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SSLGC 02-19-2009MINUTES OF THE SCHERTZ-SEGUIN LOCAL GOVERNMENT CORPORATION THE STATE OF TEXAS § COUNTY OF GUADALUPE § SCHERTZ-SEGUIN LOCAL § GOVERNMENT CORPORATION § On this the 19~' day of February, 2009, the Schertz-Seguin Local Government Corporation (SSLGC) convened at 1:30 p.m. in the City of Seguin Council Chambers located at 210 E. Gonzales, Seguin, Texas. The following members being present and in attendance: Sydney Bauer President Robin Dwyer ,Secretary Jim Wolverton Treasurer Terry Wells Director Betty Ann Matthies Ex-Officio and the following directors being absent: Hal Baldwin Ex-Officio Patricia Ramirez Director 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: Alan Cockerell Don Taylor Doug Faseler Johnny Bierschwale Susan Caddell John Bailey Georgia Hanks Sam Willoughby Patrick Lindner Bill Klemt John Winkler Crockett Camp David Hawkins General Manager City Manager of Schertz City Manager of Seguin Assistant City Manager of Schertz Finance Director of Seguin Water Superintendent Administrative Assistant Schertz Public Works Director Legal Counsel (Davidson & Troilo) Hydrologist Consultant Consultant Consultant/Project Manager Lockwood, Andrews & Newnam, Inc. The first order of business was the calling of the meeting to order. President Sydney Bauer called the meeting to order at 1:30 p.m. Mayor Betty Ann Matthies introduced SSLGC's newest board member, Terry Wells, and provided copies of his biography for board and staff members. The second order of business was public comment. General Manager Cockerell reported that funeral arrangements were pending for the mother of Seguin Water Utility Manager John Schraub. The third order of business was approval of the minutes for the board meeting held on January 22, 2009. Secretary Robin Dwyer made a motion to approve the minutes of the January 22, 2009, meeting as written. Treasurer Jim Wolverton 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. Mr. Cockerell's written report was included in the board agenda packets. He highlighted the following items in his written report: • Region L - Mr. Cockerell attended a Region L meeting on February 5, 2009. The two main topics of discussion were to consider amending the 2006 Regional Water Plan and revising the TWDB Proposed Population and Water Demand Projection. A work study group was formed to evaluate the Lower Guadalupe Water Supply Project (LGWSP). HB3776 requires modification of this project as part of the approval process. A special meeting will be conducted on March 19, 2009, to receive a recommendation from the work study group and to consider moving forward with the required modifications of the plan. Mr. Cockerell referred to a presentation which was included in the board agenda packets. The presentation outlined three LGWSP scenarios for the needs of the Guadalupe Blanco River Authority. Two public hearings will be held, one on the regional level and one on the state level. The approval process will take approximately six months. Gonzales County Underground Water Conservation District (GCUWCD) - Mr. Cockerell attended a GCUWCD meeting on February 10, 2009. The main topic of discussion was in regard to the Certified Question. In summary, GCUWCD's board of directors voted yes to the Certified Question which meant that the "approved Regional Water Plan" in the District's rules shall mean the 2001 Region L Water Plan until such time as the Texas Water Development Board approves either the 2006 Regional L Water Plan or a subsequent regional water plan adopted by the South Central Texas Regional Water Planning Group, at which time the subsequently approved plan will automatically function as the "approved Regional Water Plan" in the rules. On February 17, 2009, SSLGC. received a letter from GCUWCD stating that the Corporation's well permit applications in Gonzales County were deemed administratively complete. Two requirements of the process are for the Corporation to mail letters to adjacent landowners of the project and to publish public notices in the Gonzales Inquirer and Lockhart Post Register. One hundred thirty-six letters were mailed to adjacent landowners on February 18, 2009. The notice in the Gonzales Inquirer will be published Friday, February 20, 2009, and the notice in the Lockhart Post Register will be published Thursday, February 26, 2009. • Regional Water Alliance -Secretary Dwyer asked if all wholesale water suppliers were required to provide a Drought Contingency Plan in the near future. Mr. Cockerell reported that the Corporation is required to submit a Drought Contingency Plan to the Texas Commission on Environmental Quality (TCEQ) by May 2009. He is in the process of drafting this document and will make the information available in the near future. The Plan will be included on the Corporation's board agenda in March or April 2009. • Guadalupe County Groundwater Conservation District (GCGCD) - Mr. Cockerell attended the GCGCD meeting on January 8, 2009. He is presently working with General Manager Ron Naumann .with GCGCD to obtain one well field permit for the Corporation's municipal field in Guadalupe County instead of individual permits for each well. Mr. Naumann was not at the meeting and the other directors wanted to take the proposal under consideration before making a final decision. SSLGC may have to submit individual permit applications