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SSLGC 08-16-2007 MINUTES OF THE SCHERTZ-SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS ~ COUNTY OF GUADALUPE ~ SCHERTZ-SEGUIN LOCAL ~ - GOVERNMENT CORPORATION ~ On this the 16th day of August, 2007, the Schertz-Seguin Local Government Corporation convened at 1:37 p.m. in the City of Seguin Council Chambers located at 210 E. Gonzales, Seguin, Texas. The following members being present and in attendance: Members Present Robin Dwyer Ramon Cook Sydney Bauer Ken Greenwald Betty Ann Matthies Members Absent Jim Wolverton :aal Baldwin Also in Attendance Alan Cockerell Doug Faseler Don Taylor John Bierschwale Patrick Lindner Crockett Camp Bill Klemt John Winkler President Vice-President Treasurer Director Ex-Officio , Secretary Ex-Officio General Manager Seguin City Manager Schertz City Manager Schertz Assistant City Manager Legal Counsel (Davidson & Troilo) Consultant Hydrologist Consultant Consultant (Bury&Partners) 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. . The fIrst order of business was the calIin2: of the meetin2: to order. - President Robin Dwyer called the meeting to order at 1:37 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 meetin2: held on Julv 19. 2007. _ Treasurer Sydney' Bauer asked for clarification of a park fee of approximately $400 pertaining to the sale of the Vickery property, page 2, paragraph 4, line 9. President Dwyer. stated that the fee is required for. all platting by the City of the Seguin and asked for confimiation from.Mayor Matthies. Mayor M~tthies agreed. Treasurer Bauer made a motion to approve the minutes ofthe July 19, 2007, meeting as written. Director Ken Greenwald seconded the motion. Upon a vote being called, the motion.carried by unanimous decision. The fourth order of business was presentation of the General Mana2:er's report - Alan Cockerell. General Mana2:er. A copy of General Manager Cockerell's written report was included in the board agenda packet. Mr. Cockerell referred to his report. and stated that he would address several items which had transpired since the agenda packets were sent out the previous week. He would then answer questions and/or provide clarification, if needed, for items addressed or listed in his report. Agenda Item 4d - GCGCD Meeting GCGCD met August 9, 2007. Normal business was discussed. The meeting agenda and an attachment provided by Hilmar Blumberg were provided as handouts to board members. .Mr. Cockerell asked board members to review Mr. Blumberg's information in order to discuss it at the appropriate time. Agenda Item 4e - Gonzales County GCUWCD met August 14, 2007. An agenda and General Manager Barry Miller's report were handed out to board members. Mr. Miller's report included SSLGC's water measurements taken earlier in the summer and a chart of SSLGC water pumpage which is derived from well reading reports SSLGC provides to GCUWCD. Bill West, General Manager of GBRA, was to address GCUWCD board members regarding EAA legislation and the Region L Bill. Mr. West was not able to attend the meeting and Todd V otteler gave the presentation in his absence. The Region L Bill was passed to allow the state to approve the Region L plan that was submitted late. Stipulations regarding the lower GBRA project were included in the Bill. Agenda Item 4f SSLGC's closing on the sale of the Vickery property is scheduled. August 17,2007, at 4:00 p.m. No further action is needed from the Board. Other Items aContested Case Hearing Status of the. Contested Case Hearing has not changed. A session should be scheduled soon. aSSLGC FY2007/2008 Annual Budget and Water Rates Mr. Cockerell attended the Schertz City Council Meeting August 10, 2007. SSLGC resolutions R07-10 and R07-11 to adopt the Corporation's FY2007/2008 annual budget and water rates, respectively, were approved. Mr. Cockerell plans to attend a Seguin City Council meeting in September in order to receive approval of the resolutions by Seguin officials. a Permit renewal for Wells 1 - 6 Notice of permit renewals for Wells 1 - 6, required by GCUWCD, was posted in the Gonzales Enquirer and mailed to all adjacent property owners. A Hearing will be scheduled 2 in the near future. According to GCUWCD rules, SSLGC can continue to produce water as permitted during the renewal process. Questions from the Board included: What feedback was received at the Region L meeting, August 2, 2007,. regarding HB. #3776? Mr. Cockerell advised. board members that HB #3776 allows TWDB to approve the Region L plan and include it in the 2007 state water plan. Legislation requires some modification of the plan by including the Lower Guadalupe Water Supply Project with certain conditions. It stated. that the Lower Guadalupe Water Supply Project could not use fresh ground water to maintain water flow. Permission would have to be obtained from landowners for off-channel storage. Whether the conditions would be restricted to the current plan or carried into future plans will be clarified and reported at the next meeting. What do sections 4C. 7, 4C.B and 4C.32 pertain to? Vice-President Cook and Mr. Cockerell . stated