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SSLGC 01-18-2007 MINUTES OF THE SCHERTZ SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS ~ COUNTY OF GUADALUPE ~ SCHERTZ SEGUIN LOCAL ~ GOVERNMENT CORPORATION ~ On this the 18th day of January, 2007, the Schertz Seguin Local Government Corporation convened at 1:38 p.m. in the City of Schertz Council Chambers located at 1400 Schertz Parkway, Building #4, Schertz, Texas. The following members being present and in attendance: Members Present Robin Dwyer Ramon Cook Jim Wolverton Sydney Bauer Ken Greenwald Members Absent Betty Ann Matthies Hal Baldwin Also in Attendance Alan Cockerell Don Taylor John Bierschwale Dick O'Neal Crockett Camp Bill Klemt Mickey Fishbeck John Winkler President Vice-President Secretary Treasurer Director Ex-Officio Ex-Officio General Manager Schertz City Manager Assistant City Manager Legal Counsel (for Patrick Linder) Consultant Hydrologist Consultant Consultant (Rimrock Consulting) Consultant (Bury&Partners) Constituting a maJonty 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. A photograph of the Board was taken prior to the Board Meeting. The first order of business was the callin2: of the meetin2: to order. President Dwyer called the meeting to order at 1 :38 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 meetin2: held on December 21. 2006. President Dwyer requested the following correction be made to the minutes: Page 2, Linel - Change "......with the SSLGC SInce its inception In 1991......" to ".. .. . . with the SSLGC since its inception in 1998." Contingent on the correction, President Dwyer made a motion to approve the minutes. Treasurer Bauer seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The fourth order of business was a Public Hearing on proposed Land Use Assumptions and Capital Improvement Plan - Robin Dwyer, President. President Dwyer turned the agenda item over to General Manager Alan Cockerell. Mr. Cockerell introduced Mickey Fishbeck with Rimrock Consulting. Ms. Fishbeck gave a presentation on the development of impact fees for the Schertz Seguin Local Government Corporation (SSLGq which included land use assumptions and the CIP. Handouts were distributed to the Board. The following is a summary of the information Ms. Fishbeck provided: The SSLGC has engaged the engineering firm ofBury+Partners, in association with Rimrock Consulting Company, to develop water impact fees. Technical work, including planning and background work, was performed by Bury+Partners. The public participation process was developed by Rimrock Consulting. The public participation process will be the basis for the resolutions to be passed January 18,2007, to enact an impact fee. In accordance with Chapter 395, the Board of Directors of the SSLGC appointed an Impact Fee Advisory Committee, with whom the consultants have worked to develop the technical studies used in the development of the fee. The executive summary of the capital improvements plan report contains information regarding land use assumptions and development of the CIP upon which the water impact fee will be based. Impact fees are charged to new development which imposes new or expanded demand on the Corporation's water utility. The fees are assessed based on size of the water meter installed no matter what the land use is, residential, commercial or industrial. Impact fees are not charged to existing customers of the utility unless they purchase expanded capacity, generally indicated by the purchase of a larger water meter. The 70th Texas Legislature passed Senate Bill 336 (subsequently Chapter 395 of the Local Government Code) regulating various types of utility fees, defined in the legislation as "impact fees." Such fees include not only traditional impact fees, but also lot, acreage, frontage and other typical utility fees, as well as, facility dedication requirements. The legislation laid out very specific requirements for the technical development of impact fees, as well as, the procedures necessary for enactment of impact fee programs. In 2001, an amendment was passed to Chapter 395 (SB243), which made various changes to the administrative and fee calculation requirements which are also incorporated in this study. By law the Impact Fee program is limited to a lO-year program and is updated every five years. It can be updated more frequently, if needed. It is based on fair share cost. New customers pay their fair share and old customers pay their fare share. There is no cross- subsidizing between old and new customers. 