for each well. Mr. Cockerell and Hydrologist Bill Klemt will work to submit the applications as soon as possible. Operations - Mr. Cockerell has asked Peerless Equipment, Ltd., to cover the failed seal repairs on well #1 under warranty. Peerless representatives believe that due to lubrication problems a failed bearing caused the seal to fail. Research proved that SSLGC operators were adding oil at the normal intervals for the pump, however, a malfunction of the lubrication system is not inconceivable. Peerless has offered to pull, repair and replace the pump without labor charges, but the Corporation would be responsible for the parts which include new oil tubing, shafts, couplings and bearings. Mr. Cockerell has received a quote in the amount of approximately $4,000.00 from Peerless for the parts. In order to get the pump back in service as soon as possible, Mr. Cockerell recommended taking the offer from Peerless. Payment will be taken from the Well Repair account of the FY2008- 2009 budget. Director Terry Wells asked how long the pump had been in service and if it was covered under warranty. General Counsel for the Corporation Patrick Lindner intervened before discussion could continue and deferred any further discourse regarding contracts, warranties or other legal issues to Executive Session. Public Relations - Mr. Cockerell plans to attend the Nixon-Smiley Youth Show and Sale on March 14, 2009. The Corporation has received notification of the Nixon-Smiley High School local scholarship program for 2008-2009. Four $500.00 scholarships were included in the Corporation's FY2008-2009 budget. Secretary Jim Wolverton asked for clarification of benefits received by the Corporation for public relations efforts in Gonzales County. He suggested that General Manager Cockerell provide notice at the GCUWCD monthly meetings of the Corporation's contributions to organizations in Gonzales County. Mr. Marvin Ashley's grazing lease will expire July 7, 2009. Mr. Ashleyplans to submit a proposal to SSLGC to extend his lease by the end of February. If the proposed offer is not of market value the lease will be posted for bids. The fifth order of business was Presentation of the Treasurer's Report -Susan Caddell, Finance Director & Alan Cockerell, General Manager. A copy of the Treasurer's Report was included in the board agenda packets. The report was prepared by Director of Finance Susan Caddell and reviewed by General Manager Alan Cockerell. Mr. Cockerell recommended approval of the following report: a. Financial Statements for the quarter ended December 31, 2008. • Revenues, Expenses and Changes in Net Assets -Combined Statements ^ $1,352,334 (net income) Includes water sales billed for the first debt service payment made on February 1, 2009 • Revenues, Expenses and Changes in Net Assets -Operating Fund ^ $79,522 (net income) Schertz and Seguin are close in water usage. Includes two months of off-peak water sales for Selma. • Balance Sheet -Construction Fund ^ $4,415,488 (cash on hand) Outstanding purchase orders amount to $2,140,000 which leaves approximately $2,000,000 available. • Revenues, Expenses and Changes in Net Assets -Interest & Sinking Fund ^ $1,305,525 (net income) Includes I & S rates paid by participating entities for the first quarter. • Balance Sheet -Repair & Replacement Fund ^ $512,660 (cash balance) Bond covenants require this balance to be $500,000. The water rate includes $.15 per thousand gallons to be put into this fiend in order to build it up for lines and facilities. • Revenues, Expenses and Change in Net Assets -Future Development Fund ^ $41,347 (net income) Includes expenditures of $64,845 for bonus water lease payments and land purchases (including beginning lease payments for Guadalupe County). • Revenues, Expenses and Change in Net Assets -Impact Fund ^ $110,491 (net income) • Revenues, Expenses and Change in Net Assets -Operating Fund (comparative statement) ^ $-19,240 (net decrease in net income from FY2007-2008) • Working Capital Trend Chart ^ $1,352,819 (increase in working capital since last quarter) Revenue billed for the first bond payment did not occur until February 1, 2009. b. Investment Report for the quarter ended December 31, 2008. Ms. Caddell presented the Investment Report for October 1, 2008, through December 31, 2008. Interest earnings for quarter ending December 31, 2008, were approximately $37,000. President Bauer made a motion to approve the Investment Report for the quarter ending December 31, 2008. Secretary 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 for the quarter ending December 31, 2008. Ms. Caddell presented the expenditure information for the quarter October 1, 2008, through December 31, 2008. The account for attorney fees is over budget due to legal work being conducted on the contested case hearings. The total amount of reimbursement the City of Seguin requests from SSLGC for the first quarter of FY2008-2009 is $749,796. Secretary Dwyer made a motion to reimburse the City of Seguin in the amount of $749,796 in accordance with the Management Services Agreement. Secretary Wolverton seconded the motion. Upon a vote being called, the motion carried by unanimous decision. The sixth order of business was Gonzales County WTP Filter Rehabilitation Proiect, Phase II -Alan Cockerell, General Manager. Mr. Cockerell provided a brief summary of the status of the filter