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SSLGC 02-22-2007 MINUTES OF THE SCHERTZ SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS ~ COUNTY OF GUADALUPE ~ SCHERTZ SEGUIN LOCAL ~ GOVERNMENT CORPORATION ~ On this the 22nd day of February, 2007, the Schertz Seguin Local Government Corporation convened at 1:35 p.m. in the City of Seguin Council Chambers located at 210 E. Gonzales, Seguin, Texas. The following members being present and in attendance: Members Present Robin Dwyer Ramon Cook Jim Wolverton Ken Greenwald Betty Ann Mathies Members Absent Sydney Bauer Hal Baldwin Also in Attendance Alan Cockerell Don Taylor Doug Faseler John Bierschwale Patrick Linder Crockett Camp Bill Klemt Mickey Fishbeck John Winkler President Vice-President Secretary Director Ex -Officio Treasurer Ex-Officio General Manager Schertz City Manager Seguin City Manager Assistant City Manager Legal Counsel Consultant Hydrologist Consultant Consultant (Rirnrock Consulting) Consultant (Bury&Partners) 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. The first order of business was the callin2: of the meetin2: to order. President Dwyer called the meeting to order at 1 :35 p.m. The second order of business was public comment (other than Public Hearin2: in A2:enda Item #4). General Manager Alan Cockerell introduced the newest member of the Schertz Seguin Local Government Corporation. Jesse Herrera began his employment as an operator with SSLGC January 8,2007. The third order of business was approval of the minutes for the Board meetin2: held on Januarv 18. 2007. Secretary Wolverton made a motion to approve the minutes. Vice-President Cook seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The fourth order of business was a Public Hearin2: to set the proposed Impact Fee rate - Robin Dwver. President. President Dwyer opened the Public Hearing and turned the agenda item over to General Manager Alan Cockerell. Mr. Cockerell introduced Mickey Fishbeck with Rimrock Consulting. Ms. Fishbeck gave a Power Point presentation on development of the impact fee rate. Handouts of the presentation were included in the Board agenda packet. For the benefit of the public, Ms. Fishbeck began by reviewing events leading up to the present Public Hearing. Two Public Hearings are required to implement an impact fee. The first Public Hearing pertains to land use which is the planning basis for impact fees and the Capital Improvement Plan (CIP) which is to provide service for the next 10 years. The second Public Hearing is specifically to set the impact fee amount. The Corporation complied with Public Hearing requirements by publishing notices in the newspaper and mailing notices to anyone who requested one for both hearings. At the January 18, 2007 Board meeting the Board passed a resolution to adopt land use assumptions and CIP. They also passed a resolution to set a second Public Hearing. A resolution will be passed today to enact the actual fee. The Corporation will then have 30 days to take action and implement the fee. Ms. Fishbeck showed charts of land use assumptions used by the Cities of Schertz and Seguin. A corrected copy of the Schertz CIP chart was provided to the Board. The Corporation adopted land use assumptions based on what both Cities already had in place in their own impact fee studies. The engineers developed a CIP program amounting to almost $30,000,000. The Corporation can charge the maximum amount or any amount up to the maximum amount. According to this study the capital cost per LUE is $2,524.66. Credit for the amount paid in the rate is 50% of cost, therefore, the maximum allowable fee is $1,262.33. The action for the Board to take today is to consider the maximum fee of $1,262.33 or any amount less and pass a resolution to enact the fee. The Impact Fee Advisory Committee reviewed the Impact Fee Study and recommended the Board adopt the full amount of the impact fee. A letter from the Committee recommending the maximum impact fee was included in the Board agenda packet. Counsel wrote the resolution to enact the impact fee and recommended the Board adopt the resolution as prepared and then determine the amount of the fee. A copy of the resolution was included in the Board agenda packet. After group discussion, several items were noted and reviewed for the public. Monies from the impact fee can only be used for capital improvements; the portion of facilities in the impact fee study. The fee will apply to construction that would increase demand upon a system. Existing customers do not pay it. The fee is assessed or amount set at the time of plat. The fee is collected at the time an entity connects to a respective system. If an entity has already platted, it has up to one year to purchase a building permit and does not have to pay the fee; in other words the entity is "grandfathered" for one year. The impact fee study pertaining to this fee is for the service area of the Cities of Schertz and Seguin. Each 2 individual system collects its own fee, i.e., wholesale customers of the Corporation collect their own fees, therefore, the Corporation