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2018 01 24 BAWA Minutes, Special MINUTES OF THE SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY January 24, 2018 The Board of Directors of the Baytown Area Water Authority(BAWA)met in a Special Meeting on Wednesday, January 24, 2018, at 9:03 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 Ignacio Ramirez, Sr. General Counsel Leticia Brysch Assistant Secretary President Bradley Smith convened the January 24, 2018, BAWA Board Special Meeting with a quorum present at 9:03 A.M., all members were present with the exception of Director Benoit who arrived at 9:04 A.M. 1. MINUTES a. Consider approving the minutes of the Baytown Area Water Authority Special Meeting held on November 29,2017. A motion was made by Secretary Frank McKay III and seconded by Vice President Mike Wilson approving the November 29, 2017, BAWA Board Special Meeting minutes. The vote was as follows: Ayes: Director Harland Forrest, Jr.,President Brenda Bradley Smith, Secretary Frank McKay III, Vice President Mike Wilson Nays: None Other: Director Brandon Benoit(Not Present for Vote) Approved b. Consider approving the minutes of the Baytown Area Water Authority Special Meeting held on December 06,2017. BAWA Board Special Meeting Minutes January 24,2018 Page 2 of 7 A motion was made by Vice President Mike Wilson and seconded by Secretary Frank McKay III approving the December 06, 2017, BAWA Board Special Meeting minutes. The vote was as follows: Ayes: Director Harland Forrest, Jr., Director Brandon Benoit, President Brenda Bradley Smith, Secretary Frank McKay III, Vice President Mike Wilson Nays: None Approved 2. PROPOSED RESOLUTIONS a. Consider a resolution authorizing a contract with Terracon Consultants, Inc., for material testing services for the Baytown Area Water Authority 6 MGD Surface Water Treatment Plant Project. Engineering Director, Jose Pastrana presented the agenda item and stated that Resolution No. 2018-01 authorizes a contract with Terracon Consultants, Inc., for material testing services for the BAWA 6 MGD Surface Water Treatment Plant Project in the amount of$114,247.00. He noted that in order to ensure the quality of the materials (earthwork and concrete) incorporated into the treatment plant; a professional testing laboratory is required. Director McKay inquired if this was included in the budget. Mr. Pastrana stated that this was within the funds available and that the test was included in the budget. A motion was made by Vice President Mike Wilson and seconded by Director Brandon Benoit approving Resolution No. 2018-01,regarding agenda item 2.a. The vote was as follows: Ayes: Director Harland Forrest, Jr., Director Brandon Benoit, President Brenda Bradley Smith, Secretary Frank McKay III,Vice President Mike Wilson Nays: None Approved RESOLUTION NO. 2018-01 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING AN AGREEMENT FOR MATERIAL TESTING SERVICES WITH TERRACON CONSULTANTS, INC., FOR THE 6 MGD SURFACE WATER TREATMENT PLANT PROJECT, SUBJECT TO THE APPROVAL BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS; AUTHORIZING PAYMENT IN AN AMOUNT NOT TO EXCEED ONE HUNDRED FOURTEEN THOUSAND TWO HUNDRED FORTY-SEVEN AND NO/100 DOLLARS ($114,247.00); BAWA Board Special Meeting Minutes January 24,2018 Page 3 of 7 MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a resolution awarding the Annual Zinc Polyphosphate Contract to Sterling Water Technologies LLC. BAWA Superintendent, Sterling Beaver presented the agenda item and stated that Resolution No. 2018-02 awards the Annual Zinc Polyphosphate Contract to Sterling Water Technologies LLC, in the amount of$44,830.00 (100,000 pounds @ $0.4483 per pound). He stated that zinc polyphosphate is a corrosion inhibitor used at the plant and further noted that the bids came in at a slight increase of about $1,000 more than last year. Director Wilson inquired if there was a particular reason that Univar didn't bid. Mr. Beaver stated that Univar did not bid on this particular item last year either, but requested to remain on the bid list and received a bid packet. A motion was made by Secretary Frank McKay III and seconded by Vice President Mike Wilson approving Resolution No. 2018-02, regarding agenda item 2.b. The vote was as follows: Ayes: Director Harland Forrest,Jr., Director Brandon Benoit, President Brenda Bradley Smith, Secretary Frank McKay III, Vice President Mike Wilson Nays: None Approved RESOLUTION NO. 2018-02 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ACCEPTING THE BID OF STERLING WATER TECHNOLOGIES LLC, FOR THE ANNUAL ZINC POLYPHOSPHATE CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY, IN THE AMOUNT OF FORTY- FOUR THOUSAND EIGHT HUNDRED THIRTY AND NO/100 DOLLARS ($44,830.