1. Call to Order.

President Paulson called the meeting of the Board of Directors of Bartonville Water Supply Corporation to order at 7:07 p.m. on Monday, November 24, 2003 at the corporation office, 1911 East Jeter Road, Bartonville, Texas.

Directors in Attendance

Michael Paulson, President
Thomas Greaves, Vice-President
Larry Kaufman, Secretary-Treasurer
Scott Kilpatrick
Lloyd Hanson
Dale Mutschler

Directors Absent

Kevin Alberts

Consultants in Attendance
Jennifer Drury, CPA
Wayne Ginn, PE

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

Others in Attendance

Todd Buschmann – Double Oak

3. Public Forum

Mr. Buschmann, resident of Double Oak, stated that he had received a call from BWSC in reference to his higher than normal water consumption. Mr. Buschmann stated that when he returned the phone call he was told that he had consumed 119,000 gallons of water and BWSC was calling him in the event that he might have a leak that might need to be investigated. Mr. Buschmann stated that he had recently put in a new yard and had used the water to establish his new yard. Mr. Bushmann stated that he checked his meter and there was no movement and his sprinkler was not running and he had determined that he did not have a leak and did use the water. Mr. Buschmann stated that he asked what the amount of his bill would be with consuming 119,000 gallons of water and was told it would be approximately $1,800. Mr. Buschmann stated that after the graduated rates were explained to him, he had asked BWSC personnel if there was a one-time variance in rates for establishing a new yard or filling pools. Mr. Buschmann stated that BWSC told him that variances were not offered but he did have the option of a four month deferred payment plan. Mr. Buschmann stated that a four month deferred payment was not affordable to him at this time. Mr. Buschmann stated that about a month ago he did install $8,000 worth of grass and an irrigation system. Mr. Buschmann stated that during the period from January 2002 through October 2003 his total consumption has only been 218,839 gallons of water and therefore this was obviously a one-time usage. Mr. Buschamann stated that he was expecting a bill of approximately $250.00 based on using the first tier rate of $2.05 as his guide. Mr. Bushmann stated that when he first built his house he filled his pool and had a $265.00 bill and used that as a guide also. Mr. Buschamann stated that he has 23 stations running at 20 minutes a day on his irrigation system and the water was used to establish his new yard. Kilpatrick stated that due to current policies there was no way to lower the bill but it might be possible to offer a longer deferred payment plan. Kaufman stated that there is no way to give a variance before water is consumed and that this type of consumption is what has driven rates up. Kaufman stated that 10% of the membership consumes a majority of the water and that is the reason for the rate structure. Kaufman stated that when more water is consumed by the membership, more water has to be purchased and a variance could not be given and was not sure about the deferred payment plan policy. Drury explained that the current deferred payment plan policy is a four month payment plan without Board approval and asked Mr. Bushmann how long he thought he would need for a deferred payment plan. Mr. Buschmann stated that he was not sure since his average bill is about $40 to $50 per month. Drury asked if six months would be a better option and in the past the Board has approved six month payment plans. Mr. Buschmann stated that if he had the choice he would request a twelve month deferred payment plan, which is still four times his average bill. Wayne Ginn, P.E. stated that BWSC prefers that water bills are paid upfront due to the fact that the water that BWSC supplies to its members has to be paid for up front. Paulson stated that information presented would be taken into consideration and that according to the bylaws every member has to be given the same opportunity and treated equally. Mr. Buschmann stated that he was seeking a variance in the graduated pricing since there is such a big difference. Paulson stated that since the option is not offered to everyone, it cannot be offered to Mr. Buschmann. Kaufman stated that if Mr. Buschmann is granted relief in his bill then everyone would want the same relief. Drury asked that since the bill is due prior to the next meeting, would it be sufficient to have Mr. Buschmann pay what he can and not be penalized until the Board makes a decision. Paulson stated that was reasonable. Mr. Buschmann agreed.

2. Executive Session.

Paulson announced at 7:23 p.m. that the Board would convene in Executive Session concerning:

a) All Matters Concerning the Securing of Easements / R.O.W. for the Hilltop Rd. Waterline/Stargate Pump Station Site, Pursuant to Government Code, Section 551.072.

b) All Matters Concerning the Securing of the Waterline Easement/ Thornhill Ranch Estates, Block A Lot 9, Pursuant to Government Code, Section 551.072.

c) All Matters Concerning Personnel, Pursuant to Government Code, Section 551.074.

The Board took no action and reconvened in Open Session at 8:20 p.m.

