1. Call to Order.

Vice-President Johnson called the meeting of the Board of Directors of Bartonville Water Supply Corporation to order at 7:10 p.m. on Tuesday, March 11, 2003 at the corporation office, 1911 East Jeter Road, Bartonville, Texas.

Directors in Attendance

Duane Johnson, Vice-President
Larry Kaufman, Secretary-Treasurer
Scott Kilpatrick
Dale Mutschler
Thomas Greaves

Directors Absent
Michael Paulson, President
Kevin Alberts

Consultants in Attendance
Jennifer Drury, C.P.A.
Dan Tonn, CPA

Staff in Attendance
Jim Leggieri, General Manager
Marcy Gustafson, Administrative Assistant

Others in Attendance:
Wayne Ginn, PE
Ronnie Phillips, Esq.

ITEMS FOR INDIVIDUAL CONSIDERATION

6. Discussion and Action on the Draft of the 2002 Audit Report.

Drury introduced Mr. Dan Tonn, with Hankins, Powers, Eastup, Deaton, & Tonn, who performed the financial audit for 2002. Drury stated the only major change to the financials this year is the allocation of a portion of the Lantana payments from the discounted Lantana note to interest income. Mr. Tonn handed out copies of the audit and gave a review with specifics on the Lantana note. Greaves asked about the irrevocable letter of credit from Northstar bank. Mr. Tonn explained the two types of collateralization for securing public funds in excess of $100,000 maintained with a bank. Motion by Kaufman and second by Mutschler to accept the draft of the 2002 audit report. Motion carried unanimously.

7. Discussion and Action on All Matters Regarding the Renewal of the Certificate of Deposit with NorthStar Bank of Texas.

Drury explained that the current certificate of deposit with NorthStar bank would automatically renew on April 7, 2003 at 2.52% for six (6) months or NorthStar Bank could offer a 3% guarantee on a twelve month CD. Drury stated that she contacted other large banks and none could match the rate offered by Northstar Bank. Drury explained that if BWSC had to borrow against the line of credit, BWSC would be paying more in interest on the line of credit than BWSC would be earning on the certificate of deposit. Drury recommended the six-month certificate of deposit. Johnson asked about the certificate of deposit versus Texpool or Money Market. Drury stated Texpool is at 1.3% and the Money Market is at 1.74%. No action.

 

8. Discussion and Action on All Matters Regarding Early Pay-off of Upper Trinity Regional Water District Equity Fees.

Drury suggested an early payoff of the Upper Trinity Regional Water District equity fees. The total due as of March 11, 2003 was $42,000 and the interest rate on the note is 5.85%. Drury stated that since the interest on this loan is higher than what BWSC is earning through the bank, early pay-off would save BWSC about $1,400 in interest over a twelve-month period. Motion by Kaufman and second by Mutschler to pay off the Upper Trinity Regional Water District Equity Fees. Motion carried unanimously.

11. Discussion and Action on All Matters Regarding the Selection of BWSC General Counsel.

Leggieri introduced Mr. Ronnie Phillips, Attorney. Leggieri stated that Mr. Phillips had previously been retained by BWSC and had been BWSC's legal counsel for approximately fifteen years. Mr. Phillips introduced himself, gave a brief history of his legal experience, past experiences with BWSC, and answered questions from the Board. Johnson stated he thought the previous arrangement of an hourly fee, as opposed to a retainer fee, worked out satisfactorily. Mr. Phillips stated he had received a copy of the "Legal Counsel/Roles & Responsibilities" and he thought it was well drafted and suggested that a copy of the role and responsibilities be attached as an exhibit to his engagement letter. Mr. Phillips stated that his current billing rate would be $225.00 per hour or a retainer of $3,000 per month. Motion by Kilpatrick and second by Kaufman to enter into an hourly fee based arrangement of $225.00 per hour with Mr. Ronnie Phillips, Attorney. Motion carried unanimously.

12. Discussion and Action on All Matters Regarding Selection of BWSC Consulting Engineer.

Kilpatrick handed out his proposed "BWSC System Engineering Needs" and stated he thought the key thing BWSC was looking for in an engineer firm was a strategic partner and not looking for a project oriented engineering firm. Kilpatrick stated he thought finding a firm like this would take a lot of time. Kilpatrick stated that BWSC was looking for a firm to not only report to the Board, but also work on capital projects and hand them over to Jim Leggieri, General Manager, and the staff when they became operational.

Kilpatrick stated a firm that would be a good fit for BWSC would continue for a long time. With that in mind, his proposal would be to simply hire Wayne Ginn, P.E. back under the terms and conditions of the previous contract BWSC had with him and then set about finding a new engineering firm. Once the Master Plan was completed, Wayne Ginn, P.E. would work with BWSC to find a new firm. Ginn, Inc. could then subcontract with what they felt to be an appropriate engineering firm to implement the Master Plan. Kilpatrick stated this represented a very low risk approach in finding a suitable firm and a good match for the corporation and its members.

Johnson asked Ginn about what he envisioned the process of finding a new firm to be. Ginn stated his thoughts were to get the Master Plan approved by the Board and at the state level, so that BWSC could set sail and start on projects as BWSC needed them. Ginn stated that he was hoping the Board would authorize the Ginn Corporation to do the design of the projects. Ginn stated that if the Board authorized the Ginn Corporation to start design, he would start with site layout, design of the ground storage tank/water wells and finding a new engineering firm to design the pump station and do the hydraulic analysis. During the time frame the new firm is on board under subcontract with Ginn Corporation, Ginn is going to phase them in on the day-to-day things, such as reviewing plats and plans and so forth. Ginn stated that this would get the new firm before the Board and the board could be sure they are comfortable working with the new firm and that they are a good fit for the Corporation. Wayne Ginn, P.E. stated the firm would be someone that the Board could work with and they would have the technical capabilities to do the job.