will not be charging their wholesale customers a fee. However, if for example, Springs.Hill, a wholesale customer of the Corporation, bought additional service, the Corporation could account for an impact fee the next time the contract is renewed or negotiated. Seguin City Manager Doug Faseler suggested the $.33 be dropped for easy implementation of the fee. Exhibit C of the resolution shows where the monies can be spent and sets the rate of the impact fee. The rate would be changed to $1,262.00. Modification of this document is required every five years, however, it can be updated as often as needed. A certification of the document must be signed by the President of the Corporation and sent to the Attorney General on a yearly basis. President Dwyer asked for discussion from the public regarding the hearing. With no comments, he closed the public hearing portion of the meeting. President Dwyer reopened the general board meeting at 1:48 p.m. The fifth order of business was discussion and possible action on a resolution to adopt recommended Impact Fee rate - Alan Cockerell. General Mana2:er and Mickev Fishbeck. Rimrock Consultin2:. Vice-President Cook made a motion to pass a resolution to adopt the written Resolution #SSLGC R07-05 establishing impact fees for water service for new development contingent on changing the amount of the fee to $1,262.00 per LUE. Secretary Wolverton seconded the motion. Upon a vote being called, the motion carried by unanimous decision. President Dwyer and General Manager Cockerell thanked Bury+Partners, Mickey Fishbeck with Rimrock Consulting and the Impact Fee Advisory Committee for their hard work and guidance during the development of the impact fee process. The sixth order of business was presentation of the General Mana2:er's Report and discussion and possible action in response to said report - Alan Cockerell. General Mana2:er. Mr. Cockerell advised the Board that he had reconfigured his management report to go along with the agenda. A copy of his report was included in the Board agenda packet. Highlights of the report include the following: a. Region L Meeting A Region L meeting was held on February 1,2007. Mr. Cockerell noted the opening for a small business representative was filled by Carol Garriott of Seadrift. The district was looking for a representative from the coastal region and Ms. Garriott was a good choice. She publishes a local newspaper and does other community and environmental work. Another vacancy representing agriculture was left open with the resignation of Richard Eppright. The Regional Planning Group decided not to fill the vacancy. 3 A reduction in topics due to TWDB funding cuts in the initial submission was recommended by a staff workgroup. A chart of TWDB funding recommendations is included in the Board agenda packet. The activity which would affect the Corporation is "Resolution of Carrizo Aquifer." A recommendation has been made to drop this activity and to use the GMA process to address the availability of Carrizo groundwater. GMA 13 is the area the Corporation and Carrizo Aquifer are in. A presentation was made of the Edwards Aquifer Recharge and Recirculation Study. This four-phase study is to be completed in June 2007. It is aimed at increasing the yield of the Edwards allowing for continuous spring flow. It employs two types of methods to enhance recharge by holding runoff water for controlled release and structure for direct infiltration. A copy of the presentation was included in the agenda packet. More information can be found on the Edwards Aquifer Authority web site - www.edwardsaquifer.org. b. Regional Water Alliance Meeting Regional Water Alliance members met January 25, 2007. The Corporation and City of Schertz are members of this organization. The group is currently working to identify additional topics for study. Currently, two study groups have been developed, SS Water/City of La Vernia and Conservation. SARA gave a presentation on an interconnection study in Wilson, Karnes and Goliad counties. The group is actively recruiting additional members. The next meeting is scheduled for March 29,2007. A RWA Communications Committee meeting was held in San Antonio February 13,2007. The committee is working on a logo and identity for RWA. It is also looking at ways to provide internal and external communications on topics of interest. c. Guadalupe County The Guadalupe County Groundwater Conservation District met February 8, 2007. Bill Klemt gave a presentation on water level measurements in Guadalupe County. His presentation is included in the agenda packet. Overall, water level declines in the Carrizo have been less than one foot over a three-year period. General Manager Cockerell has been requested to give a presentation pertaining to the Corporation's activities at the next scheduled meeting. A camera survey of Blumberg well #2 was conducted in Guadalupe County January 31, 2007. The well has been dormant for years and severe deposits on the casing and screen prevented an acceptable view of the well construction. Therefore, surveys were not conducted