2003 06 23 WS MinutesMINUTES OF THE WORK SESSION
OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
June 23, 2003
The City Council of the City of Baytown, Texas, met in work session on June 23, 2003, at 8:10 a.m.
in the Hullum Conference Room of Baytown City Hall, 2401 Market Street, Baytown, Texas, with
the following in attendance:
Ronnie Anderson
Council Member
Coleman Godwin
Council Member
Calvin Mundinger
Council Member
Don Murray
Council Member
Mercedes Renteria III
Council Member
Pete C. Alfaro Mayor
Gary M. Jackson
City Manager
Ignacio Ramirez, Sr.
City Attorney
Gary W. Smith
City Clerk
Absent was: Scott Sheley Council Member
The meeting was opened with a quorum present after which the following business was conducted:
Discuss enterprise fund issues as follows:
Water and Sewer Fund, including:
Expanded wastewater infrastructure.
Gary Jackson, City Manager, noted that the discussion would involve the water and wastewater
items in the utility fund. The more significant items are on the wastewater side of the fund.
In order to address the needs of the infrastructure, Council has substantially increased the utility
capital improvement plan to $49,202,000. The system includes 200 miles of concrete pipes that are
deteriorated and need replacement. Baytown is receiving significant interest from developers,
including large developments. Wastewater capacity and infrastructure is necessary to accommodate
the developments. The wastewater system may require up to $200,000,000 in repairs. Funding in
the current plan is $5.4 million in 2002; $9.8 million in 2003; $14 million in 2004; $15 million in
2005 and $4.7 million in 2006. These expenditures are not making significant progress on the
problems. At least $10 million per year will be needed. This will impact rates. The City is not
currently under any Administrative Orders. It will take many years to fix the problems and it will
be very expensive. The work will focus on the areas involving compliance problems first. The
problems exist throughout the system.
A rate study was done to allow us to look at the costs and to understand the costs of the system and
to assure that all ratepayers are paying a fair amount. The rate study will be discussed, but the
discussion will not include the rate design. That discussion will be scheduled in a later meeting.
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Minutes of the Work Session — June 23, 2003
f Discuss enterprise fund issues as follows:
Water and Sewer Fund, including:
Water /Sewer Rate /Cost of Services Analysis.
Bob McLain of Maximus presented the water and sewer rate study. A rate study usually consists of
two phases, the revenue requirements and the rate design. The objectives of a rate study include the
revenues required for rates (multi -year financial plan), rate design (how to get the revenues) and
customer impact.
The multi -year financial plan is based on the following assumptions: maintaining sixty days of
working capital reserves and 1.25% annual actual debt service coverage and 1.25% annual average
debt service coverage. The debt service coverage is required by bond covenants.
When the new wastewater plant is added, the annual operating expenses will increase $1.3 million.
A rate increase from BAWA from $1.26 to $1.38 is anticipated. The growth rate of the customer
base is assumed to be 0.5% per year. All other growth and inflation is estimated at 3% per year. In
a multi -year financial plan, the first year is significant. All other years are subject to review and
adjustment.
The impact of the 10 -year plan is as follows:
2004
$16 million
2005
$15 million
2006
$6.5 million
2007
$10 million
The debt in the enterprise fund increases from $3 million to $11 million in ten years.
The operations and maintenance costs increase significantly when the new plant is added, but
otherwise increase at 2.3% per year.
The gross cost of service increases from S16 million in 2001 to $31 million in 2013. The transfer to
the General Fund remains flat at $1.03 million per year.
If the customer growth is greater than projected, additional revenues may be produced, but
additional costs may be incurred.
The rate study reflects that an initial change in rates will be necessary to maintain 60 days of
working capital reserves. Later in the period, an increase in rates may be driven by the debt
coverage tests.
In designing rates, the Council may consider a readiness to serve charge (minimum bill) based on
the maximum continuous flow rating for each size meter and conservation rates.
The American Water Works Association recommends that rates generate adequate revenues, are
legal, be predictable, and promote efficiency in the use of water. Predictability is significant in rate
design. Baytown has not increased the base rate since 1994, with all increases being included in the
volume rates. With increased rainfall, the additional revenues have not been produced. The rate
design must produce sufficient funds to pay the bonds. The rate design must encourage users to
install properly sized meters.
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Minutes of the Work Session — June 23, 2003
The meeting recessed for five minutes.
Discuss enterprise fund issues as follows:
Water and Sewer Fund, including:
"Radio Read" water meter reading system.
Rhonda Young, Treasurer, explained that the "radio read" water meter reading system is included in
the capital plan for implementation in 2003 -2004 for $5 million. The cost will be recovered over a
four to five year period. The "radio read" system does not require the manual reading of meters and
entry onto the customers' property. The system has a component that reads the meter and sends the
information to an interface unit. The interface unit transmits the data to a computer mounted in a
vehicle. The computer downloads the data into the billing computer. This allows meters to be read
quickly, in all weather. Estimated bills will be greatly decreased, if not eliminated. The accuracy of
the readings will be improved. The safety of the meter readers is improved, as dogs, snakes,
mosquitoes, and poison ivy are avoided. The man -hours for reading the meters are reduced. The
truck fleet and maintenance thereon is reduced.
Currently six persons are employed in meter reading. They walk routes and enter data. The
information is uploaded to the computer into the billing system.
Pasadena has used a "radio read" system for four years and has had an excellent experience. They
have eliminated estimated bills. They have had a 60% reduction in lost water and increased their
efficiency to 80 %.
Under the current system the difficulties include weather, covered meters, dogs, snakes, mosquitoes,
poison ivy and traffic.
