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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