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06-19-2014MINUTES OF THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS COUNTY OF GUADALUPE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION On this the 19t'' day of June, 2014 the Schertz /Seguin Local Government Corporation (SSLGC) convened at 1:30 p.m. in the City of Seguin Council Chambers located at 210 E. Gonzales, Seguin Texas. The following directors being present and in attendance: Ken Greenwald President Robin Dwyer Kerry Koehler David Scaghola and the following member(s) being absent: Larry Dublin T. "Jake" Jacobs Mayor Keil Vice - President Treasurer Ex- Officio Secretary Assistant Secretary Ex- Officio constituting a majority of the persons appointed to the Board and a quorum for the transaction of business, and notice of such meeting having been duly given in accordance with the provisions of Texas law. Also in attendance were: Doug Faseler City Manager (City of Seguin) John Bierschwale Executive Director (City of Schertz) Susan Caddell Director of Finance (city of Seguin) Sam Willoughby Public Works Director (City of Schertz) Patrick Lindner General Counsel (Davidson, Troilo, Ream & Garza) Steven Siebert San Antonio Water System (SAWS) John Winkler Consultant (Walker Partners) Crockett Camp Consultant Dan Jackson Consultant (Economist.com) Bill Klemt Consultant /Hydrologist Bruce Nicholson Consultant (Nicholson Innovations) Rene Moulinet, Sr. Consultant (F Rlvi) Emery Gallagher Water Utility Manager (City of Seguin) Alan Cockerell General Manager (SSLGC) Regina Franke Administrative Assistant (SSLGC) The first order of business was to Call the Meeting to Order. President Ken Greenwald called the meeting to order at 1:37 PM The second order of business was Public Comment. There were no public comments. The third order of business was Approval of the Minutes for the Board Meeting held on May 15, 2014. 1of9 )S1,( (' MINU'I' S 00 19 201 1 (? I',g< °) S]16"N11_ i.) MUG,- l:AM,(S). I �)jw/ it'l, I'nnl(d: i'/ IG/%UI { i_H) I'M ��j Treasurer Koehler made a motion to approve the May 15, 2014 minutes as read. Vice - President Dwyer seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The fourth order of business was Presentation of the General Manager's Report — Alan Cockerell, General Manager. General Manager Cockerell's written report was included in the board agenda packets. He added the following items to his written report: ➢ Water Production Seasonal pumping and monthly water sales charts were included in the board agenda packets. Water production for the month of May 2014 was 62.3% of Gonzales County Underground Water Conservation District's (GCUWCD) monthly allowable. ➢ GCUWCD Monthly Meeting The monthly meeting was held June 10, 2014. Mr. Cockerell attended. A copy of the meeting agenda was included in the board packet. SSLGC Staff and Consultants provided comments for changes to the District's rules. All comments were compiled by the District and would be available soon on their website (GCUWCD.org). The Board directors are due to provide comments by the first week in July 2014. A workshop would be conducted later in the summer to review and discuss those comments. After the Board approves the proposed rules, a public comment hearing would be held and the Board would then act on adopting the updated rules. ➢ GCGCD Monthl X Meeting The meeting was held June 12,2014; Mr. Cockerell was unable attended. A copy of the agenda was included in the board packet. Mr. Cockerell advised that the District was scheduled to take action on the renewal of SSLGC existing permits. ➢ Region L /GMA -13 GMA -13: The GMA -13 meeting scheduled for June 19, 2014 was cancelled. Mike Mahoney had resigned as the GMA -13 coordinator and a replacement had not been