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08-18-2016MINUTES OF THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS COUNTY OF GUADALUPE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION On this the 18`h day of August, 2016 the Schertz /Seguin Local Government Corporation (SSLGC) convened at 1:31 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 Bob Pees Jim Fowler Mayor Keil T. "Jake" Jacobs Vice- President Assistant Secretary Ex- Officio Ex- Officio Secretary With the following member(s) being absent: Andrew Hunt Treasurer 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 Rick Cortez Assistant City Manager (City of Seguin) John Kessel City Manager (City of Schertz Dudley Wait Executive Director of Operations (City of Schertz) Susan Caddell Director of Finance (City of Seguin) Patrick Lindner Felix Arambula John Winkler Crockett Camp Bill Klemt Emery Gallagher Alan Cockerell Amber Briggs Meya Acufia Regina Franke Mark McLiney General Counsel (Davidson, Troilo, Ream & Garza) San Antonio Water System (SAWS) Consultant (Walker Partners) Consultant Consultant /Hydrologist Water Utility Manager (City of Seguin) General Manager (SSLGC) Assistant General Manager (SSLGC) Administrative Technician (SSLGC) Former Administrative Assistant (SSLGC) SAMCO The first order of business was to Call the Meeting to Qrder President Ken Greenwald called the meeting to order at 1:31 PM The second order of business was Public Comment Regina Franke was presented an SSLGC plaque for 5 years of service by Ken Greenwald. 1of7 SSLGC MINUTES 08/18/2016 (7 Pages) SIGNED ORIGINAL(S): I Date /Tirne Printed: 9/9/2016 11:12 AM rcf General Manager Alan Cockerell asked for the floor to convey his thanks to Regina Franke for her service to SSLGC and CVLGC. The third order of business was of the Minutes for the Board Meeting held July 21,201 Assistant Secretary Pees made a motion to approve the July 21, 2016 minutes. 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 General Manager's Report — Alan ockerell, General lVi n�ager General Manager Cockerell's written report was included in the board packet. He added the following to his written report: ➢ Water Production Seasonal pumping and monthly water sales charts were included in the board packets. Water production for the month of July was 67.0% of the Gonzales County Underground Water Conservation District's (GCUWCD) monthly allowable. ➢ GCUWCD Mofll&� v Mecdi�rg The monthly meeting was held July 9, 2016; Miss Briggs attended. A copy of the agenda was included in the board packet. All items on the consent agenda passed. 1bio imlig�g Well The meeting was held July 21, 2016, to discuss the installation of monitoring wells. Permit holders are working with the Gonzales and Guadalupe districts to identify monitor well locations in the Carrizo outcrop. A follow -up meeting is scheduled for August 22 "d ➢ GCGCD M ahly Meeling The meeting was held August 11, 2016; Miss Briggs attended. A copy of the agenda was included in the board packet. ➢ Region L /GMA- 13 /RWA Repim 1, There was a meeting held August 4, 2016 to fill Region L vacancies. All were filled with the exception of the Counties Representative. The Counties Representative vacancy still remains unfilled due to an administrative error involving applicants who were not properly nominated. The Region L board decided to review applications in November. Mr. Cockerell will resubmit his application for this vacancy. ➢ Operations Report LT11.ti': Just South of Marion on SSLGC's 36" Pipeline on the Garza property, a leak occurred due to corrosion of a non - standard joint on this portion of the pipeline. The pipeline was shut down for repair and both Schertz and Seguin city officials, and SAWS were notified as operators are in the process of repairing this leak. ➢ CVLGC The CVLGC Board meeting was held July 28, 2016 in Cibolo and a copy of the agenda was included in the board packet. Work continues to execute water leases with landowners. 