2 A system-wide basis, i.e., everyone pays the same fee or a geographic-specific basis, i.e., to break it up in sub-area type designations may be used. The advice of the Advisory Committee was to have a system-wide fee. The land use assumptions came directly from the respective Impact Fee programs of Schertz and Seguin. Ms. Fishbeck showed a chart of the population and land use projections for Schertz and Seguin which came directly from the Cities' studies. The Committee adopted what the Cities already had in place. Fees must be spent on facilities in the Impact Fee CIP or costs of the Impact Fee Study. Fees are assessed at the time of plat filing. They are collected late in the development process by the Cities when building permits are issued or at plat purchase. The Cities and Corporation have agreed the impact fees collected for the Corporation will be collected by the Cities at the same time they collect their own fees, and then remitted to the Corporation. The Cities and Corporation could possibly lose revenue over time, e.g., if a customer would plat today and not build for 20 years. An entity can only charge what the fee is today. Generally, with rapid development, this is not much of a problem. Additionally, fees are updated every five years. The first hearing, January 18, 2007, is part of an administrative two-hearing process to adopt a new fee. When the fee is updated later only one hearing is needed. The first hearing is for land use assumptions and is the planning basis of development of the fee and CIP. Any person may appear at the hearing and speak either for or against the land use assumptions and associated CIP. After the first hearing, if the Board is in agreement with the land use assumptions and CIP, a resolution will be passed adopting them and a resolution will be passed to schedule the second hearing. A second hearing regarding the maximum amount of the fee will be held on February 22, 2007. After the second hearing, a resolution will be passed equivalent to a City ordinance that adopts an impact fee. The law requires that public hearing notices and packets be made available to the public at the same time the notice is put in the local newspaper. Notices are also mailed to anyone who requests one. The same procedure for notice requirements is followed for both the first and second hearing. Ms. Fishbeck introduced John Winkler who would answer questions regarding the CIP. He gave a brief summary of the CIP which identified projects through 2017 to serve growth from 2007 - 2017. An inventory was performed of existing and planned capital facilities. Specifically for each facility a. definition is made as to what it is, how much it cost, what the total capacity is, how much capacity is needed for current residences or current users, how much is needed in the next ten years which is what the fee is based on and how much is left over after that. The fee itself is based upon a portion of the capacity of each of many different facilities that will be needed to serve the community for the next ten years. The projects identified in the SSLGC Strategic Plan was the basis used to develop the CIP. The consulting team and Impact Fee Advisory Committee worked closely with both Cities' staffs to coordinate the CIP and to identify the specific projects. 3 President Dwyer noted that Vice-Chairman Jim Price of the Impact Fee Advisory Committee was present at the meeting and asked if he had anything to add. Mr. Price reported that the Committee had relied on much expertise in developing the Impact Fee plan. He added the Committee's biggest concern was that it be fair to the Cities and the users. The impact fee would impact the growth of the areas involved. President Dwyer thanked Mr. Price for his time and efforts. President Dwyer asked for discussion from the public regarding the hearing. With no comments, he closed the public hearing portion of the meeting. The fifth order of business was discussion and possible action on resolution to approve recommended Land Use Assumptions and Capital Improvements Plan to be used in support of projected adoption of Water Impact Fees - Alan Cockerell, General Manager. Secretary Wolverton made a motion to pass a resolution to adopt the recommended Land Use Assumptions and Capital Improvements Plan. Director Greenwald seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The sixth order of business was a resolution for setting the second Public Hearing in Seguin, February 22, 2007, to set the impact fee amount - Alan Cockerell. Secretary Wolverton made a motion to pass a resolution to schedule the second Public Hearing in Seguin for February 22, 2007. Treasurer Bauer seconded