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2012 07 18 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY July 18, 2012 The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular Meeting on Wednesday, July 18, 2012, at 9:04 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 Dan Mundinger Vice- President John Sandhop Director Mike Wilson Director Robert D. Leiper General Manager Karen Horner Assistant General Counsel Leticia Brysch Assistant Secretary President Bradley Smith convened the July 18, 2012, Baytown Area Water Authority (BAWA) Board Regular Meeting with a quorum present at 9:04 A.M., all members were present with the exception of Wayne Baldwin who was absent. 1. MINUTES a. Consider Approving the Minutes of the Baytown Area Water Authority Board Regular Meeting for February 15, 2012 - Assistant Secretary. A motion was made by Director Mike Wilson and seconded by Director John Sandhop approving the minutes of the February 15, 2012, BAWA Board Regular 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 b. Consider Approving the Minutes of the Baytown Area Water Authority Board Special Meeting for February 23, 2012 - Assistant Secretary. A motion was made by Director John Sandhop and seconded by Vice - President Dan BAWA Board Regular Meeting Minutes July 18, 2012 Page 2 of 5 Mundinger approving the minutes of the February 23, 2012, BAWA Board Special 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. BUSINESS ITEMS a. Discuss Baytown Area Water Authority FY 2012 -13 Proposed Budget - Finance. General Manager Leiper presented the agenda item to discuss the Baytown Area Water Authority (BAWA) FY 2012 -13 Proposed Budget and stated that the proposed budget estimates sales of $10,525,834 for an average of 12.25 million gallon per day sales. He stated that a 9.5% rate increase was included in this budget which is in line with the Utility Rate Study that was adopted by the BAWA Board in 2010 and becomes effective October 01, 2012. General Manager Leiper stated that the increase would cover the increased cost of operations including debt service, purchase of raw water and reserve for future capital projects, and is expected to generate almost $900,000 in additional revenue. General Manager Leiper stated that the expenditures for the budget were $5,465,048 which is an increase of $46,000 and includes the usual $250,000 transfer to the general fund to cover the cost of general fund administrative staff and overhead to support for BAWA. He stated that there was a slight decrease in personnel service of approximately $20,000, an increase in supplies of $138,000, an increase in maintenance of $30,000, a decrease in services of $3,400, and an increase in capital projects of $308,000. He stated that the City of Houston's annual rate increase for this year would be 3.3% and was effective on April ls` which is currently being paid. General Manager Leiper stated that the debt services for the 2012 -2013 year would be $2,429,733. He stated that the capital program consists of the three (3) generator project that's funded by the Non - Housing CDBG Grant accompanied with the electrical system improvements which removes the overhead electrical lines and replaces them in duct banks underground. He stated that the new supervisory control and data acquisition computer system is currently in the preliminary scope and design phase which would help to be more efficient in operating the plant. General Manager Leiper stated that in the 2012 -13 Budget, BAWA would have reached its working capital reserve, have a contingency fund of $75,000, and be able to transfer BAWA Board Regular Meeting Minutes July 18, 2012 Page 3 of 5 out $1,445,000 to the Capital Improvement Project Fund (CIPF) for future capital projects and help to cash fund some of the projects instead of issuing into debt. Additionally, General Manager Leiper stated that the budget is proposed to end with 140 days of working capital. 3. PROPOSED RESOLUTIONS a. Consider Calling a Public Hearing for Baytown Area Water Authority Fiscal Year 2012 -2013 Proposed Budget - Finance. General Manager Leiper presented the agenda item and stated that Resolution No. 2012- 06 calls a public hearing regarding the Baytown Area Water Authority Fiscal Year 2012- 13 Proposed Budget for August 15, 2012, during the regularly scheduled BAWA meeting, commencing at 9:00 A.M., to be held in the Council Chamber of Baytown City Hall, located at 2401 Market Street, Harris County, Baytown, Texas. Notice of the public hearing will be published in The Baytown Sun on Thursday, August 02, 2012. General Manager Leiper stated that the next meeting would not be at BAWA due to the public hearing. A motion was made by Director John Sandhop and seconded by Vice - President Dan Mundinger approving Resolution No. 2012 -06. 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 RESOLUTION NO. 2012-06 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 2012- 13 PROPOSED BUDGET; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BAWA Board Regular Meeting Minutes July 18, 2012 Page 4 of 5 b. Consider Rate Increase Pursuant to the BAWA Final Rate Adjustment Plan - Finance. General Manager Leiper presented the agenda item and stated that Resolution No. 2012- 07 authorizes a 9.50% rate increase effective October 01, 2012, as specified in the Final Rate Adjustment Plan adopted February 17, 2010, and amended Plan adopted July 21, 2010. The rates will increase from: $2.15 to $2.35 per 1,000 gallons for the City of Baytown $2.18 to $2.39 per 1,000 gallons for other customers of BAWA A motion was made by Director Mike Wilson and seconded by Vice - President Dan Mundinger approving Resolution No. 2012 -07. 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 RESOLUTION NO. 2012-07 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING A NINE AND ONE -HALF PERCENT (9.50 %) RATE INCREASE EFFECTIVE OCTOBER 1, 2012, AS SPECIFIED IN THE FINAL RATE ADJUSTMENT PLAN ADOPTED FEBRUARY 17, 2010, AND AMENDED PLAN ADOPTED JULY 21, 2010; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 4. REPORTS a. Receive the Baytown Area Water Authority's (BAWA) Revenue and Expenditure Report for the Quarter Ending June 30, 2012 - Finance. Finance Director, Louise Richman presented the update on the Baytown Area Water Authority's Revenue and Expenditure Report for the quarter ending June 30, 2012 and stated that the revenue was above budget due to the drought. She stated that interest revenues were higher than the budget which was mainly due to the cash inflow of the service. Ms. Richman stated that regarding the expenditures, the supplies were a little higher than budget which is typically 75% and that it is mainly due to the water BAWA Board Regular Meeting Minutes July 18, 2012 Page 5 of 5 purchased from the City of Houston. She indicated that maintenance was also higher than budgeted. She stated that this was due to a compressor replacement, air conditioning repair, a service contract, and a canal pump being rebuilt. Additionally, she stated that the expenditures were on target at 75 %. b. Receive Baytown Area Water Authority (BAWA) Investment Report for the Quarter Ending June 30, 2012- Finance. Finance Director, Louise Richman presented the Baytown Area Water Authority Investment Report for the quarter ending June 30, 2012 and stated that in total cash which included operating, CIP, and bond fund the total was right at $13 million at the end of June. ']emu I_ \.Irf] a��ly tUs17i> General Manager Leiper presented the agenda item and stated that the three (3) generator projects are moving along but was delayed due to some equipment arriving already damaged. He indicated that the system is proposed to be operating by the end of the month. Mr. Steve Fife stated that a TCEQ inspection was done on July 17, 2012 and BAWA passed with no problems. Additionally, he stated that the electrical project was scheduled to be transferred on July 24th at 10:00 P.M. 6. ADJOURN With there being no further business to discuss, President Bradley Smith adjourned the July 18, 2012, Baytown Area Water Authority (BAWA) Board Regular Meeting at 9:18 A.M.