rehabilitation project, Phase II. Rehabilitation of filters #1 and #2 is complete. Both filters are back in service and operating properly. Painting of filter #6 is complete. Media installation has begun and the filter should be back in service in a couple of weeks. Painting of filter #4 is in progress. Filters #4 and #6 were in better condition than filters #1 and #2 and needed minimal pitting filler. However, a small change order is anticipated for a small amount of filler. All four filters should be in operation by the end of March which is ahead of the planned May date. The seventh order of business was Water Level Measurements for Gonzales County -Bill HIemt, Hydrologist Consultant. Copies of Bill Klemt's Guadalupe County and Gonzales County written reports were included in the board agenda packets. Mr. Klemt summarized the Gonzales County report as follows: Carrizo water levels were measured in water-level observation wells which are located in the vicinity of SSLGC's well field on January 20 and January 21, 2009, by Mr. Klemt, General Manager Cockerell and GCUWCD General Manager Greg Sengelmann. Mr. Klemt referred to several Tables and Figures in his report which show location of wells measured, altitude of Carrizo water levels and Carrizo water level drawdowns for the period August September, 2002, through January 2009. Four specific Carrizo wells which are located within the SSLGC well field area, SSLGC #18, Wilson #19, SSLGC #22 and SSLGC #23, have an average water-level decline of about 25 feet for the period August-September 2002 to January 2009. The average annual water-level decline for the period August-September 2002 to January 2009 is approximately 4 feet per year for the four wells. When measurements were taken in September 2008 the average water-level decline was 31 feet and the average decline per year was approximately 5.2 feet from measurements taken August -September 2002. The average winter water-level rebounds from September to January are due to less water demands on the aquifer. Mr. Klemt reported that based on the water levels measured in the Carrizo and Queen City Aquifers since the year 2000 in southwestern Gonzales County, the aquifers continue to perform as predicted as a result of pumpage from the SSLGC well field. Comparison of the measured water levels with the simulated GAM water level drawdowns (HDR, 2005) indicates the well field is performing as good or better than expected. Mr. Klemt summarized the Guadalupe County report as follows: In January 2009, GCGCD's water-level observation wells were measured. Nine of the wells are in the Carrizo Aquifer and four are in the Wilcox Aquifer. Mr. Klemt referred to a table which shows water-level measurements for the period. The average water-level rebound for the Carrizo Aquifer for the period September 2008 -January 2009 is approximately 0.55 ft. The average Wilcox water-level rebound for the same period is about 0.48 ft. Secretary Dwyer asked Mr. Klemt if the severe drought would have a dramatic effect on water levels in the short term. Mr. Klemt stated that because of less recharge and increased pumpage some effect may be seen in the. short term, but that the water levels have been monitored for six years and no dramatic effect has been seen during low rainfall periods. President Bauer advised Mr. Klemt that for the record the date on his cover letter regarding the Gonzales County report should be changed from January 10, 2009 to February 10, 2009. Mr. Klemt corrected the letter and submitted it to SSLGC for its records on February 24, 2009. 6. The eighth order of business was Legislation Update -Counsel Patrick Lindner, Davidson & Troilo. President Bauer deferred agenda item eight to Executive Session. The ninth order of business was Guadalupe County Expansion Proiect -Alan Cockerell, General Manager. President Bauer deferred agenda item nine to Executive Session. The tenth order of business was Gonzales County Expansion Proiect -Alan Cockerell, General Manager. President Bauer deferred agenda item ten to Executive Session. The eleventh order of business was Selma Off-Peak Water Contract- Alan Cockerell. General Manager and Counsel Patrick Lindner, Davidson &Troilo. President Bauer deferred agenda item eleven to Executive Session. The twelfth order of business was Engineering Services -Alan Cockerell, General Manager and Counsel Patrick Lindner, Davidson &Troilo. President Bauer deferred agenda item twelve to Executive Session. Before going into Executive Session Counsel Patrick Lindner reported the following information: o The Corporation has closed on the Blumberg property. o Plans are for the Corporation to close on the Booth property February 20, 2009. o Alamo Title Company has received the signed earnest money contract on the Martin property. A representative for the title company has asked for formal documents in the form of resolutions on the purchase of the Blumberg and Booth properties. Counsel Lindner handed out copies of SSLGC's adopted standard form resolutions for acquisition of land for the Blumberg and Booth properties and asked the Board for a motion to approve the resolutions as written. Secretary Dwyer made a motion to approve the certificate of resolution and incumbency authorizing the purchase of the well sites and easements on the Blumberg property and also authorizing the purchase of the well sites and easements on the Booth