the motion. Upon a vote being called, the motion carried by unanimous decision. Mr. Cockerell noted February 22nd to be the regularly scheduled Board meeting. It will be the fourth instead of the third Thursday in order to give the appropriate 30 day notice for the Public Hearing. Mr. Cockerell stated that a copy of the resolution to be passed for the fee to be set at the February 22nd Board meeting was included in the Board packets. The seventh order of business was presentation of the General Mana2:er's Report and discussion and possible action in response to said report - Alan Cockerell. General Mana2:er. Mr. Cockerell reported on the following: a. Gonzales County Underground Water Conservation District. The District met on January 9, 2007. Normal business was conducted at the meeting. The contested case hearing regarding SAWS transportation permits scheduled for January 16, 2007, was postponed due to inclement weather. It will be rescheduled in early February. The Water Protection Association (WPA) met on January 9, 2007, in Gonzales. Representatives from the Regional Water Alliance (RWA) gave a presentation about its organization. There was a large crowd in attendance. The WP A is seeking party status in the SAWS contested case hearing and has hired Larry Dunbar as its attorney. Mr. Cockerell has 4 received an application to join the organization. Information regarding the WP A is included in the Board packet. b. Guadalupe County Groundwater Conservation District. The District met on January 11, 2007. Bill Klemt gave a presentation on the Wells Ranch project by Canyon Regional Water Authority (CRW A). Plans are to drill up to seven test holes to evaluate formation of the land and to provide necessary information to develop a well field. The District is moving ahead with its plans. Details from Mr. Klemt's report and a map showing the Wells Ranch are included in the Board packet. c. Well Repair Status and Equipment Purchases. Wells #1 and #4 Two stainless steel pumps have been ordered for Wells #1 and #4 from Peerless Equipment, Limited. The delivery date is in 16 weeks which will be mid-April. Communication with Peerless had not been good for the past week due to bad weather. Mr. Cockerell is working with Ray Garcia with Peerless to accelerate delivery of the pumps. Mr. Cockerell informed the group that the cost of one Peerless Goulds pump is $22,000. He noted that in the future close attention will be paid to where the pumps are purchased, what material they are made of, how they are assembled, and how they are installed. He added that different options were being considered regarding the repair and installation of the pumps and that the project as a whole was being very closely monitored. Well #8 The pump on Well #8 was pulled by Peerless on January 8, 2007. The oil tubing is to be replaced along with all the shaft bearings. The replacement tubing is due January 30th. The top seal of the pump had also failed and will be replaced. The pump was otherwise in good shape since it was placed in service last August. One section of the stainless column had damage to the threads and will have to be repaired. Peerless is working to repair the problem. They are in the process of inspecting all components and will recommend repair and/or replacement of any damaged parts. A camera survey of Well #8 was conducted January 11,2007. The problem area at 944 feet was closely examined and it appears that the damage is not progressing. The wire wrap around the outside of the screen appears to be intact. Speculation is that after completion of the well, some drilling mud trapped behind the screen may have brought some sand particles in the well thus eroding the holes. It does not appear to be an issue, however, whenever a pump is pulled there will be a down hole camera survey and the screen/down hole will be closely monitored. Pipe Line Leak A repair of a leak on the 42 inch pi feline near CR 114 was completed January 10,2007. The leak had been identified January 8t and both Cities had been notified. A plan was developed to mobilize a repair crew and minimize the downtime of the pipeline. The leak was in the same place a repair had been done last January. The leak is occurring in a place in the pipe 5 that was repaired during initial installation. A large metal plate was placed over the problem area from the outside, but technicians were unable to grout the exposed metal inside the pipe. A more extensive repair may have to be done in the future. The patch should hold up, but with bare metal inside the pipe it may experience corrosion problems in a few