that these sections of the Region L plan cover topics concerning marine and estuary. A separate authority will provide legislation for these sections, therefore, they were taken out of the Region L plan. Does SSLGC have an easement across the section of land it retained from the sale of the Vickery property? Counsel Patrick Lindner informed board members that the easement consists ofa 30 ft section across the driveway ofSSLGC's property. Was the notice of SSLGC's permit renewal only posted in the Gonzales Inquirer? Mr. Cockerell said that according to GCUWCD rules the notice is only required to be posted in the Gonzales Inquirer. The fIfth order of business was presentation of the Treasurer's report - Alan Cockerell. General Mana2:er and Susan Caddell. Director of Finance. Financial Statements, Investment Report and Management Services Agreement were included in the board agenda packet. The reports were prepared by Director of Finance Susan Caddell and reviewed by General Manager Alan Cockerell. Mr. Cockerell recommended approval of the repot:f:s.. . a) Financial Statements for the quarter ending June 30, 2007 Ms. Caddell presented the FinanCial Reports as of June 30, 2007. Report balances follow: Combined Statement of Revenues, Expenses and Changes in Net Assets Net Income $8,537,012.39 This amount includes $7.5 million received from bond proceeds when revenue bonds were issued in January and debt service payments for the second payment on tJIe bonds. Statement of Revenues, Expenses and Changes in Net Assets - Operating Fund Net Income $166,524.15 3 This amount includes two months of transfers at $8;333.33 per month to the Repair and Replacement Fund as required by bond covenants and approved by the Board of Directors, May, 2007. Construction Fund Highlights Revenues Bond Proceeds Interest Income Total Expenses Guadalupe County Project Well #9 Total $7,500,000.00 180.562.18 $7,680,562.18 $308,237.99 Net Income $308.237.99 $7,372,324.19 Next month Ms. Caddell plans to work with Consultant John Winkler to provide a more detailed report for construction. Balance Sheet - Interest & Sinking Fund Total Liabilities and Net Assets - $2,692,675.43 Bond payments are taken from this fund. The most recent bond payment of $1,750,886.67 was made on August 1,2007. Revenues, Expenses and Changes in Net Assets - Interest & Sinking Fund Net Income $1,444,901.50 Along with July. bills, both cities were asked to contribute additional funds totaling $193,698.50 towards the debt servic~ payment. Balance Sheet - Repair & Replacement Fund $291,386.44 Bond covenants require this fund to be maintained at $500,000 and it is currently being replenished at $8,333.33 per month. The fund has been used to make well and line repairs. Statement of Revenues, Expenses and Changes in Net Assets - Future Development Fund ($165,544.91) The expenditures to professional services are to pay Bury and Partners for its work on the impact fee study. The expenditures to hnprovements other than Building include the final payments on the plant expansion as well as well repairs and engineering on the new welL The expenditure for equipment is for the SCADA modifications. *Balance Sheet - Impact Fund Total Liabilities and Net Assets - $2,108.52 4 *Statement of Revenues, Expenses and Changes in Net Assets - Impact Fund Net Income $2,108.52 *The Impact Fund is a new fund added to the statements. One payment in the amount of $2,103.75 from the City of Seguin has been received through June. SSLGC's records are interfaced with the City of Seguin's records as both entities are 0:0. the same accounting/finance system. Impact fees are directly deposited into SSLGC's Impact Fund account as they are received. Normally/the funds would be submitted from each city to SSLGC on a quarterly basis. Comparative Statement of Revenues, Expenses, and Changes in Net Assets for the Operating Fund Net Income - $166,524.15 Revenues have increased by $38,812.02. Expenditures have increased by $212,544.51. Net Income for 2007 is $166,524.15. Net Income for 2006 was a decrease of $143,165.71. Springs Hill decreased by $101,535.00. Springs Hill's rates are now broken down by operat:iD.g and maintenance rate, I&S rate and future development rate. The total income from Springs Hill as of JUne 30, 2007, is $286,650.00 and is $58,170.00 larger than last year. The large amount of rain received recently has slightly affected revenue from Springs Hill, Universal City and Schertz. Universal City has not taken any water since March. Last year the City of Seguin could not take water for two months due to a line break, therefore, Seguin revenue for this year has increased. Working Capital Trend Chart Working capital has increased since Marc4 31, 2007, by $703,511. This trend usually occurs the quarter before the next bond payment is due. Questions from the Board included: " " . Two check; for mitigation on two wells, which were never signed by landowners, were voided What is the Corporation's liability regarding the voided check;? Counsel ~atrick Lindner stated that the mitigation checks were issued as a courtesy to the landowners and the Corporation