10-21-2010 MinutesMINUTES 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 October, 2010, the Schertz-Seguin Local Government Corporation
(SSLGC) 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:
Ken Greenwald President
Robin Dwyer Vice-President
Patricia Ramirez Secretary
Andrew Koenig Treasurer
Betty Ann Matthies Ex-Officio
and the following directors being absent:
Jim Wolverton Director
Hal Baldwin 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:
Alan Cockerell
Doug Faseler
Johnny Bierschwale
Susan Caddell
Shawn Shimek
Emery Gallagher
Sam Willoughby
Patrick Lindner
Bill Klemt
John Winkler
Crockett Camp
Georgia Hanks
General Manager
City Manager of Seguin
Assistant City Manager of Schertz
Finance Director of Seguin
Water System Superintendent
Seguin Water Utility Manager
Schertz Public Works Director
Legal COU11sel (Davidson & Troilo)
Hydrologist Consultant
COriSUltant (Walker Partners)
Consultant/Project Manager
Administrative Assistant
The first order of business was the Calling of the Meeting to Order.
President Ken Greenwald called the meeting to order at 1:35 p.m.
The second order of business was Public Comment.
No one addressed the Board during public comment.
The third order of business was Approval of the Minutes for the Board Meeting held on
September 16, 2010.
Treasurer Andrew Koenig made a motion to approve the September 16, 2010 minutes as
written. Vice-President Robin Dwyer seconded the motion contingent on the following
change:
Page 3, paragraph 6, line 2, change "....adjacent landowner who was opposing Link Benson's
permit application for an irrigation well is one of his partners." to "....adjacent landowner who
was opposing Link Benson's permit application for an irrigation well is Richard Crozier, one of
his partners."
Upon a vote being called, the motion carried by unanimous decision.
The fourth order of business was Approval of the Minutes for the Special Joint Workshop
of the City Councils of Cibolo, Converse, Live Oak, Schertz, Seguin and Selma and SSLGC
Board of Directors held on October 4, 2010.
Vice-President Dwyer made a motion to approve the October 4, 2010 minutes as written.
Treasurer Koenig seconded the motion. Upon a vote being called, the motion carried by
unanimous decision.
The fifth order of business was Approval of Oil and Gas Lease and/or Geophysical Survey
Permit -Attorney Bill Knobles, Knobles Raetzsch Moore & Eveld LLP.
General Manager Alan Cockerell introduced Attorney Bill Knobles. Mr. Knobles is representing
SSLGC in negotiations with various companies that are interested in leasing the Corporation's
oil and gas mineral rights. He is also in the process of preparing an addendum to the contract
Global Geophysical Services, Incorporated, has offered SSLGC to perform a seismic survey on
portions of its land in Gonzales County. Vice-President Dwyer added that Mr. Knobles is one of
SSLGC's lessors in Gonzales County and has fully cooperated with the Corporation's Gonzales
County project.
Mr. Knobles addressed the Board, and reported that although several interested parties have
approached him about SSLGC's mineral rights, presently, he did not have a proposal to offer.
He explained that the larger, more substantial companies are more interested in the land south of
Gonzales County, e.g., Karnes City, because of the thicker shale formation which is
approximately two to four hundred ft thick. Although the thicker shale is more desirable to drill
because it is easier to keep the drill bit within the formations, more expensive and sophisticated
equipment is required for the thick shale. In comparison, the shale is about fifty ft thick on
SSLGC's property. The smaller companies are interested in SSLGC's property, but funding a
project is an issue. They are end users who do not have equipment or capital, but work to
develop lease and financial packages before a legitimate offer can be made.
Discussion was held regarding the possibility of water sales to drilling companies. Mr. Cockerell
explained that oil companies were exempt from water permits and needed large amounts of water
to fracture wells. He added that an oil company's definition of a large amount of water to
fracture a well is different and much smaller than SSLGC's definition of a large amount.
In regard to the offer from Global Geophysical Services, Incorporated, Mr. Knobles stated that
his role is to legally make sure SSLGC's water, property and infrastructure -are protected. He
plans to work with Mr. Cockerell, Hydrologist Bill Klemt and Engineer John Winkler to ensure
that concerns from SSLGC's board and staff are addressed in an addendum to the contract.