years. Without a man-way into the pipeline there is no way to tell exactly what happened inside the pipe. A plan is being discussed with Bury+Partners to develop the required repair methods and materials. Filter Media A meeting was held with Bury+Partners on January 11, 2007, to discuss filters and filter media. Tonka has conducted analysis of media samples and identified that the media is degrading. Bury+Partners has analyzed the sample results and consulted with Tonka and media manufacturers. Their recommended plan is to inspect internal components of filters for corrosion and monitor filter media level. The plan is to drain and inspect the under drain plates of filter #1 on January 24,2007. Bury+Partners will be there. Based on the inspection results a long-term plan for filter rehabilitation will be developed. All media could be replaced, but if the filters are degrading a different approach may be taken. Mr. Cockerell added that water quality is monitored very closely. No degradation of water quality has been seen. The filters are working, but filter media will degrade over time. Ph, temperature and pressure are main factors which degrade media. The media is expected to degrade over a 10-year period. Bury+Partners believe the filters should be flOe for this summer, but a plan will be developed to change them out next winter. Payment for Well Repairs Mr. Cockerell summarized payment for repair of Wells #1, #4 and #8 below: Estimate for well repairs: ($153,372.80) Available balance in Future Development Fund $50,991.22 Available balance in Repair/Replacement Fund $6.668.19 Balance owed and not in Operating Fund ($95,713.39) An option for paying these repairs would be to take it out of the Repair/Replacement fund and to rebuild the fund to the required $500,000 with monthly payments of $8,333.33 for 11.5 months. Drain Valve Repair An inventory of drain valves was broken into eight sections from the valve vault to the Schertz Live Oak Tank. Some sections have three and some have four valves. Five valves have been repaired. A chart showing eight sections to be repaired totaling $150,000 was handed out to Board members. Repairs should be made before a heavy load on the pipeline occurs. A section will be done a week at a time and the pipeline will be shut down for a 24 hour period each week. Repairs should be fInished by the end of March 2007. The project mostly affects Schertz, however, it will be coordinated with both Cities. 6 A valve is leaking in Section 2. Repair for this valve in the amount $21,000 is in the budget leaving a balance of $129,000. An option for payment of these repairs would be to amend initial loans of $250,000 from both Cities. After discussion took place between Board members, General Manager Alan Cockerell, Finance Director Susan Caddell and Legal Counsel Dick O'Neal as to various options to fund money for well repair, they agreed that payment for the well repairs should be taken out of the Repair and Replacement Fund. The fund could be replenished to the required $500,000 at $8,333.33 per month over a five-year period. Treasurer Bauer made a motion to approve payment for necessary repairs be taken from the Repair and Replacement Fund and to continue to replenish the fund at $8,333.33 per month over a five-year period. Director Greenwald seconded the motion. Upon a vote being called, the motion carried by unanimous decision. Other Topics: SSLGC Water Production History: o Monthly Water Sales as of December 2006 was over 9,000 acre feet. o Seasonal Pumping Trend - Seasonal pumping is following the same trend. A later agenda item will be to address blending during the summer. o Seguin did not blend the month of December. The Corporation is permitted 12,910 acre feet per year. The Corporation is authorized to go over in one month by 25%, but not authorized to go over the annual amount. Vice-President Cook referred back to the General Manager's Report, Section 7B, regarding the Wells Ranch testing and asked what affect the pumpage plan would have on the Corporation. Consultant Bill Klemt stated that the Wells Ranch is far enough away from the Corporation's operations that it should not affect its well fields. All records pertaining to this activity are open and may be researched at a later date. The ei2:hth order of business was discussion and possible action authorizin2: the approval of a2:reement between SSLGC and Citv of Schertz for pavrnent of proiect costs not to exceed $1.000.000.00 - Alan Cockerell. General Mana2:er. No action was taken on agenda item #8. The ninth order of business was discussion and possible action on Water