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05-21-20153 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 May, 2015 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 Robin Dwyer Kerry Koehler T. "Jake" Jacobs Bob Pees Jim Fowler Mayor Keil Vice - President Treasurer Secretary Assistant Secretary Ex- Officio 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: John Bierschwale Deputy City Manager (City of Schertz) Dudley Wait EMS Director (City of Schertz) Sam Willoughby Public Works Director (City of Schertz) Patrick Lindner General Counsel (Davidson, Troilo, Ream & Garza) Steven Siebert San Antonio Water System (SAws) Lisa Guardiola San Antonio Water System (SAws) Ken Holt San Antonio Water System (SAWS) Dan Jackson Rate Consultant (Wildan Fin. Svc — formerly known as economist.com) Dan Lanning Rate Consultant (Wildan Fin. Svc) John Winkler Consultant (Walker Partners) Crockett Camp Consultant Bill Klemt Consultant /Hydrologist Alan Cockerell General Manager (SSLGC) Shawn Shimek Water System Superintendent (SSLGC) Emery Gallagher Water Utility Manager (City of Seguin) 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 1:32 PM The second order of business was Public Comment. There were no public comments. The third order of business was of the Minutes for the Board Meeting held April 16, 2015. Secretary Jacobs made a motion to approve the April 16, 2015 minutes as read. Vice - President Dwyer seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The fourth order of business was Presentation of the Genera! ManaUr'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 April was 65.6% of Gonzales County Underground Water Conservation District's (GCUWCD) monthly allowable. The overall decrease from March to April was due to the recent rains. SAWS had requested that SSLGC not deliver excess water until the end of the month due to some issues with blending on the NE side of San Antonio. ➢ GCUWCD Monthly Mee�irrg: The monthly meeting was held May 12, 2015; Mr. Cockerell attended. A copy of the meeting agenda was included in the board packet. He noted that amendments to the District's rules were on the agenda for discussion only. A special meeting was tentatively scheduled for June 18, 2015 at 5:30 PM for discussion and action on the proposed rule changes. Mr. Cockerell hopes to have something to report to the SSLGC Board at the next board meeting. ➢ GCGCD 1VlOLL/i/'y 11Mcrefi�t : This meeting was held in the SSLGC Administrative Building on May 14, 2015; Mr. Cockerell attended. The next meeting is scheduled for July 9, 2015 and a public hearing is also planned for that date regarding the SSLGC Wilcox well permit application. ➢ Region L /GMA- 13 /RWA Region L The 2016 Initially Prepared Plan (IPP) is available on the Region L website: regionitexas.org. The Public Notice was included in the board packet. Three public hearing for the Region L IPP have been scheduled as follows: ❖ June 8, 2015 San Antonio ❖ June 10, 2015 San Marcos ❖ June 11, 2015 Victoria The next Region L meeting is scheduled for September 3, 2015. ➢ CVLGC The CVLGC Board meeting was held April 23, 2015 in Cibolo. Progress was being made with the planned water supply project to meet the future long term needs. The next board meeting was scheduled for May 28, 2015 at 5:30 PM with a joint council workshop to follow at 6:30 PM, in Schertz. 2of7 I,t;C `,HNIFITIS 05 -21 -2015 (/ 1'agesi lJ.il;; !irr. I' inurl: 6/18/20159 :'10. \NI icy' The fifth_ order of business Presentation of Treasurer's Report -- Susan Caddell, Finance Director & Alan Cockerell, General Manager. a. Financial Statements for the quarter ending March 31, 2015. Included in the board packet were the financial reports for the six months ended March 31, 2015. The first three pages were the balance sheet for all the SSLGC funds. The two pages following the balance sheet was the income statement for all the SSLGC funds. Finally, following those statements were the balance sheet and income statement for the SAWS funds. Behind those, were the comparative statement for the SSLGC Operating Fund as well as the working capital chart. First, Mrs. Caddell reviewed the balance sheet for the SSLGC funds. The first column was for the Operating Fund. That fund consisted of cash and investments of $7,883,921.78. The second column was for the balance of the bonds that was issued for the purchase of the Booth property. There was a balance of cash and investments of $38,601.64. The third column was for the Interest and Sinking Fund. The cash and investment balance in that fund was $591,316.94 with receivables of $364,311.89. The first bond payment was made on February 1, 2015 in the amount of $2,134,575. The fourth column was for the Repair and Replacement Fund. The cash and investment balance was $2,549,649.84. The fifth column was for the Future Development Fund. The cash and investment balance was $1,543,887.88. The down payment and monthly payments for the Booth property had been reimbursed by the bond proceeds in the amount of $1,104,328.74. The sixth column was for the Impact Fund. The cash and investment balance in that fund was $3,097,266.24. The seventh column was for the Reserve Fund. The required