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2014 08 20 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY August 20, 2014 The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular Meeting on Wednesday, August 20, 2014, at 9:02 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 Wayne Baldwin Brandon Benoit Frank McKay Robert D. Leiper Karen Homer Leticia Brysch President Vice President Secretary Director Director General Manager General Counsel Assistant Secretary President Bradley Smith convened the August 20, 2014, Baytown Area Water Authority (BAWA) Board Regular Meeting with a quorum present at 9:02 A.M., all members were present. MINUTES a. Consider approving the minutes of the Baytown Area Water Authority Board Regular Meeting held on July 16, 2014. A motion was made by Secretary Wayne Baldwin and seconded by Vice President Mike Wilson approving the July 16, 2014, BAWA Board Regular Meeting minutes. The vote was as follows: Ayes: Secretary Wayne Baldwin, Director Brandon Benoit, President Brenda Bradley Smith, Director Frank McKay III, Vice President Mike Wilson Nays: Approved 2. PUBLIC HEARINGS a. Conduct a public hearing concerning the Baytown Area Water Authority (BAWA) 2014 -15 Proposed Budget. BAWA Board Regular Meeting Minutes August 20, 2014 Page 2 of 7 At 9:03 A.M., President Bradley Smith opened and conducted a public hearing concerning the Baytown Area Water Authority (BAWA) 2014 -15 Proposed Budget. General Manager Leiper stated that this budget continues to move forward with the new Baytown Area East Plant "The Beast ", continues to address the current water treatment facility, and provides for the inspection of the major transmission line on Thompson Road. He stated that the development of the plant continues to progress and focus on design and land acquisition with hopes of closing on the property next month. He stated that the design cost is split between two fiscal years with $2.5 million in the current year and $1.4 million in the proposed budget to complete the design. General Manager Leiper stated that the construction for the plant should begin next summer and completed in the summer of 2017. He further stated that this budget anticipates issuing $15 million in debt for the first phase of the construction, $565,000 for plant repairs and improvements, $100,000 for repairs to the flocculator equipment in basins three and four, $465,000 for improvements to the chemical feed systems, and $350,000 for the recent water leak to the 36" transmission line on Thompson Road to insure viability to the line which will be accessed for repairs. He further stated that the plan is to get a snapshot of the condition of the line and wait until the new plant is active before replacing or rehabbing it. He stated that staff is continuing to move forward with projects either through BAWA or the City to provide alternative routes of water into the City in case the 36" line has to be shut down. General Manager Leiper stated that the City of Houston notified the City of Baytown that a 1.2% rate increase became effective April 13, 2014, for untreated water, therefore the rates will increase from 61.58 to 62,32 cents per thousand gallons. He stated that this budget includes an estimated sale of $12,211,698, on an average of 12.25 million gallons per day. He stated that the existing rate of $2.53 per thousand gallons will increase to $2.61 to the City of Baytown and $2.57 to $2.65 to others. He stated that the rate increase is expected to generate $355,681 in additional revenue. He stated that the total operating expenditures for the budget were 55,968,072 which is an increase of $474,708 for the current budget and includes a transfer of 5350,000 to the general fund for services that the City provides to the district. Additionally, he stated that the proposed total revenues were $12,277,398 and the total expenditures were S13,538,722. During further discussion, Director McKay inquired if there was a limit to what the City of Houston could charge. General Manage Leiper stated that the rate is contractually tied to the previous year's percentage change to the Houston - Galveston Area Producers Price Index (PPI). With there being no one registered to speak, President Bradley Smith closed the public hearing at 9:09 A.M. 3. PROPOSED RESOLUTIONS a. Consider a resolution adopting the Baytown Area Water Authority (BAWA) 2014- 15 Budget. A motion was made by Director Brandon