2017 08 02 BAWA Minutes, SpecialMINUTES OF THE SPECIAL MEETING OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
August 02 2017
The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Special Meeting
on Wednesday, August 02, 2017, 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 President
Mike Wilson Vice President
Wayne Baldwin Secretary
Frank McKay Director
Rick Davis General Manager
Ignacio Ramirez, Sr General Counsel
Leticia Brysch Assistant Secretary
President Bradley Smith convened the August 02 2017 Baytown Area Water Authority
(BAWA) Board Special Meeting with a quorum present at 9'02 A.M. all members were present
with the exception of Director Benoit who was absent
MINUTES
a Consider approving the minutes of the Baytown Area Water Authority Regular
Meeting held on June 21, 2017
A motion was made by Director Frank McKay III and seconded by Secretary Wayne Baldwin
approving the June 21, 2017, BAWA Board Regular Meeting minutes The vote was m follows
Ayes Secretary Wayne Baldwin President Brenda Bradley Smith, Director
Frank McKay III Vice President Mike Wilson
Nays None
Other- Director Brandon Benoit (Absent)
Approved
DISCUSSION
a Receive and discuss the Baytown Area Water Authority's Fiscal Year 2017 18
Proposed Budget
General Manager Davis presented the agenda item and went over a couple of highlights about
the Baytown Area Water Authority (the Authority") FY2018 budget before extending time to
BAWA Board Special Meeting Minutes
August 02 2017
Page 2 of 6
Finance Director, Wade Nickerson to further discuss the budget numbers He stated that the one
major source of revenue is the sale of water supply to the City of Baytown (the "City") and
surrounding communities He further stated that in terms of highlights for the Authority the
water sale revenues were being budgeted with no increases to the current year projections, the
estimated sales were an average of $13 5 billion gallons of water per year the supplies budget
line item increased about $600,000 due to an increase of raw water supply cost from the City of
Houston the capital outlay is budgeted at $11.2 million in order to continue with many existing
projects of which the major items include $1 6 million for the BAWA East Water Treatment
Plant, $47 million for the High Service Pumps and $15 million for the Ground Storage
Building Improvements General Manager Davis noted that the budget estimates $2 million
dollars for debt service payments for the construction of the East BAWA Plant and that on
August 16 2017 the Board will hold a public hearing and take action regarding the proposed
budget being presented today
Mr Nickerson stated that while the budget increased by 3.4% in water cost the water operating
costs actually decreased from last year's budget mums the water cost increase from the City of
Houston He noted that overall the operating budget only increased about $578,591 With regards
to the capital side he stated that in addition to the large projects previously mentioned, there s
money in the budget to add an additional chain and flight for Basin 4 in the amount of $122,000
$400,000 for improvements to the Sludge Room, $100,000 for the improvements to the Filter
Gallery' and $150,000 for improvements to the administration binding to include flooring
painting and update the restroom facilities
Mr Nickerson stated that at the end of the budget process staff looks at what will be budgeted in
the ending working capital, in which for this budget would be about $5 to $6 million dollars of
approximately 360 operating days He noted that the ending working capital is important because
should anything catastrophic occur the Authority would be able to run its operations for at least
360 days without any additional revenue sources Mr Nickerson stated that there s a two part
debt issuance for the BAWA East Plant and that the amount in this year's proposed budget will
include the issuance cost and some debt payment for the first issuance only
In response to a question from Director Wilson Mr Nickerson clarified that the number of
working capital days is actually 309 days and is based on the assumption that no other revenue
source is coming in during that time period He stated that although the chances of that
happening are slim staff would rather be safe in case there's a project that comes up
Additionally he stated for informational purposes that the Authority earns interest on its working
capital
Director McKay inquired of staffs assumptions on the Authority's increase in revenues Mr
Nickerson stated that it s based on projections of new commercial and residential
constructions which adds to the service area, but focuses more on the residential side rather than
commercial Mr Nickerson stated that staffs predictions have been pretty accurate in the past
and tend to err on the side of being conservative with revenue projectionswhich are put together
based on the information received from the Planning and Development Services Department
regarding projected development in and around the city
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August 02 2017
Page 3 of 6
Director McKay further inquired as to what was the projected growth of the city for the
upcoming year Mr Nickerson stated that he did not have that information on hand but could
provide it to the Board at a future meeting General Manager Davis noted that the City's Utility
Billing Division logs about 300 new water service requests per month with some of its
movement being within the city itself while a lot of it being from the new migration to the city
PROPOSED RESOLUTIONS
a Consider a resolution calling for a public hearing regarding the Baytown Area
Water Authority Fiscal Year 2017 18 Proposed Budget
Mr Nickerson presented the agenda item and stated that Resolution No 2017 14 sets the public
hearing regarding the Baytown Area Water Authority ("BAWA") Fiscal Year 2017 18 Proposed
Budget for August 16 2017 at 9*00 A.M
A motion was made by Vice President Mike Wilson and seconded by Director Frank McKay III
approving Resolution No 2017 14 regarding agenda item 3.a The vote was as follows
Ayes Secretary Wayne Baldwin President Brenda Bradley Smith Director
Frank McKay III, Vice President Mike Wilson
Nays None
Other Director Brandon Benod (Absent)
Approved
RESOLUTION NO 2017 14
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 2017 18 PROPOSED BUDGET,
AND PROVIDING FOR THE EFFECTIVE DATE THEREOF
b Consider a resolution authorizing the closeout, acceptance, and release of retainage
for the Baytown Area Water Authority Plant Water Pump Station Project
