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10-16-2014MINUTES OF THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS COUNTY OF GUADALUPE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION On this the 16`' day of October, 2014 the Schertz /Seguin Local Government Corporation (SSLGC) convened at 1:30 PM at SSLGC Administrative Building located at 108 W. Mountain Street, Seguin, Texas. The following directors being present and in attendance: Ken Greenwald Robin Dwyer T. "Jake" Jacobs Steve White David Scaghola Mayor Keil and the following member(s) being absent: Kerry Koehler President Vice - President Secretary Director Ex- Officio Ex- Officio Treasurer 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) Susan Caddell Director of Finance (City of Seguin) Sam Willoughby Public Works Director (City of Schertz) Patrick Lindner General Counsel (Davidson, Troilo, Ream & Garza) Lisa Guardiola San Antonio Water System (SAws) John Winkler Consultant (Walker Partners) Crockett Camp Consultant Bill Klemt Consultant /Hydrologist Mark M` -Liney Financial Advisor (Southwest Securities) Trey Cooksey Texas Parks & Wildlife Department Steve Thompson Texas Parks & Wildlife Department Emery Gallagher Water Utility Manager (City of Seguin) Alan Cockerell General Manager (SSLGC) Shawn Shimek Water Superintendent (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 was no public comment. The third order of business was ADDroval of the Minutes for the Board Meeting held September 16, 2014. Secretary Jacobs made a motion to approve the September 16, 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 September was 82.8% of Gonzales County Underground Water Conservation District's (GCUWCD) monthly allowable. ➢ GCUWCD Montb& Meeting The monthly meeting was held October 14, 2014. Mr. Cockerell attended. A copy of the meeting agenda was included in the board packet. Renewal of permits for SSLGC's original six wells was on the agenda. Mr. Cockerell advised that the District tabled the renewal of the permits and they will stay in effect until the Board makes a decision. He noted that the Board preferred to wait until the rule changes had been finalized. ➢ GCGCD Monthl Meeting The monthly meeting was held October 9, 2014. Mr. Cockerell attended. A copy of the meeting agenda and also a copy of the District's quarterly newsletter were both included in the board packet. The District approved their budget for the next year, which was included in the board packet. The workshop to discuss potential rule changes was scheduled for October 23, 2014. Mr. Cockerell advised that Judge Kirkendall ruled that he did have jurisdiction over the District's lawsuit against POCG Landfill, and the next court date was set for November 4, 2014. ➢ Region L /GMA -13 GAM -13 Meeting: The meeting was held October 16, 2014. A copy of the meeting agenda was included in the board packet. Mr. Cockerell did not attend, as the meeting was today. He advised a report would be provided at a later date. The next Region L meeting was scheduled for November 6, 2014, ➢ CVLGC The CVLGC Board meeting was held on September 25, 2014 in Cibolo. Schertz and Cibolo continued with the planned water supply project in order to meet their future long term needs. The next board meeting was scheduled for October 23, 2014 in Schertz. The fifth order of business was COSIDERATION AND AUTHORIZATION OF PROCEEDING WITH THE BOND ISSUE FOR THE FIRST PHASE OF THE GUADALUPE PROTECT (PURCHASE OF THE LAND) AND TO REFUND SOME OF THE OUTSTANDING BONDS FOR DEBT SERVICE SAVINGS, AUTHORIZING THE STAFF AND FINANCIAL ADVISORS TO PROCEED WITH THE NEW MONEY ISSUE AND REFUNDING AND TO PRESENT FINAL RESULTS AT THE SCHEDULED DECEMBER 2of6 2ND MEETING FOR BOARD APPROVAL AND OTHER MATTERS RELATED THERETO — Duane Westerman, SAMCO & Mark McLinty. Southwest Securities Mr. M`Liney distributed handouts: the first one was to address the $7,200,000 new financing that would pay for the land in Guadalupe County (Booth Property). This was preliminary and used only to help show the anticipated total debt service to be after the first year (approximately $425,000 per year for 30 years). He noted that at the same time they want to sell that with a bond refunding. The bond would not be bank qualified and would close in 2015. There was a 2007 bond that would be callable from the investors on February 1, 2015. Mr. M`Liney advised that in that instance they would sell the combined bonds as one bond, keeping the accounting books separate (one for the new money and one for the refunding). He noted that it would include the refunding of $35,569,000 worth of bonds, which were the 2007 Series that were callable in February 2015, and replace it with approximately $34,000,000. There would be