4. Discussion and Action on All Matters Concerning Mr. Todd Buschmann's Request to Appear Before the Board to Request a Variance to a) the graduated pricing scale and b) the Deferred Payment Plan for the Consumption Metered and Billed for the 10/8/03 - 11/7/03 Consumption Period.

Mutschler stated that a six-month payment plan was adequate. Drury stated that the Board had authorized a six-month payment plan in the past but Mr. Buschmann was asking for a 12-18 month payment plan. Kaufman stated that he was concerned with the cost to BWSC if a member could spend $8,000 for a new lawn but then wanted to extend the payment for his bill for 18 months interest free. Kaufman stated that he felt four months was acceptable instead of the six months. Drury stated that the reason Mr. Buschmann appeared before the Board was because he was requesting a 12-month deferred payment, which has never been granted. Kaufman stated that if Mr. Buschmann wanted to defer his payments an option is to pay his bill with a credit card. Kilpatrick stated that six months was acceptable. Kaufman stated that the staff should handle according to the current policy. Motion by Kaufman and second by Kilpatrick to deny Mr. Buschmann's request for any variance to the graduated pricing scale. Motion carried unanimously.

5. Approve the September 2003 Disbursements and Financial Report.

Drury stated that the month of September was not as good as expected, but BWSC did not purchase as much water from the UTRWD. Drury stated that there was not a high consumption in utilities and therefore utilities was almost $9,000 under budget. Drury stated that the subdivision fees were received for the Taylor Oaks property, approximately $240,000.000. Drury stated that overall BWSC is slightly ahead on water sales for the year to date. Drury stated that Highland Village paid the remaining $100,000.00 on the CCN release. Motion by Kilpatrick and second by Alberts to accept the September 2003 disbursements and financial report. Motion carried unanimously.

5. Approve the Minutes of the October 22, 2003 Board Meeting.

Motion by Kaufman and second by Greaves to approve the minutes of the October 22, 2003 Board meeting. Motion carried unanimously.

6. Approve the October Disbursements and Financial Report.

Drury stated that the month of October payroll expenses increased due to the fact that there were three pay periods. Drury stated that the insurance expenses increased an additional $7,000 for D & O liability. Drury stated that consulting fees were increased due to an additional pay period also. Drury explained that water sales were down compared to what was projected. Drury stated that the equity fees for the Taylor Oaks property, approximately $240,000.000, were paid during the month of October. Drury stated that overall for the end of the month, there is net income of $181,000. Drury stated that a statement of cash flows was included in the packet to show how the $181,000 was generated. Drury stated that repair and maintenance expenses increased due to a 2” water line repair. Kaufman asked what large payments were projected. Drury stated that the first payment to EM Construction for the Hilltop Road waterline has been requested. Motion by Kaufman and second by Mutschler to accept the October 2003 disbursements and financial report. Motion carried unanimously.

7. Discussion and Action on All Matters Related to Approval of the Operating and Capital Budgets for the Year 2004, Including Approval of the Rates.

Drury stated that she included three options for rate increases in the packets due to the fact that UTRWD is negotiating with the Town of Flower Mound. Drury stated that the Town of Flower Mound has requested from the UTRWD that reserves be used so that the town would not be hit as hard. Drury stated that the UTRWD agreed, which resulted in a 5% increase instead of 11%. Drury stated that next year, beginning in October, UTRWD will have to raise demand charges to $200,000 per mgd, which will be an 11% increase over the next two years. Drury stated that she included 5%, 8%, and 11% increase options. Paulson asked if the estimated 8% increase in D& O liability coverage is what was spent last year or overall. Drury stated that it was an overall increase due to the fact that insurance rates are increasing and the fee was paid this year but the policy continues through to 2004. Paulson asked what the actual increase would be for a year. Drury stated that she estimated an increase of 5%. Hanson stated that with the 11% increase there was a $60,000 difference in cash flow. Drury stated that it was due to the fact that the revenue is driven by consumption. Kaufman distributed a handout showing how conservative the budget is in the water area. Kaufman stated that since the budget is conservative, if more water is sold, revenue increases. Kaufman stated that he did not think rates should be raised but would recommend a 5% increase. Kaufman stated that cash in reserve minus the amount for the Hilltop Road project, still leaves 2.2 million dollars in capital. Kaufman stated that in the 5% example, by 2011 all projects have been paid for and water line upgrades have been done and this still leaves a million dollars in capital. Hanson asked if the cost for the UTRWD had been factored in for the year 2005. Drury stated that the cost had been included. Greaves asked if the UTRWD rate increase is 5% this year and then 6% next year. Drury stated that the rate increase would be an additional 5% next year in addition to the 5% this year. Greaves stated that the 5% rate increase from the UTRWD could be passed along to the members with notification that an additional rate increase could happen in 2005. Kaufman stated that rates could always be adjusted in the future if UTRWD had an additional rate increase. Kilpatrick stated that he is more agreeable with the 8% increase as opposed to the 5% increase. Paulson stated that he thought an increase was necessary but since UTRWD is not raising rates as proposed, he was agreeable with a 5% increase. Mutschler stated that a rate increase over time instead of the all at once seemed better for the members to understand. Motion by Kilpatrick and second by Mutschler to approve the budget and 5% rate increase for 2004. Motion carried unanimously.