2of7 SSLGC MINUTES 08/18/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 9/9/2016 11:12 AM rcf The next board meeting was scheduled for August 25, 2016 in Schertz. The fifth order of business was Presentation of Treasurer's Report — Susan Caddell Finance Director & Alan Cockerell, General a. Financial statements for the quarter ending June 30, 2016 Mrs. Caddell offered her report as follows: Attached were the financial reports for the nine months ended June 30, 2016. The first three pages were the balance sheets for all the SSLGC funds. The two pages following the balance sheet were the income statements 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. Mrs. Caddell reviewed the balance sheet for the SSLGC funds. The first column is for the Operating Fund. This fund consists of cash and investments of $3,598,380.48. The second column is for the balance of the bonds that was issued for the purchase of the Booth property. There is a balance of cash and investments of $38,717.98. The third column is for the Interest and Sinking Fund. The cash and investment balance in this fund is $1,597,827.16. The fourth column is for the Repair and Replacement Fund. The cash and investment balance is now $7,144,181.26. The fifth column is for the Future Development Fund. The cash and investment balance is $1,717,662.23. The sixth column is for the Impact Fund. The cash and investment balance in this fund is $3,911,362.20. The seventh column is for the Reserve Fund. The required amount to maintain in the Reserve Fund according to bond covenants is $1,275,621.10. The cash and investment balance in this fund is $1,285,464.79. The eighth column is the 2010 Bond Fund. The cash and investment balance in this fund is $573,899.55. We still have $402,701.16 in outstanding purchase orders for this fund. Mrs. Caddell continued by the review of the income statement for the SSLGC funds. The first column is the Operating Fund. The net income before transfers is $1,715,698.19. After the budgeted transfers to the Repair and Replacement Fund and the Future Development Fund, the net loss is $57,759.56. At the board meeting in May, the board voted to approve an additional transfer of $400,000 to the Repair and Replacement Fund in accordance with our Fund Balance Policy. The second column is income statement for the bond proceeds and expenditures from the bonds issued in January of 2015. The third column is I &S Fund. This includes the first bond payment in the amount of $3,356,781.25. Another bond payment will be made August 1 in the amount of $1,662,656.25. The fourth column is for the Repair and Replacement Fund. The expenditure for Improvements other than Buildings is for the cathodic protection project and for engineering services for tank rehabilitation. The amount for Heavy Equipment is for the purchase of the vacuum truck. The fifth column is the Future Development Fund. The expenditure for $30,237.50 is for the parks master plan. The expenditure for $661,412.00 was for the purchase of the Parker property. The sixth column is the Impact Fund. For the year, we have received a total of $583,868 in impact fees. The eighth column is for the 2010 Bond Fund. I have provided a report, at the back, with an accounting of the expenditures of the bond funds since we received the proceeds at the board meeting. The total column indicates net income of $947,780.56. As indicated earlier, the reports following the SSLGC Fund reports were those for the SAWS Funds. Mrs. Caddell advised that the Comparative Income Statement for the Operating Fund was towards the back of the report. Revenue has decreased by $824,037.29. This is largely due to the reduction in sales to SAWS. The revenue from the water sales to SAWS has reduced by $810,197.06. Expenditures have increased by $509,601.43, with the largest being in professional services of $281,743.82 due to the landfill opposition. Our net income before transfers decreased from last year by $1,333,638.72. 3of7 SSLGC MINUTES 08/18/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 9/9/2016 11:12 AM rcf Finally, Mrs. Caddell called attention to the working capital trend chart. Working capital has increased since March 31, 2016, by $1,102,314. This trend is due to the fact we are collecting for our next bond payment, but that payment will not be made until the last quarter. Vice - President Dwyer made a motion to approve SSLGC's financial statements for the quarter ended June 30, 2016. Secretary Jacobs seconded the motion. Upon a vote being called, the motion carried by unanimous decision. b. Investment report for the quarter ending June 30, 2016 Mrs. Caddell presented the Investment Report for April 1, 2016 through June 30, 2016. Interest earnings for the quarter ending June 30, 2016 were $25,622. Secretary Jacobs made a motion to accept SSLGC's Investment Report for quarter ended March 31, 2016. Assistant Secretary Pees 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 for the quarter ending June 30, 2016 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 April 1, 2016 through June 30, 2016, as indicated in the first column on the report, were $2,515,654.52. 