2019 01 16 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
January 16, 2019
The Board of Directors of the Baytown Area Water Authority (BAWA) met in a
Regular Meeting on Wednesday, January 16, 2019, 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
Mike Wilson
Frank McKay III
Brandon Benoit
Rick Davis
Ignacio Ramirez, Sr.
Alisha Segovia
President
Vice President
Secretary
Director
General Manager
General Counsel
Deputy Assistant Secretary
President Bradley Smith convened the January 16, 2019, BAWA Board Regular Meeting with a
quorum present at 9:02 A.M., all members were present with the exception of Director Harland
Forrest Jr. who was absent.
1. MINUTES
a. Consider approving the minutes of the Baytown Area Water Authority Special
Meeting held on December 5, 2018.
A motion was made by Director Brandon Benoit, and seconded by Vice President Mike Wilson
approving the December 5, 2018, BAWA Board Special Meeting minutes. The vote was
as follow:
Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank
McKay III, Director Brandon Benoit
Nays: None
Other: Director Harland Forrest, Jr. (Absent)
Approved
2. PROPOSED RESOLUTIONS
a. Consider a resolution authorizing the Second Amendment to the Professional
Service Agreement with Hatch Associates Consultants, Inc., f/k/a Shrader Engineering
Inc., for the BAWA SCADA Upgrade Project.
BAWA Board Regular Meeting Minutes
January 16, 2019
Page 2 of 9
City Engineering Jose Pastrana presented agenda item 2.a. and stated that Resolution No. 2019-
01 authorizes the Second Amendment to the Professional Service Agreement with Hatch
Associates Consultants, Inc., f/k/a Shrader Engineering Inc., for the BAWA SCADA Upgrade
Project, in the amount of $42,380. He further stated that a few years ago SCADA was installed
throughout the City for the water and waste water systems and that the BAWA Plant is mostly
online with the exception of a few items, which will be addressed through this item. He further
stated that this item will go before Council for their consideration at their January 24th meeting.
A motion was made by Vice President Mike Wilson, and seconded by Director Brandon
Benoit approving Resolution No. 2019-01, regarding agenda item 2.a. The vote was as follows:
Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank
McKay III, Director Brandon Benoit
Nays: None
Other: Director Harland Forrest, Jr. (Absent)
Approved
RESOLUTION NO. 2019-01
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY AUTHORIZING THE GENERAL MANAGER
TO EXECUTE THE SECOND AMENDMENT TO THE PROFESSIONAL
SERVICE AGREEMENT WITH HATCH ASSOCIATES CONSULTANTS,
INC., F/K/A SHRADER ENGINEERING INC., FOR THE BAWA SCADA
UPGRADE PROJECT; AUTHORIZING PAYMENT IN AN AMOUNT NOT
TO EXCEED FORTY-TWO THOUSAND THREE HUNDRED EIGHTY AND
NO/100 DOLLARS ($42,380.00); MAKING OTHER PROVISIONS RELATED
THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
b. Consider a resolution authorizing a Contract Amendment to the Amended and
Restated Water Supply Contract with the City of Baytown to increase the contract
quantity.
City Engineer Jose Pastrana presented agenda item 2.b. and stated that Resolution No. 2019-02
authorizes a Contract Amendment to the Amended and Restated Water Supply Contract with the
City of Baytown to increase the contract quantity from 21 Million Gallons per Day (MGD)
to 22.7 MGD and that this increase is needed as Texas Commission on Environmental Quality
("TCEQ") requires that peak demand is allocated to the City. He further stated that demand for
water within the City of Baytown continues to grow and this increase provides for continued
growth, as well as allowing for current peak demand. Additionally, Mr. Pastrana stated that there
is no fiscal impact associated with this item unless the water is used.