identified. Draft DFCs are being developed to be presented to each groundwater district. ➢ CVLGC A combined workshop with the city councils was held May 22, 2014 in Cibolo. The next board meeting was scheduled for June 26 2014 in Converse. The fifth order of business was Annual O & M Budget FY2014 -2015 — Alan Cockerell, General Manager. Executive Session Recommended President Greenwald deferred item five to Executive Session. President Greenwald closed General Session at 1:43 PM Executive Session was held from 1.44 PM to 1:46 PM President Greenwald reopened General Session at 1:47 PM Executive Session was held in Mayor Keil s office. 2of9 ��.HNIli'] FS (16 19 7.i)l ] (9 SIGNED L.7TUGI,NAL(S). i I)atr��lnnr i'nulcci: ri 1(i��ill i ':I1. i'i.i t Mr. Cockerell called attention to his summary sheet included in the board packet. He noted that Electricity had increased 36 %, this was due to the increase in water production /delivery. Mr. Cockerell advised that Capital Outlay would be discussed after Mr. Jackson's presentation. He noted that the Cathodic Protection project was expected to be included in the O & M Budget for FY2014- 2015. Mr. Cockerell stated that the Water Lease line item had decreased due to the GCUWCD's reduction of SSLGC's permit (from 2:1 decreased to 1:1). This essentially cut the annual amount in half. Mr. Cockerell also noted the following: ❖ General Chemicals were shown at a 19% increase due in part to rising chemical costs and an increase in water production. Salaries would increase 46% to accommodate more operators to handle the increased work load for the plant expansion. ❖ Professional Services increased 124% to ensure SSLGC was able to meet the need for legal counsel. ❖ Repair & Maintenance would increase 7% in anticipation of future issues while utilizing the pipeline at full capacity. ❖ Building & Vehicle Liability Insurance would increase 60% as SSLGC purchased a new office building ❖ Fuel was anticipated to increase 88% as there would be more trucks and travel with the expansion. d• Education expenses was up 6% -New operators & CEUs (Continuing Education Units) as required by law. ❖ Public Relations remained the same at a 0% increase. Vice - President Dwyer asked how Mr. Cockerell intended to handle the difference in the O & M Budget to balance the budget. Mr. Cockerell advised that excess /difference would be addressed before he presented a FY2014 -2015 O & M Budget to the Board for approval. The discussion would focus mostly on the Capital Outlay /Cathodic Protection project. The sixth order of business was Approval for Staff to Initiate the Hiring Process for Three New Operators — Alan Cockerell, General Manager Mr. Cockerell advised that there would be three new operators added in FY2014 -2015. In an effort to employ experienced operators, Staff requested permission to initiate the hiring process. Vice - President Dwyer made a motion to authorize Staff to initiate the process and hire prior to FY2014 -2015 budget year. Treasurer Koehler seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The seventh order of business was Water Rates FY2014 -2015 — Dan Jackson, Economist.com & Alan Cockerell, General Manager 3 of 9 SIC N ED OR] G IN, _L(S): t Crakw >♦s 4 eftv"Ift FY 2015 Water Rate Plan Update Board Presentation June 192014 • Two types of water purchased: . 7br 1 -SAWS W.I., treated by SSLGC: s,bfit l to O&M alb debt sarvfe. on .