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SSLGC 01-21-1999 MINUTES OF THE SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS ~ COUNTY OF GUADALUPE ~ SCHERTZ/SEGUIN LOCAL ~ GOVERNMENT CORPORATION ~ On this, the 21st day of January, 1999, the Schertz/Seguin Local Government Corporation convened at 1 :30 p.m. in the Conference Room of the Schertz Municipal Complex located at 1400 Schertz Parkway, Schertz, Texas with the following members being present and in attendance: Robin Dwyer Ramon Cook Jim Wolverton Sidney Bauer Gloria Rivera President Vice-President Secretary Director Director 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 Ken Greenwald, Eric Vordenbaum, Kerry Sweatt and Jack Hamlett. The meeting was called to order by President Robin Dwyer. The first order of business was a staff briefing and board discussion of the implementation and schedule for the water project. Mr. Sweatt deferred to Crockett Camp who reviewed a draft of a scoping document covering most of the work to be accomplished in 1999. Mr. Camp said the Board is being asked today to consider the scope of the services to be performed by the project engineer and the project groundwater consultant. After consideration of these services, the Board will be asked to consider adopting the broad time line. Budget numbers need to be included with this. After the Board has considered the scope of services, the document will be refined to reflect the Board's concern. At the next meeting the Board will consider land acquisition and water rights acquisition. President Dwyer inquired about feasibility studies and Mr. Camp indicated those will probably be done at the same time a preliminary environmental assessment is done to determine the types of permits needed. Clay Roming covered several points at this time, saying (a) they need to make a determination of how much water is needed and over what period of time; (b) to determine where it is best to deliver water into the system; (c) do an economic analysis which will include right-of-way costs; (d) address the water quality; (e) end up with a final cost estimate; and, (f) end up with a final report. Director Rivera reported attending a meeting where they made it clear that resources are limited. She felt they should be separate from the Edwards and base their decisions on being self-sufficient in case of a drought. Mr. Roming pointed out it will really change the economics of the system if they can rely on the Edwards and/or the Guadalupe at peak times. Vice- President Cook was in favor of basing the flow on our own sources. President Dwyer commented he doesn't think anyone is abandoning their current sources. Eric Vordenbaum noted peak time is when the Edwards won't have water. President Dwyer asked if the potential expense of the feasibility study is known and Mr. Roming answered they have a good idea. Mr. Camp added they are uneasy only about the cost of the environmental survey. Director Rivera inidcated that at the Regional meeting yesterday they said all entities had received a letter asking for a plan. Do we have any idea how much water from the Carrizo can be included in that plan? Mr. Roming suggested writing a letter and saying that data will be available by July 1, 1999. He feels they were given unrealistically low figures by the Water Development Board. Mr. Hamlett related they gave higher numbers to the cities, but then took away from the County. Mr. Sweatt thought it would be a good idea to write a response on behalf of both cities. Mr. Camp reminded the Board they do need to approve a time line today. They will put numbers with the scope of services and then take that to the cities. Mr. Hamlett stated they need those numbers fairly fast and Mr. Camp assured him they will have those estimates the next time. Mr. Bill Klemp informed the Board they need to conduct two pumping tests and get better data from the observation wells. They need enough control to see what the water levels are doing. He also described what they need to do to obtain the permits which is anticipated will be by December of this year. President Dwyer asked Mr. Klemp to fill them in on what's been done to date. Mr. Klemp reported they have looked at the chemistry, the well use, the drawdown, the performance tests, the specific capacity, the transmissivity, the well yields, and have conducted pumping tests. Vice-President Cook asked who owns the 170,000 feet in the Carrizo now and Mr. Klemp replied there are no claims on it yet. President Dwyer observed if we get there first, then it will be Schertz and Seguin. Secretary Wolverton inquired if there are any restrictions or any land use controls over the recharge zone and Mr. Klemp answered, that at the present time, there are not many restrictions. Mr. Sweatt reported that he, Mr. Camp and Mr. Hamlett traveled to Corpus Christi last week to study their project from Lake Texana to Corpus. Corpus used a