2017 10 18 BAWA Minutes MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
October 18, 2017
The Board of Directors of the Baytown Area Water Authority(BAWA) met in a Regular
Meeting on Wednesday, October 18, 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
Harland Forrest,Jr. Director
Brandon Benoit Director
Frank McKay Director
Rick Davis General Manager
Leticia Brysch Assistant Secretary
President Bradley Smith convened the October 18, 2017, BAWA Board Regular Meeting with a
quorum present at 9:02 A.M., all members were present.
1. MINUTES
Agenda items 1.a., l.b., and 1.c. were considered together.
a. Consider approving the minutes of the Baytown Area Water Authority Special
Board Meeting held on August 02, 2017.
b. Consider approving the minutes of the Baytown Area Water Authority Regular
Board Meeting held on June 21,2017.
c. Consider approving the minutes of the Baytown Area Water Authority Regular
Meeting held on August 16,2017.
A motion was made by Vice President Mike Wilson and seconded by Director Brandon Benoit
approving the August 02, 2017, BAWA Special Meeting, as well as, the June 21, 2017 and
August 16, 23017, BAWA Board Regular Meetings minutes. The vote was as follows:
Ayes: Director Harland Forrest, Jr., Director Brandon Benoit, President Brenda
Bradley Smith, Director Frank McKay III, Vice President Mike Wilson
Nays: None
Approved
2. REPORTS
BAWA Board Regular Meeting Minutes
October 18, 2017
Page 2 of 5
a. Receive and discuss an update regarding the BAWA East Plant Project.
Gary Rabalais, a representative from Jones and Carter Engineers presented the Board with an
update regarding the BAWA East Plant Project. He stated that they advertised the project for bid
and the bids came in higher than anticipated. He noted that the construction costs for the project
is a big issue. He stated that at the end of the preliminary engineering the costs was at $36
million and further into the detail design the costs was estimated at $41 million. He further stated
that at the end of the past year, the estimated $41 million was increased to $44.6 million to
account for escalation. Mr. Rabalais stated that the apparent low bidder was Pepper Lawson
Waterworks who submitted the bid estimated at $52 million, which was $1 million less than the
second low bid of $53 million from Allco. He stated that the third bidder, Balfour Beatty was a
little over $55 million. He noted that there were no irregularities, but that there was a slight
mathematical error in the bid from Pepper Lawson Waterworks, which wasn't enough to impact
the bid. Additionally, he stated that the number being so much higher than budgeted they worked
with staff and Pepper Lawson Waterworks to see if there was some engineering that could be
done to bring down the costs of the construction portion of the job.
Director McKay inquired if there was a cause for the bid to wine in higher than expected. Mr.
Rabalais stated that a sure factor was the additional approximate $1 million added to the project.
He noted that during the period of trying to obtain final approval from the City of Houston there
were issues with the raw water meter. He stated that thejob was designed to where the raw water
meter after pumping from the canal would go into the plant, but the City of Houston objected to
such because they wanted the meter on a pump discharge and as designed it would flow by
gravity out of the canal into the plant. He stated that they settled on putting in a raw water pump
station which resulted in another pump station being added to the cost. He further noted that the
impact of Hurricane Harvey was hard to anticipate and the contractors expressed their concerns
regarding the prices and availability of equipment for the project.
President Bradley Smith asked Mr. Rabalais how he'd characterize the bid numbers being that
they were fairly close. Mr. Rabalais stated that he was comfortable with the numbers being
that the two (2) lowest bidders were competent and experienced in this type of project.
Director McKay inquired if the cost could increase once the contract was agreed upon. Mr.
Rabalais explained that the bid was a lump sum price, whereas, everything defined in the
contract documents would be done at that lump sum price and that there could be changes
from the original base bid.
During further discussion, Mr. Rabalais stated that although nice to have the following items
identified weren't necessarily critical to the mission of the plant for making water: the
maintenance building, backwash reclamation clarifier, independent power feed, electrical
distribution equipment, concrete pavement, and future site work phases. He stated that the
maintenance building was deferred as it was not 100% needed at the opening of plant and could
be added at any time without impact. He stated that the backwash reclamation clarifier was also
deferred and could also be added at later time being that it's an extra process to treat waste
stream before it is recycled.
BAWA Board Regular Meeting Minutes
October 18, 2017
Page 3 of 5
Mr. Rabalais stated that the job was initially planned with consideration of how to meet the states
criteria of two (2) power sources to the plant. He stated that ultimately the decision was to have
the diesel emergency generator to size the entire plant although the option of a second
independent feed from Centerpoint was explored. He stated that since there's been lots of
development in this area, he recommended submitting a request to Centerpoint again to see if it's
possible to bring in that second feed, which would allow for the removal of the generator option
from the project. Director McKay inquired if the plant would be a priority with Centerpoint in
the event of a massive power outage. General Manager Davis stated that he could only assume
that the plant would be on Centerpoirus priority list, but would discuss with them for clarity.
Director Benoit inquired for clarity if the $2 million was a flat rate to install the diesel generators
and if it did not factor in additional costs. Mr. Rabalais stated that it's possible that Centerpoint
may request for additional money for certain services, but further noted that there's a certain
amount of capacity within the ground water wells allowed for emergency purposes as well.
Mr. Rabalais stated that for back up purposes there was redundancy designed within the plant
site itself that included two (2) sets of electrical wiring and transformers of the distribution legs.