no required cash contribution from SSLGC. He advised that the total estimated savings would be $2,300,000, which he noted that at present dollar value was about $1,300,000, with an annual savings of $90,000. The interest rate on the new bonds was estimated at approximately 4% and 4.5% on the refunded bonds. Mr. M`Liney stated that they believed this would be worth pursuing. Vice - President Dwyer made a motion to authorize the financial advisors to proceed with the new money issue and refunding and to present final results at the scheduled December 2nd meeting for Board approval and other matters related thereto. Director White seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The sixth order of business was Water Level Measurements — Bill Klemt, Geologist Mr. Klemt's report was included in the board packet. His summary was as follows: Of concern were the Carrizo water level declines in the SSLGC Area of Guadalupe County and the SSLGC Well Filed in Gonzales County. Average water levels declined approximately -4.9 feet during the period September 2013 to September 2014 in the proposed SSLGC Area of Guadalupe County. Within the immediate SSLGC Well Field of Gonzales County, for the period Aug /Sept 2002 to September 2014, the average annual Carrizo water level decline was on the order of -4.8 feet per year. However, in the general area of western Gonzales County, water levels were declining at an average rate of -2.4 feet per year for that same period of time. Those declines represented an increase of 26% in the Well Field and 14% in the general area above the Aug /Sept 2002 to September 2013 calculated average annual declines. The increase in the rate of water -level decline, in addition to the drought, was due largely to increases in pumpage in the SSLGC, SAWS, CRWA, Nixon and Smiley well fields. The seventh order of business was OHV Park — Alan Cockerell, General Manager & Steve Thompson, TPWD & Trey Cooksey, TPWD As an 80/20 reimbursement grant, SSLGC would have to front the funds and then submit for reimbursement. Once the submissions were approved, SSLGC would receive an 80% reimbursement. Both Mr. Thompson and Mr. Cooksey assured the Board that, in the event that SSLGC decided to decline the grant, there would be no negative impact for SSLGC, the City of Schertz nor the City of Seguin. They suggested that if SSLGC was interested in moving forward, then it would be wise to host a public meeting to see how people in the area would feel they would be impacted. The expectation /requirement would be for the OHV Park to remain opened and maintained for no less than 20 years. However, in the event it was closed before the 20 year mark, SSLGC should expect for a pro -rated amount of the grant to be paid back to the TPWD. The OHV Park would require a complete and different staff from what SSLGC currently employees. 3of6 Secretary Jacobs stated that he felt like SSLGC owed it to the citizens to offer something like the OHV Park to the citizens / community. He advised that he realized that he appeared to be in the minority, but would like to entertain a public hearing to determine the interest level. It was a practice that was encouraged but not required, especially if SSLGC intended to move forward. Vice - President Dwyer asked if TPWD managed parks like the OHV Parks. They would assist SSLGC in any way they could offer advice, etc., but they do not manage a project /park such as this type OHV Park. Director White asked how long until the grant would be considered void. The response was that if SSLGC decided to move forward with the grant /park, there would be an agreement which would be signed allowing time to construct the project. Until that agreement was executed, TPWD would allow time to hold hearings, etc. Director White advised that he was dead set against SSLGC moving forward with the OHV Park project. He noted that SSLGC was in the water production business to provide water to the cities and that SSLGC needed to stay focused and concentrate on that business, not the OHV Park business. The Board decided that they wanted to seek legal advice from Counselor Lindner in Executive Session, regarding agenda item seven. President Greenwald deferred item seven to Executive Session. The eighth order of business was Emergency Repair of the Static Mixer at WTP # 1 — John Winkler, Walker Partners & Alan Cockerell, General Manager Mr. Cockerell advised that there had been a leak on the pipe at the Static Mixer and a patch had been welded. The patch was only a temporary solution. Mr. Winkler had a contractor look at the pipe and determine what needed to be done to provide a permanent solution. He advised that SSLGC could solicit bids, but this was an emergency situation. Mr. Winkler did not