BAWA Board Regular Meeting Minutes
January 16, 2019
Page 3 of 9
A motion was made by Vice President Mike Wilson, and seconded by Secretary Frank McKay
III approving Resolution No. 2019-02, regarding agenda item 2.b. The vote was as follows
Ayes- President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank
McKay III, Director Brandon Benoit
Nays: None
Other: Director Harland Forrest, Jr. (Absent)
Approved
RESOLUTION NO. 2019-02
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY AUTHORIZING A CONTRACT
AMENDMENT TO THE AMENDED AND RESTATED WATER SUPPLY
CONTRACT WITH THE CITY OF BAYTOWN TO INCREASE CONTRACT
QUANTITY; MAKING OTHER PROVISIONS RELATED THERETO; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
C. Consider a resolution awarding the Annual Zinc Polyphosphate Contract to
Shannon Chemical Corporation.
BAWA Superintendent Sterling Beaver presented agenda item 2.c. and stated that
Resolution No. 2019-03 awards the Annual Zinc Polyphosphate Contract to Shannon Chemical
Corporation, in the amount of $49,300.00 (100,000 pounds @ $0.4930 per pound). He further
stated that that this product is used for corrosion control at the BAWA Surface Water Treatment
Plant and that bids for this item were opened Monday, January 7th, 2019, at 9:30 a.m., with
Shannon Chemical Corporation having the lowest bid.
A motion was made by Vice President Mike Wilson, and seconded by Secretary Frank McKay
III approving Resolution No. 2019-03, regarding agenda item 2.c. The vote was as follows
Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank
McKay III, Director Brandon Benoit
Nays: None
Other: Director Harland Forrest, Jr. (Absent)
Approved
BAWA Board Regular Meeting Minutes
January 16, 2019
Page 4 of 9
RESOLUTION NO 2019-03
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY ACCEPTING THE BID OF SHANNON
CHEMICAL CORPORATION FOR THE ANNUAL ZINC POLYPHOSPHATE
CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA
WATER AUTHORITY IN THE AMOUNT OF FORTY-NINE THOUSAND
THREE HUNDRED AND N0100 DOLLARS ($49,300.00); MAKING OTHER
PROVISIONS RELATED THERETO; AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF.
e. Consider a resolution awarding the Annual Liquid Chlorine Contract to DXI
Industries, Inc.
BAWA Superintendent Sterling Beaver presented agenda item 2.e. and stated that
Resolution No. 2019-04 awards the Annual Liquid Chlorine Contract to DXI Industries, Inc., in
the amount of $84,987.00. (133 tons/per year @ $639.00 per ton). He further stated that this
product is used in the disinfection process at the BAWA Surface Water Treatment Plant and that
bids for this item were opened Monday, January 7th, 2019, at 9:30 a.m., with DXI Industries,
Inc. having the lowest bid.
A motion was made by Secretary Frank McKay III, and seconded by Director Brandon
Benoit approving Resolution No. 2019-04, regarding agenda item 2.e. The vote was as follows
Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank
McKay III, Director Brandon Benoit
Nays: None
Other: Director Harland Forrest, Jr. (Absent)
Approved
RESOLUTION NO. 2019-04
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-FOUR THOUSAND NINE
HUNDRED EIGHTY-SEVEN AND NO/100 DOLLARS
($84,987.00); MAKING OTHER PROVISIONS RELATED THERETO; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
BAWA Board Regular Meeting Minutes
January 16, 2019
Page 5 of 9
f- Consider a resolution awarding the Annual Liquid Ferric Chloride Contract to PVS
Technologies, Inc.
BAWA Superintendent Sterling Beaver presented agenda item 2.f and stated that Resolution No.
2019-05 awards the Annual Liquid Ferric Chloride Contract to PVS Technologies, Inc., in the
amount of $144,500.00 (500,000 pounds @ $0.289 per pound). He further stated that this
product is used in the coagulation process at the BAWA Surface Water Treatment Plant and that
bids for this item were opened Monday, January 7th, 2019, at 9:30 a.m., with PVS Technologies,
Inc. having the lowest bid.