Benoit and seconded by Vice President Mike Wilson approving Resolution No. 2014 -13. The vote was as follows: BAWA Board Regular Meeting Minutes August 20, 2014 Page 3 of 7 Ayes: Secretary Wayne Baldwin, Director Brandon Benoit, President Brenda Bradley Smith, Director Frank McKay III, Vice President Mike Wilson Nays: Approved RESOLUTION NO. 2014 -13 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ADOPTING A BUDGET FOR THE ENSUING FISCAL YEAR, BEGINNING OCTOBER 1, 2014, AND ENDING SEPTEMBER 30, 2015; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a resolution authorizing an Interlocal Agreement with the City of Baytown concerning the acquisition of property for the BAWA East Project. General Manager Leiper presented the agenda item and stated that on August 16, 2014, the Board of the Baytown Area Water Authority authorized the General Manager to negotiate and execute an earnest money contract for the purchase of approximately 60 acres for the BAWA East Project in an amount not to exceed $3,000,000. He stated that since such time, the property owner entered into a purchase and sale agreement with Chambers County Improvement District No. 1 (CCID) for the sale of the property for $2,613,600. He stated that the agreement was then assigned by CCID to the City of Baytown, which was approved by the City Council on May 22, 2014. Additionally, he stated that he's a board member on the CCID appointed by Chambers County. He further stated that the seller of the property will only sell it to CCID 41 and that the sale contract cannot be further assigned without the express consent of the Seller. General Manager Leiper stated that his recommendation was to allow for the City to purchase the property and then convey the property to the Baytown Area Water Authority at no additional cost. Director Benoit inquired for clarity, if the City's title insurance policy would also cover BAWA and inquired of what type of deed would the property be conveyed under. General Counselor, Karen Horner stated that the City's policy would not cover BAWA and that the property would be conveyed through a no warranty deed. Additionally, General Manager Leiper stated that the City Council will consider this interlocal agreement at its meeting on August 28th. A motion was made by Director Brandon Benoit and seconded by Secretary Wayne Baldwin approving Resolution No. 2014 -14. The vote was as follows: Ayes: Secretary Wayne Baldwin, Director Brandon Benoit, President Brenda Bradley Smith, Director Frank McKay III, Vice President Mike Wilson Nays: Approved RESOLUTION NO. 2014 -14 BAWA Board Regular Meeting Minutes August 20, 2014 Page 4 of 7 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING AN INTERLOCAL AGREEMENT CONCERNING THE ACQUISITION OF PROPERTY FOR THE BAWA EAST PROJECT; AUTHORIZING PAYMENT IN THE AMOUNT OF TWO MILLION SIX HUNDRED THIRTEEN THOUSAND SIX HUNDRED AND NO /100 DOLLARS ($2,613,600.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. C. Consider a resolution authorizing the Assignment of the Wholesale Water Supply Contract — Treated Water from Cindy Riley d /b /a C &R Water Supply to Utilities Investment Company, Inc., d/b /a Orchard Crossing. General Manager Leiper presented the agenda item and stated that on August 17, 2003, BAWA authorized the Contract with C &R. He stated that since such time C &R has sold its facilities and transferred its certificates of convenience and necessity to Orchard Crossing. He stated that pursuant to Section 15.01 of the above- referenced contract, C &R requested BAWA's consent to assign the contract to Orchard Crossing. A motion was made by Director Brandon Benoit and seconded by Director Frank McKay III approving Resolution No. 2014 -15. The vote was as follows: Ayes: Secretary Wayne Baldwin, Director Brandon Benoit, President Brenda Bradley Smith, Director Frank McKay III, Vice President Mike Wilson Nays: Approved RESOLUTION NO. 2014 -15 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING THE ASSIGNMENT OF THE WHOLESALE WATER SUPPLY CONTRACT -- TREATED WATER FROM CINDY RILEY DB /A C &R WATER SUPPLY TO UTILITIES INVESTMENT COMPANY, INC., D /B /A ORCHARD CROSSING; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BAWA Board Regular Meeting Minutes August 20, 2014 Page 5 of 7 d. Consider a resolution authorizing a Professional Services Agreement with HIT Professionals, Inc. for the BAWA Filter Re- Rating Project. General Manager Leiper presented the