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2021 12 15 BAWA MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY December 15, 2021 The Board of Directors of the Baytown Area Water Authority (BAWA) met in a Regular Meeting on Wednesday, December 15, 2021, at 4:30 P.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 Frank McKay III Secretary Brandon Benoit Director Kevin Troller Presiding Manager Trevor Fanning General Counsel Angela Jackson Assistant Secretary President Brenda Bradley Smith convened the December 15, 2021, BAWA Board Regular Meeting with a quorum present at 4:30 P.M., all members were present. 1. MINUTES a. Consider approving the minutes of the Baytown Area Water Authority Regular Meeting held on October 26, 2021. A motion was made by Director Brandon Benoit, and seconded by Vice President Mike Wilson to approve the minutes of the BAWA Regular Meeting held on October 26, 2021, as submitted. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank McKay III, Director Brandon Benoit Nays: None Approved b. Consider approving the minutes of the Baytown Area Water Authority Special Meeting held on November 3, 2021. BAWA Board Regular Meeting Minutes October 26, 2021 Page 2 of 8 A motion was made by Secretary Frank McKay III, and seconded by Director Brandon Benoit to approve the minutes of the BAWA Regular Meeting held on November 3, 2021, as submitted. The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank McKay III, Director Brandon Benoit Approved Nays: None Approved 2. PROPOSED RESOLUTIONS a. Consider a resolution repealing Resolution No. 2021-17, which selected J.P. Morgan Chase Bank as the depository for the Baytown Area Water Authority and selecting Cadence Bank, N.A., as the depository for the Baytown Area Water Authority and authorizing the City of Baytown to negotiate and enter into a Depository Services Agreement with Cadence Bank, N.A., on behalf of the Baytown Area Water Authority. Finance Director Victor Brownlees presented agenda item 2.a. and stated that on August 18, 2021, the Baytown Area Water Authority passed Resolution No. 2021-17, which (i) selected J.P. Morgan Chase Bank as the depository for the Baytown Area Water Authority ("BAWA") and (ii) authorized the City of Baytown to negotiate and enter into a Depository Services Agreement with J.P. Morgan Chase Bank on behalf of BAWA. Since such time, J.P. Morgan Chase Bank has refused to enter into an agreement for such services due to the recent legislation passed by the 87th Texas Legislature. Therefore, a new request for applications had been advertised and Cadence Bank, N.A. was chosen as the bank that will provide depository services at the best value to the City and BAWA. As such, Resolution No. 2021-27 approves the selection of Cadence Bank, N.A., as the depository for the Baytown Area Water Authority and authorizes the City of Baytown to negotiate and enter into a Depository Services Agreement with the Bank on behalf of the Baytown Area Water Authority. Furthermore, Director Brownlees stated that Cadence Bank N.A., can make the verifications that J.P. Morgan Chase Bank was not able to make. Vice -President Mike Wilson asked the specifics of the items in which JP Morgan Chase Bank would not agree to and Director Brownlees responded with the following items and stated that JP Morgan Chase Bank is not the only organization that has decided not to agree to these policies: • not to discriminate against Israel, • not to discriminate against fire artn manufactures, and not to discriminate against companies in the oil and gas industry. BAWA Board Regular Meeting Minutes October 26, 2021 Page 3 of 8 Presiding Officer Kevin Troller noted that Staff has considered moving away from JP Morgan Chase Bank in the past and as such it was not a loss to the City. A motion was made by Director Brandon Benoit, and seconded by Secretary Frank McKay III to approve Resolution No. 2021-27, related to 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 Approved RESOLUTION NO. 2021-27 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY REPEALING RESOLUTION NO. 2021-17 WHICH SELECTED J.P. MORGAN CHASE BANK AS THE DEPOSITORY FOR THE BAYTOWN AREA WATER AUTHORITY; SUBJECT TO THE APPROVAL OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, SELECTING CADENCE BANK, N.A., AS THE DEPOSITORY FOR THE BAYTOWN AREA WATER AUTHORITY; AUTHORIZING THE CITY OF BAYTOWN TO NEGOTIATE AND ENTER INTO A DEPOSITORY SERVICES AGREEMENT WITH CADENCE BANK, N.A., ON BEHALF