07-17-2014MINUTES OF THE
SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION
THE STATE OF TEXAS
COUNTY OF GUADALUPE
SCHERTZ /SEGUIN LOCAL
GOVERNMENT CORPORATION
On this the 17th day of July, 2014 the Schertz /Seguin Local Government Corporation (SSLGC)
convened at 1:30 PM in the City of Schertz Council Chambers located at 1400 Schertz Parkway,
Building #4, Schertz, Texas. The following directors being present and in attendance:
Ken Greenwald President
Robin Dwyer Vice - President
T. "Jake" Jacobs Assistant Secretary
David Scagliola Ex- Officio
and the following member(s) being absent:
Larry Dublin Secretary
Kerry Koehler Treasurer
Mayor Keil 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:
Doug Faseler
City Manager (City of Seguin)
John Bierschwale
Executive Director (City of Schertz)
Susan Caddell
Director of Finance (city of Seguin)
Jimmy Hooks
Public Works Assistant Director (City of Schertz)
Patrick Lindner
General Counsel (Davidson, Troilo, Ream & Garza)
Gary Guy
San Antonio Water System (SAWS)
Steven Siebert
San Antonio Water System (SAWS)
John Winkler
Consultant (Walker Partners)
Crockett Camp
Consultant
Dan Jackson
Consultant (Economist.com)
Bill Klemt
Consultant /Hydrologist
Mark M- Liney
Financial Advisor (southwest securities)
Duane Westerman
Financial Advisor (sAMco)
Billy Phenix
Legislative Consultant
Emery Gallagher
Water Utility Manager (City of Seguin)
Alan Cockerell
General Manager (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 1:46 PM
The second order of business was Public Comment.
There were no public comments.
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sOGNIA) ORIGINi1L(q); t
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The third order of business was Approval of the Minutes for the Board Meeting_
•S June 19, 2014 Regular Board Meeting
Vice - President Dwyer made a motion to approve the June 19, 2014 minutes advising of a
change on Page 6 — Agenda item 9 — third paragraph: "field" versus "filed ". Assistant
Secretary Jacobs seconded the motion. Upon a vote being called, the motion carried by
unanimous decision.
❖ July 1, 2014 Special Board Meeting
Vice- President Dwyer made a motion to approve the July 1, 2014 minutes as read. Assistant
Secretary Jacobs 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 June was 63.4% of Gonzales County Underground Water
Conservation District's (GCUWCD) monthly allowable.
➢ GCUWCD
Monthly Meeting
The monthly meeting was held July 8, 2014. Mr. Cockerell attended. A copy of the meeting
agenda was included in the board packet.
The District had notified SSLGC that the balance in the Western Mitigation fund had dropped
below the required amount in the mitigation agreement. SSLGC was required to submit a
payment of $62,285.23 in January 2015 based on SSLGC's 2013 transportation of water.
The drilling production permit for SSLGC Well # 7 was renewed April 8, 2014 at the reduced
allowable of one ac -ft /acre.
➢ GCGCD
Monthly Meeting
There was no meeting held July 2014; the next meeting was scheduled for August 14, 2014.
➢ Region L /GMA -13
Kegion L Quarterly Meeting
The next Region -L meeting was rescheduled for August 7, 2014.
➢ CVLGC
The CVLGC Board meeting was held on June 26, 2014 in Schertz and concentrated on
reorganization due to the withdrawal of Converse. Schertz and Cibolo intend to continue with
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the planned water supply project in order to meet their future long term needs. The meeting
agenda was included in the board packet. The next meeting was scheduled for July 24, 2014
in Cibolo.
The fifth order of business was Water Level Measurements — Bill IGemt }Geologist.
Mr. Klemt's report was included in the board packet. His summary was as follows:
Within the immediate SSLGC Well Field area, for a period Aug /Sept 2002 to June 2014, the average
annual Carrizo water -level decline was on the order of -3.8 feet per year. However in the general area
of western Gonzales County, water- levels were declining at an average rate of -2.1 feet per year for
the same period of time. Water levels continue to decline modestly in the Carrizo outcrop areas of
Guadalupe and western Gonzales Counties. In the future, it was expected that SSLGC, SAWS, and
CRWA would increase pumpage above the present day level. When that happens, average water -level
declines per year will increase and then gradually decrease per year.
The sixth order of business was Annual O &M Budget FY2014 -2015 — Alan Cockerell, General
Manager
➢ Resolution # SSLGC R14 -08
Mr. Cockerell stated that the proposed FY2014 -2015 O & M Budget was $12,571,963. The major
increases were due in part to the addition of SAWS production and treatment. Chemical costs, the
addition of three new operators and the Cathodic Protection project were the three items that were
driving the increase.
