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2018 04 18 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY April 18, 2018 The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular Meeting on Wednesday, April 18, 2018, at 9:01 A.M., in the Conference Room of the Baytown Area Water Authority Facility, 7425 Thompson Road, Baytown, Texas with the following in attendance: Brenda Bradley Smith President Frank McKay III Secretary Harland Forrest Jr. Director Brandon Benoit Director Rick Davis General Manager Karen Horner General Counsel Alisha Segovia Deputy Assistant Secretary President Bradley Smith convened the April 18, 2018, BAWA Board Regular Meeting with a quorum present at 9:01 A.M., all members were present with the exception of Vice President Mike Wilson who was absent. 1. MINUTES a. Consider approving the minutes of the Baytown Area Water Authority Regular Meeting held on March 21, 2018. A motion was made by Director Brandon Benoit and seconded by Director Harland Forrest, Jr. approving the March 21, 2018, BAWA Board Regular Meeting minutes. The vote was as follows: Ayes: President Brenda Bradley Smith, Secretary Frank McKay III, Director Harland Forrest Jr. and Director Brandon Benoit Nays: None Other: Vice President Mike Wilson (Absent) Approved 2. PROPOSED RESOLUTION a. Consider a resolution amending the Baytown Area Water Authority Fiscal Year 2017-2018 Capital Improvement Program Fund (CIPF) budget in order to increase the budget for the BAWA East Plant. Finance Director Wade Nickerson presented the agenda item and stated that Resolution No. 2018-13 approves a budget amendment in the amount of $2,500,000 to move funds out of the BAWA Board Regular Meeting Mmutes Apnl 18, 2018 Page 2 of 8 fund balance account, so that they have the availability to use the funds for costs associated with (i) the Cost -Share Agreement with TGS Cedar Port Partners, L.P., for the roadway and (ii) the Purchase and Sale Agreement for Mitigation Credits with Gin City Restoration, LLC, and Mitigation Solutions USA, LLC. Mr. Nickerson further noted that these expenditures were planned for Fiscal Year 2018-2019, but will be spent, in part, in Fiscal Year 2017-2018. Mr. Nickerson noted that approval of this item is necessary in order to move forward with these contracts and the BAWA East Plant Project. A motion was made by Director Harland Forrest, Jr. and seconded by Secretary Frank McKay III approving Resolution No. 2018-13, regarding agenda item 2.a. The vote was as follows: Ayes: President Brenda Bradley Smith, Secretary Frank McKay III, Director Harland Forrest Jr. and Director Brandon Benoit Nays: None Other: Vice President Mike Wilson (Absent) Approved RESOLUTION NO. 2018-13 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AMENDING THE BAYTOWN AREA WATER AUTHORITY'S FISCAL YEAR 2017-2018 CAPITAL IMPROVEMENT FUND BUDGET IN ORDER TO INCREASE THE BUDGET FOR THE BAWA EAST PLANT BY REPROGRAMMING TWO MILLION FIVE HUNDRED THOUSAND AND NO, 100 DOLLARS ($2,500,000.00) FROM FUND BALANCE TO SUCH PROJECT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a resolution authorizing a Purchase and Sale Agreement for Mitigation Credits with Gin City Restoration, LLC, and Mitigation Solutions USA, LLC, for mitigation credits associated with the 6 MGD Surface Water Treatment Plant Project. Director of Engineering Jose Pastrana presented the agenda item and stated that the project site for the MGD Surface Water Treatment Plant Project (the "Project") includes a little over seventeen acres of wetlands area that will be disturbed in the building process. The mitigation credits purchased from Gin City Restoration, LLC and Mitigation Solutions USA, LLC, in the amount of $1,231,200, would be used to offset the impact of the wetlands area and that if this item is approved it would go before Council for consideration and action. Deputy City Manager, Ron Bottoms further noted that this item is related to the item that the Board just approved under agenda item 2.a. Secretary McKay noted that in the past there had been discussions of the possibility to using other properties to offset the wetlands requirement. Mr. Bottoms noted that the Nature Center was the property in question, and while staff had looked into this option, it was not feasible. Mr. Bottoms also noted that it can take years to generate these types of credits and there might not be BAWA Board Regular Meeting Minutes April 18, 2018 Page 3 of 8 an opportunity to purchase them at a later date. Mr. Pastrana noted that this purchase would satisfy the mitigation credit needs for the entire build -out of the BAWA East Plant and recommended approval. A motion was made by Secretary Frank McKay III, and seconded by Director Brandon Benoit approving Resolution No. 2018-14, regarding agenda item 2.b. The vote was as follows: Ayes: President Brenda Bradley Smith, Secretary Frank McKay III, Director Harland Forrest Jr. and Director Brandon Benoit Nays: None Other: Vice President Mike Wilson (Absent) Approved RESOLUTION NO. 2018-14 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING THE GENERAL MANAGER TO EXECUTE A PURCHASE AND SALE AGREEMENT FOR MITIGATION CREDITS WITH GIN CITY RESTORATION, LLC, AND MITIGATION SOLUTIONS USA, LLC, FOR MITIGATION CREDITS ASSOCIATED WITH THE BAYTOWN AREA WATER AUTHORITY 6 MGD SURFACE WATER TREATMENT PLANT PROJECT; AUTHORIZING PAYMENT IN AN AMOUNT NOT TO EXCEED ONE MILLION TWO HUNDRED THIRTY-ONE THOUSAND TWO HUNDRED AND NO/100 DOLLARS ($1,231,200.