2018 03 21 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
March 21, 2018
The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular
Meeting on Wednesday, March 21, 2018, at 9:00 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
Rick Davis General Manager
Deanie King General Counsel
Leticia Brysch Assistant Secretary
President Bradley Smith convened the March 21, 2018, BAWA Board Regular Meeting with a
quorum present at 9:00 A.M., all members were present with the exception of Directors Benoit
and McKay who were both absent.
1. MINUTES
a. Consider approving the minutes of the Baytown Area Water Authority Regular
Meeting held on February 21, 2018.
A motion was made by Vice President Mike Wilson and seconded by Director Harland Forrest,
Jr. approving the February 21, 2018, BAWA Board Regular Meeting minutes. The vote was as
follows:
Ayes: Director Harland Forrest, Jr., President Brenda Bradley Smith, Vice
President Mike Wilson
Nays: None
Other: Director Brandon Benoit (Absent), Secretary Frank McKay III (Absent)
Approved
2. BAWA EAST PLANT PROJECT
a. Present update on the Baytown Area Water Authority East Plant Project.
Deputy General Manager, Ron Bottoms presented the agenda item and stated that the plans for
the project were being amended to consider the value engineering changes that were discussed
to reduce the price. He stated that the consultant have thirty days and should have the plans
BAWA Board Regular Meeting Minutes
March 21, 2018
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complete by the end of March. He stated that staff met with the contractor, whom stated that
once they receive the plans would have to go back to their sub -contractors and update the
costs then should be in position to start construction no sooner than May. Deputy General
Manager Bottoms stated that as a group they went over BAWA's CIP for the next five (5) years
and found an opportunity to use the BAWA CIP Year 2020 funds to keep the generator included
in the project, which is staffs recommendation. Additionally, he noted that staff is still looking
at the $46 million bond for the plan.
Director Wilson stated that based on the information previously mentioned would the project be
in position to move forward. Deputy General Manager Bottoms stated that the process is moving
at a slow pace, and noted that many parts were being done at the same time. He further noted that
TGS is installing the feeder road on Hwy 99 and that the next discussion with the board would be
with regards to mitigation credits for the wetlands mitigation.
b. Discuss the plan of finance for the BAWA East Plant Project, including the issuance
of Water Supply Contract Revenue Bonds, Series 2018.
City Controller, Jeffrey Miller presented the agenda item and stated that because of the length of
the project being 27 to 36 months, staff recommended issuing bonds in terms of $28 million in
proceeds for this year and another $18 million in the year 2019. He stated that they've identified
residual funds over and above the reserve requirement of about $3.8 million to use to offset
the 2018 year bond, in which they've also evaluated alternatives to those funds to include paying
off, or exercising a call to the 2006 and 2007 series or applying it to the 2019 series. He stated
that through evaluation, it's more advantageous to apply the funds in the 2018 bond, which
would save about $1.8 million in interest, but at a cost; therefore, there's a request of a rate
increase of about 3% in the 2019 budget year and 2% for the next three (3) consecutive years.
Kristin Blomquist with Hilltop Securities stated that the bond would take about three (3) months
from start to finish. She stated that once approved to move forward with the bond, they would
put together a preliminary official statement, which is the document that goes to market the
bond, and present it to the board at the April BAWA Board meeting. She stated that afterwards,
they would finalize the preliminary official statement and electronically distribute the documents
to potential investors. Ms. Blomquist stated that this would be a competitive sale and the market
is comfortable with BAWA's credit. She stated that the bonds would be awarded the same day as
the City Council and Special BAWA meeting scheduled for May 24th. She further noted that it
takes approximately a month to put together a transcript and get the bonds approved by the
Attorney General, so they estimate closing the transaction around June 21st. Additionally, she
stated that the bonds would be available for use in late June.
Director Wilson stated that of the timeline of the sale and receives and with BAWA's current
reserves would there be a constraint on construction and payment of bills. Ms. Blomquist
noted that the bond is a 20 year issue and for the 20 year debt, the rate is about 3.75 and because
the rate is low this is a great time to be on the market.
C. Consider a resolution setting the time, date and place of a special meeting of the
Board of Directors of the Baytown Area Water Authority.