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. c. Consider a resolution awarding the Annual Liquid Ferric Chloride Contract to PVS Technologies,Inc. Mr. Beaver presented the agenda item and stated that Resolution No. 2018-03 awards the Annual Liquid Ferric Chloride Contract to PVS Technologies, Inc., in the amount of $134,500.00 (500,000 pounds @ $0.269 per pound). He stated that the previous contract was also awarded to PVS Technologies, Inc., for $119,500.00 (500,000 pounds @ $0.239 per pound) and further noted that the ferric chloride is a coagulate base. BAWA Board Special Meeting Minutes January 24,2018 Page 4 of 7 ' A motion was made by Director Brandon Benoit and seconded by Director Harland Forrest, Jr. approving Resolution No. 2018-03, regarding agenda item 2.c. The vote was as follows: Ayes: Director Harland Forrest, Jr., Director Brandon Benoit, President Brenda Bradley Smith, Secretary Frank McKay III, Vice President Mike Wilson Nays: None Approved RESOLUTION NO. 2018-03 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ACCEPTING THE BID OF PVS • TECHNOLOGIES, INC., FOR THE ANNUAL LIQUID FERRIC CHLORIDE CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY, IN THE AMOUNT OF ONE HUNDRED THIRTY- FOUR THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($134,500.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. d. Consider a resolution awarding the Annual Liquid Chlorine Contract to DXI Industries, Inc. Mr. Beaver presented the agenda item and stated that Resolution No. 2018-04 awards the Annual Liquid Chlorine Contract to DXI Industries, Inc., in the amount of$81,662.00 (@ $614.00 per ton). He noted that the previous contract was also awarded to DXI Inc., for $78,204.00 @ $588.00 per ton and that this product is used in the disinfection process. A motion was made by Vice President Mike Wilson and seconded by Director Harland Forrest, Jr. approving Resolution No. 2018-04,regarding agenda item 2.d. The vote was as follows: Ayes: Director Harland Forrest, Jr., Director Brandon Benoit, President Brenda Bradley Smith, Secretary Frank McKay III, Vice President Mike Wilson Nays: None Approved RESOLUTION NO. 2018-04 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ACCEPTING THE BID OF DXI INDUSTRIES, INC., FOR THE ANNUAL LIQUID CHLORINE CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY, IN THE AMOUNT OF EIGHTY-ONE THOUSAND SIX BAWA Board Special Meeting Minutes January 24,2018 Page 5 of 7 HUNDRED SIXTY-TWO AND NO/100 DOLLARS ($81,662.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. e. Consider a resolution awarding the Annual Sodium Hydroxide Contract to PVS Minibulk, Inc. Mr. Beaver presented the agenda item and stated that Resolution No. 2018-05 awards the Annual Sodium Hydroxide Contract to PVS Minibulk, Inc., in the amount of $216,070.00 (407,000 pounds @ $0.310 per dry pound at 50% and 290,000 pounds @ $0.310 per dry pound at 25%). He noted that this product is used to control PH, which in the winter months they use 25% strength and the wanner months 50%. He further noted that last year, for 50% they paid just fewer than .24 cents per pound in the amount of $178,557 and for 25% there was a slight increase from 28.45 cents per pound to .31 cents per pound. A motion was made by Vice President Mike Wilson and seconded by Director Brandon Benoit approving Resolution No. 2018-05,regarding agenda item 2.e. The vote was as follows: Ayes: Director Harland Forrest, Jr., Director Brandon Benoit, President Brenda Bradley Smith, Secretary Frank McKay III, Vice President Mike Wilson Nays: None Approved RESOLUTION NO. 2018-05 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ACCEPTING THE BID OF PVS MINIBULK, INC., FOR THE ANNUAL SODIUM HYDROXIDE CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA WATER AUTHORITY, IN THE AMOUNT OF TWO HUNDRED SIXTEEN THOUSAND SEVENTY AND NO/100 DOLLARS ($216,070.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 3. REPORTS a. Receive an update regarding the Baytown Area Water Authority East Plant Project. Mr. Pastrana presented the agenda item and stated that during this board's last meeting, the board authorized a change order to reduce the price of the contract by approximately $6 million. He stated that the design for such changes have not been done, but should be done in about month. He stated that they're in the process of creating the design so that the contractor can began work on such items and they're working with CenterPoint to provide a second feed to plant, whereas, BAWA Board Special Meeting Minutes January 24,2018 Page 6 of 7 CenterPoint indicated that they could do the work. Additionally, he noted that the