has no legal obligation. b) Investment Report for the quarter ending June 30,2007 Currently Tex-Pool has the highest interest rate at 5.37% and as much money as possible is being placed with it. Interest has increased from the last quarter by $4,166.00. Interest rates are staying level within .5% of the interest rates four or five months ago. Vice-President Cook made a motion to approve the Inyestment Report as written. Treasurer Bauer seconded the motion. Upon a vote "being called, the motion passed by unanimous decision. c) Reimbursement to the City of Seguin in accordance with the Management Services Agreement for the quarter ending June 30, 2007 Expenditures for April 1, 2007, through June 30,2007, are $387,229.00. The only account showing a negative balance is Attorney Fees. 5 Ouestions from the Board included: How is the City of Schertz compensated for the general manager's salary? Ms. Caddell advised board members that the City of Schertz sends the City of Seguin a quarterly statement for the general manager's salary and the City of Seguin reimburses the City of Schertz. Reimbursement for the general manager's salary is included in the MSA report. President Dwyer made a motion to reimburse the City of Seguin $387,229.00 in accordance with the Management Services Agreement for the quarter ending June 30, 2007. Treasurer Bauer seconded the motion. Upon a vote being called, the motion passed by unanimous decision. Before the next agenda item was addressed, General Manager Cockerell introduced SSLGC's scholarship recipients from Nixon-Smiley CISD who had just arrived. Megan Tristan, Carmen Martinez, and their escort Maggie Gaytan from the school district were presented to the Board. Ms. Tristan plans to attend UTSA in San Antonio and Ms. Martinez plans to attend Austin Community College in Austin. Both scholarship winners .expressed their thanks and sincere appreciation for the awards. Mr. Cockerell thanked board members for. authorizing funds for the students. Board members congratulated the young women and wished them good luck in the future of their education. The sixth order of business was the Mana2ement Services A2:reement between SSLGC and the Cities of Schertz and Sef!Uin - Alan Cockerell. General Mana2:er. President Dwyer noted that the agreement is renewed annually and nothing substantial had changed from the previous year's contract. After the resolution is adopted by the board, Mr. Cockerell will present it to both city councils for approval. President Dwyer asked if anyone had questions for the city managers or board members regarding the Management Services Agreement. No questions were asked and addition31 discussion was not needed. Treasurer Bauer made a motion to adopt Resolution SSLGC R07-12 to approve the Management Services Agreement between SSLGC and the City of Seguin and SSLGC R07-13 to approve the Management Services Agreement between SSLGC and the City of Schertz as presented in the board packet. Director Greenwald seconded the motion. Upon a vote being called, the motion passed by unanimous decision. The seventh order of business was the Contract between SSLGC and Crockett Camp - Crockett Camp. Mr. Camp's contract continues on a month to month basis as previously agreed upon until a new contract is ready for negotiation. The ei2:hth order of business was Water Lease Contracts for Guadalupe County - Crockett Camp. Proiect Mana2:er. President Dwyer deferred Agenda Itein #8 to Executive Session. The ninth . order of business was Water Lease Contracts for . Gonzales County - Crockett Camp. ProiecfMana2:er. President Dwyer deferred Agenda Item #9 to Executive Session. 6 The tenth order of business was Guadalupe Countv Project Status - Alan Cockerell. General Mana2:er and John Winkler. Burv+Partners. Mr. Cockerell referred to handouts provided to the Board earlier in the meeting pertaining to Ardaga and Associates' progress in contacting land owners in Guadalupe County. He added that Ardaga representatives have not received many positive responses from landowners in Guadalupe County. Mr. Cockerell asked for feedback from board members regarding landowners they may know. The information would be discussed at a later date. Mr. Cockerell referred to Bury+Partners' progress report provided in the agenda packet. A detailed time-line was included in the report. He also called attention to a one page time-line handout regarding when additional water would be available for sale. He advised board members that the project is losing time in regard to developing additional wells in Gonzales County and/or building a treatment plant in Guadalupe County. Landowner negotiations and design work are falling behind the four month schedule. The time-line shows that the TCEQ review of well design and district permit application process will take approximately six months. Although the permit application process should not take long in Guadalupe County, the process is more difficult in Gonzales County and may take longer than expected. Bidding and construction of both projects are estimated to take 12 months. In summary, although the time-line shows additional water