote was as follows:
Ayes: Director Brandon Benoit, President Brenda Bradley Smith, Director Frank
McKay III, Vice President Mike Wilson
Nays: None
Other: Secretary Wayne Baldwin (Absent)
Approved
RESOLUTION NO. 2014-11
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 2014 -15 PROPOSED BUDGET;
AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
b. Consider a resolution authorizing the First Amendment to the Professional Services
Agreement with Jones & Carter, Inc., for the Baytown Area Water Authority 6 MGD
Surface Water Treatment Plant for the detailed wetlands delineation of the project's 60-
acre tract.
General Manager Leiper presented the agenda item and stated that Resolution No. 2014 -12
authorizes the First Amendment to the Professional Services Agreement between the Baytown
Area Water Authority ( "BAWA ") and Jones & Carter, Inc., for the Baytown Area Water
Authority ( "BAWA ") 6 MGD Surface Water Treatment Plant for the detailed wetlands
delineation of the project's 60 -acre tract, in the amount of $85,983. He stated that the initial
construction layout of the plant will change and where the wetlands are is where the first unit
was going to be, but it will be moved to another area of the land and by the time the plant is
ready for expansion, the wetlands would be mitigated.
A motion was made by Director Brandon Benoit and seconded by Vice President Mike Wilson
approving Resolution No. 2014 -12. The vote was as follows:
Ayes: Director Brandon Benoit, President Brenda Bradley Smith, Director Frank
McKay III, Vice President Mike Wilson
Nays: None
Other: Secretary Wayne Baldwin (Absent)
Approved
RESOLUTION NO. 2014 -12
BAWA Board Regular Meeting Minutes
July 16. 2014
Page 4 of 6
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY AUTHORIZING THE FIRST AMENDMENT
TO THE PROFESSIONAL SERVICE AGREEMENT WITH JONES AND
CARTER, INC., FOR THE BAYTOWN AREA WATER AUTHORITY SIX
MILLION GALLON SURFACE WATER TREATMENT PLANT;
AUTHORIZING PAYMENT IN AN AMOUNT NOT TO EXCEED THREE
MILLION EIGHT HUNDRED EIGHTY -EIGHT THOUSAND THREE
HUNDRED EIGHTY AND NO /100 DOLLARS ($3,888,380.00); MAKING
OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF.
4. REPORTS
a. Receive an update regarding the Baytown Area Water Authority (BAWA) East
Plant Project.
General Manager Leiper presented the update on the BAWA East Plant Project and stated that
the preliminary design is going well and there's been discussion with NRG about shared access
to the property although the City will receive a 75 foot easement for access. He stated that the
plant property is up against NRG's canal. He stated that he requested for NRG to give the City
permission to improve and maintain a road that is currently there for access to the property.
Additionally, he stated that there are easements on the property to provide water Flow in three
directions and that Cedar Crossing LP has agreed to an easement to the south. He further stated
that Cedar Crossing LP may want to realign the easement to the south to accommodate a line that
they want to put in and the City is okay with that.
b. Receive the Baytown Area Water Authority's Revenues and Expenditures Report
for the Quarter Ending June 30, 2014.
Finance Director, Louise Richman presented the Baytown Area Water Authority's Revenues and
Expenditures Report for the Quarter Ending June 30, 2014. She stated that the revenues were on
target and were a little over 75 %. She stated that the miscellaneous item in the report was a late
fee collected from Harris County District #I.
Ms. Richman further stated that expenditures were on target and under budget due to some
vacancies in personnel. She stated that the supply line included some of the major expenditures
for raw water purchases and chemicals. She stated that although maintenance was doing well, the
electrical maintenance was a little on the higher side. She further stated that services were low
and at 55 %. Additionally, she stated that the transfers were on target and that the debt services
payments were made according to a schedule and done timely.
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July 16, 2014
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C. Receive the Baytown Area Water Authority's Quarterly Investment Report for the
Quarter Ending June 30, 2014.
Ms. Richman stated that BAWA has S 16 million in its investment portfolio with a .0721% rate.
Director Wilson inquired of the reason for being under in personnel. Mr. Zachary Lillie, BAWA
Superintendent, stated that they were in the process of filling the coordinator position and the
operator training position person was scheduled for preliminary testing on July 17th.
5. MANAGER'S REPORT
a. The next Baytown Area Water Authority meeting is scheduled for Wednesday,
August 20, 2014, at 9:00 A.M., in the City Council Chamber, 2401, Market Street,
Baytown, Texas 77520.
General Manager Leiper presented the agenda item and stated that the next Baytown Area Water
Authority meeting is scheduled for Wednesday, August 20, 2014, at 9:00 A.M., in the City
Council Chamber, 2401 Market Street, Baytown, Texas 77520. He stated that the hearing on the
budget is scheduled for that meeting and a quorum is important.
General Manager Leiper stated that there's been discussion with the Fresh Water District #1
(Highlands) about them wanting to increase their contracted amount for water. He stated that
while the City is being very judicious in doing so, the District is getting impatient. He stated that
the City is not obligated to increase the amount. He further stated that the District is trying to
stay out of trouble with TCEQ by making sure that they show that they have enough water with a
combination of wells and BAWA for serving their customers. He stated that there are no issues
with them or the City running out of water and that staff is making sure that we manage our
paper capacity efficiently. He stated that in the past, the City would enter into service agreements
depending on which line the merchant was taking water from for the large improvement district
developments and would always contract out for the build out amount which has never been an
issue. General Manager Leiper further stated that the drought caused TCEQ to relook at
capacities in water plants because there were areas in state that ran out of water. He stated that
rather than obligate to a contract for the build out amount, the City is structuring to a six (6) year
phase in so that the City is not obligated to give more water than what's needed. Additionally, he
stated that staff is also going back to and request to restructure previous contracts as well.
Director McKay inquired if there was a way to sell an option on the capacity, such as covering
them for a certain amount of time with them nominating how much capacity they would need
ahead of time. General Manager Leiper stated that it's not a capacity issue for the City where
there has to be plan for them using the water, but it's that TCEQ looks at the City's plant and total
up all of the City's contracts which has very little to do with how much is being used. General
Manager Leiper further stated that under state law, the City can only charge outside users the
same rate plus an additional small increase. General Manager Leiper staled that the City charges
a water impact fee which pays for capacity and past boards chose not to charge this fee because
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July 16, 2014
Page 6 of 6
88% of BAWA's water goes to the City of Baytown; therefore, the City would be paying the
most and would then have to increase its rate to the customers.
During further discussion, Director McKay requested to explore the impact fee option and to see
if the City could be exempt from the impact fees. General Manager Leiper stated that all impact
fees are segregated and audited by the state. He further stated that and the only exemptions are
for Neighborhood Empowerment Zones which extends only to Habitat for Humanity.
President Bradley Smith identified a correction for the June 18, 2014, Minutes and stated that the
correct acronym for SEAWA is CWA.
6. ADJOURN
With there being no further business to discuss, President Bradley Smith adjourned the July 16,
2014, Baytown Area Water Authority (BAWA) Board Regular Meeting at 9:37 A.M.
Leticia Brysch, Assistant Se rotary
City of Baytown
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