process is moving along with this plant. Director Wilson inquired if the projected savings remain as a reality. Mr. Pastrana stated that the contractor indicated that he could do a little bit more,but only time could tell if he lives up to his word. b. Receive the Baytown Area Water Authority's Annual Financial Report for the fiscal year ended September 30, 2017. Stephanie Harris provided a summary of BAWA's Annual Financial Report for the fiscal year ended September 30, 2017. She stated that they issued an unmodified opinion, which is the highest level of assurance that they can provide, on BAWA's financial statements. She stated that the financial statements were materially correct and that all disclosures required by generally accepted accounting principles were included. Ms. Harris stated that BAWA's net position ended the year with total assets of approximately $64.3 million, which is an estimated$4 million increase over last year with the bulk of the being seen in additional cash investments held year end, as well as, additional investments made within capital assets. She stated that BAWA ended the year with total liabilities of$14.3 million, which is a reduction compared to the $15 million at the end of year 2016. She stated that BAWA concluded with an overall positive net position at $50.1 million, an increase from the prior year of $45.3 million. Ms. Harris stated that total operating revenues were comparable to the prior year at $13.1 million. She stated that the total operating expenses were up at$8.2 versus $7.4 from the prior year with the majority of that increase in the form of raw water purchases. Additionally, she stated that there were non-operating expenses of a net$135,000 for a positive change in the net position for the year of$4.7million. In terms of cash, Ms. Harris stated that the net cash provided by the operating activities for the year was $7.4 million, which was down from the prior year at $8.1 million. She stated that net cash provided by non capital financing activities came in at$100,000, which was up over the prior year at $68,000. She stated that the net cash used for capital and other financing activities, BAWA reinvested essentially$4.7 million for the year. She stated that cash flows from investing activities were down from the prior year and there was a net cost in terms of investments of$1.2 million. Additionally, Ms. Harris stated that there was a positive overall increase in the cash position for the year of$1.5 million taking BAWA from $13.6 million to$15.1 million. a c. Receive the Baytown Area Water Authority's Quarterly Financial and Investment Reports for the Quarter Ending December 31, 2017. Finance Director, Wade Nickerson presented the agenda item and stated that the revenues were right above 25%, as expected. He noted that the expenditures had vacancies last year, but is now at full staff this year. He stated with regards to expenditures that the supplies were at 47%, which was due to repairs for some maintenance issues, but further noted that they expect to come in on budget. Mr. Nickerson noted that services were fewer than 25%, because they don't necessarily go through the calendar's expenditure pattern. With regards to the CIP fund,he stated BAWA Board Special Meetmg Minutes January 24,2018 Page 7 of 7 that the revenues were transfers from operations and the expenditures of $6.8 million were mostly for the repairs to the high service pumps. Additionally, he stated that the investments were at $20.5 million with the earnings of 1.3266% interest, resulting in quarterly earnings of$63,216. 4. MANAGER'S REPORT a. Reminder that the next Baytown Area Water Authority meeting is scheduled for Wednesday,February 21, 2018, at 9:00 A.M., in the Council Chamber located at City Hall, 2401 Market Street,Baytown,Texas 77520. General Manager Davis expressed appreciation to staff for investing in critical infrastructure which put an entity in a stronger financial position than they were the year prior. Additionally, he stated that the next BAWA meeting is scheduled for Wednesday, February 21, 2018, at 9:00 A.M., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. 5. ADJOURN A motion was made by Director Brandon Benoit and seconded by Vice President Mike Wilson adjourning the January 24, 2018, BAWA Board Special Meeting. The vote was as follows: Ayes: Director Harland Forrest, Jr., Director Brandon Benoit, President Brenda Bradley Smith, Secretary Frank.McKay III,Vice President Mike Wilson Nays: None Approved With there being no further business to discuss, President Bradley Smith adjourned the January 24, 2018, BAWA Board Special Meeting at 9:22 A.M. L icia Brysc ,Assistan a et (jL: ; ? City of \ e tt 1OW"