GUADALUPE-BLANCO RIVER AUTHORITY Minutes of the Board of Directors. The Board of Directors of the Guadalupe-Blanco River Authority met in a regular

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1 GUADALUPE-BLANCO RIVER AUTHORITY Minutes of the Board of Directors The Board of Directors of the Guadalupe-Blanco River Authority met in a regular monthly meeting on July 20, 2005, at the GBRA River Annex Board Room, 905 Nolan, Seguin, Guadalupe County, Texas. Directors present were John P. Schneider, Jr., Stephen F. Wilson, DVM, Myrna P. McLeroy, Frank J. Pagel, Kathleen A. Devine, Jack R. Gary, Margaret M. Grier, and Clifton L. Thomas, Jr. Director Frederick S. Schlather was absent. Also present were W. E. West, Jr., General Manager; Fred M. Blumberg, Deputy General Manager and Chief Operations Officer; Alvin Schuerg, Executive Manager of Finance and Administration; Randy Worden, Executive Manager of Business Development and Resource Management; Gary Asbury, Manager of Project Engineering; Judy Gardner, Manager of Communications and Education; Debbie Magin, Director of Water Quality Services; John Smith, Operations Manager-Upper Basin; Bryan Serold, Operations Manager-Lower Basin; Tommie Streeter-Rhoad, Economic Development Manager; Todd H. Votteler, Director of Natural Resources and Special Assistant to the General Manager; Cricket Dietert, Executive Assistant to the General Manager; Janet Thome, Trust Coordinator; Connie Rothe, Board Relations Assistant; Tammy Beutnagel, Public Communications Assistant; Juan Gonzalez, Web Master; Sandra Terry, Accountant; Jeannine Herrmann, Accounting Assistant II; Teresa VanBooven, Project Coordinator; Roger Nevola, legal counsel; Jim Dublin and Rose Marie Eash representing Dublin and Associates, Inc.; and David Engel, representing Engel and Associates, Inc. L 7/20/05 1

2 The meeting was called to order at 10:13 a.m. by Chairman Schneider who took note of the certifications presented by the General Manager that notice of the meeting had been properly posted in the office of the Secretary of State, in the Guadalupe County Courthouse, and at the GBRA main office and river annex in Seguin, Texas, pursuant to Title 5, Chapter 551 of the Government Code. A quorum being present, the following proceedings were had: Director Grier led the United States Pledge of Allegiance and the Texas Pledge of Allegiance. The Chairman called for comments from the public. There were no public comments at this time. The Chairman called for Chairman Item 1 - Consideration of and possible action appointing Myrna P. McLeroy to serve as the Guadalupe-Blanco River Authority representative on the General Assembly of the Golden Crescent Regional Planning Commission. Upon motion by Director Gary, seconded by Director Grier, the Board unanimously appointed Myrna P. McLeroy to serve as the GBRA representative on the General Assembly of the Golden Crescent Regional Planning Commission. Next, the Chairman called for Consent Items 2 - Consideration of and possible action approving the June 15, 2005 Board meeting minutes; 3 - Consideration of and possible action approving the monthly financial report for June 2005; 4 - Consideration of and possible action approving the monthly operations report for June 2005; and 5 - Consideration of and possible action L 7/20/05 2

3 approving Directors expense vouchers. Upon motion by Director Gary, seconded by Director Wilson, the Board unanimously approved Consent Items 2, 3, 4, and 5. The Chairman then called for Executive Report 6 - Discussion of the Executive Report. General Manager West informed the Board about GBRA s safety program including ten months of no lost time accidents. Discussion was had regarding TP-4 spillgate work, continued work with representatives of the U. S. Fish and Wildlife Service relating to the Whitmire Unit of the Aransas Refuge, the sale of renewable energy credits related to Hydro power generation, and the Lower Guadalupe Water Supply Project environmental studies. The Board was informed about work on various long-term water supply options, coordination efforts with the Texas Commission on Environmental Quality relating to water sale contract ownership and transfers, the engineering scope of work for the expansion of the San Marcos Water Treatment Plant, the U. S. Army Corps of Engineers Galveston District modeling of the Guadalupe Delta Project, the IH-35 and Western Canyon Regional Water Projects, and a progress report on the Seguin office expansion project. General Manager West informed the Board on finance and administration activities including information technology, human resources, financing efforts on various water development projects, and preparation of the Fiscal Year 2006 Work Plan and Budget. The Board was briefed on business development activities including right-of-way acquisitions, the City of Bulverde water supply requirements, appraisal of BexarMet facilities in Comal County, a request for an operating proposal from Saddleridge Ranch, negotiations with various developers, the Canyon Gorge Project and the Texas Water Safari. L 7/20/05 3