Well Testin2: A2:reement with Carrizo Water Company - Alan Cockerell. General Mana2:er. General Manager Cockerell advised that details to this agreement were not complete at this time. Hilmar Blumberg, president and co-owner of Carrizo Water Company, was in attendance at the Board meeting. He voiced concern with the agreement regarding Testing Right for Owner's Water Wells, Section (1) Line 8.......0wner accepts all risk of damage to wells that may result from testing by SSLGC contractor(s).......typical for the well testing industry. A copy of the agreement was included in the Board packet. Discussion took place as to who would assume risk of damage relevant to specific conditions, owners of Carrizo Water Company, the Corporation or the contractor on the job? 7 Noted was the fact that testing of Carrizo Water Company's wells had been scheduled for January 30, 2007, and the Corporation would like to move ahead with the testing. Mr. Blumberg stipulated that if verbiage was changed to identify liability for all parties involved, Carrizo Water Company, SSLGC and contractors, and not hold his company completely liable for damage to the wells, he would be happy to sign the agreement at that time. Secretary Wolverton made a motion to approve the Water Well Testing Agreement with Carrizo Water Company subject to changing Section (1) Line 8....0wner accepts all risk of damage to the wells that may result from testing by SSLGC contractor(s)..... to "the SSLGC would be responsible for any damage to the wells. " Counsel advised against the motion and suggested that the Board give a layman's view of the language necessary to show liability for all parties involved and to authorize the General Manager and Counsel to negotiate the appropriate terminology to show specific liability for any damage which may be done to the wells by Carrizo Water Company, SSLGC or contractor. Secretary Wolverton withdrew his initial motion. Secretary Wolverton made a motion to approve the agreement subject to the Board authorizing General Manager Cockerell and Counsel to negotiate the correct terminology to reflect responsibility of Carrizo Water Company, SSLGC and contractor for specific liability for damage to the wells. Treasurer Bauer seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The tenth order of business was discussion and possible action to award a contract for the testin2: of two wells owned bv Carrizo Water Company in Guadalupe Countv - Alan Cockerell. General Mana2:er A tabulation based on the bids received from contractors was included in the Board packet. Peerless Equipment, Ltd., turned in the lowest bid at $23,600. General Manager Alan Cockerell recommended that the Corporation award the contract to Peerless. Secretary Wolverton made a motion to approve the contract for the testing of two wells owned by Carrizo Water Company to Peerless Equipment for $23,600. Counsel advised that the change pertaining to who assumes liability for damage to the wells made to the agreement with Carrizo Water Company in agenda item nine would affect the contract with Peerless Equipment. After discussing the issue, the Board determined that an amendment to the contract would be necessary . President Dwyer made an amendment to Mr. Wolverton's motion to award the contract for the testing of two wells owned by Carrizo Water Company to Peerless Equipment, Ltd., for $23,600 contingent on an inclusion of an insurance and indemnity clause stipulating liability for damage to the wells and naming the SSLGC and Carrizo Water Company as additional insureds. Vice-President Cook seconded the motion. Upon a vote being called, the motion carried by unanimous decision. 8 The eleventh order of business was discussion and possible action on a proposal for Professional En2:ineerin2: Services. Guadalupe Countv Project. Amendment 4 to A2:reement for Professional Services between SSLGC and Burv+Partners - Alan Cockerell. General Mana2:er A copy of Amendment 4 to the Agreement for professional services between the SSLGC and Bury+Partners was handed out to Board members. General Manager Cockerell informed the group that this amendment to the base contract was necessary so that work could begin on the Guadalupe County project. If the design phase started now, construction would be estimated to begin in March 2008, and could be completed in May 2009. Geotechnical and archaeological surveys will be done. The contract is based on the assumption that archaeological artifacts will not be found. If archaeological artifacts were found, the site could possibly be moved. Secretary Wolverton made a motion to