A motion was made by Director Brandon Benoit, and seconded by Secretary Frank McKay
III approving Resolution No. 2019-05, regarding agenda item 21 The vote was as follows:
Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank
McKay III, Director Brandon Benoit
Nays: None
Other: Director Harland Forrest, Jr. (Absent)
Approved
RESOLUTION NO. 2019-05
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 FORTY-
FOUR THOUSAND FIVE HUNDRED AND NO/100 DOLLARS
($144,500.00); MAKING OTHER PROVISIONS RELATED THERETO; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
d. Consider a resolution awarding the Annual Sodium Hydroxide Contract to
Brenntag Southwest Inc.
BAWA Superintendent Sterling Beaver presented agenda item 2.d. and stated that
Resolution No. 2019-06 awards the Annual Sodium Hydroxide Contract to Brenntag Southwest
Inc., in the amount of $207,391.00 (407,000 pounds @ $0.273 per dry pound at 50% and
290,000 pounds @ $0.332 per dry pound at 25%). He further stated that this product is used to
control pH at the BAWA Surface Water Treatment Plan and that bids for this item were opened
Monday, January 7th, 2019, at 9:30 a.m., with Hydroxide Contract to Brenntag Southwest Inc.
having the lowest bid, which is 4% lower than last year's contract.
BAWA Board Regular Meeting Minutes
January 16, 2019
Page 6 of 9
A motion was made by Vice President Mike Wilson, and seconded by Director Brandon
Benoit approving Resolution No. 2019-06, regarding agenda item 2.d. The vote was as follows:
Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank
McKay III, Director Brandon Benoit
Nays: None
Other: Director Harland Forrest, Jr. (Absent)
Approved
RESOLUTION NO. 2019-06
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY ACCEPTING THE BID OF BRENNTAG
SOUTHWEST INC., FOR THE ANNUAL SODIUM HYDROXIDE
CONTRACT AND AUTHORIZING PAYMENT BY THE BAYTOWN AREA
WATER AUTHORITY, IN THE AMOUNT OF TWO HUNDRED
SEVEN THOUSAND THREE HUNDRED NINETY-ONE AND NO/100
DOLLARS ($207,391.00); 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.
City Engineer Jose Pastrana presented an update on the Baytown Area Water Authority East
Plant Project by showing the Board a bird's eye view of the BAWA East Plant construction site
and stated that work continues to progress and that the project is on schedule at a current
completion rate of 19%. He also noted that there continues to be some issues with dewatering
that Staff believes is a contractor issue, as such; staff is pursuing a workable solution with the
contractor at their cost. Lastly, Mr. Pastrana stated that the cost for the project is currently at an
estimated 8.5 million dollars.
b. Receive the Baytown Area Water Authority's Annual Financial Report for the fiscal
year ended September 30, 2018.
Stephanie Harris representative of Belt Harris Pechacek, LLLP presented the Baytown Area
Water Authority's Annual Financial Report for the fiscal year ended September 30, 2018, and
stated that they issued a clean unmodified opinion on the BAWA's Financial Statements, which
is the highest level of assurance that they can provide and that the financial statements are
materially correct and that all disclosures required by general accepted accounting principles
have been included. As an overview Ms. Harris stated that the reports that she will present are
comparative reports for the 2018 and 2017 fiscal year, and that she will focus primarily on
BAWA Board Regular Meeting Minutes
January 16, 2019
Page 7 of 9
an overview of the 2018 fiscal year. She stated that the Authority ended the year with total assets
of approximately $93.5 million which is a significant increase over the prior year which is
primarily a result of bond proceeds and capital investments. Ms. Harris also noted that BAWA
ended the year with total liabilities of $38.4 million compared to $14.3 million the prior year,
which a majority of it is a result of the issuance of the 2018 contract revenue bonds. She further
noted that BAWA ended the year with a positive net position of $55.1 million in comparison to
$50.1 million from the prior year with the most notable increase being the Authority's net
position and capital assets.
Ms. Harris noted that in regards to BAWA's operating statement, listed on Page 15 of the
report that the total operating revenues collected were at $13.7 million; total operating expenses
at $8.4 million; and operating income at $5.3 million. She further noted that after the non-
operating items (investment income and interest expense in the Authority's long term debt) there
was a negative net expense of $307,000, and an overall increase for the net position for the year
of $4,998,000.