on the other two wells. A Sonarjet cleaning process was done on all three wells. This process lowered cable into the wells that contained explosive devices which were detonated to provide a sonic cleaning of the screens. The next step will be to conduct pumping tests. Presently Mr. Cockerell and staff are working with Peerless Equipment, Ltd., regarding pumping tests. The plan is to pump well #1 and proceed from there. A Guadalupe County Kick-off meeting facilitated by Bury+Partners was held February 7, 2007. All SSLGC operators attended the meeting and provided valuable input on many issues. A progress report for the project is included in the agenda packet. This report summarized on-going activities, current schedule, meeting minutes, and changes, and identified potential problems. 4 Bill Klemt, Tom Caponi and Mr. Cockerell were given a tour of the Blumberg Ranch by Ed Blumberg. This provided an opportunity to document environmental issues that will have to be identified and accounted for with the TCEQ. Currently Mr. Cockerell is working with Mr. Klemt and Mr. Caponi to identify issues which should be disclosed. After discussion board members agreed the plan of action would be to purchase wells, lease land and use easements for access rather than to purchase property. The environmental issues will have to be documented, but the Corporation should not take responsibility for them. d. Gonzales County The Gonzales County Underground Water Conservation District meeting was held February 13,2007. Permits were granted for wells in the eastern part of the county which included a new irrigation well northeast of Gonzales and re-equipping of a flowing irrigation well southeast of Gonzales. President Robin Dwyer, Consultant Crockett Camp and General Manager Cockerell attended a meeting with SAWS at SAWS' request January 30, 2007. SAWS personnel wanted to discuss possible mediation activities as part of the contested case hearing over SAWS permits in Gonzales County. The impact of SAWS proposed project on our project and future plans in Gonzales County were discussed. SAWS has requested a follow-up meeting February 23, 2007. It will be held at Seguin City Hall in the 2nd floor conference room at 10:00 a.m. President Dwyer, Consultant Crockett Camp, Counsel Patrick Linder and General Manager Alan Cockerell plan to attend. Mr. Cockerell invited other interested parties at the Board meeting to attend. A SAWS Contested Case Hearing was held in Gonzales February 15, 2007. The meeting was a carry-over of the initial hearing conducted in October 2006 and was a continuation of solicitation for parties opposing the SA WS permits. Mr. Clarence Moore requested and was given party status. He owns about 600 acres south of FM1117 adjacent to SSLGC's well field of eight wells. Mr. Moore leases SSLGC property for grazing leases. Phase two of the hearing process is mediation between all of the parties. This process is the next step to fmd out if there can be some agreement between all parties. Three individuals were identified as possible mediators; Judge Joe Hart, Judge Pete Lowery and Sam Graham. They will be contacted in the order listed to find out if one of them will be available to act as mediator. SAWS has agreed to fund 50% of the mediation costs and has requested other parties to provide the other half of the costs. The issue of funding was not resolved at the meeting and will be discussed at a later date. e. Repair of 30 Inch Water Line at Guadalupe River Crossing The 30 inch water pipeline at the Guadalupe River crossing and 36 inch pipeline, section two, were repaired. Dan Drugan would cover specifics and answer questions in his Operations report. 5 The Board approved an expenditure of $23,600 to perform pumping tests on well #1 and well #2 at the Blumberg property at the last Board meeting. A third well on the Blumberg property may be producible. Mr. Cockerell asked for funds to include the third Blumberg well for pumping tests. The plan is to perform pumping tests on the first well. If tests meet the recommended criteria, a pumping test will be performed on the second well, etc. Mr. Cockerell provided a handout of costs to perform the tests to the Board. The costs included camera survey, sonatjet, and water sample analysis taken during pumping tests. An estimate for debris removal had not been received. After discussing the project, the Board agreed that by pumping all three wells a good picture of what was happening with the Aquifer could be evaluated. Consultant Bill Kempt added that each of the well areas is far enough away from each other to provide a difference in water quality. Pumping tests could provide valuable information. Also, the TCEQ may request a clear video to show construction as a part of the application and permitting process. Secretary Wolverton made a motion to give General Manager Alan Cockerell authority to spend up to $60,000 for testing the three Blumberg Wells. Vice-President Cook seconded the motion. Upon a vote being called, the motion carried by unanimous decision. f. Public Relations On February 13, 2007, General