think that it would be beneficial to solicit additional bids as timing was a big factor and due to this being such a small project, he did not feel confident that SSLGC would be able to get any more bids. The booming oil business inhibits other types of construction. Mr. Winkler has worked on other projects with (Bruce) Matous and recommended them. Since this was an emergency repair, Mrs. Caddell and Mr. Faseler determined that it would not violate the City of Seguin's purchasing policy and SSLGC could proceed with the emergency repair by Matous without requiring the solicitation of other bids. Secretary Jacobs made a motion to approve the emergency repair of the Static Mixer at WTP # 1 by Matous in the amount up to $112,484.83 and utilize the use of monies from the Emergency Repair & Replacement Fund. Director White seconded the motion. Upon a vote being called, the motion carried by unanimous decision The ninth order of business was SSLGC Construction Update /Seguin Connection — John Winkler, Walker Partners & Alan Cockerell. Mr. Cockerell advised that JS Haren had completed the cement pour for the foundation on the piers at the Seguin Plant on Wednesday, October 14, 2014 and it would need to cure for seven days. They had some delays due to an issue with the original electrician which was resolved by contracting with a different electrician. The only issue that Mr. Cockerell advised that needed to be address was the direction of water when it hit the backsplash, but he noted that he and Mr. Winkler would discuss that further to resolve. 4of6 Sl {;TdED ClltRANAL(S): t Mr. Cockerell reminded the Board of the Building Dedication and noted that if someone had not received their electronic invite, to please advise. The tenth order of business was SAWS Expansion_ PtaiggL Update — John _Winkler, Walker Partners & Alan Cockerell, General Manager. Mr. Winkler advised that he and Mr. Cockerell had done a walk through with Pepper- Lawson and there were still items on the punch list that needed to be resolved and at that time Mr. Winkler considered them approximately 85% complete with that process. The eleventh order of Business was Legislative Update Billy Phenix, Legislative Considtant & Alan Cockerell, General Manager. Mr. Cockerell advised that Mr. Phenix was in Washington D.C. and he would not be in attendance at this meeting. He noted that Mr. Phenix had spoken to the N.E. Partnership the previous week and he encouraged the municipalities to get involved in water issue. The twelfth order of business was Status Update BPS Ground Storage Tank /Preload and Action in Response to Same Patrick Lindner General Counsel & John Winkler Walker Partners & Alan Cockerell, General Manager. Executive Session Recommended President Greenwald deferred item twelve to Executive Session The thirteenth of business was Guadalupe Project Wholesale Water Contract(s) — Patrick Lindner, General Counsel. Executive Session Recommended President Greenwald deferred item thirteen to Executive Session. The fourteenth order of business was Gonzales County Water Rights and Permits — Patrick Lindner, General Counsel & Alan Cockerell, General Manager. Executive Session Recommended President Greenwald deferred item fourteen to Executive Session. The fifteenth order of business was Gonzales County & Guadalupe County Carrizo and Wilcox Water Leases and Property Purchases —Alan Cockerell, General Manager. Executive Session Recommended President Greenwald deferred item fifteen to Executive Session. The sixteenth order of business was Executive Session called under Chapter 551 Government Code, Section 551.471, 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 3:41 PM Executive Session was held from 3.52 PM to 4:24 PM The seventeenth order of business was to Consider and Take Action as Result of Agenda Item Number sixteen. President Greenwald reopened General Session at 4:24PM Agenda Item # 7: No action requested /No action taken 5 of G i."'" A,1, 1 i ; ii, i6 ')01 -1 (_(-1 Pa ;;c:;j SIGN I'D C7RKANALQS): 1 VJ r7 Agenda Item # 12: No action requested /No action taken Agenda Item # 13: No action requested /No action taken Agenda Item # 14: No action requested /No action taken Agenda Item # 15: No action requested /No action taken The eighteenth 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 Tuesday, December 2, 2014 in the SSLGC Administrative Building at 1:30 PM ❖ Include an agenda item pertaining to the Bond Issuance & Refunding ❖ Approval of bids and award contract for BPS Piping — SAWS to fund The nineteenth order of business was Adjournment. President Greenwald declared the meeting adjourned at 4:26 PM MINUTES APPROVED THIS _2nd DAY OF DECEMBER, 2014. 6of6 4 LC ;C MINti -ITS M.1b 2011 I6 1'x.oSic SIGNED ORIGINAL(S): 1