—ts wad and maful lit SAWS, no leas. ants • 71ar 2- Escess wale, NIchaeed by SAWS: subleel to same fate Pale by Seb.ds eM saty in • Tier 2 water purchases began June 2013: large scale purchases began November 2013 • Tier 1 water purchases began March 2014 1 1 lase 3 • SAWS water purchases are benefilting SSLGC in precisely the manner described by staff: e Reve,wef sra incre.fing agnificandy ♦ E.pemea sre also Incfening WI not al me Sams rate as rovenues • Asa result, FY 2015 may result in stgrnecantly gfealer rt ounl of net operating revenues Ittanln prior yaam (not ntvenu6s after operating expenses) i ) Peg. 6 Scenario 1 'Rebate" • Lower ales by amount of net opereufp revenue Irom SAWS Wfchases e Fines $2 SM Ca"-1 Prot.11— Ihro4h long term bred • Scenario 2 "Invasnent" ♦ x.eP,.InNaotalsyel. • runES O.laodic Proleelion Program and other capital p,o1•cts wah net operalinp ,•venues • Note: Board also has the option or adopting a "hybrid' rate plan that combines the two scenarios .., 1 • Pew 7 Je.6.na.A to , I SSLGC's financial statements and fund balance continue to be healthy • Scheduled 2013 rate increase was Guildship. delayed due to anticipated 201s commencement of SAWS purchases 2017 • SAWS purchases (Tier 1 and Tier 2) Milt . have now begun S 6660.607 • FY 2015 will be first fiscal year where $ 6795017 SAWS will purchase for entire year 512151627 Pay. 2 1460000 1 300000 J•a.aea b Jee.J. J.A—A J.e.d. • Last year's rale plan assumed that Board would rebate excess revenues to cu5fomors nlrough the lowering of rates • Another option for Board to consider: keep rates fixed at 2014 levels and use excess net operating revenues to fund needed capital projects: • Pfpelme Calbom. Protect." ♦ Leak Repair e Other Capital Protects P.O. 9 4 of 9 SS1 -,GC: MIN LA ES 06 -19 -2014 (9 Ilaoc;j SIGNED ORIGINAL(S):I I)ill,; "I'imc Prin(cd: ;116; 20t47:11) PIU ouadshupf Guildship. 201s 2016._ 2017 2016 Milt . OW,Lng S 6660.607 S 9207,41,11 $ 6795017 511622.60/ 512151627 cW.1 aelsr. 1460000 1 300000 1 000000 1300 ODO 1 300000 Rd P-- 1 3302660 3236572 bblS k. 62964172 5255.272 5406665+ 7.917.305 9.627650 NlalC., of 1—k. 161615,970 16.652715 17,705,07 N.162,150 N,W.590 7 i Pp.5 4 of 9 SS1 -,GC: MIN LA ES 06 -19 -2014 (9 Ilaoc;j SIGNED ORIGINAL(S):I I)ill,; "I'imc Prin(cd: ;116; 20t47:11) PIU N«,Nwx..w,w. nx orx.,.aw.IrMwxiee ax ' i grv..K.N.r..AN Ox J.r..w Aa_.J. .1'e2..+..1.fy.J.. � Ps9e 11 C..—. "_!.. t Ppe 11 es'aM.4a I d'ae..L. JaM.nta / e'.1. • Cost of service analysis and proposed rate plan remain consistent wsth prior year bnd.ngs • FY 2015 rate to be adopted is entirely dependent on the amount of capital Improvements the Board chooses to fund with the revenues available from the expansion of service • Board has option of adopting Scenario 1, Scenario 2 or a 'hybrid' of the two scenarios .r . d r ,..i.. ex.N. p.n Ra M1AN Od 4p. w oaz F i• t 6 F eF. f uro 4.AMtw� M.�A.e pl IN xi]e 1N .N .N 1 ... ..1-1, P.9. 10 2015 2015 26iT auad.lup. 7015 OW.lup. 2019 0".00 5 5960507 S 9297Ae1 S 0.795017 S11.822004 112181927 caftwope.ys d 164 000 3100,000 2,700000 2700,000 2500000 R,1k I'—fi— J.lw.I.rrr.r. 3 302 560 3 236 822 Debt S.1ke 6295172 5285272 5442152 7752917 9,583531 Tow CmI of S.rviee 19A16.970 15.602,713 16,040,176 25,378,731 27.582.280 � Ps9e 11 C..—. "_!.. t Ppe 11 es'aM.4a I d'ae..L. JaM.nta / e'.1. • Cost of service analysis and proposed rate plan remain consistent wsth prior year bnd.ngs • FY 2015 rate to be adopted is entirely dependent on the amount of capital Improvements the Board chooses to fund with the revenues available from the expansion of service • Board has option of adopting Scenario 1, Scenario 2 or a 'hybrid' of the two scenarios .r . d r ,..i.. ex.N. p.n Ra M1AN Od 4p. w oaz F i• t 6 F eF. f uro 4.AMtw� M.�A.e pl IN xi]e 1N .N .N 1 ... ..1-1, P.9. 