amount to maintain in the Reserve Fund according to bond covenants was $1,275,621.10. The cash and investment balance in that fund is $1,282,399.22. The eighth column was the 2010 Bond Fund. The cash and investment balance in that fund was $1,707,321.85. There were $652,853 in outstanding purchase orders for this fund remaining. In reviewing the income statement for the SSLGC funds, the first column was the Operating Fund. The net income before transfers was $2,363,090.87. After the budgeted transfers to the Repair and Replacement Fund and the Future Development Fund, the net income was $1,713,090.87. The second column was income statement for the bond proceeds and expenditures from the bonds issued in January 2015. The third column was I &S Fund. The first bond payment had been made. The interest for that payment was in the expenditures. The fourth column was for the Repair and Replacement Fund. The expenditure for L &I Maint. -Dist. System was for repairs to pumps #1 and #4. The fifth column was the Future Development Fund. The expenditure for $285,000 was the amount needed for the contribution towards the refunding of old bonds in order to achieve the greatest savings over the life of the bonds. The expenditure for $1,054,328.74 was the down payment and monthly payments for the Booth property. The sixth column was the Impact Fund. For the first six months, SSLGC had received a total of $201,851 in impact fees. The eighth column was for the 2010 Bond Fund. Provided was a report, at the back, with an accounting of the expenditures of the bond funds since SSLGC received the proceeds at the board meeting. The total column indicates net income of $3,470,880.33. As indicated earlier, the reports following the SSLGC Fund reports are those for the SAWS Funds. Provided was a report, at the back, with an accounting of the expenditures of the bond funds since SSLGC had received the proceeds at the board meeting. The Comparative Income Statement for the Operating Fund was towards the back of the report. Revenue had increased by $1,015,844.03. This was largely due to SAWS purchasing SSLGC excess water. Not including SAWS and Springs Hill usage, consumption had increased by 197,810,500 gallons. Expenditures 3of7 S 1,GC `.IINl i1 "E� 05 11 - 2,ii15 , 7 1.'agc;;j S I GT JJ.,I X311,; GIN.A.L () -1 !IF 0 PriIILCI1! (/ 18201 i 9 ',0 \ \I n/ had increased by $317,606.17, with the largest being in utilities services of $320,600.10. SSLGC net income increased from last year by $967,237.86. Finally, was the working capital trend chart. Working capital had decreased since December 31, 2014, by $241,358. That was largely attributable to the first bond payment being made. Assistant Secretary Pees made a motion to approve SSLGC's financial statements for the quarter ended March 31, 2015. Secretary Jacobs seconded the motion. Upon a vote being called, the motion carried by unanimous decision. b. Investment Report for the quarter ending March 31, 2015. Mrs. Caddell presented the Investment Report for January 1, 2015 through March 31, 2015. Interest earnings for the quarter ended March 31, 2015 were $ 3,622. Secretary Jacobs made a motion to accept SSLGC's Investment Report for quarter ended March 31, 2015. Vice - President Dwyer seconded the motion. Upon a vote being called, the motion carried by unanimous decision. c. Reimbursement to the City of Seguin in accordance with the Management Services Agreement (MSA) for the quarter ending March 31, 2015. Included in the board packet was a list of expenditures from the Operations and Maintenance budget which was paid by the City of Seguin. The expenditures for January 1, 2015 through March 31, 2015, as indicated in the first column on the report, were $1,650,187.82. The second column was the expenditures for the first six months of the year. All categories were currently under budget. In accordance with the MSA between SSLGC and the City of Seguin, The City requested reimbursement for the expenditures for the second quarter of FY2015 in the amount of $1,650,187.82. Vice - President Dwyer made a motion to approve the reimbursement to the City of Seguin in accordance with the Management Services Agreement of $1,872,763.46. Secretary Jacobs seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The sixth order of business was Budget Amendment — Susan Caddell Director of Finance & Alan Cockerell, General Manager ➢ Resolution ## SSLGC R15 -04 — Budget Amendment Attached was a budget amendment for transfers to the Repair /Replacement Fund. Currently, there was $2,130,999 budgeted in the Operating Fund for cathodic protection program. Due to the fact that project would not be complete by the end of the fiscal year, staff recommended transferring that appropriation to the Repair /Replacement Fund. The fund is a capital projects fund. Once the money is appropriated in the fund, the budget carries forward from year to year until the project is complete. Staff also recommended the transfer be made directly from the water sales, rather than go through the management services agreement. Last year the Board approved a Retained Earnings policy. The policy set a threshold for the minimum retained earnings to be held in the operating fund. The minimum policy was set at three months operating expenditures. Based on that policy, there was $3,192,159 above the threshold available for use. Staff recommended using $869,001 of the funds to bring the appropriation for the cathodic protection project to $3,000,000. The future remaining balance of $2,323,158 would be transferred to the Repair /Replacement Fund for future projects. 