4 The Chairman called for Action Item 7 - Consideration of and possible action authorizing the General Manager to enter into a grant agreement with the Texas Commission on Environmental Quality for the Guadalupe River and Lavaca-Guadalupe Coastal Basin Clean Rivers Program. GBRA has been a partner in the Clean Rivers Program since the early 1990 s. The Texas Clean Rivers Program is managed by the Texas Commission on Environmental Quality and is funded entirely by fees assessed to wastewater discharge and water rights permit holders. GBRA carries out the water quality management efforts in these basins under a grant agreement with the Texas Commission on Environmental Quality. There are four major elements to the Clean Rivers Program: water quality data collection, special studies, basin data analysis, and public participation. The grant agreement between GBRA and the Texas Commission on Environmental Quality is for the Guadalupe River and Lavaca-Guadalupe Coastal Basin Clean Rivers Program. The grant agreement obligates the Texas Commission on Environmental Quality to reimburse up to $286,682 to GBRA for actual allowable and eligible costs of performing the tasks prescribed in the Scope of Work. The amount of the contract was $271,046. Additional funds ($41,500) were provided to conduct the nutrient study on Lakes Dunlap and McQueeney. Upon motion by Director Wilson, seconded by Director Gary, the Board unanimously authorized General Manager to enter into a grant agreement with the Texas Commission on Environmental Quality for the Guadalupe River and Lavaca-Guadalupe Coastal Basin Clean Rivers Program. L 7/20/05 4

5 Next, the Chairman called for Action Item 8 - Consideration of and possible approving a professional engineering services contract with PBS&J for Phase I distribution system improvements for the City of Bulverde CCN. Several areas within the City of Bulverde CCN were identified in the Capital Improvements Plan as part of the Phase I improvements. There are immediate needs for water service in the Phase I areas as some developments have begun construction. Interim water supply and service agreements have been implemented for some of the developments that are being constructed to allow the developer to proceed. The interim systems will only supply a portion of the ultimate demands. The Capital Improvement Plan identified the areas and provided a general description of the improvements to be made. The next step is to have an engineering firm prepare detailed plans for bidding and constructing the improvements. Requests for Proposal were received on June 3, 2005 from ten engineering firms to supply professional services for the project. The proposals were distributed to the Selection Committee for review. The Selection Committee convened on June 8, 2005 to discuss the proposals and determine the three firms that presented the best qualifications for this project. The three firms were then rated. The first selection was PBS&J, followed by Kimley-Horn, and Hunter Associates. GBRA negotiated the scope of work and fees with PBS&J. The compensation for designing the connection to the Western Canyon line, storage, pump stations and associated distribution piping for the three areas is 7.5 percent of the construction cost. The estimated fee is $253, Upon motion by Director Devine, seconded by Director Thomas, the Board unanimously authorized the engagement of PBS&J for professional L 7/20/05 5

6 engineering services to prepare detailed designs for the three areas of the Phase I improvements for the City of Bulverde CCN for a fee of 7.5 percent of the construction costs. The Chairman then called for Action Item 9 - Consideration of and possible action amending GBRA Board Policy 403-Investment Policy to insure consistency with the Water Code (b)(2). GBRA Board Policy 403 Investment Policy as well as the Texas Public Funds Investment Act requires GBRA s Board of Directors to annually approve the investment policy and the investment strategy contained therein. The GBRA staff is recommending one amendment to Board Policy 403 Investment Policy and recommends that the Board of Directors approve Policy 403 Investment Policy as amended. The single amendment reduces the required number of biennial investment training hours from ten to four. This amendment is consistent with changes to Water Code Section Director Devine suggested additional amendments to the Policy. Upon motion by Director Wilson, seconded by Director Gary, the Board unanimously approved Board Policy 403 Investment Policy as amended. A copy of the Policy, as amended, is attached and made a part of these minutes. The Chairman called for Action Item 10 - Consideration of and possible action approving a bank loan to finance the Dunlap Wastewater Treatment Plant expansion. GBRA executed an Agreement with NBL 300 Group LTD on May 25, 2003 to provide wastewater treatment capacity in GBRA s Dunlap Wastewater Treatment Plant. The capacity required by the Group s Legend Pond Development is sufficient to serve an estimated 1,440 new homes. The current unused capacity in the Dunlap Plant L 7/20/05 6

