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03-17-20163 MINUTES OF THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS COUNTY OF GUADALUPE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION On this the 17" day of March, 2016 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 board members being present and in attendance: Ken Greenwald President Andrew Hunt Bob Pees Treasurer Assistant Secretary Jim Fowler Ex- Officio Mayor Keil Ex- Officio and the following member(s) being absent: Robin Dwyer Vice- President T. "Jake" Jacobs Secretary 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) Dudley Wait Executive Director of Operations (City of Schertz) Susan Caddell Director of Finance (City of Seguin) Sam Willoughby Public Works Director (City of Schertz) Jimmy Hooks Assistant Public Works Director (City of Schertz) Richard Lindner General Counsel (Davidson, Troilo, Ream & Garza) Nancy Vaughan Auditor (Armstrong, Vaughan & Associates) Steven Seibert San Antonio Water System (SAWS) Felix Arambula San Antonio Water System (SAWS) John Winkler Consultant (Walker Partners) Crockett Camp Consultant Bill Klemt Consultant /Hydrologist Billy Phenix Legislative Consultant Emery Gallagher Water Utility Manager (City of Seguin) Alan Cockerell General Manager (SSLGC) Amber Briggs Assistant General Manager (SSLGC) Regina Franke Administrative Assistant (SSLGC) The first order of business was to CaH the Meeting _t Or er President Ken Greenwald called the meeting to order at 1:30 PM The second order of business was Public Comment Mr. Cockerell displayed the news cast video for the Board to view regarding the proposed Post Oak Clean Green Landfill. 1of7 SSLGC MINUTES 03/17/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed 4/20/2016 5:08 PM rcf President Greenwald and Mr. Cockerell presented Mr. Willoughby with a Grill Master kit in appreciation for his years of dedication to SSLGC, as he will be retiring from the City of Schertz April 2016. There were no public comments. The third order of business was of the Minutes for the Board Meeting held February 18, 2016 Assistant Secretary Pees made a motion to approve the February 18, 2016 minutes. Treasurer Hunt seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The fourth order Qf business was Presentation of the eneral Manager's Re — 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 February was 38.9 % of Gonzales County Underground Water Conservation District's (GCUWCD) monthly allowable. ➢ GCUWCD MonLl1l Meelir ;. The monthly meeting was held March 8, 2016; Mr. Cockerell attended. A copy of the agenda was included in the board packet. The Board continued discussion on designating a new DFC for the District. Monitoring of the outcrop continued to appear as the preferred method by the District Certification, of unopposed candidates, was approved and the May elections were cancelled for the Board of Directors. SSLGC requested the District investigate two wells that were located on the recently purchased Parker Property. It appeared that the wells were currently registered with the District, but well data was incomplete. SSLGC would continue to work with the District to provide more information on the two wells. ➢ GCGCD Morr2lalz� Meeln There was no meeting this month. The next meeting was scheduled for April 14, 2016. ➢ Region L /GMA- 13 /RWA Rei, on . There was no meeting this month. The next meeting will be May 5, 2016 in San Antonio. GMA -13: The meeting was February 25, 2016; Miss Briggs attended this meeting in Pleasanton. A copy of the agenda was included in the board packet. Groundwater districts continue to discuss the update to the DFCs. The next meeting was scheduled for March 30, 2016 in Pleasanton. 2of7 SSLGC MINUTES 03/17/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed 4/20/5:08 PM rcf RW/A The meeting was held March 1, 2016; Mr. Cockerell and Miss Briggs attended this meeting at SARA. A review of the Region L meeting was presented. ➢ CVLGC The CVLGC Board meeting was held February 25, 2016 at 9:00 AM in Schertz and a copy of the agenda was included in the board packet. Work continues to execute water leases with landowners. The next board meeting was scheduled for April 28, 2016 at 9:00 AM in Cibolo The fifth order of business was Presentation of FY2014 -2015 Audit Report — Nancy Vaughan, Armstrong, Vaughan & Associates Copies of the SSLGC FY2014 -2015 Audit Report were provided in the board packets. Ms. Vaughan with Armstrong, Vaughan & Associates, P.C., presented an overview of the report. Highlights of the FY2014 -2015 report are as follows: Ms. Vaughan began by stating there was a good audit this year with a clean opinion. Ms. Vaughan called attention to Page 9 of the Audit Report (Statement of Net Position). She listed Total Current Assets to be $16,000,000 compared to $11,000,000 from FY2013 -2014. The Total Restricted Assets were $7,600,000, which was primarily representative of bond funds, debt service and impact fees that had not been spent as of September 30, 2015. The balance for Net Property, Plant & Equipment was noted to be $93,000,000. She called attention to the Lease Acquisition Costs, specifically the original water leases and noted that they were almost fully