2012 01 18 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
January 18, 2012
The Board of Directors of the Baytown Area Water Authority (BAWA) met in a
Regular Meeting on Wednesday, January 18, 2012, 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
Dan Mundinger
John Sandhop
Mike Wilson
Robert D. Leiper
Karen Horner
Jason Cozza
President
Vice - President
Director
Director
General Manager
Assistant General Counsel
Deputy Assistant Secretary
President Bradley Smith convened the January 18, 2012, 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 Secretary Baldwin who was absent.
1. MINUTES
a. Consider Approving the Minutes of the Baytown Area Water Authority
(BAWA) Board Special Meeting held on November 23, 2011 - Assistant Secretary.
A motion was made by Vice - President Dan Mundinger and seconded by Director John
Sandhop approving the minutes of the November 23, 2011, BAWA Board meeting. The
vote was as follows:
Ayes: President Brenda Bradley Smith, Vice - President Dan Mundinger,
Director John Sandhop, Director Mike Wilson
Nays: None
Other: Secretary Wayne Baldwin (Absent)
Approved
2. DISCUSSIONS
a. Discuss BAWA's Issuance of Contract Revenue and Refunding Bonds, Series
2012 - Finance.
BAWA Board Regular Meeting Minutes
January 18, 2012
Page 2 of 6
General Manager Leiper presented the agenda item to discuss the BAWA's issuance of
Contract Revenue and Refunding Bonds, Series 2012.
Finance Director Louise Richman stated that on January 12, 2012, the City Council
approved the Resolution that BAWA pursue the issuance of new money and refunding
contract revenue bonds. Ms. Richman stated that the refunding bond is up to $2.4 million
of refunded and the present value savings on that is approximately $239,000; and the new
money is up to $6 million of new debt and part of that will be for the $2.5 million in the
BAWA power improvements along with other BAWA projects.
Ms Richman stated that the timetable for this process is to have preliminary official
statement approved at the BAWA meeting on February 15, 2012 which appoints the
paying agents and the underwriters to sell the debt. Ms. Richman then stated that a
special meeting would be necessary to adopt a bond resolution and award the sale of the
bonds with the proposed date being on February 23, 2012, prior to the City Council
meeting on that same day. Ms. Richman indicated that after the BAWA meeting on
February 23, 2012, City Council would consider approving the BAWA Bond Resolution
at the City Council meeting.
3. PROPOSED RESOLUTIONS
a. Consider a Resolution Setting the Time, Date and Place of a Special Meeting
of the Board of Directors of the Baytown Area Water Authority - Finance.
President Bradley Smith presented the agenda item and stated that Resolution No. 2012-
01 sets a Special Meeting of the BAWA Board of Directors for February 23, 2012, in the
Council Chamber at City Hall at 5:00 P.M.
At the February 23, 2012 meeting, the Board will consider adopting a bond resolution
and awarding the sale of bonds.
General Manager Leiper inquired about the flexibility of time and if bids would be
opened on that day. Ms. Richman stated that the bids would be opened on that day and
that they would probably come in that morning.
All present board members agreed on the proposed date and time. General Manager
Leiper stated that the bid process should take approximately 30 minutes.
A motion was made by Director John Sandhop and seconded by Director Mike Wilson
approving Resolution No. 2012 -01. The vote was as follows:
Ayes: President Brenda Bradley Smith, Vice - President Dan Mundinger,
Director John Sandhop, Director Mike Wilson
BAWA Board Regular Meeting Minutes
January 18, 2012
Page 3 of 6
Nays: None
Other: Secretary Wayne Baldwin (Absent)
Approved
RESOLUTION NO. 2012-01
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
BAYTOWN AREA WATER AUTHORITY CALLING A SPECIAL
MEETING TO BE HELD ON FEBRUARY 23, 2012, AT 5:00 P. M. IN
THE COUNCIL CHAMBERS OF CITY HALL, BAYTOWN, TEXAS;
AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
b. Consider Authorizing the General Manager to Negotiate and Execute an
Engagement Letter with Bracewell & Giuliani, LLP, to Perform Legal Services as
the Baytown Area Water Authority's Bond Counsel and to Take Appropriate
Action to Transfer the Authority's Files, Records, and Documents - Finance.
General Manager Leiper presented the agenda item and stated that Resolution No. 2012-
02 authorizes the General Manager to negotiate and execute an engagement letter with
Bracewell & Giuliani, LLP, to perform legal services as the Baytown Area Water
Authority's Bond Counsel and to take appropriate action to transfer the Authority's files,
records, and documents from Vinson & Elkins, LLP, to Bracewell & Giuliani, LLP. The
engagement letter will contain terms and conditions acceptable to the General Manager
and the General Counsel. Vinson & Elkins is dissolving its public finance practice. The
public finance attorneys will move on or about January 13, 2012, to Bracewell &
Giuliani, LLP. Therefore, Resolution 2012 -02 is to facilitate a smooth transition and
ensure uninterrupted service to the Authority.
The City Council approved this action at its meeting on January 12, 2012.