Discussion was held regarding the benefits of performing a seismic survey and stipulations
which should be included in the contract. Board members agreed that a good picture of the
ground formation would be useful for future projects. They asked Mr. Knobles to include the
following issues in the addendum he was preparing: 1) surveyors should stay at least 500 ft.
away from pipelines, wells and other infrastructure; 2) board members and staff would be given
results of the survey; and 3) a member of SSLGC's staff would be permitted and possibly paid to
observe the operations of the project.
Mr. Cockerell asked the Board to approve the contract between SSLGC and Global Geophysical
Services, Incorporated, for the seismic survey contingent on the terms and conditions negotiated
by himself and Mr. Knobles.
Vice-President Dwyer made a motion to approve the contract along with the addendum
prepared by Attorney Bill Knobles between SSLGC and Global Geophysical Services,
Incorporated. Secretary Patricia Ramirez seconded the motion. Upon a vote being called,
the motion carried by unanimous decision.
The sixth order of business was Presentation of the General Manager's Report -Alan
Cockerell, General Manager.
General Manager Alan 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 agenda packets.
Due to recent rainfall, water production and sales were a little low for the month of
September at 64.2% of Gonzales County Underground Water Conservation District's
(GCUWCD) monthly allowable.
• GCUWCD
General Manager Cockerell attended the monthly meeting on October 12, 2010.
SSLGC's historical use permits were approved as submitted.
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Guadalupe County Groundwater Conservation District (GCGCD)
Based on GCGCD's rules, a public hearing report is required before the Board can take
action on proposed rule changes. Aboard meeting and public hearing were held October
14, 2010. The Board plans to take action on the rule changes at its next meeting
scheduled November 10, 2010.
Region L
Mr. Cockerell plans to attend Region L's next meeting on November 4, 2010.
The seventh order of business was Acknowledgement of Fulbright & Jaworski's Limited
Role in Regard to Proposed Contract Between SSLGC and the San Antonio Water System
(SAWS) -Alan Cockerell -General Manager.
Fulbright and Jaworski represent various entities involved in a proposed contract between
SSLGC and SAWS and want to insure that all parties are aware of their limited role with respect
to the contract. Mr. Cockerell asked for Board approval to sign a letter he received
acknowledging that SSLGC is aware of the circumstances.
Vice-President Dwyer made a motion to authorize General Manager Cockerell to sign the
letter acknowledging Fulbright & Jaworski's limited role in regard to the proposed
contract between SSLGC and SAWS. Treasurer Koenig seconded the motion. Upon a vote
being called, the motion passed by unanimous decision.
The eighth order of business was Water Level Measurements for Gonzales County -Bill
Klemt, Hydrologist Consultant.
Mr. Klemt's written report on water level measurements for Gonzales County was included in
the board agenda packets. He summarized his report as follows:
Carrizo water levels were measured in water-level observation wells which are located in the
vicinity of SSLGC's well field on September 21 and 22, 2010, by Mr. Klemt, General Manager
Cockerell and GCUWCD General Manager Greg Sengelmann. Mr. Klemt referred to several
figures of maps in his report which show location of wells measured, Carrizo water-level
drawdowns for the period August-September/02 to September 2010, and altitude of Carrizo
water levels, September 2010.
The four Carrizo wells which are located within SSLGC's well field area, SSLGC (#18), Wilson
(#19), SSLGC (#22) and SSLGC (#23), had an average annual water-level decline for the period
August-September/02 to September 2010 of approximately 27 ft. The largest measured decline
(32.0 ft) was obtained from well #18. The other three wells had declines ranging from
approximately 23 to a little over 28 ft. With regard to the above four wells, for the period Aug-
Sept/02 to January 2010, the average water-level decline was approximately 23 ft. There appears
to be very little change of water levels in the vicinity of the SSLGC well field for the period
January to September 2010. Mr. Klemt noted that there was about 4 ft of additional water-level
decline from January to September for these wells which is about the normal seasonal January -
September decline.
Mr. Klemt noted that as of September 2010 water levels in the Carrizo are approximately 22 ft
below that of the Queen City in the vicinity of SSLGC's well field. Prior to Aug-Sept/02, water
levels in the Carrizo were above those of the Queen City.