7 would serve only about 120 new homes, therefore, GBRA has designed and executed a contract to expand the plant from a.16 MGD capacity to.95 MGD. The.95 MGD expanded capacity will be sufficient to serve not only the 1,440 Legend Pond home sites but an additional 1,100 home sites. In addition to the contract to serve the new Legend Pond development, GBRA is in various stages of discussion with other developers on ten other tracts of land totally approximately 1,000 acres. Section 2(x) of GBRA s Enabling Act authorizes GBRA to borrow money and issue negotiable bonds to finance projects such as the Dunlap Wastewater Treatment Plant expansion. GBRA has contacted seven banks about providing funds for the project. Banks were deemed to be the preferable financing source on this project rather than a revenue bond financing due to the existing customer base and revenue stream being unacceptably small to issue bonds on, the unpredictability of the development pace and the connection of new homes to the Plant requires flexible repayment terms that banks can more easily offer than bond issues, and banks will more readily accept Letters of Credit that GBRA receives from developers as part of the repayment pledge. GBRA requested loan terms from IBC, JP Morgan Chase, Broadway Bank, Bank of America, Frost Bank, State Bank and Trust, and Wells Fargo Bank. Upon motion by Director Gary, seconded by Director Thomas, the Board unanimously approved a bank loan with a 6.10 percent fixed interest rate to finance an expansion of the Dunlap Wastewater Treatment Plant with Wells Fargo Bank. Next, the Chairman called for Action Item 11 - Consideration of and possible action approving a Resolution by the Board of Directors of Guadalupe-Blanco L 7/20/05 7

8 River Authority declaring a public necessity for the acquisition of certain water pipeline easements and temporary construction easements and certain fee estates for the Western Canyon Regional Treated Water Delivery Project or System in connection therewith, over, across, upon and under certain privately owned real properties; authorizing all appropriate action by the General Manager, staff, and retained attorneys and engineering and technical consultants in the institution and prosecution of condemnation proceedings to acquire any such needed fee estates and easements and temporary construction easements and related rights of ingress and egress that cannot be acquired through negotiation; declaring further negotiations futile; ratifying and affirming all acts and proceedings heretofore done or initiated by employees, agents, and attorneys of GBRA to acquire such property interests; authorizing all other lawful action necessary and incidental to such acquisitions or eminent domain proceedings to survey, specify, define, and secure the necessary interests in real property; declaring the sections of the Resolution to be severable one from the other in the event any section of this Resolution is determined to be invalid; said properties to be identified to wit: Tract G-12 Charles Martin Urban and wife, Joyce Marie Urban, being approximately.679 acres of permanent easement and acres of temporary easement and being a portion of land out of acre tract of land conveyed to Charles Martin and Joyce Marie Urban in Warranty Deed with Vendor s Lien as recorded in Volume 88, Pages of the Deed Records of Kendall County, Texas, out of the H.S. Stouffer Survey No. 219, Abstract 468 of L 7/20/05 8

9 Kendall County, Texas, save and except.928 of an acre conveyed to the State of Texas by Deed recorded in Volume 312, Page 641, Kendall County Official Records, and attached as Exhibit A. Water supply agreements for treated water service by GBRA from the Western Canyon Regional Treated Water Supply Project have been executed with San Antonio Water System, San Antonio River Authority, the City of Boerne, the City of Fair Oaks Ranch, the City of Bulverde, Tapatio Springs Resorts/Kendall Water Utility, Cordillera Ranch and Johnson Ranch. Proceedings in eminent domain are necessary to acquire certain properties for the Western Canyon Regional Treated Water Supply Project. Efforts to negotiate for the acquisition of these properties have been unsuccessful to date. Upon motion by Director Gary, seconded by Director Grier, the Board unanimously approved a Resolution by the Board of Directors of Guadalupe-Blanco River Authority declaring a public necessity for the acquisition of certain water pipeline easements and temporary construction easements and certain fee estates for the Western Canyon Regional Treated Water Delivery Project or System in connection therewith, over, across, upon and under certain privately owned real properties; authorized all appropriate action by the General Manager, staff, and retained attorneys and engineering and technical consultants in the institution and prosecution of condemnation proceedings to acquire any such needed fee estates and easements and temporary construction easements and related rights of ingress and egress that cannot be acquired through negotiation; declared further negotiations futile; ratified and affirmed all acts and proceedings heretofore done or initiated by employees, agents, and attorneys of GBRA to acquire such property L 7/20/05 9