amortized. She moved to Page 10, Total Current Liabilities were $6,000,000 and $103,000,000 Long Term Liabilities resulting in Total Liabilities being $109,000,000 leaving SSLGC with $10,000,000 in Total Net Position. Ms. Vaughan advised that there was a negative in Net Investment in Capital Assets. That number represents the total capital assets less the liabilities that were issued to fund those (infrastructure less the debt). The reason it was negative was because the depreciation charges on the capital assets were accelerating faster that the principal pay down of the debt; she expected that would reverse at some point. The Unrestricted Net Position was $9,800,000 compared to $7,000,000 of that total net position in FY2013 -2014. Ms. Vaughan moved on to Page 11. The Total Operating Revenues were $17,000,000 compared to the previous year's $14,000,000. The reason for such a large increase was due, in large part, to water sales to SAWS. The Total Operations & Maintenance of $4,700,000 which was up from $3,200,000 in FY2013 -2014. After depreciation the Operating Income (TAss) was $8,400,000. The Non- operating Expenses were mostly interest and debt issuance costs this year. Ms. Vaughan noted this yielded a total positive change to the Net Position of $4,800,000. Ms. Vaughan called attention to the Governance Letter. Ms. Vaughan advised that the one audit difference that, with approval of management, was not corrected, as they agreed that it was immaterial (the accrued vacation for the SSLGC employees which are hired through the City of Seguin). Ms. Vaughan also advised that SSLGC was in compliance regarding the Public Funds Investments Act (PFIA). Treasurer Hunt asked what estimated life for the utility system was being used. Ms. Vaughan advised that on Page 16 was a table (see below). 3of7 SSLGC MINUTES 03/17/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Tune Printed: 4/20/2016 5:08 PM rcf Fixed Asset Useful Life (Years) Utility Water System 10 -15 Building & Improvements 40 Equipment & Vehicles 5 -20 Assistant Secretary Pees made a motion to accept the FY2014 -2015 Audit Report as presented by Ms. Nancy Vaughan of Armstrong, Vaughan & Associates, P.C. Treasurer Hunt seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The sixth order of business was Approve Retention of a Depository Bank — Susan Caddell, Director of Finance &_Alan Cockerell, General Manager ➢ Resolution # SSLGC R16 -03 — Wells Fargo The banking services contract is required to be renewed every five years. A memo from the City of Seguin Finance Department was included in the packet for review of the selection process and recommendation. After careful consideration by the committee, it was recommended to maintain services with Wells Fargo. Staff recommends approval of Resolution # SSLGC R16 -03 to retain Wells Fargo as the depository bank for another five years. Assistant Secretary Pees made a motion to approve Resolution # SSLGC R16 -03 (Retention of Wells Fargo as depository bank for five years). Treasurer Hunt seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The seventh order of business was ADmove Task Order # 23 — WTP Discharge Perini Renewal — John Winkler, Walker Partners ➢ Task Order # 23 Mr. Cockerell advised that the Discharge Permit was due to be renewed by February 2017. Task Order # 23 would be for Mr. Winkler to provide the engineering support for this renewal. The funding for Task Order # 23 would be paid from the O & M Budget. Staff requested approval. Assistant Secretary Pees made a motion to approve Task Order # 23 (WTP Discharge Permit Renewal). Treasurer Hunt seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The eighth order of business was Protyerty Manazement-/Grazing Leases /Hunting Leases — Amber Brinks, Assistant General Manager & Alan Cockerell, General Manager Miss Briggs advised that as SSLGC was renewing grazing leases this year, she had developed a hunting lease to be offered, as well. The grazing leasees were being offered the first right of refusal. If the grazers opted not to accept the lease, then the public would have a chance to bid on the hunting lease. The hunting leases are expected to generate approximately $30,000 annually. President Greenwald asked if any of these leases were inclusive of the area we were considering developing as a recreational area. Mr. Cockerell advised to the affirmative, however these are one year hunting leases and once the decision is made to move forward with the recreational project, those tracts would not be offered as hunting leases any longer. The ninth order of business was SWIFT Funding-- '(Guadalupe Project — Alan Cockerell General Manager & Duane Westerman & Mark MrLiney, SAMCO 4of7 SSLGC MINUTES 03/17/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 4/20/2016 5:08 PM rcf Mr. Cockerell advised that things were moving forward in the initial abridged application process. TWDB was in the process of prioritizing the applicants /applications. The next step would be an invitation from the TWDB to move forward in the process and complete a full application. Mr. Cockerell expected a list to be presented on April 11, 2016 of those entities which would be invited to advance to the full application step