He noted that this was not a necessary feature and that the contractor was working on the revised
cost, but he estimated the cost of $1.5 million. Additionally, he stated that this feature could be
added later, but could be more complicated as it's sort of within the plant site.
Mr. Rabalais stated that there were roadways within the plant site designed to be concrete
pavement at a cost of $1 million that could provide for a savings of an estimated $400,000, if the
main facility, along with the more useable roadways were constructed with concrete and the
other less driven roadways with crushed rock.
Mr. Rabalais stated that included in the initial design was the treatment of the soil in the areas of
the site that were planned for future construction, but further noted that there could be another
estimated $1 million savings if they only treated the area needed to date. Additionally, Mr.
Rabalais stated that the estimated savings goal was a little over $6 million, but that the had
numbers were not received from the contractor.
Director Benoit inquired if BAWA was bound to the lowest bidder of the project based on the
initial bidding to where the second bidder could not be considered with regards to cost savings
being that their bid amounts were in such close proximity. Mr. Rabalais stated that the legal
department should speak on such regards, but noted that currently the contract was not rewarded
to anyone and they were in the negotiation phase with Pepper Lawson Waterworks. Mr. Rabalais
further noted that they could remove the items listed and rebid the project which would allow all
bidders to rebid with those changes. General Manager Davis stated that the contractor with the
low bidder is highly motivated to avoid the rebid scenario and further noted that by working with
this contractor additional savings aside from the estimated $6.4 million could be expected.
Additionally, General Manager Davis noted that the ambition is to get the project to the low
$40's and if such does not happen more discussion would have to be made being that there were
several dimension's to this project other than the financial.
BAWA Board Regular Meeting Minutes
October 18, 2017
Page 4 of 5
During further discussion, Mr. Rabalais stated that they were scheduled to meet within a few
days to receive the final the numbers from the contractor. General Manager Davis stated that
after Mr. Rabalais confirm the final cost updated information would be provided to the board.
Director McKay asked Mr. Rabalais to inquiry if Hurricane Harvey presented an inflation factor
with regards to this project and further stated that once the final number is determined he would
like to know the rate of how many gallons of water could be done per day. Mr. Rabalais stated
that sometimes it hard to provide such data because the cost includes aspects other than just the
cost specifically for water and in some cases people would say dollars per gallon meaning
literally the pieces required for the plant. With regards to this project, he noted that some of the
items were developed during the design based on the future of having a 24 MGD plant.
President Bradley Smith stated that in summary last year's estimate was $44.6 million and with
the estimated $6.4 million possible reduction would result to being $46.4, an approximately 5%
increase over the November 2016 estimate in terms of dollars.
b. Receive the Baytown Area Water Authority's Quarterly Financial and Investment
Reports for the Quarter Ending September 30, 2017.
Finance Director, Wade Nickerson presented the BAWA's Financial Report for the Quarter
Ending September 30, 2017. He stated with regards to revenues that the two (2) major line
items were a little over 100% and that there was some increased water sales overall. He noted
that the expenditures increased and that the investments earned more than budgeted.
Mr. Nickerson stated that the expenditures came in on budget and that the water costs was at
107%, because more water had to be purchased as more water was sold. He noted that overall
budget was slightly under what was projected. He further stated that the CIP was just under 61 %
of budget, which included transfers related to the high service pumps and the design of the
BAWA east plant.
With regards to the investment report, Mr. Nickerson stated that there was approximately $19.5
million at the end of the quarter with an interest rate of 1.15% and a total interest eaming of just
under $52,000.
3. MANAGER'S REPORT
a. Reminder that the next Baytown Area Water Authority meeting is scheduled for
Wednesday, November 15, 2017, at 9:00 A.M. in the City Council Chamber, 2401 Market
Street, Baytown, Texas 77520.
General Manager Davis stated that the next BAWA meeting was scheduled for Wednesday,
November 15, 2017, at 9:00 A.M. in the City Council Chamber, 2401 Market Street, Baytown,
Texas 77520.
Director McKay requested an update on the current facility, as well as, the new property with
regards to Hurricane Harvey. BAWA Superintendent, Sterling Beaver stated that the current
BAWA Board Regular Meeting Minutes
October 18, 2017
Page 5 of 5
facility received damage to the roof, whereas, water affected some of the ceiling tile and light
fixtures. He stated that the main entrance was also exposed to water damage and FEMA was
scheduled to come out to assess those damages. He noted that there was monies budgeted this
year for improvements to the facility, in which they plan to address, but further noted that there
were no operational issues.
With regards to the new property, Director Engineering Jose Pastrana stated that there's a small
drainage tunnel that crosses the property which had localized water, but no major flooding
issues. He noted that once the area is cleared and drainage improvements are made, which is part
of the plan, things will improve more. Additionally, he noted that the surrounding elevated street
structures would keep the storm surge from impacting this property.
4. ADJOURN
A motion was made by Director Brandon Benoit and seconded by Director Frank McKay III
adjourning the October 18, 2017, BAWA Board Regular Meeting. The vote was as follows:
Ayes: Director Harland Forrest, Jr., Director Brandon Benoit, President Brenda
Bradley Smith, Director Frank McKay III, Vice President Mike Wilson
Nays: None
Approved
With there being no further business to discuss, President Bradley Smith adjourned the October
18, 2017, BAWA Board Regular Meeting at 9:33 A.M.
Nticiai Brysch, Assistant S ary
City of Baytown