fast-tracking process. They took bids before the final design was finished, they were still acquiring right-of-way when construction began, there were variables in the types of materials and lots of alternatives to encourage competition. Fast-tracking worked to keep everybody focused. They recommend the fast-tracking process. They had an attorney on call and immediately available. They did all the permits (for particular items) at once. They used national permits when they could and invited all the agencies in at once. President Dwyer stated that, in terms of issuing bonds, they need an overview of time and method. Jeffrey Kuhn of Fulbright & Jaworski noted if the project is never built, then the cities will have to repay the bonds. He assumes it will be a "take or pay" contract. The Corporation doesn't have funds, so they have to take others in to reduce the risk to Schertz and Seguin. It's not unreasonable to say 6-8 weeks after all the basics are established. President Dwyer asked, if during this process, Mr. Kuhn will be the attorney for the cities and Mr. Kuhn replied he will be the bond counsel, but the cities will have their own lawyers. He also recommends they have a financial advisor. Vice-President Cook asked if the bond prices aren't as good as ever now, and Mr. Kuhn replied that's correct. Director Rivera asked Mr. Kuhn why the adversarial position and he replied because one city may grow faster than another and need more water. The second order of business was adoption of the project management schedule. President Dwyer advised that Mr. Camp has submitted a schedule as outlined in the handout. Vice-President Cook moved to adopt the project management schedule as set out in the handout submitted by Mr. Camp. Director Bauer seconded the motion, which carried by a unanimous vote of all Directors present. The third order of business was to consider recommendations to member cities concerning water project implementation. Mr. Camp explained they will put numbers with the project scoping document so the Board can move forward. All Directors present agreed to that action. The fourth order of business was consideration of resolutions regarding reimbursement of certain expenditures from future bond proceeds. The caption for Resolution No.1 read as follows: AUTHORIZING REIMBURSEMENT BY THE SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION TO THE CITY OF SCHERTZ, TEXAS AND THE CITY OF SEGUIN, TEXAS FOR THE ADVANCEMENT OF EXPENSES RELATING TO THE SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION; AND OTHER MATTERS IN CONNECTION THEREWITH. The caption for Resolution No.2 read as follows: RELATING TO ESTABLISHING THE CORPORATION'S INTENTION TO REIMBURSE ITSELF FOR THE PRIOR LAWFUL EXPENDITURE OF FUNDS RELATING TO CONSTRUCTING VARIOUS CAPITAL INFRASTRUCTURE IMPROVEMENTS TO THE CORPORATION'S UTILITY SYSTEM FROM THE PROCEEDS OF TAX-EXEMPT OBLIGATIONS TO BE ISSUED BY THE CORPORATION FOR AUTHORIZED PURPOSES; AUTHORIZING OTHER MATTERS INCIDENT AND RELATED THERETO. Director Rivera moved to adopt Resolution No. 1 and Resolution No. 2 as described in the above captions. Secretary Wolverton seconded the motion, which carried by a unanimous vote of all Directors present. The fifth order of business was to consider action to select Southwest Securities as financial advisor. Mr. Sweatt related he and Mr. Hamlett asked that this item be placed on the agenda because they need to get a financial advisor on board. Southwest Securities is used by by both Schertz and Seguin and they see no problem with using them for this project. Director Bauer moved to approve the selection of Southwest Securities as financial advisor for the Schertz/Seguin Local Government Corporation. Vice-President Cook seconded the motion, which carried by a unanimous vote of all Directors present. Mr. Sweatt mentioned that the packet next week will contain the first set of minutes. The following packet will contain the minutes from today's meeting. Schertz is coordinating the agendas and packets if anyone needs anything. / President Dwyer announced the next meeting will be held February 4th in Seguin at 1 :30 p.m. in the Council Chambers. Secretary Wolverton offered the use of the County Sub-Courthouse in Schertz if nothing else is available for a meeting. President Dwyer asked if there's any new business and Mr. Hamlett stated they will have an investment policy drawn up by Mr. Kuhn at the next meeting. President Dwyer then asked if there was any other business for the Board to consider and, none being offered, it was moved and seconded that the meeting be adjourned. Upon a vote being taken, the motion carried by a unanimous vote of all Dierectors present and the meeting was adjourned at 3:37 p.m. MINUTES APPROVED this the day of . 1999. Signatures of all Directors Robin Dwyer, President Ramon J. Cook, Vice-President Jim Wolverton, Secretary Sidney Bauer, Director Gloria Rivera, Director