OF THE BAYTOWN AREA WATER AUTHORITY; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a resolution authorizing an interlocal agreement with the City of Baytown regarding the operation and maintenance of water treatment facilities. General Counsel Trevor Fanning presented agenda item 2.b by stating that Resolution No. 2021- 28 authorized an interlocal agreement with the City of Baytown, which updates the prior interlocal agreement that dates back to 1980. Further, Mr. Fanning stated that the revisions include updating the agreement to reflect the new water treatment facility, administrative expenses, and various updates to reflect the current practices. Also, he stated that one of the revisions includes a financial provision of 5% for costs and stated that Director Brownlees could answer further question if needed. Secretary Frank McKay questioned if the business fees would be updated to bring BAWA more online with comparable water entities such as the City of Houston or etc. and General Counsel Fanning responded that those fees are set by Ordinance and that this item was simply an operation item and did not include fees. Director Brandon Benoit asked that other than updating two plants and legislative updates, what are the differences in the contract than the previous contract. General Counsel Fanning responded BAWA Board Regular Meeting Minutes October 26, 2021 Page 4 of 8 by reiterating that the previous contract was awarded over forty years ago and did not address the current practices. A motion was made by Vice President Mike Wilson, and seconded by Director Brandon Benoit to approve Resolution No. 2021-28, related to 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 Approved RESOLUTION NO. 2021-28 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING AN INTERLOCAL AGREEMENT WITH THE CITY OF BAYTOWN REGARDING THE OPERATION AND MAINTENANCE OF WATER TREATMENT FACILITIES; AUTHORIZING PAYMENT IN ACCORDANCE WITH THE INTERLOCAL AGREEMENT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. C. Consider a resolution awarding a construction contract to LEM Construction Company, Inc., for the Baytown Area Water Authority's Fritz Lanham Water Treatment Plant Filter Air Scour Improvements Project. Assistant Director of Public Works and Engineering Andrea Brinkley presented agenda item 2.c. and stated that Resolution No. 2021-29 approved the construction contract to LEM Construction Company, Inc., (the "Contractor") for the BAWA Fritz Lanham Water Treatment Plant Filter Air Scour Improvements Project (the "Project") in the amount of $4,903,000 and stated that this was the first project to be procured by the Competitive Sealed Proposal delivery method, which is based on predefined evaluation criteria and not solely price. As such, a non -mandatory pre -bid meeting was held on November 111) 2021, and a total of three proposals were received and publicly opened and read out loud on November 18, 2021. The three proposals were evaluated by Staff utilizing the following criteria, and interviews were conducted on November 29, 2021. Competitive Sealed Proposal Evaluation Criteria: Cost proposal 75% Experience with similar projects within past 5 years 7% Experience and qualifications of key project personnel 6% Demonstrate ability to meet schedule on similar projects 4% BAWA Board Regular Meeting Minutes October 26, 2021 Page 5 of 8 Subcontractors qualifications and work history with general 4% contractor fQuality assurance and safety record . 2% Current Workload Total: 2% 100% Staff completed the evaluation rating of the contractors, alternates, and recommended that the BAWA Water Treatment Plant Filter Air Scour Improvements Project contract be awarded to the most qualified proposer, LEM Construction Company, Inc., for a total amount of $4,903,000 that includes the Base Bid and both Alternate No. One (1) and Alternate No. Two (2) for the following: • Alternate #1: Furnish and install a new fixed air grid system inside each filter, and remove and replace filter media as required for construction, and • Alternate #2: Remove existing media and install new filter media in all eight (8) filter basins. A motion was made by Director Brandon Benoit, and seconded by Secretary Frank McKay III to approve Resolution No. 2021-29, related to 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 Approved RESOLUTION NO. 2021-29 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY AWARDING THE BAWA WATER TREATMENT PLANT FILTER AIR SCOUR IMPROVEMENTS PROJECT TO LEM CONSTRUCTION COMPANY, INC.; AUTHORIZING PAYMENT IN THE AMOUNT OF FOUR MILLION NINE HUNDRED THREE THOUSAND AND NO/100 DOLLARS ($4,903,000.