Manager Alan Cockerell attended a meeting at GBRA to discuss a Wonders of Water program. The program was formerly offered by TCEQ and taught at Texas Lutheran University (TLU) on environmental issues. The course is no longer offered at TLU, therefore, GBRA has taken it over. The course consists of a five-day seminar on water. Prospective students of the program are K-8 science teachers. The GBRA is asking for fmancial support to fund the program. They have also requested a tour of our facilities. In return Mr. Cockerell requested GBRA to include Gonzales County, especially the Nixon-Smiley School District, in a quad-county effort to educate the public about water. General Manager Cockerell reported $3,000 was budgeted for Public Relations for FY2006- 2007. The funds are for the Nixon Smiley Youth Show which will be held March 10,2007. Mr. Cockerell requested the Board to approve $500 to help fund the Wonders of Water Program and to confIrm $2,500 for the Nixon-Smiley Youth Show. President Dwyer made a motion to amend the budget and take $500 from the $3,000 budgeted for the Nixon-Smiley Youth Show and contribute it to the Wonders of Water program. Director Greenwald seconded the motion. Upon a vote being called, the motion carried by unanimous decision. g. Vickery Property Mr. Cockerell referred Item 6g to the Executive Session Additional Notes: 1) SSLGC Water Production History Seasonal water charts were provided for the Board in the agenda packet. 6 2) A legal memorandum from Bond Counsel Jeffrey Kuhn was received February 5, 2007. A copy of the cover letter was included in the Board agenda packet. Mr. Cockerell asked Counsel Pat Linder to give a summary of the letter in Executive Session The seventh order of business was presentation of the Treasurer's report - Susan Caddell. a) Discussion and possible action to approve the Financial Statements for the quarter ending December 31, 2006 Ms. Caddell presented the Financial Reports as of December 31, 2006. The balances are as follows: Revenues, Expenses and Changes in Net Assets - Operating Fund $107,841.02 Balance Sheet - Interest & Sinking Fund $1,571,788.78 This is the fund bond payments are taken out of. With the refinancing of old bonds, it lowered our payment on the old bonds, therefore, the bond payment due on February 1 was $1,053,741.25; ample funds to make the first payment. Neither City was billed any additional funds for the first payment Revenues, Expenses and Changes in Net Assets - Interest & Sinking Fund $763,009.00 Balance Sheet - Repair & Replacement Fund $511,130.40 The bond covenant requires this balance be kept at $500,000.00. At the last Board meeting, the Board voted to use these funds to fund needed repairs on water lines, therefore, this fund will be going down again in the future and have to be replenished. Balance Sheet - Future Development Fund The amounts owed to the Cities of Schertz and Seguin were $250,000 each. Once the bond funds were received in January, both Cities were paid back. The next quarterly report will not show these amounts as they have been paid. Revenues, Expenses and Changes in Net Assets - Future Development Fund Expenditures to professional services are to pay Bury+Associates for their work on the Impact Fee study. Payments to Rimrock are included in the payments to Bury+Associates. Expenditures to Improvements other than Building are payments on the plant expansion as well repairs and engineering on the new well. Expenditures for equipment are for the SCACA modifications. Comparative Statement of Revenues, Expenses, and Changes in Net Assets for the Operating Fund $107,841.02 Last year at this time a loss of $32,545.84 before transfers was recorded. Springs Hill revenue decreased by $33,660.00. This is due to the fact Springs Hill rates are now 7 broken down by operating and maintenance rate, I & S rate and future development rate. Last year the funds were all going to the operating fund. The total income from Springs Hill as of December 31, 2006 is $96,600.00 which is $20,160.00 larger than last year. Working Capital Trend Chart Working capital has increased since September 30,2006, by $778,323 due to the fact the bond payment has not been paid yet. It will probably decrease next quarter. Vice-President Cook made a motion to accept the Financial Report. Director Greenwald seconded the motion. Upon a vote being called, the motion passed by unanimous decision. b) Discussion and possible action to approve the Investment Report for the quarter ending December 31, 2006 The Investment report shows $39,215 was made in interest. Presently, pools are providing more income than agency notes. Interest rates are substantially improving. President Dwyer made a motion to approve the Investment Report. Secretary Wolverton seconded the motion. Upon a vote being called, the motion passed by unanimous decision. c) Discussion and possible action authorizing the reimbursement to the City of Seguin in accordance with the Management Services Agreement for the quarter ending December 31, 2006 The Management Services Agreement shows expenditures