should be available in June 2009, the early processes in the project such as landowner negotiations to secure water rights are moving slowly and the date for additional water will be moved out considerably. The locations of wells and a treatment plant in Guadalupe County are other issues. Bury+Partners is ready to start detailed design work such as surveys and staking off property, but locations of the wells and treatment plant have not been determined. A design-review meeting is scheduled August 21,2007, in Seguin. Vice-President Cookhas been representing the Board at the meetings. Other board members are invited to attend as long as a quorum of the board of directors is not present. Technical memoranda will be discussed. An electrical memorapdum is included in the board agenda packet. Guadalupe Valley Electrical Cooperative (GVEC) provides electrical service to the existing water treatment plant (WTP) and will provide it to the proposed WTP2. GVEC's background and SSLGC's electrical requirements are included in the technical memorandum. The eleventh order of business was the Operations Status Report includin2: pipeline and well repair - Dan Dru2:an. Water Systems Mana2:er. Mr. Drugan's report included the following: . . Regeneration of green sand in nine filters has been completed. This process is usually done every six months, but the time period was extended a little longer this time in order to wait for three new filters so that all filters would be on the same maintenance schedule. . Secondary repairs were done to raw water inlet plpmg at the filtration plant. Corrosive water had caused leaks in the inlet piping. Operators will continue to monitor the raw water inlet piping in order to prevent future leaks. . Timer relays have been replaced at several well sites. 7 . Alan Cockerell, John Schraub, Mr. Drugan, two Seguin operators and two -SSLGC operators attended a TCEQ Water Conference in Austin on August 14-15. . SSLGC will host the September 21st meeting of the Armadillo District of the Texas Water Utilities Association at 6:00 p.m. at the Seguin Coliseum. The District will be celebrating its 25th Anniversary. Water Utility Manager John Schraub is a charter member of the District. Water operators and waste water operators receive training hours for attending the meeting. The meeting will include a banquet and business meeting. Mr. Drugan invited board members and staff to attend. . All eight wells are in 'operation although Well #1 has been turned off temporarily because its flow meter is not registering correctly. . No major leaks were reported in the pipeline. . Mr. Drugan's department is fully staffed~ Jesse Herrera is the newest member and in Mr. Drugan's opinion learning the operation quickly. The twelfth order of business was presentation of consultant report - , Crockett Camp. Consultant. Mr. Camp deferred Agenda Item #12 to Executive Session. The thirteenth order of business was presentation of consultant report - Bill Klemt. Hvdrolo2:ist Consultant. Mr. Klemt reported that Modeling Consultant Randall G. Larkin had turned in a good first draft. President Dwyer closed General Session at 2:20 p.m. The fourteenth order of business was Executive Session called under Chapter 551 Government Code. Subsection 551.071. to seek the advice of its attorney on le2:al matters relatin2: to the Board of Directors' ri2:hts and liabilities under certain contracts and Section 551.072 to deliberate the purchase of certain real estate. ' Executive Session was held from 2:35 p.m. to 3:20 p.m. President Dwyer closed Executive Session at 3:20 p.m. and opened Regular Session at 3:21 p.m. The fIfteenth order of business was to consider and take action as a result of A2:enda Item #14. As a result of Executive Session: President Dwyer called the meeting to order and reverted to Agenda Item #9, water lease cOJ;ltracts for Gonzales County. . 8 I I I I President Dwyer made a motion to authorize General Manager Alan Cockerell to execute water leases with Milton C. Butcher, Donco Investments, Ltd., Alvin, W. Pawelek and W. P. Whitley on behaH of the Corporation. Vice-President Cook seconded the motion. Upon a vote being called, the motion carried by. unanimous. decision. No action was taken on Agenda Item #8, water lease contracts for Guadalupe County, or Agenda Item #12, presentation of Consultant Crockett Camp's report, as a result of Executive Session. The sixteenth order of business was additional Board of Directors discussion and/or comments. Vice-President Cook advised the Board, he would represent them at the DesignlReview Meeting scheduled August 21,2007. President Dwyer thanked everyone for their continued hard work and participation with the Guadalupe and Gonzales expansion projects. No additional discussion and/or comments were discussed... The seventeenth order of business was adjournment. President Dwyer declared the meeting adjourned at 3:24 p.rn. The next regular meeting was scheduled for September 20, 2007, in Schertz. MlNUTES APPROVED THIS. c::OOlv\ DAY O~007. SIGNATURE OF DIRECTORS ABSENT Jim Wolverton, Secretary ~ Sydney Bauer,. Treasurer- ~~~ Ken Greenwald, Director 9