10 P.O. 16 Ex- officio Scagliola asked if the Tier 2 water rate for SAWS was the same as SSLGC. Mr. Jackson answered to the affirmative and added that the SSLGC rate could not be decreased while keeping SAWS rate the same, per the RWS Contract. Ex- officio Scagliola stated that it would make sense to keep the rate the same versus reducing the rate, then having to raise it again later. Mr. Jackson agreed. Vice - President Dwyer noted that we would maintain a stable rate versus other suppliers that would be finding it necessary to adjust theirs. Mr. Jackson advised that he had seen cases where they have had to increase by as much as 10% or higher. If SSLGC could refrain from an increase over the next 5 of 9 :I.C��: \[Iv "l:'ES OG -19 -101 d (� f'<i ,c::• y.PaI.?. 0[��G;)lod��.� I)atr;' "lim% Pcinrccl: 'i /I6,'20l -1 ;:1111'\( ;;/ u.... ..ti+ eAe.... em.w. rn.... 9N1/ q.. lM NMNIq/n/rNq/N. p.wr..MrI.FNPx ... _ ^�i 4r1 • 1Wr..ie.r�w, 1N 1N 1N 1N 1N p..x..�x.w iANOw •^ w s nW s o B n 111 2. 11L i�1 L. M�.M.rr.ANO,r 1..... i . L i f Ppe 12 Orl J.lw.I.rrr.r. Aawnnw. Di ... wanla". ewn.rb t More d.M bndnp re9ulred a.MN L —r.I., n e.dy yea. bpay for c.pNl .dP.ay..enN C- 14-t wnl, poor a.bf Nfl S.ne bb. b..." Inere... P. In Nw. yam 8....do2 r/4 rvbv.. <4..nw•t' +.cM No lnv 6M...r f Inve.Onmt for pbnnlnp purpo.af 15 7M in .ddnon.l Wong 9mer.W w'.Mw Pro.. P.9, 1a P.O. 16 Ex- officio Scagliola asked if the Tier 2 water rate for SAWS was the same as SSLGC. Mr. Jackson answered to the affirmative and added that the SSLGC rate could not be decreased while keeping SAWS rate the same, per the RWS Contract. Ex- officio Scagliola stated that it would make sense to keep the rate the same versus reducing the rate, then having to raise it again later. Mr. Jackson agreed. Vice - President Dwyer noted that we would maintain a stable rate versus other suppliers that would be finding it necessary to adjust theirs. Mr. Jackson advised that he had seen cases where they have had to increase by as much as 10% or higher. If SSLGC could refrain from an increase over the next 5 of 9 :I.C��: \[Iv "l:'ES OG -19 -101 d (� f'<i ,c::• y.PaI.?. 0[��G;)lod��.� I)atr;' "lim% Pcinrccl: 'i /I6,'20l -1 ;:1111'\( ;;/ had to increase by as much as 10% or higher. If SSLGC could refrain from an increase over the next few years by not lowering the rate, that would prove to be beneficial. Vice - President Dwyer noted that Capital Outlays were unknown for the future (due to wear and tear on the system). President Greenwald added that he would rather invest back into maintaining /improving the system while SSLGC has the funds to do so. Mr. Jackson advised that he would to continue to study the water rates on an annual basis for SSLGC. Mr. Cockerell advised that it would be necessary for the shortfall in the FY2014 -2015 O & M Budget (difference due to Cathodic Protection Project) to be funded by the Repair & Replacement Fund and /or the 2010 Bond Fund. This would balance the FY2014 -2015 O & M Budget. The Board gave Staff direction to keep the rates the same and move forward with the budget process. Mr. Cockerell did advise the Board that there was one unknown variable, the cost of caustic. In the event of a hurricane, caustic prices can increase drastically. The eighth order of business was SSSLGC Fund Balance_ 1'Worlung Captal Minimum Balance Policy — Alan Cockerell, General Manager. ➢ Resolution # SSLGC R14 -05 Mr. Cockerell advised that there had been a request to establish a policy to protect SSLGC, in a financial situation. He stated that the policy presented today mirrored the policy that the City of Seguin followed, with adjustments to fit SSLGC. 