The proposal on the "radio read" system is for a turnkey replacement of all meters over five years
old. Seventy-three percent of the meters in Baytown are over five years old. Forty -six percent of
the meters are over eighteen years old. The benefits of the system include a recovery of the cost
within four to five years and increasing water accountability from 72% to 85 -90 %. Any employees
displaced by the system are planned to be relocated to other duties.
Donna Sams, Finance Director, reported that 28% of the water is unaccounted, resulting in $5.6
million in lost revenues ($3 million in water and $2.7 million in sewer).
Discuss NPDES Storm Water Phase II compliance and establishment of a Storm Water
Enterprise Fund for fiscal year 2003 -2004.
Mike Lester, Director of Health and EMS, reported that under NPDES Storm Water Phase 11 the
City is responsible for the quality of storm water runoff. Our program must demonstrate that the
City is not negatively impacting storm water. The City may either study the existing system and
engineer changes and thereafter, dealing directly with EPA, design a unique permit, or may give
notice of its intention to comply with the state system. Compliance with the state system is
recommended. Annual reports will be required and they will reveal whether or not the City is
complying with the permit.
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Minutes of the Work Session — June 23, 2003
r A significant question is how to pay for this program. The first year was included in the General
Fund. For the next fiscal year, it is recommended that an enterprise fund be established. The
method of determining fees will be decided later. It may be based on lot size and use and
permeability of the surface of the lot. The City will have five years to implement the program after
the permit is approved. Presently staff recommends a plan that meets compliance requirements
only. The plan could include other issues, as drainage, but that is not within staffs
recommendation.
Discuss Solid Waste Fund and the proposed erosion control project at the closed East District
Landfill.
Mr. Jackson explained that a report of erosion into an old landfill along Cedar Bayou had been
received. The report was investigated and confirmed. Samples of the leakage and testing of the
samples have been completed. No risk to humans exists and there are no environmental problems.
ERM, our environmental consultants, have indicated that the City must shore up the banks and do
restoration work. The proposed remedial work has been reviewed by the Texas Commission on
Environmental Quality without objection.
The work is estimated to cost between $670,000 and $1,000,000 for erosion control. The
information is very preliminary and a more detailed analysis will be prepared.
Adjourn.
There being no further business, Council Member Anderson moved adjournment. Council Member
Renteria seconded the motion. The vote follows:
Aye: Council Members Anderson, Godwin, Mundinger, Murray and Renteria
Mayor Alfaro
Nay: None.
The motion carried and the meeting adjourned at 10:15 a.m.
Gary W. Simith
City Clerk
MINUTES OF THE SPECIAL SESSION
OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
June 23, 2003
8:00 a.m.
The City Council of the City of Baytown, Texas, met in special session on June 23, 2003, at 8:00 a.m. in
the Hullum Conference Room of the Baytown City Hall with the following in attendance:
Ronnie Anderson
Council Member
Coleman Godwin
Council Member
Calvin Mundinger
Council Member
Don Murray
Council Member
Mercedes Renteria III
Council Member
Pete C. Alfaro Mayor
Gary Jackson City Manager
Ignacio Ramirez, Sr. City Attorney
Gary W. Smith City Clerk
The following Council Member was absent:
Scott Sheley Council Member
The meeting was opened with a quorum present after which the following business was conducted:
Consider Proposed Ordinance No. 030626 -1, approving a professional services contract in
connection with building repairs at the Baytown Municipal Court /jail complex.
City Manager Gary Jackson reminded Council that counsel, Coats/Rose, had recommended retaining de
Oplossing, Inc. in connection with the bid package and the repairs to the Municipal Court/Jail complex,
excluding the curved roof. The seven -day notice letter was sent to Fireman's Construction, Inc., the
contractor last week. Should the contractor fail to make the necessary repairs before the end of the seven -
day period, it will be necessary to proceed to bidding the work and making the repairs to the complex.
Prior to the end of the seven -day period, the microbial investigation should be commenced to determine if
any additional work is required from the roof leaks and other water intrusions. The bids and repair work,
if required, would not include the curved roof and would be overseen by de Oplossing. Funds for the
contract and the repairs will come from the retainage.
Council Member Renteria moved adoption of the proposed ordinance. Council Member Godwin
seconded the motion. The vote follows:
Ayes: Council Member Anderson, Godwin, Mundinger, Murray and Renteria
Mayor Alfaro.
Nays: None.
The motion carried.
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la
Minutes of the Special Meeting —June 23, 2003
ORDINANCE NO. 9578
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE A PROFESSIONAL
SERVICES AGREEMENT WITH DE OPLOSSING, INC., TO PERFORM A MICROBIAL
INVESTIGATION AS WELL AS TO PERFORM RE -BID SOLICITATION AND CONSTRUCTION
MANAGEMENT SERVICES FOR THE BAYTOWN COURT AND JAIL FACILITY; AUTHORIZING
PAYMENT BY THE CITY OF BAYTOWN IN AN AMOUNT NOT TO EXCEED EIGHTEEN
THOUSAND TWO HUNDRED SIXTY AND NO /100 DOLLARS ($18,260.00); MAKING OTHER
PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
Adjoum.
There being no further business, Council Member Mundinger moved adjournment of the meeting.
Council Member Renteria seconded the motion. The vote follows:
Ayes: Council Member Anderson, Godwin, Mundinger, Murray and Renteria
Mayor Alfwo.
Nays: None.
The meeting adjourned at 8:09 am.
00,
i
G W. Sfnith
City Clerk