During further discussion regarding the statement of cash flows as predicted on Page 17 of the
report, Ms. Harris stated that the BAWA had net cash provided for the 2018 Fiscal Year of $8.4
million due to noncapital items of $109,000 and Net Cash Provided from Capital Activities of
$8.7 million in which the net adjustment is a result of the issuance of the long term debt. Ms.
Harris reported that for the year there was an overall positive increase in cash of $6.1 million and
ended the year with $21.3 million in total cash, of which $7.5 million is unrestricted and $13.7
million is restricted for the purpose of debt service and future expenditures of bond proceeds and
offered any questions from the Board.
Vice President Mike Wilson questioned the difference in net cash provided and Ms. Harris
responded that in relation to cash flows from capital activities that typically capital would see a
net reduction in cash from capital investments during the year; however the debt proceeds offset
what was actually spent in the same time period this year.
C. Receive the Baytown Area Water Authority's Quarterly Financial and Investment
Reports for the Quarter Ending December 31, 2018.
Finance Director Wade Nickerson presented the Baytown Area Water Authority's Quarterly
Investment Report for the quarter ending December 31, 2018, and stated that he will provide the
Board a general overview of the report; as such he will only address items that are over the 25%
range. Mr. Nickerson stated that revenues are at 24.64% which is right where staff expects it to
be; however, he noted that this number might increase as the summer months approach.
Maintenance came in at 6.22% which appears to be relatively low and that these maintenance
projects do not always happen in a linear fashion and that staff believes it will come within
budget. Capital outlay came in at 41% due to improvements and purchase of vehicles and that
staff believes it will come within budget as bottom line is well under the expected 25% for this
time of year.
BAWA Board Regular Meeting Minutes
January 16, 2019
Page 8 of 9
He further stated that the CIP fund which is revenues that are transfers from the operating fund
and that expenditures and encumbrances are at approximately $3.3 million in which this line
item covers large projects such as chain of flight, bulk tanks, high service pumps and etc. Mr.
Nickerson clarified that this line item does not include the BAWA East Construction Project
expenditures as they are accounted for in the bond funds since debt was issued for the
project. Lastly, Mr. Nickerson presented the quarterly interest earnings report by stating that at
the end of the quarter (December 31, 2018) there was $34,365,000 in the bank, which includes
the proceeds from the bond issuance from the prior year and an interest earnings of 2.4% for a
total earnings of $205,428 for the quarter.
Vice President Mike Wilson questioned the forms of investment and Mr. Nickerson responded
that they are invested in two different governmental pools, commercial paper, Federal and U.S.
agency treasury notes and he reiterated that they only invest with Triple A rated agencies.
4. MANAGER'S REPORT
a. The next Baytown Area Water Authority meeting is scheduled for Wednesday,
February 20, 2019, at 9:00 a.m., in the Council Chamber located at City Hall, 2401 Market
Street, Baytown, Texas 77520.
General Manager Rick Davis presented the Managers Report and stated that the High Service
Pump Project will provide a huge significance of water supply to the citizens and directed
Sterling Beaver to present an update to the Board. Mr. Beaver presented an update on the Project
and stated that he will coordinate a tour for the Board once the project is complete, as well an
open house for the public. President Bradley Smith and Vice President Mike Wilson provided
accolades for all of their work and Mr. Davis concluded the Manager Repot by announcing the
next Baytown Area Water Authority meeting for February 20, 2019, at 9:00, in the Council
Chamber.
5. ADJOURN
A motion was made by Director Brandon Benoit, and seconded by Secretary Frank McKay III to
adjourn the January 16, 2019, BAWA Board Regular Meeting. The vote was as follows:
Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank
McKay III, Director Brandon Benoit
Nays: None
Other: Director Harland Forrest, Jr. (Absent)
Approved
BAWA Board Regular Meeting Minutes
January 16, 2019
Page 9 of 9
With there being no further business to discuss, President Bradley Smith adjourned the January
16, 2019, BAWA Board Regular Meeting at 9:33 A.M.
Le icia Brysch, Assistant Secretary
City of Baytown