10 interests; authorized all other lawful action necessary and incidental to such acquisitions or eminent domain proceedings to survey, specify, define, and secure the necessary interests in real property; and declared the sections of the Resolution to be severable one from the other in the event any section of this Resolution is determined to be invalid. A copy of the Resolution is attached and made a part of these minutes. The Chairman then called for Action Item 12 - Consideration of and possible action approving a Resolution by the Board of Directors of Guadalupe-Blanco River Authority declaring a public necessity for the acquisition of certain water pipeline easements and temporary construction easements and certain fee estates for the IH-35 Water Transmission Main Project in connection therewith, over, across, upon and under certain privately owned and public properties; authorizing all appropriate action by the General Manager, staff, and retained attorneys and engineering and technical consultants in the institution and prosecution of condemnation proceedings to acquire any such needed fee estates and easements and temporary construction easements and related rights of ingress and egress that cannot be acquired through negotiation; declaring further negotiations futile; ratifying and affirming all acts and proceedings heretofore done or initiated by employees, agents, and attorneys of GBRA to acquire such property interests; authorizing all other lawful action necessary and incidental to such acquisitions or eminent domain proceedings to survey, specify, define, and secure the necessary interests in real property, declaring the sections of the Resolution to be severable one from the other in the event any L 7/20/05 10

11 section of this Resolution is determined to be invalid; said properties to be identified to wit: Tract C-25 H.O. Limited, a Texas Partnership, being approximately acre of permanent easement, and acre of temporary easement, and being part of a called acre tract of land in the Samuel Little Survey, Abstract No. 286, and the J.B. Eaves Survey, Abstract No. 166, described in deed recorded in Volume 2628, Page 491 of the Deed Records of Hays County, Texas, attached as Exhibit A ; Tract D-6 Kiva, Inc., a Texas Corporation, being approximately.262 acre of permanent easement, and.350 acre of temporary easement, and being part of a called acre tract of land in the George Herder Survey, Abstract No. 239, described in deed recorded in Volume 1792, Page 380 of the Deed Records of Hays County, Texas, attached as Exhibit B ; Tract D-6A Kiva, Inc., a Texas Corporation, being approximately.262 acre of permanent easement, and.350 acre of temporary easement, and being part of a called acre tract of land in the George Herder Survey, Abstract No. 239, described in deed recorded in Volume 1792, Page 380 of the Deed Records of Hays County, Texas, attached as Exhibit C ; Tract E-13A Stoneridge Ventures, L.P., being approximately.047 acre of permanent easement, and being a portion out of a acre tract of land in the Trinidad Varcinas Survey, Abstract No. 465, Page 595 of the Deed Records of Hays County, Texas, and further described as Lot 16, Block A out of the Stoneridge Subdivision Section No. 1 Volume 11, Page 379 of the Plat Records of Hays County, Texas, attached as Exhibit D ; and Tract E-14A Abdulai Kamara and wife, Clara Kamara, being approximately.118 acre of L 7/20/05 11

12 permanent easement and.201 acre of temporary easement, and being a portion out of 1.66 acres of land out of the Trinidad Varcinas Survey, Abstract 465, Hays County, Texas, and as described in Volume 1076, Page 65, Official Public Records, Hays County, Texas, attached as Exhibit E. Water supply agreements for delivery of treated water service by Guadalupe-Blanco River Authority from the IH- 35 Water Transmission Main Project have been executed between the City of Kyle, the City of Buda, GoForth Water Supply Corporation, and GBRA. Proceedings in eminent domain are necessary to acquire certain properties for the IH-35 Transmission Water Main Project. Efforts to negotiate for the acquisition of some of these properties have been unsuccessful. A settlement has been reached on Tract E-13A Stoneridge Ventures, L.P., being approximately.047 acre of permanent easement, and being a portion out of a acre tract of land in the Trinidad Varcinas Survey, Abstract No. 465, Page 595 of the Deed Records of Hays County, Texas, and further described as Lot 16, Block A out of the Stoneridge Subdivision Section No. 1 Volume 11, Page 379 of the Plat Records of Hays County, Texas, and this tract was removed from the Resolution. Upon motion by Director Gary, seconded by Director Devine, the Board unanimously approved a Resolution by the Board of Directors of Guadalupe-Blanco River Authority declaring a public necessity for the acquisition of certain water pipeline easements and temporary construction easements and certain fee estates for the IH-35 Water Transmission Main Project in connection therewith, over, across, upon and under certain privately owned and public properties; authorized all appropriate action by the General Manager, staff, and retained attorneys and engineering and technical L 7/20/05 12

