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2016 01 20 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY January 20, 2016 The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular Meeting on Wednesday, January 20, 2016, at 9:03 A.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Brenda Bradley Smith President Wayne Baldwin Secretary Brandon Benoit Director Frank McKay Director Rick Davis General Manager Karen Horner General Counsel Leticia Brysch Assistant Secretary President Bradley Smith convened the January 20, 2016, Baytown Area Water Authority (BAWA) Board Regular Meeting with a quorum present at 9:03 A.M., all members were present with the exception of Director Mike Wilson who was absent. 1. MINUTES a. Consider approving the minutes of the Baytown Area Water Authority Special Board Meeting held on December 09, 2015. A motion was made by Secretary Wayne Baldwin and seconded by Director Frank McKay III approving the December 09, 2015, BAWA Board Special Meeting minutes. The vote was as follows: Ayes: Secretary Wayne Baldwin, Director Brandon Benoit, President Brenda Bradley Smith, Director Frank McKay III Nays: None Other: Vice President Mike Wilson (Absent) Approved 2. PROPOSED RESOLUTIONS a. Consider a resolution awarding the Annual Sodium Hydroxide Contract to Univar USA Inc. BAWA Board Regular Meeting Minutes January 20, 2016 Page 2 of 5 b. Consider a resolution awarding the Annual Zinc Polyphosphate Contract to Shannon Chemical Corporation. C. Consider a resolution awarding the Annual Liquid Ferric Chloride Contract to PVS Technologies, Inc. d. Consider a resolution awarding the Annual Liquid Chlorine Contract to Brenntag Southwest, Inc. General Manager Davis presented the agenda items and stated that agenda items 2.a., 2.b., 2.c., and 2.d. all have to do with the chemicals that are typically secured. He stated that the first chemical is sodium hydroxide, the zinc polyphosphate controls the corrosion, the liquid ferric chloride is used for the water treatment process, and the liquid chlorine is the disinfectant. A motion was made by Director Frank McKay III and seconded by Director Brandon Benoit approving Resolution No. 2016 -01, Resolution No. 2016 -02, Resolution No. 2016 -03, and Resolution No. 2016 -04. The vote was as follows: Ayes: Secretary Wayne Baldwin, Director Brandon Benoit, President Brenda Bradley Smith, Director Frank McKay III Nays: None Other: Vice President Mike Wilson (Absent) Approved RESOLUTION NO. 2016 -01 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ACCEPTING THE BID OF UNIVAR USA INC., FOR THE ANNUAL SODIUM HYDROXIDE CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY, IN THE AMOUNT OF ONE HUNDRED THIRTY -EIGHT THOUSAND FIVE HUNDRED NINETY -TWO AND 80100 DOLLARS ($138,592.80); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. RESOLUTION NO. 2016-02 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ACCEPTING THE BID OF SHANNON CHEMICAL CORPORATION FOR THE ANNUAL ZINC POLYPHOSPHATE CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY, IN THE AMOUNT OF FORTY -SIX THOUSAND BAWA Board Regular Meeting Minutes January 20, 2016 Page 3 of 5 FOUR HUNDRED AND NO /100 DOLLARS ($46,400.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. RESOLUTION NO. 2016 -03 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ACCEPTING THE BID OF PVS TECHNOLOGIES, INC., FOR THE ANNUAL LIQUID FERRIC CHLORIDE CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY, IN THE AMOUNT OF ONE HUNDRED TWENTY - ONE THOUSAND AND NO /100 DOLLARS ($121,000.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. RESOLUTION NO. 2016 -04 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ACCEPTING THE BID OF BRENNTAG SOUTHWEST, INC., FOR THE ANNUAL LIQUID CHLORINE CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY, IN THE AMOUNT OF SEVENTY -SIX THOUSAND TWO HUNDRED NINE AND NO /100 DOLLARS ($ 76,209. 