4of7 SSI,f_ C 1\NNUTIES kW 21 - 21015 (7 I';iges' Sad:`IN 1?,:G?'()XI.G�' ".dhl (S )o I t) ;II FinwI'rim(d: 6/18/30159:-10 1 iv1 )y' Vice - President Dwyer made a motion approve(Resolution # SSLGC R15- 04- Budget Amendment) the transfer $2,323,158 to the Repair/ Replacement Fund from the Operating Fund for future projects and $869,001 to the Repair/ Replacement Fund so that the total for Cathodic Protection Project will equal $3,000,000. Treasurer Koehler seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The seventh order of business was SSLGC Construction Update — -John Winkler,' Walker Partners & Alan Cockerell, General Manager ➢ Resolution # SSLGC R15 -05- Chlorine Dioxide System Mr. Winkler advised that this would be the cost for the Chlorine Dioxide System pilot program. He anticipates that this will resolve the issue. Vice - President Dwyer made a motion to approve (Resolution # SSLGC R15 -05) Chlorine Dioxide System (90 day pilot program once TCEQ approves the design) in the amount not to exceed $75,000 to be paid with monies from the SSLGC 2010 Bond Fund. Treasurer Koehler seconded the motion. Upon a vote being called, the motion carried by unanimous decision. Mr. Cockerell noted that he was receiving and reviewing the quotes for the parking lot repair at the SSLGC Administrative Building. The last update regarding the Wauters Engineering BPS Pipeline project was an anticipated date to begin of June 1, 2015. The eighth order of business was Legislative Update — Billy Phenix, Legislative Consultant & Alan Cockerell, General Manager Mr. Cockerell advised that he had spoken to Mr. Phenix this morning and there had not been much activity. He expected Mr. Phenix to be present at the June 18, 2015 board meeting. The ninth order of business was Water Rate-s-/Budget — Alan Cockerell, General Manager PY 2016 WIN, R.1. Fen UPGN V✓wiuonn; .�.a��m.• -o,,. •.r s, zois � a..usauwonanaia.a x«naa.�e6m raw s.e.ua.a.w..ibis6, s000wnaaw�uwaw,nn „�anar 5 of 7 V., — S 1 ,GC: ,MINUITS 05 21 - 201.5 (7 P.Igcs) �'iIG f _0 -0 R I G I N AL( S)o 1 enaryero erq brieme of saws wrwsee amens sonuuenivnrn pror yxu Abnge woNweaio rgrwm urniaipee unli sun�np FYM[S an ,wpWaw ervrce[egwaewa . SAWS I�erp weld Wrcbsee[Wrnea iobr.Mi SSLCCq bap a rb,a weln rbl rs nd can ennN EY dire r .tlw Aged enoutl brenl eo aby rd wrr,�Ae"w^a.nwrrosnws Wr[n..a, Vice - President Dwyer wanted to ensure that there were enough unknown contingencies built into the SSLGC rates to accommodate any potential disaster/ significant break in the system. Mr. Jackson advised that there were as much as a utility in our position could be expected to; will not protect against a true catastrophe but will protect against a disaster. The tenth order of business was Post Oak Clean Green, Inc. (Landfill) Patrick Lindner, General. Counsel &John Winkler, Walker Partners & Alan Cockerell, General Manager Executive Session Recommended President Greenwald deferred item ten to Executive Session The eleventh order of business was Guadalupe Project Wholesale Water Contract(s) & Well Permit's) — Patrick Lindner, General Counsel & Alan Cockerell, General Manager Executive Session Recommended President Greenwald deferred item eleven to Executive Session The twelfth order of business was Gonzales County & Guadalupe County Carrizo and Wilcox Water Leases and Pro erty Purchases — Alan Cockerell, General Manager Executive Session Recommended President Greenwald deferred item twelve to Executive Session The thirteenth order of business was Executive Session called under Chapter 551 Government Coder Section 551.071, to seek the advice of its attorney on legal matters, and Section 551.072, for deliberations regarding real estate and Section 551.074, for deliberation regarding a specific officer or empl wee. President Greenwald closed General Session at 3:01 PM Executive Session was held from 3:21 PM to 3:46 PM The fourteenth order of business was Consider and Take Action as Result of Agenda Item Number fourteen. President Greenwald reopened General Session at 3:46 PM Agenda Item #10 No action requested /No action taken Agenda Item #11 No action requested /No action taken 6of7 )) ','I 2,l} 1 > 1' SIG FI) OR YG1NAT.(S): Y Imn Pilate[ {. 6/1812i)!' 9 ; .A \1 i %'i Agenda Item # 12: No action requested /No action taken The fifteenth 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 Thursday, June 18, 2015 in the SSLGC Administrative Building at 1:30 PM ❖ Budget /Water Rates Proposal The sixteenth order of business Ad "ournment. President Greenwald declared the meeting adjourned at 3:48 PM MINUTES APPROVED THIS 18`" DAY OF JUNE, 2015. 1 OR T. "Jake" J cobs, tetary Bob Pees, Assistant Secretary 7 of 7 SSLGC MINUTES 05 -21-2015 (7 Pages) SIGNED ORIGINAL(S): I U,urj 1 inw, Yrirntcd: G/18/2015 9:',U _ NI i,/