13 consultants in the institution and prosecution of condemnation proceedings to acquire any such needed fee estates and easements and temporary construction easements and related rights of ingress and egress that cannot be acquired through negotiation; declared further negotiations futile; ratified and affirmed all acts and proceedings heretofore done or initiated by employees, agents, and attorneys of GBRA to acquire such property interests; authorized all other lawful action necessary and incidental to such acquisitions or eminent domain proceedings to survey, specify, define, and secure the necessary interests in real property, and declared the sections of the Resolution to be severable one from the other in the event any section of this Resolution is determined to be invalid. A copy of the Resolution, as amended, is attached and made a part of these minutes. Chairman Schneider restated for the record that the GBRA Board is extremely sensitive to personal property rights and that the GBRA staff makes every effort to negotiate a settlement before requesting authorization to initiate condemnation proceedings. Next, the Chairman called for Discussion Item 14 - Discussion regarding the Fiscal Year 2006 Work Plan and Budget. General Manager West presented an overview of the budget process and the upcoming workshop scheduled for August 3, The Board was informed that GBRA has received the Government Finance Officers Association s Distinguished Budget Award for the 8 th consecutive year. Discussion was had regarding meetings held with customers of GBRA to discuss proposed budgets and rates. The Board was informed on the format of the 2006 Work L 7/20/05 13

14 Plan and Budget and the consolidated budget summary comparing budgeted figures from Fiscal Year 2005 to Fiscal Year 2006 including revenues, expenses, and other sources and uses of funds. Discussion was had regarding income, expenses, debts, and administrative and general charges in the General Division and Water Resources Division. The Board was also informed on items deferred in the General Division Budget. The Board was briefed on water sales and proposed water rates, water right leases, professional fees, interest and banking fees, revenue bonds, project development, and deferred items in the Water Resources Division Budget. The Board was informed on budget items relating to the Lower Guadalupe Water Supply Project. The Chairman then called for Discussion Item 15 - Discussion regarding Base Flow Report, Water Quality Index, and condition of the Guadalupe Basin. The reports were discussed. The Chairman called for Discussion Item 16 - Discussion regarding the Canyon Lake Gorge Natural Area. There was no discussion on this item. Next, the Chairman called for Items from the General Manager 17 - Discussion regarding water planning and water resource issues. General Manager West briefed the Board planning activities and public meetings. The Chairman called for Items from the General Manager 18 - Discussion regarding the Edwards Aquifer Authority and South Central Texas Water Advisory Committee. There was no discussion on this item. L 7/20/05 14

15 Next, the Chairman called for Items from the General Manager 19 - Discussion regarding the Guadalupe-Blanco River Trust. There was no discussion on this item. The Chairman then called for Items from the General Manager 20 - Discussion regarding the Texas Water Conservation Association 2005 Mid-Year Conference. General Manager West informed the Board on conference activities. The Chairman recessed the open meeting at 12:02 p.m. The Chairman closed the open meeting and convened the meeting in Executive Session at 12:25 p.m. The meeting reconvened in open session at 1:05 p.m. The Chairman called for Action Item 13 - Consideration of and possible action regarding the Lower Guadalupe Water Supply Project. Upon motion by Director Wilson, seconded by Director Gary, the Board unanimously authorized the General Manager to review the status of the ongoing studies related to the Lower Guadalupe Water Supply Project and, if the General Manager determines it to be necessary or appropriate, negotiate and execute any contracts, agreements or amendments necessary for continuation of any of those studies should San Antonio Water System withdraw from participation in the funding of such study. There being no further business to be brought before the Board, the meeting was adjourned, subject to call by the Chairman. Chairman Secretary L 7/20/05 15