Assistant Secretary Dwyer asked if the SAWS excess water portion was discretionary. Mr. Cockerell
advised that it was a take or pay agreement. SSLGC was responsible for reporting the amount that
was estimated to be excess available for purchase, by SAWS, by June V. In turn, SAWS would respond
in writing the amount they would commit to of the excess declared by SSLGC.
Staff recommended approval of the FY2014 -2015 Annual O & M Budget.
Assistant Secretary Jacobs made a motion to approve Resolution # SSLGC R14 -08. Vice -
President Dwyer seconded the motion. Upon a vote being called, the motion carried by
unanimous decision.
The seventh order of business was Water Rates FY2014 -2015 — Dan Jackson, Economist.com
& Alan Cockerell, General Manager
➢ Resolution # SSLGC R14 -09
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Vice - President Dwyer asked what the revenue increase would be if the rate was raised from
$1.55/1,000 gal to $1.60/1,000 gal. Mr. Jackson advised that he would have to calculate but that it
would be significant (several hundred thousand dollars).
Vice - President Dwyer made a motion to approve Resolution # SSLGC R14 -09. Assistant
Secretary Jacobs seconded the motion. Upon a vote being called, the motion carried by
unanimous decision.
The eighth order of business was CONSIDERATION AND APPROVAL OF A
RESOLUTION RELATING TO ESTABLISHING THE CORPORATION'S
INTENTION TO REIMBURSE ITSELF FOR THE PRIOR LAWFUL
EXPENDITURE OF FUNDS RELATING TO CONSTRUCTING VARIOUS
CORPORATION IMPROVEMENTS FROM THE PROCEEDS OF TAX -
EXEMPT OBLIGATIONS TO BE ISSUED BY THE CORPORATION FOR
AUTHORIZED PURPOSES; AUTHORIZING OTHER MATTERS INCIDENT
AND RELATED THERETO; AND PROVIDING AN EFFECTIVE DATE — Mark
M °Liney, Southwest Securities & Duane Westerman, SAMCO & W. Jeffrey Kuhn,
Fulbright & Jaworski LLP
➢ Resolution # SSLGC R14 -12
Mr. M`Liney advised that this would allow for SSLGC to use their own funds to pay the deposit /down
payment for the land for the Guadalupe Project then to reimburse itself, if SSLGC chose to, from the
bond proceeds. Assistant Secretary Jacobs asked why the amount was $13,000,000. Mr. Cockerell
advised that with some of the initial estimated start -up cost of the Guadalupe Project, including the
purchase price for the land, Mr. Kuhn had suggested that amount for reimbursement. Mr. Faseler
asked that if the amount that needed to be reimbursed was less, would the Board be required to
approve an amendment. Mr. M`Liney advised that if the Board approved the reimbursement
resolution, it would not obligate them to reimburse that entire amount; it only allowed for a
reimbursement up to $13,000,000, therefore an amendment would not be necessary.
Assistant Secretary Jacobs made a motion to approve Resolution # SSLGC R14 -12 in the
amount not to exceed $13,000,000. Vice - President Dwyer seconded the motion. Upon a
vote being called, the motion carried by unanimous decision.
The ninth order of business was CONSIDERATION OF REFUNDING SOME OF THE
OUTSTANDING BONDS FOR DEBT SERVICE SAVINGS AND AUTHORIZATION
THE STAFF AND FINANCIAL ADVISORS TO PROCEED WITH THE REFUNDING
IF CERTAIN SAVINGS TARGETS ARE REACHED AND OTHER MATTERS
RELATED THERETO — Mark M °Liney, Southwest Securities & Duane Westerman,
SAMCO & W. Jeffrey Kuhn, Fulbright & _Jaworski LLP_M'Lin_ey & Duane Westerman & W.
Jeffrey Kuhn, Fulbright & Jaworski LLP
Mr. Westerman stated that in 2005 there was a savings of almost $850,000 generated by refunding of
the 1999 Bond. The 2005 Issue would now be eligible to be refunded and save SSLGC money, once
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again. Mr. Westerman understood that SSLGC would not issue any new bonds during this calendar
year, but that there were some provisions where refunding could be issued as a bank qualified issue
and not impact the status of the two cities. The bond was originally a bank qualified issue, therefore
this refunding would be deemed bank qualified issue, as well. One of the criteria points for the
refunding of the bond would be that SSLGC could not issue more bonds than what they would be
refunding. Mr. Westerman noted that there would be costs involved in the refunding, and to
account for those fees and not increase the amount of the bond, SSLCG would be required to
contribute cash at the closing in the amount of approximately $275,000. Those monies could come
from debt service funds or any legal & lawful available funds belonging to SSLGC. In return the net
savings would equate to approximately $276,000 (approximately $58,000 per year). Mr. Westerman
advised that the term of the bond would not be extended or shortening the maturity; it would
mature in 2025. SSLGC would not be borrowing any additional funds with the refunding; they
would only be addressing the current principal owed. Vice - President Dwyer asked for an
explanation of how the interest would be calculated. He asked if by 2025 the interest amount would
be the same for the bond as it was currently. Mr. Westerman advised that the amount would be less
under the refunding. Mr. M`Liney and Mr. Westerman explained that with refunding of the bond,
the combined interest and principal would be less than the current payment schedule. The
refunding would apply more money paid toward the principal of the bond and less amount in
interest versus the current payment structure which would pay more to interest and less to principal.