approve Amendment 4 to the Agreement for Professional Services between SSLGC and Bury+Partners subject to Legal Counsel's review. Director Greenwald seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The twelfth order of business was discussion and possible action on projected need for blendin2: in 2007 of SSLGC water bv the Citv of Schertz and the Citv of Se2:uin - Alan Cockerell. General Mana2:er and John Winkler. Burv+Partners A handout was provided for the Board. Based on historical infOrniation, the Master Plan and growth projection, the projected peak demand period for water consumption is toward the end of June and July. Projected flow rates for 2007, available supply and capacity required from the Schertz Edwards Wells are shown below: Peak Day Demand, Total System Peak Day Demand, Seguin & Springs Hill Peak Demand, Schertz, Selma & Universal City 18.6 MGD 7.9 MGD 12.5 MGD Total Wellfield Capacity Firm Wellfield Capacity Seguin Blending Capacity 14.2 MGD 12.1 MGD 2.0 MGD Capacity Required from Schertz Edwards Wells 2.4 MGD (assuming total capacity) 4.5 MGD (assuming firm capacity) With all eight wells running, 2.0 MGC blended, and the amount of water the City of Schertz is reserving, the projected flow rates should satisfy requirements for peak demand in 2007. No action was taken on Agenda Item 12. The thirteenth order of business was discussion and possible action on SSLGC endorsement of candidate{s) for small business vacancy on Re2:ion L Plannin2: Group- Alan Cockerell. General Mana2:er. The South Central Texas Regional Water Planning Group (RWPG) is soliciting nominations to fill a vacancy for a voting member on the South Central Texas RWPG in the Small 9 Business interest area. Nominations must be received by 5:00 p.m., Wednesday, January 24, 2007. A notice to the public and a Nomination form were provided in the Board packet. Several candidates have expressed interest, however, at this time the Corporation has not sponsored an applicant. The Executive Committee of the RWPG will review and interview the applicants, and then make a recommendation to the Region L Board. No action was taken on Agenda Item 13. The fourteenth order of business was presentation of the Operation Status Report and discussion and possible action in response to same - John Schraub. Water Systems Mana2:er. John Schraub reported on the following: o A motor was lost on Well #6 on December 23,2006, due to a lightning strike. Mr. Schraub is in the process of working with the insurance company to pay for replacing the motor. o Steve Threadgill informed the SSLGC of a leak on the 42" line on January 8, 2007. Water from the leak flooded his property making some areas non-accessible. The SSLGC plans to provide him two truck loads of crushed "slag" for property repair. o On January 13, 2007, a vehicle damaged the chain link fence and gate at the valve vault on FM 467. A report was not filed with the County Sheriffs Department or D.P.S. The Corporation will get quotes for repairs for the valve vault fence repairs and fence repair at the SSLGC Booster Pump Station which occurred last year. o SSLGC is fully staffed with the hiring of Jesse Herrera. No action was taken on Agenda Item 14. The fifteenth order of business was presentation of the Consultant's Report and discussion and possible action to same - Crockett Camp and Bill Klemt. Mr. Klemt stated that water measurements and pumping tests will begin on January 30th. He added both districts require water well measurements. The sixteenth order of business was Executive Session. President Dwver advised there bein2: no business to discuss under Chapter 551 Government Code. Subsection 551.071. to seek the advice of its attorney on le2:al matters relatin2: to the Board of Director's ri2:hts and liabilities under certain contracts. Section 551.072 to deliberate the purchase of certain real estate: no action taken on A2:enda Item Seventeen. The ei2:hteenth order of business was additional Board of Directors discussion and/or comments. Mr. Greenwald requested letters of appreciation be sent to members of the Impact Fee Advisory Committee. President Dwyer directed Georgia Hanks to prepare the letters on SSLGC letterhead for his signature. 10 The nineteenth order of business was adiournment. President Dwyer declared the meeting adjourn. The meeting adjourned at 3:27 p.m. The next regular meeting was scheduled for February 22, 2007, in Seguin. MINUTES APPROVED THIS DAY OF ,2007. SIGNATURE OF DIRECTORS Robin V. Dwyer, President Ramon J. Cook, Vice-President Jim Wolverton, Secretary Sydney Bauer, Treasurer Ken Greenwald, Director II