Mr. Klemt reported that HDR's 2005 GAM simulated water-level drawdowns should be about
50 ft in the SSLGC well-field area and 10 ft near the down-dip edge of the Carrizo outcrop in
Guadalupe County (2002 - 2010). The average measured Aug-Sept/02 to September 2010 water
level drawdown in wells 18, 19, 22 and 23 is approximately 27 ft in the SSLGC well-field area
and 6 ft in the Guadalupe County outcrop. Actual pumpage from the well field is somewhat less
than simulated pumpage which in theory would reduce simulated drawdowns to about 35 to 40 ft
and about 7.5 ft in the outcrop. Comparison of these simulated and measured water levels in the
well field and out crop areas indicates that the TWDB GAM is over predicting water-level
drawdowns in southwest Gonzales and Guadalupe Counties.
Mr. Klemt reported that in his opinion, based on water levels measured in the Carrizo and Queen
City aquifers in southwestern Gonzales County since the year 2000, the aquifers continue to
perform as predicted as a result of pumpage from the SSLGC well field.
The ninth order of business was Legislative Update -Jack Fickessen, Legislative
Consultant.
Mr. Cockerell reported that he had attended the Senate Natural Resources Committee Hearing in
Austin on September 22, 2010. He presented his written testimony which Mr. Fickessen and
Counsel Lindner assisted in preparing, and provided brief oral comments to support SSLGC's
concerns. Mr. Fickessen added that both committee staffs in the House and Senate are in the
process of writing interim reports that will be presented to the Legislature in December. The
Texas Water Development Board (TWDB) is in the process of reviewing Desired Future
Conditions (DFC's) from Groundwater Districts. The Groundwater Districts appear to be
misinterpreting the DFC's. TWDB is returning them to the Districts for further clarification.
The tenth order of business was Award Contract for Well Pumps for Wells #9, #10, #11
and #12 in Gonzales County -Alan Cockerell, General Manager and John Winkler,
Walker Partners.
Mr. Cockerell called attention to a recommendation and bid tabulation from John Winkler with
Walker Partners which was included in the board agenda packets. Although Thunder Well
Service was the lowest bidder for the contract, they withdrew their bid. SSLGC accepted their
withdrawal because of variances or deviations from the bid requirements.
Mr. Winkler noted that also included in the bid is to pull existing pumps from wells #2, #3, #4,
and #7 and replace them with stainless steel pumps, and to furnish and install replacement
stainless steel well discharge heads on existing well pumps for wells #1 - #8.
Mr. Winkler recommended award of the bid to the second bidder Alsay, Incorporated, in the
amount of $1,897,000. He said that Alsay took no exceptions to the Bidding Documents in its
bid (the only bidder of the five to do so).
Secretary Ramirez made a motion to award the contract for well pumps for wells #9, #10,
#11, and #12 to Alsay, Incorporated, in the amount of $1,897,000. Vice-President Dwyer ~"
seconded the motion. Upon a vote being called, the motion passed by unanimous decision.
The eleventh order of business was Award Contract for Construction of Collection System
for Wells #9, #10, #11 and #12 in Gonzales County -Alan Cockerell, General Manager and
John Winkler, Walker Partners.
Mr. Winkler's bid tabulation and recommendation were included in the board agenda packets.
Harris Road Company was the lowest bidder in the amount of $4,345,317.79. The bid also
included roads and surface improvements for the four new wells. Mr. Cockerell noted that
Harris Road Company's office is located in Wimberley. He added that they had performed work
for the City of Seguin and were given a good reference. Mr. Cockerell requested Board approval
to award the contract to Harris Road Company.
Mr. Cockerell stated that one change would be made to the contract. A road will have to be
constructed from the Water Treatment Plant to CR114 to meet property SSLGC owns to
continue to FM1117 because SSLGC was unable to secure the purchase of a small tract across
the Whitley property to FM1117.
Vice-President Dwyer made a motion to award the contract for construction of the
collection system for wells #9, #10, #11, and #12 to Harris Road Company in the amount of
$4,345,317.79. Secretary Ramirez seconded the motion. Upon a vote being called, the
motion carried by unanimous decision.
The twelfth order of business was Gonzales County Expansion Proiect -Alan Cockerell,
General Manager. ,
Mr. Cockerell reported that Weisinger, Incorporated, is in the process of drilling wells #9 and
#12. Well logs and sieve analysis have indicated that both wells have over 300 ft of Carrizo
sands. Well #12 is scheduled to be logged today. Screening and gravel should take place
tomorrow. Well #9 was cemented yesterday, and is about two weeks behind well #12 for
screening and gravel. Pumping tests should begin within the next few weeks.