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 third quarter of FY2016 in the amount of $2,515,654.52. Assistant Secretary Pees made a motion to approve the reimbursement to the City of Seguin in accordance with the Management Services Agreement of $2,515,654.52. Vice - President Dwyer seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The Sixth order of business was the Annual Audit/Engagement Letter — Armstrong, Vaughn, & Associates, Alan Cockerel], General Mangger & Susan Caddell, Finance Director ➢ Resolution #S LGC R16 -1 A copy of the engagement letter was included in the board packet. In September 2015 the board approved the resolution to retain the services of Armstrong, Vaughn, & Associates not to exceed three years. Mr. Cockerell requested that the board approve the resolution and sign and submit the engagement letter between SSLGC and Armstrong, Vaughn and Associates for conducting an annual audit. Vice - President Dwyer made a motion to approve resolution R16 -14 with a spelling correction. Assistant- Secretary Pees seconded. Upon a vote being called, the motion carried by unanimous decision. The seventh order of business was SSLGC Plant Improvements /Cost Estimate — John Winkler, Vii' ]ker Partners & Alan Cockerell General Manap,,er Mr. Cockerell and John Winkler of Walker Partners presented a list of improvements and cost estimates that were included in the board packet. Mr. Winkler will prepare documents to solicit construction bids and will present them at a future board meeting. 4of7 SSLGC MINUTES 08/18/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 9/9/2016 11:12 AM rcf The eighth order of business was the Interlocal Agreement City of Scher z and City of Seguin - Alan Cockerell, General Manager and Mark McLiney, SAMCO ➢ Resolution #SSLGC R16 Mr. Mark McLiney presented the resolution with financing agreements for the SWIFT loan. Mr. McLiney informed the board that SSLGC has been approved but still waiting for interest rates. Mr. McLiney advised the board of important dates regarding the SWIFT loan funds as well as penalty information. Executive Session Recommended President Greenwald deferred item eight to Executive Session. The ninth order of business was - -- CONSIDERATION AND APPROVAL OF A RESOLUTION APPROVING THE STATE WATER IMPLEMENTATION REVENUE FUND FOR TEXAS FINANCING AGREEMENT BETWEEN THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION AND THE TEXAS WATER DEVELOPMENT. BOARD AND OTHER MATTERS IN CONNECTION THEREWITH ➢ R &solution # SSLGC R16 -15 Executive Session Recommended President Greenwald deferred item nine to Executive Session. The tenth order of business was CONSIDERATION AND APPROVAL OF A ftE$-0—LUTIOI'N APPROVING THE BOARD PARTICIPATION PROGRAM FINANCING AGREEMENT BETWEEN THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION AND THE TEXAS WATER DEVELOPMENT BOARD AND OTHER MATTERS IN CONNECTION THEREWITH ➢ Resolution #SSLGC R16 -16 Executive Session Recommended President Greenwald deferred item ten to Executive Session The eleventh order of business was CONSIDERATION AND APPROVAL OF A RESOLUTION APPROVING THE BOARD PARTICIPATION PROGRAM MASTER AGREEMENT BETWEEN THE SCHERMSEGUIN LOCAL _ _!GOVERNMENT CORPORATION AND THE TEXAS WATER DEVELOPMENT BOARD AND OTHER MATTERS IN CONNECTION WTHEREWITH ➢ Resolution #SSLGC R16 -17 Executive Session Recommended President Greenwald deferred item eleven to Executive Session. The twelfth order of business was SSLGC Construction Update -- John Winkler: Walker Partners & Alan Cockerell, General Manager Mr. Cockerell advised of the following: • Chlorine Dioxide (Task Order # 16) SSLGC would like to purchase the skid and solicit bids for permanent installation and improvements per the cost estimate. • Cathodic Protection Project (Task Order # 17) Cathodic protection all deep bed anodes and rectifiers are installed on 42" section and waiting on power to place them into service. We have between 40 and 45 more joints to bond on the pipeline. This process is slow due to amount of concrete. We anticipate having all joints bonded within next 45 days. • Metal Tank Rehabilitation (Task Order # 20) Tank painting is progressing slowly. Several issues have been noted and called to contractor's attention to fix. SSLGC is discussing issues with staff and assessing options. 