of the process. He anticipated an action request to the Board at the April 21, 2016 to allow SSLGC to advance their application. The tenth order of business was SSLGC Construction Update _John Winkler, Walker Partners & Alan Cockere% General Manager • Chlorine Dioxide (Task Order # 16) Final installation of SCADA connections were completed and the system was placed online on March 8, 2016. All operators will receive required training. • Cathodic Protect (Task Order # 17) The contractors continue progress along the pipeline. They have completed bonding of joints along the 42 inch pipeline and the 30 inch pipeline to Seguin. Repairs have been conducted at several locations where minor corrosion has occurred from the old clips, which were welded to the top of the metal pipe couplings. This repair of Sutherland Springs Road was completed. • Metal Tank Rehabilitation (Task Order # 20) A pre - construction meeting with Williams Painting and Sandblasting Inc. was scheduled for March 24, 2016. • WTP1 Upgrades (Task Order # 21) • separate demolition plan has been finalized to simplify the construction activity. • High Service Pump Controller Upgrade (Task Order # 22) • pre - construction meeting was held with Alterman on March 8, 2016. The contractor had begun ordering of required components and anticipated contract completion in February 2017. Installation of the drives would be phased so that only one high service would be out of service at a time. • SSLGC Park & Recreation Master Plan (Task Order # 19) Work is progressing on the design for the largest lake possible that the location will allow (44.5 acres). John Winkler had completed preliminary calculations which suggested our discharge water should be able to keep a sufficient water level in the reservoir. The eleventh order of business was Cibolo Relocation of the 36 inch Pipeline — John Winkler, Walker Partners & Alan Cockerell, General Manager Vickery & Associates and the City of Cibolo were close to finalizing the design of the project. SSLGC was waiting for the results from the City of Cibolo on exact depths of the pipeline before final relocation requirements could be developed. The twelfth order of busine s was Le isl tiv Update — BiHy Phenix Legislaliye Con ultant & Alan ockerelb General Manager Counselor Lindner requested that this agenda item be deferred to Executive Session. President Greenwald deferred item twelve to Executive Session The thirteenth order of business was Gonzales County Mitigation Fund — Alen Cockerell, General Manage Executive Session Recommended President Greenwald deferred item thirteen to Executive 5of7 SSLGC MINUTES 03/17/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 4/20/2016 5:08 PM rcf The fourteenth order of business was Post Oak Clean Green, Inc. Landfill — Patrick Lindner General Co el ohn Winkler Walker Partners Executive Session Recommended President Greenwald deferred item fourteen to Executive Session The fifteenth order of business was Guadalupe Project Wholesale Water Contracts & Well Permit s! -- Patrick Lindner, General Counsel & Alan Cockerell, General Manager Executive Session Recommended President Greenwald deferred item fifteen to Executive Session The sixteewh order of business was Gonzales Counjy & Guadalupe County Carrizo and Wilcox Water-Leases and Property Purchases — Alan Cockerell, General Manager Executive Session Recommended President Greenwald deferred item sixteen to Executive Session The n h r er of business was General Manages Evaluation — Dudley Wait Executive Director of Operations- Schertx — Executive Session Recommended President Greenwald deferred item seventeen to Executive Session The ehteenth order of business was Executive Session called under Chapter 551 Government Code, Section 551.071, to seek the advice of its_atwmey on legal :natters, and Section 551.072, for deliberations rggarding real estate President Greenwald closed General Session at 2:21 PM Executive Session was held from 2:30 PM to 3:30 PM The nineteenth order of business was Consider and Take Action as Result of Agenda Item Number Eighteen President Greenwald reopened General Session at 3:31 PM 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 Agenda Item #16 Assistant Secretary Pees made a motion to approve to execute water leases for 50 +/- acres in Gonzales County. Treasurer Hunt seconded the motion. Upon a vote being called, the motion carried by unanimous decision. Agenda Item #17 No action requested /No action taken 6of7 SSLGC MINUTES 03/17/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 4/20/2016 5:08 PM of The twentieth order of business was Consideration and /or Action on auestions_ and Dossible items to be Placed on the next agenda ➢ The next board meeting was scheduled for Thursday, April 21, 2016 in SSLGC Administrative Building at 1:30 PM ➢ General Manager Evaluation ➢ Response from SAWS —T -2 Water ➢ Relocation of the pipeline - Cibolo The twenty -first order of business was Adjournment President Greenwald declared the meeting adjourned at 3:34PM MINUTES APPROVED THIS 21" DAY OF APRIL, 2016. s i OP T. "Jake" obs, S y Bob Pees, Assistant Secretary 7 of 7 SSLGC MINUTES 03/17/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 4/20/2016 5:08 PM rcf