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2011 11 23 BAWA Minutes, SpecialMINUTES OF THE SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY November 23, 2011 The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Special Meeting on November 23, 2011, 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 President John Sandhop Director Mike Wilson Director Kevin Troller Assistant General Manager Karen Horner Assistant General Counsel Leticia Brysch Assistant Secretary President Bradley Smith convened the November 23, 2011, Baytown Area Water Authority (BAWA) Board Special Meeting with a quorum present at 9:00 A.M., all members were present with the exception Directors Baldwin and Mundinger who were absent. 1. MINUTES a. Consider Approving the Minutes of the Baytown Area Water Authority (BAWA) Board Special Meeting held on August 17,2011 - Assistant Secretary. A motion was made by Director John Sandhop and seconded by Director Mike Wilson approving the August 17, 2011, BAWA Board Special Meeting. The vote was as follows: Ayes: President Brenda Bradley Smith, Director John Sandhop, Director Mike Wilson Nays: None Other: Director Wayne Baldwin (Absent) and Director Dan Mundinger (Absent) Approved BAWA Special Meeting Minutes November 23, 2011 Page 2 of 5 b. Consider Approving the Minutes of the Baytown Area Water Authority (BAWA) Board Special Meeting Minutes held on August 24, 2011 - Assistant Secretary. A motion was made by Director John Sandhop and seconded by Director Mike Wilson approving August 24, 2011, BAWA Board Special Meeting. The vote was as follows: Ayes: President Brenda Bradley Smith, Director John Sandhop, Director Mike Wilson Nays: None Other: Director Wayne Baldwin (Absent) and Director Dan Mundinger (Absent) Approved 2. PROPOSED RESOLUTIONS President Bradley Smith stated that item 2.b. would be considered at this time and then item 2.a. would be considered. a. Consider Authorizing Advanced Funding for Costs Associated with the Baytown Area Water Authority Power Distribution Improvement Project - Finance. Assistant General Manager Troller presented the agenda item and stated that Resolution No. 2011-16 authorizes advanced funding as needed for costs associated with the Baytown Area Water Authority Power Distribution Improvement Project. This project initially was to be funded up to $3,315,000 through the Texas Water Development Board ( "TWDB "). However, to date, TWDB has not released funding for the project. In order to begin construction as soon as possible and mitigate any delays, it is necessary to establish different funding sources for this project. The project is now proposed to be advanced funded with available resources in the BAWA Operating Fund and the BAWA Capital Improvements Project Fund; provided TWDB funds are not available. IRS regulations dictate that BAWA declare its official intent to reimburse prior expenditures with proceeds of subsequent borrowing. The advanced funding still necessitates BAWA and Council approval for contracts that require such approval. In order to reduce interest costs, the sale of the Certificates of Obligations will be delayed until needed. Assistant General Manager Troller stated that the advanced funding will be before the Council at the December 8th meeting. BAWA Special Meeting Minutes November 23, 2011 Page 3 of 5 RESOLUTION NO. 2011- 16 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY EXPRESSING INTENT TO FINANCE EXPENDITURES TO BE INCURRED; CONTAINING A REPEALING CLAUSE; CONTAINING A SAVINGS CLAUSE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. A motion was made by Director John Sandhop and seconded by Director Mike Wilson approving Resolution No. 2011 -16. The vote was as follows: Ayes: President Brenda Bradley Smith, Director John Sandhop, Director Mike Wilson Nays: None Other: Director Wayne Baldwin (Absent) and Director Dan Mundinger (Absent) Approved b. Consider Amending Resolution No. 2011 -14 to Authorize Alternate Funding for the BAWA Power Distribution Improvement Project - Engineering. Assistant General Manager Troller presented the agenda item and stated that Resolution No. 2011 -17 amends Resolution No. 2011 -14 to authorize alternate funding for the Power Distribution System Improvement Project (the "Project ") for the Baytown Area Water Authority. BAWA authorized a construction agreement for the Project on August 24, 2011, via Resolution No. 2011 -14 with T & C Construction, Ltd., in the amount of $2,490,000.00. The award was made subject to the receipt of funding from the Texas Water Development Board. The City Council approved BAWA's contract subject also to BAWA's receipt of funding from the Texas Water Development Board ( "TWDB "). In order to begin construction as soon as possible and mitigate any delays for BAWA, the City Council on November 21, 2011, considered removing the funding contingency placed on its approval of BAWA's construction contract for the Project. This is the companion item for BAWA, which will allow BAWA to fund the Project with either BAWA funds or TWDB funds if such funds become available. The work to be performed under the contract includes a new primary electrical building that will house a new switchgear, new pad- mounted transformers for existing motor control centers and appurtenances, as well as various site and drainage improvements. BAWA Special Meeting Minutes November 23, 2011 Page 4 of 5 RESOLUTION NO. 2011-17 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AMENDING RESOLUTION NO. 2011 -14 TO AUTHORIZE ALTERNATE FUNDING FOR THE BAYTOWN AREA WATER AUTHORITY POWER DISTRIBUTION IMPROVEMENT PROJECT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. A motion was made by Director Mike Wilson and seconded by Director John Sandhop approving Resolution No. 2011 -17. The vote was as follows: Ayes: President Brenda Bradley Smith, Director John Sandhop, Director Mike Wilson Nays: None Other: Director Wayne Baldwin (Absent) and Director Dan Mundinger (Absent) Approved 3. REPORTS a. Receive the BAWA Revenues and Expenditures for the Quarter Ending September 30, 2011- Finance. Finance Director Louise Richman presented the update on the Baytown Area Water Authority's revenues and expenditures for the Quarter ending September 30, 2011 and stated that the water sales was up due to the drought. She indicated that the miscellaneous charges refer to late fees and surcharges. Ms. Richman stated that the expenditures included an increase of supplies from the water sales from the City of Houston and overtime from personnel which was also affected by the drought. She stated that the expenditures for the debt are budgeted as if the funds were going to be taken out for TWDB even though it was not. b. Receive BAWA Quarterly Investment Report - Finance. Finance Director Louise Richman presented the Baytown Area Water Authority Quarterly Investment Report for the period ending September 30, 2011 and stated that the ending balance is a little over $5 million dollars. Ms. Richman stated that she would present the auditors report on BAWA at the next meeting. BAWA Special Meeting Minutes November 23, 2011 Page 5 of 5 4. MANAGER'S REPORT Director Wilson stated that according to the news media, the City of South Houston was supposedly cyber attacked and inquired of the vulnerability of the BAWA site as it relates to a cyber attack. Mr. Steve Fife stated that right now our system is not vulnerable to that type of attack because it is isolated and there is no way of entering into the system except through a phone line that is disconnected. Mr. Fife stated that the City's policy has always been that if it is critical information to keep it isolated from the internet. Mr. Fife stated that in regards to the updates of the system, there is talk about putting some information on the safe secure net which he opposes due to this type of possible threats. Mr. Fife indicated that the current system has worked well for the last 10 years without any incidents and he doesn't expect to have any going forward. Director Wilson suggested Mr. Fife could think about creating a report analyzing why we think we are safe comparatively to the alleged incident at the City of South Houston in an effort to make the public aware of BAWA's security system as it applies to our water supply. Assistant General Manager Troller stated that the IT master plan is very much oriented to the security of our systems. Director Wilson inquired if we needed to be web enabled. Mr. Fife stated that we would need to access other sites outside of BAWA; however for operations there is no reason to place this information on the net. 5. ADJOURN With there being no further business to discuss, President Bradley Smith adjourned the November 23, 2011, Baytown Area Water Authority (BAWA) Board Special Meeting at 9:15 A.M.