A motion was made by Director Mike Wilson and seconded by Director John Sandhop
approving Resolution No. 2012 -02. The vote was as follows:
Ayes: President Brenda Bradley Smith, Vice - President Dan Mundinger,
Director John Sandhop, Director Mike Wilson
Nays: None
Other: Secretary Wayne Baldwin (Absent)
Approved
BAWA Board Regular Meeting Minutes
January 18, 2012
Page 4 of 6
RESOLUTION NO. 2012-02
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
BAYTOWN AREA WATER AUTHORITY AUTHORIZING THE
GENERAL MANAGER TO NEGOTIATE AND EXECUTE AN
ENGAGEMENT LETTER WITH BRACEWELL & GIULIANI, LLP,
TO PERFORM LEGAL SERVICES AS THE AUTHORITY'S BOND
COUNSEL AND TO TAKE APPROPRIATE ACTION TO TRANSFER
THE AUTHORITY'S FILES, RECORDS, AND DOCUMENTS FROM
VINSON & ELKINS, LLP, TO BRACEWELL & GIULIANI, LLP; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
C. Consider Revising the Baytown Area Water Authority's Investment Policy
and Strategy - Finance.
General Manager Leiper presented the agenda item and stated that Resolution No. 2012-
03 revises the Baytown Area Water Authority's Investment Policy to comply with
legislative changes and approval in accordance with the Public Funds Investment Act
Section 2256 -005 (e), to add an additional broker /dealer (Wells Fargo Brokerage
Services, LLC), to approve additional authorized investments and to include revisions to
BAWA's Investment Strategy.
A motion was made by Director John Sandhop and seconded by Director Mike Wilson
approving Resolution No. 2012 -03. The vote was as follows:
Ayes: President Brenda Bradley Smith, Vice - President Dan Mundinger,
Director John Sandhop, Director Mike Wilson
Nays: None
Other: Director Wayne Baldwin (Absent)
Approved
RESOLUTION NO. 2012-03
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
BAYTOWN AREA WATER AUTHORITY ADOPTING THE
BAYTOWN AREA WATER AUTHORITY'S INVESTMENT POLICY
AND STRATEGY; AND PROVIDING FOR THE EFFECTIVE DATE
THEREOF.
BAWA Board Regular Meeting Minutes
January 18, 2012
Page 5 of 6
4. REPORTS
a. Annual Financial Report for the Fiscal Year Ending September 30, 2011 -
Finance.
Robert Belt of Belt Harris Pechacek, LLLP presented the Annual Financial Report for the
fiscal year ending September 30, 2011 and stated that BAWA received a
clean unqualified report which is the highest level of assurance an auditor can give.
Additionally, the financial statement was materially correct. Mr. Belt stated that the total
operating revenues were $9,925,000, the expenses were $6,278,000, the non operating
revenue and expenses net was a negative $409,000 reduction, and that there was a change
net asset of $3,237,000 to begin the year with a total net asset of $18,779,000 and ending
with net asset of $22,017,000. During further discussion of the report, Mr. Belt stated that
in regards to the cash flow statement, the cash increased for the year by $1,275,000, and
that the year began with $4,478,000 and ended with $6,023,000. He indicated that of the
amount of $6,023,000, only $1,997,000 was available to be expended and $4,026,000
was restricted.
Mr. Belt stated that BAWA adopts a budget on the modified accrual base of accounting
and that there was a positive budget variance on revenues of $1,326,000 along with a net
positive budget variance on operating expenses of $179,000 leaving a net positive budget
variance of $1.5 million.
City Manager Leiper stated that the reason that the expenditures were over was because
lots of water was sold.
b. Receive the Baytown Area Water Authority's (BAWA) Revenue and
Expenditure Report for the Quarter Ending December 31, 2011 - Finance.
Finance Director, Ms. Louise Richman presented the update on the Baytown Area Water
Authority's Revenue and Expenditure Report for the quarter ending December 31, 2011
and stated that the City of Baytown is one of BAWA's largest customers and that the City
is currently in drought conditions and may continue through this year. Ms. Richman
indicated that the expenditures are on target and informed the members that when they
are reviewing the report anything that they see that is over 25% is due to the item being
encumbered.
C. Receive Baytown Area Water Authority (BAWA) Investment Report for the
Quarter Ending December 31, 2011- Finance.
Ms. Richman presented the Baytown Area Water Authority Investment Report for the
quarter ending December 31, 2011 and stated that the investment return is at a low rate,
but with the new investment policy other options are being explored for a better return.
BAWA Board Regular Meeting Minutes
January 18, 2012
Page 6 of 6
5. MANAGER'S REPORT
BAWA Superintendent Steve Fife presented updates of current BAWA projects
and stated that the generator installation process is going well with the estimated
limeframe of receiving the generators, fuel tanks, and the necessary equipment that goes
along with it, to be between February and March. Mr. Fife slated that the electrical
building for the Electrical Improvement Project is in the process of being built to
include the conduits and ducts being installed as well. Mr. Fife indicated that temporary
power had to be stored at each of the buildings which make for an easier transition for the
new wiring to be installed. Mr. Fife stated that the chlorine banks were going to be
relocated and a new compressor system for plant is ready to be wired. Mr. Fife stated that
some changes at the plant that have been complete were the installation of new
LED lights and installed sidewalks on the fields.
Director Wilson inquired if the project plan was on schedule as projected. General
Manager Leiper stated that in regards to timing, that BAWA should be well in place for
the hurricane season. Mr. Fife stated that the plan is to have having everything
operational by the end of May at the latest.
6. ADJOURN
With there being no further business to discuss, President Bradley Smith adjourned the
January 18, 2012, Baytown Area Water Authority (BAWA) Board Regular Meeting at
9:30 A.M.
Leticia Brysch, F
City of Baytown