City Engineer, Jose Pastrana presented the agenda item and stated that Resolution No 2017 15
authorizes the closeout, acceptance, and release of retainage for the Baytown Area Water
Authority Plant Water Pump Station Project to R&B Group, Inc in the amount of $32,681 07
He stated that the original contract was for $650,000.00, with only one (1) change order being
executed in the amount of $3 621 37 thus bringing the final contract amount to $653,62137
Additionally, he stated that all funds for this project were expended the work was performed
satisfactorily, and that staff recommended the approval of this item
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August 02 2017
Page 4 of 6
A motion was made by Secretary Wayne Baldwin and seconded by Vice President Mike Wilson
approving Resolution No 2017 15, regarding agenda item 3.b The vote was as follows
Ayes Secretary Wayne Baldwin President Brenda Bradley Smith, Director
Frank McKay III Vice President Mike Wilson
Nays None
Other Director Brandon Benoit (Absent)
Approved
RESOLUTION NO 2017 15
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY ACCEPTING THE BAYTOWN AREA WATER
AUTHORITY PLANT WATER PUMP STATION PROJECT, AUTHORIZING
FINAL PAYMENT OF THE SUM OF THIRTY TWO THOUSAND SIX
HUNDRED EIGHTY ONE AND 07/100 DOLLARS ($32,681.07) TO R&B
GROUP, INC., FOR SAID PROJECT AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF
c Consider a resolution authorizing the easement for the Raw Water Service
Comamtkin from Coastal Water Authority to Baytown Area Water Authority for the 6
MGD Surface Water Treatment Plant Project
Mr Pastrana presented the agenda item and stated that Resolution No 2017 16 authonzes an
easement for the Raw Water Service Connection from Coastal Water Authority (CWA) to
Baytown Area Water Authority (BAWA) for the 6 MGD Surface Water Treatment Plant
Project He stated that the easement being conveyed from CWA to BAWA is for the installation
of the intake structure which allows BAWA to receive water from the CWA canal Additionally,
he stated that this easement is on CWA's property which is immediately adjacent to the
Authonty's property and staff recommended its approval
A motion was made by Director Frank McKay III and seconded by Vice President Mike Wilson
approving Resolution No 2017 16 regarding agenda item 3.c The vote was as follows
Ayes Secretary Wayne Baldwin President Brenda Bradley Smith Director
Frank McKay 111, Vice President Mike Wilson
Nays None
Other- Director Brandon Benoit (Absent)
Approved
RESOLUTION NO 2017 16
BAWA Board Special Meeting Minutes
August 02 2017
Page 5 of 6
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY ACCEPTING AN EASEMENT FOR A RAW
WATER SERVICE CONNECTION FROM COASTAL WATER AUTHORITY
FOR THE 6 MGD SURFACE WATER TREATMENT PLANT PROJECT AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF
REPORTS
a Receive an update regarding the Baytown Area Water Authority (BAWA) East
Plant Project
Mr Pastrana presented the agenda item and stated that the BAWA East Plant Project (the
"Project ) is out for bid which will be open on August 27th He stated that a pre-bid conference
was held with enough interest contractors that almost completely filled the council chamber
which is a good sign He stated that one of the major issues that came up from interested
contractors was that there was no proposed time frame for the project's completion He stated
that the contractors stated that the timeline is not sufficient in today's market due to the many
ongoing projects in this area, i.e Exxon and Chevron therefore there may be a shortage of
equipment, supplies and resources, which may drive the prices up and extend the time frame
needed to complete the project Mr Pastrana stated that in order to bring the project in at a
reasonable price staff is looking at extending the completion time from 600 days to 1,000 days
or about three (3) years General Manager Davis stated that because the Authority and staff have
been so proactive in its planning of the additional water plant, the time frame is not as sensitive
an issue as it could ve been Additionally, General Manager Davis stated that luckily there's
additional time to make sure that flus project is done well and to the full benefit of the Authority
and those it serves
It Receive the Baytown Area Water Authority's Quarterly Financial and Investment
Reports for the Quarter Ending June 30, 2017
Mr Nickerson presented the agenda item and stated the revenues as well as the expenditures
were right where staff expected them to be at this point in the budget year with an estimated 75%
of the projected revenue already collected As it relates to the expenditures, he noted that the
capital outlay line item is only at a little over 21 %, which is normal because equipment has yet to
be purchased He stated that in looking at the bottom line the projections are at 72% of the
budget, which shows financials coming in under budget year to date With regards to the CIPF
Revenue fund, he noted that there s a transfer from BAWA Operations and that there's $9
million dollars of project expenditures for the BAWA East Plant for the SCADA system
chemical feed system etc., as well as encumbered amounts for items such as the high service
pumps
With regards to the investment report Mr Nickerson stated that the interest rate of 8023% was
just over 1%, which is an increase from the last quarterly report He stated that the revenues for
the quarter as it relates to the interest earnings are $44,957 02 He noted that staff is actively
looking at ways to invest momes in ways that will yield higher returns, while maintaining the
BAWA Board Special Meeting Minutes
August 02 2017
Page 6 of 6
safety and security of the investment When asked what types of investments were being
considered, Mr Nickerson noted that the last page of the report showed a breakout of all of
BAWA's investments, which included, TexPool, Mumcipal Bonds and Commercial Paper
MANAGER S REPORT
a Reminder that the next Baytown Area Water Authority meeting is scheduled for
Wednesday, August 16, 2017, 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 Board will hold its public
hearing and take action on its proposed budget at its next BAWA meeting scheduled for
Wednesday August 16 2017 at 9'00 A.M in the City Council Chamber
ADJOURN
With there being no further business to discuss President Bradley Smith adjourned the August
02 2017 Baytown Area Water Authority (BAWA) Board Special Meeting at 9:25 A.M
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