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. C. Consider a resolution approving the preliminary official statement and notice of sale and appoints the paying agent/registrar for BAWA's issuance of Water Supply Contract Revenue and Refunding Bonds, Series 2018. Mr. Nickerson presented the item and stated that Resolution No. 2018-15 approves the preliminary official statement, which would allow the notice of sale of the bond to be made and appoints the paying agent/registrar for BAWA's issuance of Water Supply Contract Revenue and Refunding Bonds, Series 2018, in the aggregate principal amount not to exceed $30,000,000 for the purposes of (i) acquiring and constructing certain authorized equipment and improvements for the BAWA East Project and (ii) paying the costs of issuing the bonds. Mr. Wade Nickerson further noted that the numbers of the official statement are preliminary and are subject to change as the sale date approaches. A motion was made by Director Brandon Benoit and seconded by Director Harland Forrest, Jr. approving Resolution No. 2018-15, regarding agenda item 2.c. The vote was as follows: Ayes: President Brenda Bradley Smith, Secretary Frank McKay III, Director Harland Forrest Jr. and Director Brandon Benoit Nays- None Other Vice President Mike Wilson (Absent) Approved RESOLUTION NO. 2018-15 BAWA Board Regular Meetmg Mmutes Apn1 18, 2018 Page 4 of 8 RESOLUTION BY THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY APPROVING THE PRELIMINARY OFFICIAL STATEMENT AND NOTICE OF SALE; APPOINTING THE PAYING AGENT/REGISTRAR; APPROVING OTHER MATTERS INCIDENTAL THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. d. Consider a resolution authorizing a sole -source purchase from with Purafd Inc., for material replacement services for the Baytown Area Water Authority's emergency gas scrubber system. BAWA Superintendent Sterling Beaver presented the item and stated that Resolution No. 2018- 16 authorizes payment by the City of Baytown in the amount of $102,846 to Purafil Inc., for the sole -source purchase of material replacement services needed to replace the gas scrubber for the chlorine system at the BAWA Plant, as the current one is past its useful life. He further noted that currently the system is working only about 40%, so in the event that there was a major leak at the Plant, the scrubber could not hold or absorb the required amount of chlorine gas to protect the citizens from being exposed to this very toxic gas, which has the potential of being fatal. Mr. Beaver noted that this system is inspected on a yearly basis, and while last year there was a decline in its performance, this year the decline was sufficient enough to cause staff concern. The requested system is a safety measure for staff and the public, so staff moved quickly to replace it and recommends approval of the item. A motion was made by Secretary Frank McKay III and seconded by Director Harland Forrest, Jr. approving Resolution No. 2018-16, regarding agenda item 2.d. The vote was as follows: Ayes: President Brenda Bradley Smith, Secretary Frank McKay III, Director Harland Forrest Jr. and Director Brandon Benoit Nays: None Other: Vice President Mike Wilson (Absent) Approved RESOLUTION NO. 2018-16 BAWA Board Regular Meeting Minutes Apn1 18, 2018 Page 5 of 8 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN IN AN AMOLJNT NOT TO EXCEED ONE HUNDRED TWO THOUSAND EIGHT HUNDRED FORTY-SIX AND NO'100 DOLLARS ($102,846.00) TO PURAFIL INC., FOR THE SOLE -SOURCE PURCHASE OF MATERIAL REPLACEMENT SERVICES FOR THE BAYTOWN AREA WATER AUTHORITY'S EMERGENCY GAS SCRUBBER SYSTEM; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. e. Consider a resolution authorizing the sole -source purchase of a replacement chain and flight sludge collection system from W WaterTech Services, Inc., for the Fritz Lanham Surface Water Treatment Plant and installation such system by W Water Technology, Inc. Mr. Beaver presented the item and stated that Resolution No. 2018-17 approves the fourth and final replacement of the chain of flight, which if the Board remembers, staff has replaced one a year for the last three years as a part of the Plant's expansion in 2003. Mr. Beaver further noted that the is a different vendor from what was used on the last three chain of flights. General Counsel Karen Horner clarified that originally the item was presented for both the purchase and for the installation of the item; however, staff is still working on the installation portion of the contract. Therefore, at this point, staff is pulling out the installation and is just approving the sole -source purchase. A motion was made by Director Brandon Benoit and seconded by Director Harland Forrest, Jr. approving the amended Resolution No. 2018-17 as noted by General Counsel Karen Horner, regarding agenda item 2.e. The vote was as follows: Ayes: President Brenda Bradley Smith, Secretary Frank McKay III, Director Harland Forrest Jr. and Director Brandon Benoit Nays: None Other: Vice President Mike Wilson (Absent) Approved RESOLUTION NO. 2018-17 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING PAYMENT IN THE AMOUNT OF ONE HUNDRED SIX THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($106,500.00) TO W WATERTECH SERVICES, INC., FOR THE PURCHASE OF A CHAIN AND FLIGHT SLUDGE COLLECTION SYSTEM TO REMOVE THE SLUDGE FROM THE BOTTOM OF A SEDIMENTATION BASIN AT THE FRITZ LANHAM SURFACE WATER TREATMENT PLANT; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BAWA Board Regular Meetmg Minutes Apn1 18, 2018 Page 