property as per the documents submitted by General Counsel Patrick Lindner. Treasurer Wolverton seconded the motion. Upon a vote being called, the motion passed by unanimous decision. President Bauer closed General Session at 2:15 p. m. The thirteenth order of business was Executive Session called under Chapter 551 Government Code, Subsection 551.071, to seek the advice of its attorney on legal matters relating to the Board of Director's rights and liabilities under certain contracts, Section 551.072, to deliberate the purchase of and/or sale of certain real estate and Section 551.074, for deliberations regarding a specific officer or employee. Executive Session was held from 2:20 p.m. to 3:46 p.m. The fourteenth order of business was to consider and take action as a result of Agenda Item Thirteen. President Bauer reopened General Session at 3: 46 p. m. As a result of Executive Session and based on recommendations from Counsel Patrick Lindner, the following motions were made: Agenda Item 8 -Legislation Update Secretary Dwyer made a motion to authorize the Executive Committee to continue to monitor legislation and to engage the services of a lobbyist if necessary. Treasurer Wolverton seconded the motion. Upon a vote being called, the motion passed by unanimous decision. President Bauer made a motion for Secretary Dwyer to act on his behalf if and when he is unavailable for consultation or meetings. Treasurer Wolverton seconded the motion. Upon a vote being called, the motion passed by unanimous decision. Agenda Item 9 -Guadalupe County Expansion Project No action was taken as a result of Executive Session Agenda Item 10 -Gonzales County Expansion Project Treasurer Wolverton make a motion to authorize the Executive Committee and Project Manager Crockett Camp to negotiate an agreement with Mr. Richard Lott regarding his water lease with the Corporation in Gonzales County and to present it to the Board for approval. Director Terry Wells seconded the motion. Upon a vote being called, the motion passed. by unanimous decision. Agenda Item 11-Selma Off-Peak Water Contract Secretary Dwyer made a motion to approve authorization for the General Manager to negotiate an amendment to the off-peak water contract between SSLGC and the City of Selma to include off-peak billing for water usage above historical average with historical average defined as the average water usage during the off-peak season by the City of Selma for FY2006-2007 and FY2007-2008 and present it to the Board for approval. Director Wells seconded the motion. Upon a vote being called, the motion passed by unanimous decision. s Secretary Dwyer made a motion to approve authorization for the General Manager to send invoices for January and February 2009 to the City of Selma for the off-peak water supply as per the original off-peak water contract, but to include a letter stating that the Corporation agrees to accept an amount based on the historical average calculations in the amendment to the contract and that payment of the lesser amount if appropriate would not constitute a default. Treasurer Wolverton seconded the motion. Upon a vote being called, the motion passed by unanimous decision. Agenda Item Y2 -Engineering Services Secretary Dwyer made a motion to authorize LAN to complete the Gonzales water treatment plant improvements concerning the filter rehabilitation in work authorization #2 and to authorize the General Manager to issue astop-work order for the following: o Items remaining in work authorization #2 (e.g. the SCADA system) which are presently not ready for service or construction o Work order #1, Gonzales County well expansion o Work order #3, storage expansion Although not included in the motion, General Manager Cockerell added that as part of the stop- work order, the Corporation will request that current electronic data and plans for above mentioned projects which belong to the Corporation, but have not been received, be provided by LAN to the Corporation. President Bauer seconded the motion. Upon a vote being called, the motion passed by unanimous decision. Secretary Dwyer made a motion to authorize the General Manager to request a proposal from John Winkler regarding a new engineering services contract with the Corporation in conjunction with General Counsel and present it to the Board for approval. Treasurer Wolverton seconded the motion. Upon a vote being called, the motion passed by unanimous decision. The fifteenth order of business was Consideration and/or Action on auestions and possible items to be placed on the next agenda. Mr. Cockerell stated that with Mr. Greenwald's departure from the board, the position of vice- president was left vacant. The issue was discussed at the last, executive committee meeting and President Bauer preferred to elect officers at the March board meeting in order for all board members to .be present. Mr. Cockerell reminded the Executive Committee of a meeting scheduled February 26, 2009, in San Antonio which was tentatively scheduled for 4:00 p.m. He added that he would communicate any changes before the meeting. . Do to schedule conflicts the next regular board meeting was moved from March 19, 2009, to March 26, 2009, in Schertz, Texas The seventeenth order of business was adiournment. President Bauer declared the meeting adjourned at 3:59 p.m. MINUTES APPROVED THIS Z~ ~: Robin Dwyer Secretary DAY OF ~~((.~ , 2009. io