agenda item and stated that this agreement is to be certain that the City does not run out of water on paper. He stated for clarity that there's no water shortage and that the City has plenty of water. He further stated that Resolution No. 2014 -16 authorizes a Professional Service Agreement with KIT Professionals, Inc. in the amount of $49,600.00 to complete a Pilot Study to re -rate the BAWA filters per TCEQ requirements and obtain agency approval increasing the official rating of the BAWA plant. He stated that KIT will utilize plant hydraulics information developed in the previously completed Alternative Capacity Assessment Report. During further discussion, Director Baldwin inquired if KIT would submit the report to TCEQ. General Manager Leiper stated that KIT would assist staff with submitting the report. Director McKay inquired what the anticipated magnitude of increase would be. Mr. Trent Slovak, a representative of KIT, stated that the plant was designed for five (5) gallons per minute per square foot for the filters, but they planned for a conservative increase of 5.7. Mr. Slovak stated that TCEQ requires that a certain capacity be met for the entire plant and in the City's case, having one of the filters to be out of service at all times for backwashing, which currently can't be accomplished, but with the rerating should be able to. General Manager Leiper inquired as to how much additional capacity BAWA would receive through the rerating. In response to General Manager Leiper's inquiry, Mr. Slovak stated that plant is at a 26 MGD design capacity and the filters are at 23 MOD, which will be increased to 27 MOD. A motion was made by Vice President Mike Wilson and seconded by Director Brandon Benoit approving Resolution No. 2014 -16. The vote was as follows: Ayes: Secretary Wayne Baldwin, Director Brandon Benoit, President Brenda Bradley Smith, Director Frank McKay III, Vice President Mike Wilson Nays: Approved RESOLUTION NO. 2014-16 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING THE PROFESSIONAL SERVICE AGREEMENT WITH KIT PROFESSIONALS, INC, FOR THE BAYTOWN AREA WATER AUTHORITY FILTER RE- RATING EVALUATION PROJECT; AUTHORIZING PAYMENT IN AN AMOUNT NOT TO EXCEED FORTY -NINE THOUSAND SIX HUNDRED AND NO /100 DOLLARS ($49,600.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BAWA Board Regular Meeting Minutes August 20, 2014 Page 6 of 7 4. BUSINESS ITEMS a. Consider the election of officers: President, Vice President, and Secretary; and the appointment of an Assistant Secretary. General Manager Leiper presented the agenda item and stated that the current officers were as follows: Brenda Bradley Smith, President; Mike Wilson, . Vice President; Wayne Baldwin, Secretary; and the City Clerk serves as the Assistant Secretary. Director McKay requested that the current officers and appointment of the Assistant Secretary continue for another term. A motion was made by Director Frank McKay III and seconded by Director Brandon Benoit approving the current officers and appointment of Assistant Secretary to serve for another term. The vote was as follows: Ayes: Secretary Wayne Baldwin, Director Brandon Benoit, President Brenda Bradley Smith, Director Frank McKay 111, Vice President Mike Wilson Nays: Approved Lj1�ti�Ri7l a. Receive an update regarding the Baytown Area Water Authority (BAWA) East Plant Project. General Manager Leiper stated that most of the updates were presented during previous agenda items. He stated that September 04, 2014 is the anticipated closing date on property. He further stated that they are in preliminary discussion with NRG about shared access to the property by upgrading and maintaining their existing rail crossing. 6. MANAGER'S REPORT a. Reminder that the next Baytown Area Water Authority meeting is scheduled for Wednesday, September 17, 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, September 17, 2014, at 9:00 A.M. He requested that a meeting be scheduled for the following week to take action on the purchase of equipment for a chain to one of the basins. The consensus of the board was to have the meeting at 8:30 A.M., on Monday, August 25, 2014. BA WA Board Regular Meeting Minutes August 20, 2014 Page 7 of 7 7. ADJOURN With there being no further business to discuss, President Bradley Smith adjourned the August 20, 2014, Baytown Area Water Authority (BAWA) Board Regular Meeting at 9:28 A.M. eticia Brysch, AssistW Secref6ry _ City of Baytown --