Johnson asked about the involvement of the Board in the upfront agreement in terms of the engineering subcontractor chosen by Ginn to later become the Corporation's engineer. Johnson wanted to make sure there is a clear understanding as to why a particular firm was chosen over all others. Ginn, P.E. stated that he knows of three or four firms that he will be interviewing and he will choose the firm that he thinks is the best and bring the firm to the Board for introductions. Ginn stated that as we go through the process, at some point in time BWSC will need to have a contract with the new firm but this process of subcontracting will allow BWSC a chance to review the new firm's work before a contract is put into place. Ginn stated that if BWSC does not like the firm, BWSC would not have to switch over to a contract with them and he could always find someone else. Ginn stated that through the years the Board always relied on him to choose the sub contractor for the surveys, electrical designs, soil borings, etc. but the Ginn Corporation was always ultimately responsible for the work.

Johnson stated that the only difference is BWSC was not intending to use that as a basis for establishing a long-term relationship with the sub-contractors, as they would like to do in the case of a succeeding consulting engineer. Ginn stated that he was going to do the best job he could to find somebody that he felt was technically competent, had long term staying power, and had the experience and expertise to give the Board the proper guidance in the future.

Wayne Ginn, P.E. stated he wanted to do the review of the design and review the hydraulics since this was a Master Plan the Ginn Corporation provided and wanted to make sure it would work. Kilpatrick stated that maybe it would be a good idea if the Board had a sub committee to work with Wayne Ginn, P.E. and go through the selection process.

Wayne Ginn, P.E. stated all he wanted to do was whatever the Board wants and if the Board chose to reinstate the contract of The Ginn Corporation, which worked for sixteen years, either party can amend it by addendum. Ginn stated that the only thing that would change is the hourly rate on non-project items. Wayne Ginn, P.E. stated he started at $100.00 per hour in 1986 and held it at that rate until he resigned in December 2002. Wayne Ginn, P.E. stated that his current billing rate is $200.00 per hour and the fee would not impact projects since projects were always designed based on the fee curve, which is a percentage of construction.

Drury asked if the responsibility of engineering consultant handout should be added as an amendment to the contract. Wayne Ginn, P.E. stated he did not mind signing it and agreeing to it but he did not want it as part of the engineering contract.

Motion by Kilpatrick to reinstate The Ginn Corp. under the terms of the previous contract per the proposal Kilpatrick had put before the Board. Johnson asked if an amendment to the motion was needed to increase the billing rate to $200.00 per hour. Kilpatrick offered to amend his motion. Ginn stated that his contract is written so that hourly work is billed "at the current billable rate" so it wasn't necessary. Ginn stated that if approved tonight, he would send a letter to Mike Paulson to sign. Johnson asked if the current billable rate would stay the same or could it change over time. Wayne Ginn, P.E. stated that billable rate has changed each year for his other clients, he has just maintained the $100.00 per hour rate for BWSC because there were always large projects going on.

Motion by Kilpatrick and second by Kaufman to reinstate The Ginn Corp. under the terms of the previous contract. Motion carried unanimously.

2. Executive Session

Johnson announced at 8:31p.m. that the Board would convene in Executive Session concerning:

a. All Matters Concerning the Securing of Easements/ Hilltop Rd. Waterline, Pursuant to Government Code, Section 551.072.
b. All Matters Concerning Real Property of the Corporation, Including the Securing of an Additional Well Site Pursuant to Government Code Section 551.072.

The Board took no action and reconvened in Open Session at 9:04 p.m.

3. Public Forum.

No one was present.

 

ITEMS FOR INDIVIDUAL CONSIDERATION

4. Approve the Minutes of the Meeting February 11, 2003 Board Meeting.

Motion by Kilpatrick and second by Mutschler to approve the minutes of the February 11, 2003 Board meeting. Motion carried unanimously.

5. Approve the February 2003 Disbursements and Financial Report.

Motion by Kaufman and second by Mutschler to approve the February 2003 disbursements and financial report. Motion carried unanimously.

9. Discussion and Action on Final Approval of Barrington Hills On-Site Water Lines.

Leggieri stated that the staff approved the Barrington Hills on-site water lines and all necessary fees have been paid. Motion by Kilpatrick and second by Mutschler to approve the Barrington Hills on site water lines. Motion carried unanimously.

10. Discussion and Action on All Matters Regarding Roles/Responsibilities of Professional Consultants for the Corporation.

No discussion or action.

 

13. Discussion and Action on All Matters Concerning the Securing of Easements/ Hilltop Road Waterline.

No discussion or action.

 

14. Discussion and Action on All Matters Concerning Real Property of the Corporation, Including the Securing of an Additional Well Site.

No discussion or action.

 

15. Staff Reports.

Leggieri stated that the meters at the chosen pump stations were being changed out for participation in the I.T.U (Industrial Time of Use) program offered by CoServ.

 

16. Consultants Reports.

None.

 

17. Review Future Agenda Items, Activities, Announcements, Set the Date for the April 2003 Meeting.

A Roles and Responsibilities workshop was scheduled for Monday, March 31, 2003 at 7 p.m. at the corporation office. The Annual Meeting was scheduled for Monday, April 14, 2003 at 7:30 pm at the Crossroads Bible Church.

 

18. Adjournment.

Motion by Kaufman and second by Greaves to adjourn the meeting. Motion approved unanimously. The meeting adjourned at 9:35 p.m.

 

Recorded by Marcy Gustafson, Administrative Assistant

Certified by Larry Kaufman, Secretary-Treasurer

 

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