8. Discussion and Action on the 2003 Financial Audit for BWSC.

Drury stated that Hankins, Powers, Eastup, Deaton, and Tonn have done the audit for BWSC for the previous two years. Drury stated that BWSC has received a proposal for $8500.00, which is the same amount as last year. Motion by Hanson and second by Kaufman to approve the 2003 audit with Hankins, Powers, Eastup, Deaton, and Tonn at a price of $8500.00. Motion carried unanimously.

 

9. Discussion and Action on Approval of Payment Request #1 from E M Construction and Work to Date on the Hilltop Rd. Waterline.

Ginn stated that the payment request is for work completed thru October 31, 2003, which consists of 12-13% of the overall project. Ginn stated that the project is estimated to be complete in February 2004 and during the next couple of months approximately $200,000-$300,000 in payments will be requested. Ginn stated that BWSC is under contract and is obligated to pay on a monthly basis and it is not necessary to be an agenda item, but Ginn likes the Board to see the payments so they can keep up with the project. The final payment requires Board approval. Motion by Kilpatrick and second by Mutschler to accept payment request #1 from EM Construction in the amount of $50,655.90 for work completed through October 31, 2003. Motion carried unanimously.

10. Discussion and Action on all Matters Concerning BWSC's Policies Regarding Agenda Item Limitation.

Motion by Kaufman and second by Hanson to accept the agenda item limitation policy. Motion carried unanimously.

11. Discussion and Action on Easements/R.O.W. for the Hilltop Road Water Line/Stargate Pump Station Site.

No discussion . No action.

12. Discussion and Action on All Matters Concerning the Securing of the Waterline Easement/Thornhill Ranch Estates, Block 1 Lot 9.

No discussion. No action.

 

13. Discussion and Action on All Matters Concerning Personnel.

Paulson stated that the Board decided to raise the salary of the general manager by $2,450. Kaufman stated that the remaining $5,100 was to be distributed to the remainder of the staff at the general manager's discretion. Paulson stated that the Board felt that the general manager, Jim Leggieri, had done an excellent job for the year 2003. Paulson stated that at the January Board meeting the directors would like to discuss the goals of the general manager for 2004. Motion by Kaufman and second by Mutschler to increase the salary of the general manager by $2,450 with the remaining $5,100 to be distributed among the remaining staff at the general manager's discretion. Motion carried unanimously.

14. Staff Report.

Leggieri stated that in response to the vulnerability assessment due in June, staff had attended training in Dallas. Leggieri stated that he was confident with the security measures in place with the system were sufficient. Kaufman asked if there was a system in place to track security costs. Drury stated that costs could be tracked, but manually. Kaufman stated that he thought the current billing system had a system. Drury stated that Incode has a work order system but it does not supply a cost. Drury stated that Incode could be contacted to see if a system to track security costs could be created.

Paulson asked Leggieri if an overview of the SCADA system could be given at the January meeting for the benefit of the new directors.

15.  Consultants Report.

None.

16.  Review Future Agenda Items, Activities, Announcements, and Set the Time and Date of the December Meeting, and Set the Date and Time for the Christmas Party.

The next regular meeting is scheduled for Monday, December 15, 2003 at 7 p.m. at the corporation office. The time and date of the Christmas Party is set for December 16-17 th at Christina's or Bari's Restaurant, dependent on the availability of the facility.

 

17. Adjournment.

Motion by Kaufman and second by Greaves to adjourn the meeting. Motion approved unanimously. The meeting adjourned at 9:30 p.m.

Recorded by Marcy Gustafson, Administrative Assistant

Certified by Larry Kaufman, Secretary-Treasurer

 

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