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 3. BUSINESS ITEMS a. Discuss future expansion of BAWA East Surface Water Treatment Plant. Director of Public Works and Engineering Frank Simoneaux presented agenda item 3.a by discussing the expected future water demand and available capacity as it related to the timing of BAWA Board Regular Meeting Minutes October 26, 2021 Page 6 of 8 expanding the BAWA East Surface Water Treatment Plant. Director Frank McKay asked what the original expansion cost was and the current amount were producing and Mr. Simoneaux responded that the amount was approximately around $49.6 with land cost factored in and that the BAWA East Plant currently produces 2.4 MGD currently. Current Capacity: Main Plant - 25.878 MGD East Plant - 6.000 MGD Total Capacity 31.878 TCEQ Rule for Capacity: 30 TAC 291.93 (3): "A retail public utility that possesses a CCN that has reached 85% of its capacity as compared to the most restrictive criteria of the commission's minimum capacity requirements in Chapter 290 of this title shall submit to the executive director a planning report that clearly explains how the retail public utility will provide the expected service demands..." Capacity Requirements: City of Baytown 1. COB fixed contract obligations with wholesalers 2. Alternate Capacity Requirement (ACR) • Based on number of connections • 34,631 current connections • Demand per connection in ACR updated April, 2020 • 0.37 GPM/Connection Other Wholesale Customers • Fixed contract amounts • No projected change in contract obligations Director Simoneaux reviewed the Existing Conditions for Capacity Requirements as well as the Financial Impact: 6 MGD 12 MGD One Treatment Train Two Treatment Trains One Ground Storage Tank One Ground Storage Tank No Forebay One Forebay Estimate = $50M Estimate = $115M BAWA Board Regular Meeting Minutes October 26, 2021 Page 7 of 8 Note: Estimates include: 1. 18% Escalation 2. 20% Contingency 3. 25% for Engineering, Testing & Admin Costs 4. 15% increase for proprietary treatment equipment Director Simoneaux then proceeded to take the Board through some of the initial financial impacts that they had previously discussed to detennine whether or not they can afford to do an expansion of the plant. CCID Current Rate: Current BAWA BAWA Exp. Rate: (Estimated) $6.72 1 $3.05 I S 1.00 Bottlin.g Plant Revenues GPD Annual BAWA BAWA BAWA City Gross Gross Expenses Net W&S Net Revenue Revenue Revenue Revenue Phase 1- 650,000 $1,594,320 $723,613 $2375250 $486,363 $870,708 2022 Phase 2- 173005000 $3,188,640 $1,447,225 $474,500 $972,725 $1,7415415 2023 Phase 3- 199503000 $4,782,960 $2,170,838 $711,750 $1,459,088 $2,612,123 2024 Estimated Debt Service Expansion Cost # of Payments Interest Rate Estimated Annual Cost $(50,000,000) 120 3% 1 $3,360,785.38 Recommendations: • File required plan with TCEQ • Start planning process in January 2022 • Determine optimal size to construct based on demand projections • Determine delivery method • Determine financing strategy Mr. Simoneaux concluded his presentation and offered any questions from the Board. BAWA Board Regular Meeting Minutes October 26, 2021 Page 8 of 8 Vice -President Mike Wilson asked the current design capacity and Mr. Simoneaux responded that they are currently at 6 MGD and that there is plenty of land to expand capacity to 24 MGD. 4. MANAGER'S REPORT a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, January 19, 2022, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. Presiding Officer Kevin Troller presented the item and stated that the next BAWA meeting is scheduled for January 19th, and he thanked the Board and Staff for all of their hard work and dedication and service to the Baytown Area Water Authority Board. Furthermore, Presiding Officer Troller introduced the new BAWA Superintendent, Mr. Michael Gay. 5. ADJOURN A motion was made by Vice President Mike Wilson, and seconded by Secretary Frank McKay III The vote was as follows: Ayes: President Brenda Bradley Smith, Vice President Mike Wilson, Secretary Frank McKay III, Director Brandon Benoit Nays: None Approved With there being no further business to discuss, President Brenda Bradley Smith adjourned the December, 15, 2021, BAWA Board Regular Meeting at 5:15 P.M. �•��`pR�P WAIF Angela Ja son, Assistant Secretary City of Baytown S `��