The calculated savings included all the required fees. Mr. Westerman noted that the requested
action today would not commit SSLGC to the refunding; it would only give direction for the
financial advisors to proceed with research to determine the savings.
Vice - President Dwyer made a motion giving direction to consider the refunding and for the
financial advisors to continue to determine the savings by refunding the 2005 Bond.
Assistant Secretary Jacobs seconded the motion. Upon a vote being called, the motion
carried by unanimous decision.
The tenth order of business was SAWS Expansion Project Update — _„Jghn Winkler, Wallcer
Partners & Alan Cockerell, General Manager.
➢ Change Order # 2 (Pepper- Lawson Waterworks LLCQ
Mr. Cockerell advised that Change Order # 2 was to rework the vault and change out a portion of the
pipeline. Mr. Winkler stated that when the pipeline was dug up, it was determined that the pipe was
a smaller size than what was indicated on the as built plans for that part of the pipeline. The
reduced /current size of the pipeline would hinder delivery of water from the BPS.
Vice - President Dwyer made a motion to approve Change Order # 2 in the amount of
$41,682.82. Assistant Secretary Jacobs seconded the motion. Upon a vote being called, the
motion carried by unanimous decision.
Mr. Winkler advised that the new plant had been started up and appears to be going well, with normal
minor tweaks to be done. He noted that the contractor still had quite a bit of details to complete.
There was some tank work that needed to be done by Preload (under the Pepper- Lawson contract)
and they were scheduled to begin that on Monday, July 21, 2014. Mr. Winkler and Mr. Cockerell
would continue to update the Board.
The eleventh order of business was SSLGC Construction Update /Seguin Connection — John
Winkler, Walker Partners & Alan Cockerell.
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.`iT(:NED C)ItiGiNAL(S): I
Mr. Cockerell advised that the Seguin Connection project was moving forward on schedule. He would
continue to update the Board.
Mr. Cockerell advised that Staff had moved into the new SSLGC Administrative Building. He
anticipated that the SSLGC Board meetings would be scheduled in the new building beginning August
2014. Mr. Cockerell noted that there was a plaque being made to commemorate the building and
recognize those instrumental in that process. Once Staff had a more definitive date for the delivery
of the plaque, a date for an open house /building dedication could be set.
The twelfth order of business was Legislative Update — Billy Phenix, Legislative Consultant
& Alan Cockerell, Executive Director.
Counselor Lindner recommended Executive Session.
President Greenwald deferred item twelve to Executive Session.
The thirteenth order of business was General Manger's Evaluation — John Bierschwale,
Deputy City Manager— Schertz
Executive Session Recommended
President Greenwald deferred item thirteen to Executive Session.
The fourteenth order of business was OHV Park — Alan Cockerell, General Manager & Steve
Thompson, TPWD & Bill Nicholson, Nicholson Innovations
Executive Session Recommended
President Greenwald deferred item fourteen to Executive Session.
The fifteenth 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 fifteen to Executive Session.
The sixteenth order of business was Guadalupe Project Wholesale Water Contract(s) — Patrick
Lindner, General Counsel.
Executive Session Recommended
President Greenwald deferred item sixteen to Executive Session.
The seventeenth order of business was Gonzales County & Guadalupe County Carrizo and
Wilcox Water Leases — Alan Cockerell, General Manager.
Executive Session Recommended
President Greenwald deferred item seventeen to Executive Session.
The eighteenth order of husiness 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 closed General Session at 3:00 PM
Executive Session was held from 3:09 PM to 3:36 PM
The nineteenth order of business was to Consider and Take Action as Result of Agenda Item
Number eighteen.
President Greenwald reopened General Session at 3:36 PM
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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:
No action requested /No action taken
Agenda Item # 17:
No action requested /No action taken
The nineteenth 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 August 21, 2014 in the SSLGC Administrative
Building at 1:30 PM
•3 Discuss OHV park /TPWD
•S Financial Report (Q3)
❖ Bond Refunding
The nineteenth order of business was Adjournment.
President Greenwald declared the meeting adjourned at 3:57 PM
MINUTES APPROVED THIS 21s' DAY OF AUGUST, 2014.
Larry Dublin, Secretary
acobs, Assistant Secretary
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