'Vice- President Dwyer asked if it was based on a three month budget from FY to FY. Mr. Cockerell advised that Staff planned to use the residual revenue from the current FY for the initial deposit to this fund. Once the audit was complete, usually by February, Staff would revisit the balance and determine if more money could be deposited. The plan was to be fully funded to an amount of $2,240,000. Vice - President Dwyer made a motion to approve Resolution # SSLGC R14 -05. Treasurer Koehler seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The ninth order of business was SAWS Expansion Project Update _.John Winkler, Walker Partners & Alan Cockerell, General Manager. Mr. Cockerell advised that Shawn Shimek (Water System Superintendent) was not present at the board meeting; Shawn and the Operators were extremely busy with the added duties due to the SSLGC /SAWS Expansion. Mr. Winkler advised that there were vast amount of details that need to be worked out regarding chemicals & water quality (pH). He noted that Pepper- Lawson was working on getting that resolved. Mr. Winkler mentioned the shut down from the night before advising that there were a lot of steps and it was a painstaking operation. He hoped to have it all leveled out and up and running next week. Mr. Winkler advised that the contractor is still behind but working hard. Vice - President asked if the SAWS well field was completely online. Mr. Winkler advised that they were not, but they would be doing a performance test the following week on five wells then plan to add two more. 6of9 SSL C `III \U" ES 06 -19 201 d (9 Pages) A6.,MED ORI sMU,(S)e I I)Mc/I'irn( PrinIcd: 7/18/210143:)?PM !'/ The tenth order of business was SSLGC Construction Update — John Winkler, Walker Partners & Alan Cockerell. ➢ Change Order # 3 (T & F Construction Mr. Cockerell advised that after the inspection by the Fire Marshall, it was determined that there needed to be an emergency light installed above the stairwell. There was also an electrical outlet in the kitchen behind the refrigerator that needed to me adjusted. These items were in Change Order # 3 in the amount of $797.50. Staff requests approval. Vice - President Dwyer made a motion to approve Change. Order # 3. Treasurer Koehler seconded the motion. Upon a vote being called, the motion carried by unanimous decision. Mr. Cockerell advised that while the contractor was working on the connection at the City of Seguin Water Plant, they found an old storm drain that was not on any drawings /plans. That drain runs under the Seguin tank. He advised that Staff was working with the City of Seguin to resolve that issue. The tenth order of business was Legislative Update — Crockett Camp, Consultant & Alan Cockerell, Executive Director. Mr. Cockerell advised that Mr. Phenix was on vacation. He noted that there was a House Natural Resources Committee hearing scheduled for June 25th & 26' however they only invited testimony would be welcomed. Staff would monitor. Mr. Cockerell stated that he believed the focus would be on brackish groundwater. Mr. Cockerell advised that SSLGC Staff was scheduled to meet with the new TWDB Commissioner Jackson July 22, 2014. The eleventh order of business was OHV Park. Mr. Cockerell called attention to the information in the board packet. He noted there was a letter from Mayor Keil in opposition of the OHV Park and an article in the Graham Ledger. Mr. Cockerell stated that he was contacted by Steve Thompson, Texas Parks & Wildlife Department (TPWD); Mr. Thompson requested he be allowed to attend the board meeting to discuss this project with the Board. Mr. Cockerell reminded the Board that there was no items included in the budget that would apply to this project. President Greenwald recommended that no decisions be made as there was not a full board present. Mr. Cockerell advised that he had not anticipated any action, that this was merely a discussion item. President Greenwald asked Mr. Bruce Nicholson that if SSLGC were to decide to reject the grant, what would be the repercussions. Mr. Nicholson advised that he has seen where there was nothing official, but he has seen where entities have encountered issues regarding grants in the future for approximately 5 years. The Board posed the question that in the event of a negative public opinion (being a reason for the rejection by SSLGC) had Mr. Nicholson ever known of any ramifications upon the rejecting entity? Mr. Nicholson advised that, in that particular type situation, he had not known of any future problems with TPWD against a rejecting entity. Mr. Cockerell hoped that a representative from TPWD would be able to attend the July 17, 2014 board meeting to help answer the questions. 