6 of 8 3. REPORTS a. Present an update regarding the current BAWA Capital Improvement Projects. Mr. Beavers presented the item and gave the Board an update regarding the BAWA Capital Improvement Projects (CIP). He noted that in regards to the high service parts, this project is probably scheduled for completion by the end of the year. He noted that so far, the new T which allows staff to move down and tap off or build a new header for a new pump station has been installed. So far, four taps have been performed on a line. Mr. Beavers showed the Board pictures of said line and identified the cut outs, the new taps and new valves and noted that he would point out the location during the plant tour at the end of the meeting. Mr. Beavers next talked about the filter gallery. He noted that some weeks there were some safety issues down in the filter gallery that staff wanted to address in order to ensure that nobody is hurt. Mr. Beavers showed pictures of a staircase that was rotten towards the bottom due to some leaks that resulted in that bottom stair giving away altogether. So, this has been replaced and the bottom step is now concrete, so that in the event of it being exposed to large amount of water it will be fine. Mr. Beavers also noted that there were some of the leaks on the roof of the filter gallery, which was caused by a filter that had reached its useful life, had been degrading to the point where leaks resulted. Mr. Beavers stated that staff has made some great improvements and updates to the Plant that include a new exterior paint; updates to the lobby; and the hallway, which leads from the lab, the restrooms and the break room have all been renovated. Mr. Beavers noted that in regards to ground source tanks, they are scheduled to have an 18 month lead time on the repair portion of the job. The contractor estimated that it is going to take about six (6) months to rehabilitate each one, so they will need to be done one at a time in order to continue operations uninterrupted, which give a total time frame for this project and about two (2) years. KIT Professionals, the consultant for the chemical feed improvements project gave an overview of their progress. It was noted that this project is in the early stages of the design phase, but will include items; such as: the replacement of the existing gas ammonia system with a liquid ammonia system in order to rid of the hazard of having a compressed gas, the replacement of many of the pumps, some of the piping and the storage tanks in the Plant that have reached their limit of their service life, the design of the addition of a lime system at the head of the plant, and other miscellaneous improvements associated with the replacement of valves, the sledge, and the piping gallery. b. Receive the Baytown Area Water Authority's Quarterly Financial and Investment Reports for the Quarter Ending March 31, 2018. Mr. Nickerson presented the item and stated that the quarterly reports BAWA revenues are right by 50%, which is right where staff expects them to be this time of the year. He noted that revenues will probably come in slightly ahead of budget if the area continues to go without a lot of rain. BAWA Board Regular Meetmg Mmutes April 18, 2018 Page 7 of 8 Mr. Nickerson noted that there is not a lot to report on expenditures, and stated that once again they right at 44° o for the budget. He noted that in the maintenance line item that is just under 60%, which is a bit high for this time of year; however, Mr. Nickerson noted maintenance issues do not occur in a linear fashion and staff has dealt with some unplanned issues; such as pump and brick and mortar replacement at the Plant. Mr. Nickerson stated that in the Capital Improvement Project (CIP) portion of the budget, BAWA has about 11.2 million dollars that is made up of some engineering services for the BAWA East Plant Project, the high service pumps, all of the filtration and chemical feed stuff, and other such items. Mr. Nickerson stated that to date, about 1.3 million dollars have been spent and an estimated 6.4-6.5 million dollars have been encumbered, which leaves about 7.724 million dollars in that line item. Lastly, Mr. Nickerson presented the investment report and noted that BAWA has $23,495,000 dollars in the bank that is being invested at about 1.655% with earnings for the quarter at $83,255.64. 4. MANAGER'S REPORT a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, May 16, 2018, at 9:00 a.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. General Manager Rick Davis stated that the next BAWA meeting is scheduled for Wednesday, May 16, 2018, at 9:00 A.M. in the City Council Chamber, 2401 Market Street, Baytown, Texas 77520. Deputy General Manager Ron Bottoms presented drone video footage of the BAWA East Plant project and noted that a special BAWA meeting may be called for mid May, in order to approve the issuance of the bonds for the new plant. 5. TOUR OF FACILITY a. The Board will tour the BAWA Surface Water Treatment Plant, 7425 Thompson Rd., Baytown, Texas 77521. President Bradley Smith stated that everyone was welcome to tour the facility. The directors toured BAWA Plant located at 7425 Thompson Road, Baytown, Texas. 6. ADJOURN Upon completion of the tour and with there being no further business to discuss, President Bradley Smith adjourned the April 18, 2018, BAWA Board Regular Meeting at 10:21 A.M. 13, Leticia Brysch, Assist ecretary City of Baytown BAWA Board Regular Meeting Minutes April 18, 2018 Page 8 of 8