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March 21, 2018
Page 3 of 5
Assistant Secretary, Leticia Brysch presented the agenda item and recommended that the board
approve setting the special meeting of the BAWA Board of Directors for May 24, 2018, in the
Council Chamber at City Hall at 5:00 P.M., and noted that if this date was not feasible, staff
would work on providing an alternate date for the following week
Director Wilson inquired as to how Council's approval and the schedule would be impacted, if
the May 24th date is not feasible. Mrs. Brysch stated that staff would work to be certain the dates
were in line if there was no quorum for May 24th. Ms. Blomquist stated that the pricing date
would have to be on the council meeting date, as the Council would be approving the sale. Mrs.
Brysch further noted that if there's not a quorum for May 24th, staff would work to get a BAWA
and Council special meeting scheduled as soon as possible to be able to get the approval done
together.
A motion was made by Vice President Mike Wilson and seconded by Director Harland Forrest,
Jr. approving Resolution No. 2018-11, regarding the BAWA Board Special Meetings to be
scheduled for May 24, 2018 and May 31, 2018. The vote was as follows:
Ayes: Director Harland Forrest, Jr., President Brenda Bradley Smith, Vice
President Mike Wilson
Nays: None
Other: Director Brandon Benoit (Absent), Secretary Frank McKay III (Absent)
Approved
RESOLUTION NO. 2018-11
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY CALLING A SPECIAL MEETING TO BE
HELD ON MAY 24, 2018, AT 5:00 P.M. IN THE COUNCIL CHAMBER OF
CITY HALL, BAYTOWN, TEXAS; AND PROVIDING FOR THE EFFECTIVE
DATE THEREOF.
3. PROPOSED RESOLUTIONS
a. Consider a resolution approving the Baytown Area Water Authority's Investment
Policy and Strategy Statement in accordance with the Public Fund's Investment Act.
Mr. Miller presented the agenda item and stated that Resolution No. 2018-12 approves the
changes to the investment policy to include adding an authorized training organization for
continuing education; identifying eligible collateral securities and frequency of valuation, such as
city federal home loans, bank, letters of credit, claims, etc.; and amending the diversification
level by increasing the single transaction from 5% to 10%.
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March 21.2018
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A motion was made by Director Harland Forrest, Jr. and seconded by Vice President Mike
Wilson approving Resolution No. 2018-12, regarding agenda item 3.a. The vote was as follows:
Ayes: Director Harland Forrest, Jr., President Brenda Bradley Smith, Vice
President Mike Wilson
Nays: None
Other: Director Brandon Benoit (Absent), Secretary Frank McKay III (Absent)
Approved
RESOLUTION NO. 2018-12
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY ADOPTING THE BAYTOWN AREA WATER
AUTHORITY'S INVESTMENT POLICY AND STRATEGY STATEMENT;
AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
4. MANAGER'S REPORT
a. The next Baytown Area Water Authority meeting is scheduled for
Wednesday, April 18, 2018, at 9:00 A.M., in the Council Chamber located at City
Hall, 2401 Market Street, Baytown, Texas 77520.
General Manager Davis stated that on March 06, 2018, he received the 2016 Water Fluoridation
Quality Award for BAWA from the Centers of Disease Control and Prevention commending the
water system for its consistent and professional adjustment of a fluoride content to the
recommended level for oral health for 12 consecutive months.
Additionally, General Manager Davis stated that the next BAWA meeting is scheduled for
Wednesday, April 18, 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 Vice President Mike Wilson and seconded by Director Harland Forrest,
Jr. adjourning the March 21, 2018, BAWA Board Regular Meeting. The vote was as follows:
Ayes: Director Harland Forrest, Jr., President Brenda Bradley Smith, Vice
President Mike Wilson
Nays: None
Other: Director Brandon Benoit (Absent), Secretary Frank McKay III (Absent)
Approved
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March 21, 2018
Page 5 of 5
With there being no further business to discuss, President Bradley Smith adjourned the March
21, 2018, BAWA Board Regular Meeting at 9:17 A.M.
Leticia Brysch, J
City of Baytown