The Nixon plant repair is complete. A final walk-through will be scheduled soon.
Mr. Cockerell reported that he had submitted Weisinger's timeline to GCUWCD for the four
wells and as long as General Manager Greg Sengelmann is kept informed of the progress, there
should be no issue in regard to completing the project within the required time limit. Presently
construction is ahead of schedule.
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Mr. Cockerell called attention to project cost estimates, including a Wilcox Aquifer proposal for
SSLGC's well field in Gonzales County which were included in the board agenda packets.
SSLGC owns 4,200 acres with 1 ac-ft of water rights associated with the property. Carrizo water
is significantly different than Wilcox water and the Corporation wants to have a plan for future
development of the water.
The thirteenth order of business was Formation of a New Local Government Corporation -
Crockett Camp, Consultant/Project Manager.
Mr. Camp was unable to attend the last New Local Government Corporation (New LGC)
meeting and Mr. Cockerell provided a brief update in his place. He said that six cities continue
to be interested in forming the New LGC. A joint council meeting of all the cities was held
October 4th and most all agreed the meeting was very informative. To date none of the cities
have backed out of process to form the entity. Mr.,Bierschwale reported that the City of Cibolo
and the City of Converse had voted to proceed with development of the new corporation. The
Cities of Seguin, Selma and Live Oak are pending.
The fourteenth order of business was Guadalupe County Groundwater Conservation
District Rules -Patrick Lindner, General Counsel, Davidson &Troilo.
President Greenwald deferred agenda item 14 to Executive Session.
The fifteenth order of business was Proposed Resolution Authorizing Acquisition through
Condemnation or Purchase of Fee-Simple Title in and to 2.5 Acres out of a 459.98 Acre
Tract more fully described in the Resolution, said 459.98 Acre Tract being Titled in the
Name of Walter E. Koepp and being Adiacent to the East Line of Nockenut Road in
Guadalupe County, Texas, for the Necessary Public Purpose of Upgrading the Existing
Water_ Pipeline by and through the Installation of a Surge Tank and Related
Appurtenances and Facilities -Patrick Lindner, General Counsel, Davidson &Troilo.
President Greenwald deferred agenda item 15 to Executive Session.
The sixteenth order of business was Wholesale Water Contracts with SAWS and the City
of Converse -Patrick Lindner, General Counsel, Davidson &Troilo.
President Greenwald deferred agenda item 16 to Executive Session.
President Greenwald closed General Session at 2: 35 p. m.
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 opened Executive Session at 2:48 p. m.
Executive Session was held from 2: 48 p. m. to 3: 26 p. m.
The eighteenth order of business was to Consider and Take Action as a result of Agenda
Item Seventeen.
President Greenwald reopened General Session at 3: 26 p. m.
As a result of Executive Session:
Agenda Item #14
Vice-President Dwyer made a motion to authorize General Manager Cockerell and
General Counsel Patrick Lindner to interview local counsel for purposes of representation
in the matter before the GCGCD. Treasurer Koenig seconded the motion. Upon a vote
being called, the motion carried by unanimous decision.
Agenda Item # 15
Vice-President Dwyer made a motion to authorize General Manager Cockerell to employ
James Frost and Albert Menn for purposes of acquiring 2.5 acres of the Koepp property on
Nockenut Road. Treasurer Koenig seconded the motion. Upon a vote being called, the
motion carried by unanimous decision.
The nineteenth order of business was Consideration and/or Action on Questions and
Possible Items to be placed on the Next Agenda.
Requests were made by Vice-President Dwyer and President Greenwald, respectively, for the
following items to be placed on the November 18, 2010 board meeting agenda:
o Lease of the Brelsford property
o Construction of an administration building for SSLGC
No additional discussion was held.
The next regular board meeting was scheduled November 18, 2010, at 1:30 p.m. in Schertz,
Texas.
The twentieth order of business was Adjournment.
President Greenwald declared the meeting adjourned at 3:30 p.m.
MINUTES APPROVED THIS ~~.~~ DAY OF , 2010.
Patricia Ramirez
Secretary