5 of 7 SSLGC MINUTES 08/18/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 9/9/2016 11:12 AM ref a WTP1 Upgrades (Task Order # 21) Drawings are currently being worked on. • High Service Pump Controller Upgrade (Task Order # 22) We are progressing with the installation of new starters. There are several issues with the existing wiring which is being resolved as the installation progresses. We anticipate having two units running by end of this month. • SSLGC Park & Recreation Master Plan (Task Order # 19) No further work is being conducted until funding is made available. The thirteenth order of business as Cibolo Relocation of the 36 inch Pipeline --John Winkler Walker Partners & Alan Cockerell General Mana er Staff is trying to schedule a meeting with City of Cibolo. The fourteenth order of business was Legislative Update -- Billy Phenix, Legislative Consultant &.Alan Cockerelh General Mana er No action requested /No action taken The fifteenth order of business was Post Oak Clean Green, Inc. (Landfill) — Patrick Lindner, Genera! Counsel &_John Winkler, Walker Partners No action requested /No action taken The sixteenth order of business was Guadalupe Project Wholesale Water Contracts) & We Permit — Patrick. Lindner, Gen 1 Counsel & Alan Co k r ll General Manager No action requested /No action taken The seventeenth order of business was Gonzales County & Guadalupe County Carrizcs Wilcox Water Leases and Property Purchases — Alan Cockerell, General Manager No action requested /No action taken The eighteenth order of business was Executive Session called under Chanter 551 Government Code, Section 551,071, seek the advice Qf its attorney n le al matters, and Section 551.072 for deliberations regarding real estate and Section 55.1.074 deli er_ fi ns reg arding a specific officer of emplo r� ee President Greenwald closed General Session at 2:24 PM Executive Session was held from 2:37 PM to 3:38 PM The nineteenth order of business was Consider and 'fake Action a. Res f end Item Number E ahtee President Greenwald reopened General Session at 3:38 PM Agenda Item #8 Assistant - Secretary Pees made a motion to postpone approval of resolution R16 -18 until a special meeting scheduled August 29, 2016 at 9 a.m. occurs. Vice - President Dwyer seconded. Upon a vote being called, the motion carried by unanimous decision. Agenda Item #9 Assistant - Secretary Pees made a motion to postpone approval of resolution R16 -15 until a special meeting scheduled August 29, 2016 at 9 a.m. occurs. Vice- President Dwyer seconded. Upon a vote being called, the motion carried by unanimous decision. 6of7 SSLGC MINUTES 08/18/2016 (7 Pages) SIGNED ORIGINAL(S): 1 Date /Time Printed: 9/9/2016 11:12 AM rcf Agenda Item #10 Assistant - Secretary Pees made a motion to postpone approval of resolution R16 -16 until a special meeting scheduled August 29, 2016 at 9 a.m. occurs. Vice - President Dwyer seconded. Upon a vote being called, the motion carried by unanimous decision. Agenda Item #11 Assistant - Secretary Pees made a motion to postpone approval of resolution R16 -17 until a special meeting scheduled August 29, 2016 at 9 a.m. occurs. Vice - President Dwyer seconded. Upon a vote being called, the motion carried by unanimous decision. The twentieth order of business was Consideration and/or Action on questions and possible items to be placed on the next agenda ➢ A Special Board Meeting was scheduled for Monday, August 29, 2016 in SSLGC Administrative Building at 9 A.M. ➢ Agenda items eight, nine, ten, and eleven that were postponed at the August 18`' meeting will be further discussed. The twen -first order of business was Adjournment President Greenwald declared the meeting adjourned at 3:46PM MINUTES APPROVED THIS I a DAY OF •: 7 of 7 Bob Pees, Assistant Secretary SSLGC MINUTES 08/18/2016 (7 Pages) SIGNEID ORIGINAL(S): 1 Date /Time Printed: 9/9/2016 11:12 AM rcf