of $459,144 for the fIrst quarter of the fiscal year. According to the Management Services Agreement the City of Seguin should be reimbursed $459,144. Secretary Wolverton made a motion to reimburse the City of Seguin $459,144. Vice- President Cook seconded the motion. Upon a vote being called, the motion passed by unanimous decision. The ei2:hth order of business was presentation of the Operation Status Report and discussion and possible action in response to same - Dan Dru2:an. Water Systems Mana2:er. Dan Drugan reported on the following: o The second section of the drain valve repairs was completed February 21,2006. Six out of twenty-one valves, almost 1/3, have been completed. Five more sections or fifteen valves remain to be repaired. Mr. Drugan showed a bolt that had been recovered. The bolt was either zinc coated or made of mild steel. It probably met specifications, but was made of inferior material. The bolts will be replaced with stainless steel bolts. $7,000 had been budgeted for repair on each valve. Three valves have been completed at $15,000 which is under budget. By being proactive, money can be saved in the future. 8 Conditions are different with each valve and operators are learning to be more efficient with each repair. Repairs need to be fInished by mid or end of April because water usage is already picking up. Mr. Drugan thanked John Schraub, Water Systems Manager for the City of Seguin and Seguin and Schertz operators for their help. Operators continue to monitor iron and manganese through individual filters. They also monitor the individual flows from the well to make sure none are deteriorating. Well #'s 1,4 and 8 are presently down. Well #8 should be up and running by week of February 25th. Filter media should be replaced next year. The inside of the vessels looks good, but have some limited rusted spots. When the media is replaced these repairs will be done. Valves taken out are being put back in without much replacement, however, one valve had to be replaced. As valves are put back or replaced, anti-seize is added on the threads. Valves and new piping are also being wrapped in plastic. No action was taken on Agenda Item 8. The ninth order of business was presentation of the Consultant's Report and discussion and possible action to same - Crockett Camp and Bill Klemt. Mr. Klemt summarized a report he sent SSLGC February 14,2007. A copy of the report was included in the Board agenda packet. He reported that well levels were measured in Gonzales County January 22nd and 23rd. Water levels were measured in Guadalupe County January 29th. Good news reported is that four wells located in the SSLGC well field area, (SSLGC #18), Wilson (#19), SSLGC (#22) and SSLGC (#23) have an average water-level decline of a little over 21 feet for the period August - September 2002 to January 2007. From August - September 2002 to September 2006 there is a drawdown of 31 feet. This difference of about 10 feet illustrates the effects of summer pumpage and the ability of the Aquifer to rebound during the winter (10 ft rebound). The Aquifer is very transmissive and takes some of the stress off. Mr. Klemt referred to Table 1 which was a listing of observation wells and their locations in Gonzales County. Locations are also shown in Figure 1 which is a well location map. Table 2 allows one to look at observation wells which have measurements from 2002 and compare them to measurements from January 2006 and January 2007. The table also shows the distance these wells are from the center of the Schertz Seguin well field. Figure 3 allows one to see how the Aquifer is responding to stress, pumpage and recharge. Mr. Camp added to the information Mr. Cockerell provided in regard to the SAWS meeting held January 30, 2007. He reported that SAWS was also meeting with San Marcos and Kyle. They are meeting to primarily prepare for mediation. They are also meeting with communities they are not presently competing with, but expect to be competing with in the future. No action was taken on Agenda Item 9. The tenth order of business was Executive Session called under Chapter 551 Government Code. Subsection 551.071. to seek the advice of its attorney on le2:al 9 matters relatin2: to the Board of Director's ri2:hts and liabilities under certain contracts. Section 551.072 to deliberate the purchase of certain real estate. Executive Session was held from 3:35 p.m. to 4:13 p.m. The eleventh order of business was to consider and take action as a result of A2:enda Item #10. No action was need as a result of Executive Session. The twelfth order of business was additional Board of Directors discussion and/or comments. No new discussion and/or comments were discussed. The thirteenth order of business was adjournment. President Dwyer declared the meeting adjourn. The meeting adjourned at 4: 16 p.m. The next regular meeting was scheduled for March 15,2007, in Schertz. MINUTES APPROVED THIS DAY OF ,2007. SIGNATURE OF DIRECTORS Robin V. Dwyer, President Ramon J. Cook, Vice-President Jim Wolverton, Secretary Sydney Bauer, Treasurer Ken Greenwald, Director 10