7of9 �4i 11V 1J _. FS 0l 1'/ 01'f �9 Pa f.��' .iq r.5 B. i) Cv. tYk.S'I...Vf,.:A.(3 ) o. Al t, 'lol P lilt, c1: .; I(; %:__ >,Ul ;:IUI'A1 .. The thirteenth order of business was Status Update BPS Ground Storage Tank /Preload and Action in Response to Same -- Patrick Lindner, General Counsel & Jahn lYinkler, Walker Partners & Alan Cockerell, General Manager. Mr. Cockerell advised that Preload was in the process of filling the tank last week at a rate of 10 feet /day until it was full; it sat full over the weekend. He noted that there appeared to be no loss, but did notice small pooling around the exterior of the tank. Mr. Cockerell advised that he and Mr. Winkler would continue to monitor this process. He noted that Staff was waiting on the water sample test for Zylene (outgassing from the liner). Those results were due by Monday. If those results were good then the next step would be to begin pumping the water into the system. Mr. Cockerell stated that Preload would still need to put the sidewalk around the tank. He would continue to update the Board. The fourteenth order of business was Acquisition of PrortY in Guadalupe CquntvPatrick Lindner, General Counsel & Alan Cockerell, General Manager. Executive Session Recommended President Greenwald deferred item fourteen to Executive Session. The 6fteenth_order 4f business was Guadalupe Project Wholesale Water Contract(s) -- Patrick Lindner, General Counsel & Alan Cockerell, General Manager. Executive Session Recommended President Greenwald deferred item fifteen to Executive Session. The sixteenth order of business was Gonzales County & Guadalupe County Carrizo and Wilcox Water Leases — Alan Cockerell, General Manager. Executive Session Recommended President Greenwald deferred item sixteen to Executive Session. The seventeenth order of business was Executive Session called under Chapter 551 Government Code, Section 551.071, to seek the advice of its attorney on legal matters, and Section 551.072, for deliberations regarding real estate. President Greenwald closed General Session at 3:05 PM Executive Session was held from 3:12 PM to 4:25 PM The eighteenth order of business was to Consider and Take Action as Result of Agenda Item Number seventeen. President Greenwald reopened General Session at 4:25PM Agenda Item # 14: Vice - President Dwyer made a motion to table agenda item # 14. Treasurer Koehler seconded the motion. Upon a vote being called, the motion carried by unanimous decision. Agenda Item # 15: No action requested /No action taken Agenda Item # 16: No action requested /No action taken 8of9 'l'G"e ;ailN 1 Us Ors 14 201 1 (4 4';igt ;ii:.t*iT,[7 O1t1(;tI'3,ML(i):'1. !),I[" / "I'ii u" Is IT) 1,d: i 16j20 11 ;':In I',A1 The nineteenth order of business was Consideration and /or Action on Questions and Possible Items to be placed on the Next Agenda. ❖ The next board meeting was scheduled for July 17, 2014 in the City of Schertz at 1:30 PM ❖ Budget /Water Rates ❖ OHV Park The twentieth order of business was Adjournment. President Greenwald declared the meeting adjourned at 4.27 PM MINUTES APPROVED THIS 17TH DAY OF JULY, 2014. OR Larry Dublin, Secretary 9of9 SSLGC N IfMU. LS 06 -19- 201 (9 Pages) SIGNED ORIGINAL(S): 1 0.1tc;''Iimm,Prlwcd: 17!I6;'20H7":[O],\I rt,