00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 3. REPORTS a. Receive an update regarding the Baytown Area Water Authority (BAWA) East Plant Project. General Manager Davis presented the agenda item of an update regarding the Baytown Area Water Authority (BAWA) East Plant Project and stated that the grubbing of the property will go forward on the January 23rd and at that point the remaining 10% of the design can be received. Additionally, he stated the agreement with the City of Houston in regards to securing the 6 million gallons of water has been sent to the City of Houston for their Council's approval. b. Receive the Baytown Area Water Authority's Annual Financial Report for the fiscal year ended September 30, 2015. Ms. Stephanie Harris, a partner of Belt, Harris, and Pechacek presented agenda item 3.b. and stated that they issued a clean unmodified opinion of the financial statements which is the highest level of assurance that they can provide as an independent auditor. She stated that the financial statements were materially correct and that all disclosures required by generally accepted accounting principles were included. Ms. Harris stated that BAWA's total assets were BAWA Board Regular Meeting Minutes January 20, 2016 Page 4 of 5 $55.6 million which was up compared to last year's $53.5 million and the total liabilities decreased to $15.6 million from $17.9 million ending the year with a positive net of $40 million compared to $35.7 million from the prior year. She stated in regards to the income statement that the total operating revenues were up at $12.1 million compared to $11.7 million and the total operating expenses were also up at $7.3 million compared to $6.6 million. Additionally, Ms. Harris stated that there was an ending increase for the year of $4.7 million and after some non - operating items which included interest paid on the debt there was a positive increase for the year of $4.3 million. President Bradley Smith stated that agenda items 3.c. and 3.d. would be considered together. C. Receive the Baytown Area Water Authority's Revenues and Expenditures Report for the Quarter Ending December 31, 2015. d. Receive the Baytown Area Water Authority's Quarterly Investment Report for the Quarter Ending December 31, 2015. Acting Finance Director, Carl Currie presented agenda items 3.c. and 3.d. He stated that the report included the operating, debt service, and capital project funds. He stated that the water sales came in at 26% to Baytown and 23% to the other MUDS. He stated that the revenues were right at 26% and the overall expenditures on the operating funds were just under 25 %. He stated in regards to the debt services that the revenues were right above 25% and the expenditures were 7.23% in which the number is low because it excluded the debt service payment. In regards to capital improvement projects, he stated that the revenues were right at 25% and the expenditures at 38 %. Additionally, Mr. Currie stated that the quarterly interest earnings were $6,166.96, which is an interest earning of 0.2608 %. Director McKay inquired as to what's considered when making an investment and if they are they looking to make sure that there is feasible liquidity for the expansion or longer term in CD's. Mr. Currie stated that the criteria for the investments are to protect the principle, receive a decent return, and acquire safety. He further stated that they are planning to issue bonds for the plant construction but the debt is structured so that the anticipated expenditures can be made when due. President Bradley Smith inquired if the money was in Textpool. In response to President Bradley Smith's inquiry, Mr. Currie stated that the majority of the money is in Textpool and that there's some in the municipal issuance. 4. MANAGER'S REPORT a. Reminder that the next Baytown Area Water Authority meeting is scheduled for Wednesday, February 17, 2016, at 9:00 A.M. in the City Council Chamber, 2401 Market Street, Baytown, Texas 77520. General Manager Davis presented the agenda item and stated that the next Baytown Area Water Authority meeting is scheduled for Wednesday, February 17, 2016, at 9:00 A.M. in the City BAWA Board Regular Meeting Minutes January 20, 2016 Page 5 of 5 Council Chamber, 2401 Market Street, Baytown, Texas 77520. Additionally, he stated that the agreement with the City of Houston for the six (6) million gallons is a short term solution for the project and staff is in the process of developing a strategy that will help with negotiating the reservation fee for the remaining gallons needed in the future. 5. ADJOURN With there being no further business to discuss, President Bradley Smith adjourned the January 20, 2016, Baytown Area Water Authority (BAWA) Board Regular Meeting at 9:13 A.M. p``�tttWATt����� Leticia Brysch, Asshs&t o' City of Baytown = r y ;'� S `: