1. Call to Order.

President Paulson called the meeting of the Board of Directors of Bartonville Water Supply Corporation to order at 7:10 p.m. on Wednesday, October 22, 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
Kevin Alberts

Directors Absent

Dale Mutschler

Consultants in Attendance
Jennifer Drury, CPA
Wayne Ginn, PE
Ronnie Phillips, Esq.

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

Others in Attendance

Evelyn Vera- Double Oak
Kirk Selby – Double Oak (Ms. Vera)
Allen Zubrod – Double Oak
Paul Libscomb – Arlington
Jim Fiegenschue - Double Oak
Meg Fiegenschue - Double Oak
Kathy Gregory - AIA Insurance

3. Public Forum

Ms. Evelyn Vera, resident of Double Oak, stated that she wanted to discuss with the Board her August 2003 water bill (122,668 gallons), which she thought was excessive. Ms. Vera stated that she checked her sprinkler system and had the house checked for leaks and no leaks were detected. Ms. Vera stated that American Sprinkler checked her irrigation system and told her there was no way she used all the water as the meter registered. Ms. Vera stated that her issue was with the meter and she did not believe it was functioning properly, even after being sent for testing. Paulson asked when the irrigation system was operated. Ms. Vera stated that the system started at 4:30 am. Ms. Vera stated that she has had her irrigation system checked twice and that a few heads were replaced but she was told that would not have anything to do with her high consumption. Ms. Vera stated that Mr. Kirk Selby had tested the meter. Paulson asked how the meter was tested. Mr. Selby stated that he opened the box and looked at the meter and could tell via the “tattletale” and there was no water flowing through it and that all valves were off in the house. Mr. Selby stated that he went one step further and shut the main off and left it off for fifteen minutes. Mr. Selby stated that after fifteen minutes he turned the main back on and the “tattletale” still did not move which indicated to him that there was no leak in the system. Mr. Selby stated that he checked around the foundation of the house and any other noticeable areas for leaks and found none. Mr. Selby stated that based on the average usage by Ms. Vera of approximately 6,000 to 8,000 gallons a month and to then jump to the alleged 122,000 gallons he would have seen some sort of leak around the house or yard, but found none. Mr. Selby stated that he also checked the irrigation system and except for a few broken sprinkler heads, found no leak. Kaufman asked how many settings Ms. Vera had on her system and how often it ran. Ms. Vera stated that there were twelve setting that ran twice per week. Mr. Selby stated the he checked the meter by taking a reading (0214710) off the meter and then filled a 5-gallon bucket from the hose bib and went back and checked the reading on the meter (0214730). Mr. Selby stated that this was a usage of ten gallons. Mr. Selby stated that he repeated the test and used 10.3 gallons to fill a 5-gallon bucket and that he was not certified to perform a more accurate test since he did not have the meters and gauges that are certified to perform these tests. Kaufman asked if Mr. Selby determined how much water he thought Ms. Vera should be using. Mr. Selby stated that since he was not familiar with her particular sprinkler system he could not make a determination. Ms. Vera stated that she has run the sprinkler system previously and has never used as much water. Mr. Selby stated that he was unable to calculate the amount of usage in her sprinkler system, but the sprinkler company estimated the usage of 14-16 gallons per minute. Greaves asked Leggieri if the meter was sent out and if there was any explanation as to why a meter would read double at any point. Leggieri stated there was not and that was the reason for adopting the policy and having the meter sent to be tested according to American Water Works Association (AWWA) standards. Leggieri stated that once a meter started registering inaccurately it does not fix itself and meters will register less than what is actually used. Leggieri stated that all the meters in the system are not any older than 36 months. Leggieri stated that sending the meters off to be tested eliminates opinion. Leggieri stated that information was not received on the testing of the sprinkler system from the company other than what Ms. Vera had stated in her letter. Leggieri stated that since the meter tested within AWWA standards that the only conclusion is that the water passed through the meter and registered accurately. Greaves asked how long Ms. Vera has had the sprinkler system and how long she has been running the system. Ms. Vera stated she bought the house a year ago and had the system checked when she moved in. Ms. Vera stated that she ran the system and then it started raining and turned it off and the next time she ran it is when she incurred the large bill. Greaves asked if she ever really determined how much her system used. Greaves asked if she ever ran the system and watched the meter as opposed to running the water into a bucket. Ms. Vera stated that she had not because she could not afford another large bill.

Mr. Allen Zubrod stated that he was interested in obtaining information regarding the fire hydrants being installed on Cross Timbers Drive. Mr. Zubrod wanted to know if there was a final plan. Paulson stated that the Board was still discussing the options. Ms. Meg Figenshue stated that she was checking in on the status and that she had handed out flyers to her neighbors encouraging them to come to the meeting. Paulson stated that a workshop was held and ideas were discussed and that further research was necessary. Ms. Figenshue asked where her neighborhood fell in the five-year plan, in the beginning or end. Paulson suggested discussing item 11 for further information and details.

11. Discussion and Action on All Matters Concerning The Ginn Corporation's Proposal for the Upgrade of 2-inch and 4-inch Waterlines, such as Oak Grove Circle, by Means of a Pro-rata Program.

Wayne Ginn, P.E. reviewed the Master Plan and stated that the Cross Timbers line was one of the lines listed in the Mater Plan but none of the lines have been prioritized. Ginn stated that he drove Cross Timbers and the cost estimate is about the same as it was in the Master Plan, the Master Plan cost was $230,000 compared to the current cost estimate of $250,000. Paulson stated that in the workshop it was discussed to try to get the homeowners in the area involved to help make up the cost. Ronnie Phillips, Esq. stated that an assessment cannot be made of an individual member for maintenance, upgrades, etc. for services that are system wide. Phillips stated that when the Public Utility Commission issued the CCN (certificate of convenience and necessity) it was required to go to the city limits, but stated that the you only have to serve people if you have the capacity to do so, but the Board has the responsibility to plan for the future. Phillips stated that requirements have changed and upgrades have been made that are best for everyone and that BWSC is not in the fire protection business. Phillips stated that new developers pay for the best system money can buy and that the older parts of the system will be updated as they can be done. Ms. Figenshue asked what the logic was behind deciding on the priority of which lines to do first. Phillips stated that it was mainly engineering and system maximizing concern, i.e. making a loop system and that it was hard to give an exact date. Mr. Zubrod asked if a new line was put in, does the pressure stay the same. Ginn stated that the pressure throughout the system does not exceed AWWA standards. Ginn stated that a 5 million dollar capital project program has been started with 2 million dollars in water line projects. Ginn stated that the first capital project is for future growth, and then if funds are left, lines will be prioritized according to the greatest need and therefore should not expect anything for at least 4-5 years. Ms. Figenshue asked if Double Oak, as a legal entity, could help in any way. Phillips stated that there is no legal problem with the Town of Double Oak approaching BWSC to do a cooperative project. Ms. Figenshue asked if individuals could give money to Double Oak and if so, would that change the priority. Paulson stated that the limitation is the funding, but if funding became available, it could be taken on as a separate project and not part of the five year Master Plan. Mr. Zubrod asked if a fire hydrant could be installed on the current line without replacing it. Leggieri stated that from the Tanglewood hydrant everyone but two houses are inside the 1,000 feet insurance requirement, but if the dedicated easement through Mr. Minassian's yard is used, all the houses could be accessed. Kaufman asked if the dedicated access easement could be used to install a waterline. Drury stated Jeff Crannel with the Town of Double Oak stated that there would be no problem with putting a water line in the easement. Leggieri stated that the cost to under bore with casing is $80.00 per foot, approximately $36,500. Kilpatrick stated that since it sounded like the major concern was with fire protection, that the cheapest and easiest solution at the time would be to utilize the access easement and to voice their concerns with Chief Mabra of the Double Oak Volunteer Fire District. Paulson stated that there are three options; spend $250,000 upgrading the lines, spend $36,000 for under bore or talk with the chief of the fire department. No action.

 

9.  Discussion and Action on Selecting the Corporation's Officers and Directors Liability Insurance Policy Limits.

Drury stated that she checked with Argyle Water Supply Corporation and they carry three million dollars in coverage. Ms. Gregory stated that per the request of the Board the limit has been raised to five million. Ms. Gregory stated that the Travelers policy, which is in force now, which has five million on the D & O, has a sub limit of one million dollars on employment practices. Ms. Gregory stated that if there is a D & O claim that goes over the five million, this policy picks up immediately, but if there is an employment practices claim that goes to five million, Travelers will pay the first one million, BWSC pays the next four million and then the excess policy picks up after five million. Ms. Gregory stated that she had requested a quote to fill in the four million dollar gap and has not received it yet. Ms. Gregory asked the Board what they wanted. Kaufman stated that he thought the biggest risk was the employment practices. Ms. Gregory stated that with the 350 utilities that her company writes insurance policies for, she has seen the most claims in the employment practices but has not seen any in rural water utilities. Leggieri asked what the claims were for. Ms. Gregory stated that a majority of the claims were for wrongful termination and sexual harassment. Phillips stated the biggest damages were punitive from other Boards not adopting policies and following through with them. Phillips stated that the one million dollars in coverage worried him and thought three million in coverage was better suited since 95% of cases usually settle for one million or less. Gregory stated that there have not been many D & O claims, but when there is they are significant. Gregory stated that she is not comfortable with the gap in the coverage and will get quotes for three and five million. Paulson asked Ginn what insurance covers a contractor when working on site. Ginn stated that the contractors provide their own insurance. No action.

 

2. Executive Session.

Paulson announced at 8:12 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.

The Board took no action and reconvened in Open Session at 8:26 p.m.

4. Approve the Minutes of the September 15, 2003 Board Meeting.

Motion by Kaufman and second by Alberts to approve the minutes of the September 15, 2003 Board meeting. 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.

6. Discussion and Action on All Matters Concerning BWSC's Operating and Capital Budgets.

Drury stated that based on the previous workshop, the base rate was adjusted to reflect $1.00 increase and changing the first rate to $2.19. Drury stated that this makes funds for operations for 2004 approximately $422,000.00. Kaufman stated that according to the future plans, the Stargate pump station should be completed in 2005 leaving BWSC $650,000 in arrears. Drury stated that was correct and is expected to be made up by 2008. Kaufman asked if a well could be drilled in 2006 as opposed to 2009. Drury stated that this could be done but with using the line of credit. Paulson asked what it would cost BWSC in interest to be $650,000 in arrears if the line of credit was used. Drury stated that she would check into what it would cost in interest. Ginn stated that next spring, if all plans submitted to the state have been approved and after reviewing water demands for the summer, would be the best time to make a decision on the pump station. Hanson asked what would cause the utilities to fluxuate. Drury stated that it is dependent on the actual electrical usage for the pump stations and the fact that CoServ might have an increase next year. Hanson stated that reviewing the numbers on a per gallon basis, it looks as if it is a 10% increase in utilities. Drury stated that there is a 10% budgeted increase, but currently BWSC is not using the Industrial Time of Use (ITU) and when BWSC does, she hopes to see a decrease. Paulson asked if any information was received from Coserv. Drury stated that when she spoke with CoServ, they were still doing budgets, but the big concern is their fuel costs. Hanson asked about the $285,000 demand charge from high end users and asked if there was any validation that this was actually being recovered. Drury stated that this year it will not be recovered and will be approximately $50,000 short by the end of the year. Hanson asked where this amount would be recovered next year. Kaufman stated that 173 gallons is budgeted per member and the opportunity is great to exceed that and in 1999, $475,000 was recovered. Kaufman stated that some years are better than others. Hanson asked about the cash flow changing in upcoming years. Drury stated that part of it is due to new member fees. Kaufman stated that historically new members show a 3% increase and each number should be multiplied by 3%, which increases the cash flow by approximately $200,000 in cash flow. Kilpatrick asked Ginn what his thoughts were from an engineering point of view. Ginn stated that he was comfortable with the working draft of the budget but would like to review it further. Kaufman asked if UTRWD could increase their proposed increase of 11% with the Lewisville adjustment. Leggieri stated that the UTRWD would take funds from other areas to cover the Lewisville adjustment and it would possibly be next year if the increase from the Lewisville adjustment would be passed on to UTRWD members. Paulson stated that he thought the UTRWD increase was an opportune time for BWSC to raise rates. Kaufman stated that the rate increase from UTRWD is justification for BWSC to raise rates. Hanson asked if BWSC was required by law to carry any sort of reserves. Kaufman stated that BWSC previously had reserves, but now has the line of credit. Kaufman stated that in theory with the membership growing at 3%, which is the same as inflation, all of the fixed costs are covered by the current membership. Kaufman stated that UTRWD raising their rates could cause BWSC to raise rates also. Kaufman stated he would like to include potential savings by utilizing the ITU. Kaufman stated that interest income and expense might need to be recalculated. Kilpatrick asked what the increases were for both of the budget examples. Kaufman stated that one example showed $1.00 increase in the monthly service fee and the other has increase in water rates. Kilpatrick stated that if fees are raised along with the UTRWD raising rates it is easier for the membership to understand. Paulson suggested leaving the base rate alone and bring the rates up 11%, which is easily explainable to the membership. Kaufman stated that even though there was justification to raise the rates by 11%, he was not sure it was necessary. Kaufman stated that he thought something other than 11% might be more efficient instead of raising rates every time UTRWD does. Paulson suggested restating the income and expenses to cover the 11% increase. No action.

7. Discussion and Action on Ms. Evelyn Vera's Request to Appear Before the Board Regarding the Consumption Metered and Billed for the 7/9/03-8/8/03 Consumption Period.

Kilpatrick stated that he did not hear evidence that the water was not used, the meter was tested within AWWA standards, the plumber stated that he found no leaks and the irrigation system was questionable and therefore supports the staff recommendation. Drury stated that the deferred payment plan was offered and accepted by Ms. Vera. Motion by Kilpatrick and second by Kaufman to uphold the AWWA testing results on the meter. Motion carried unanimously.

8.  Discussion and Action on Authorization for General Manager to Purchase/Install an UPS for the Elevated Storage Tank SCADA system.

Motion by Kilpatrick and second by Hanson to accept the proposal on the purchase/install of an UPS for the elevated storage tank SCADA system. Motion carried unanimously.

10. Discussion and Action on All Matters Concerning The Ginn Corporation's Proposal for a Computer Hydraulic Model.

Ginn presented his proposal along with a resume of Mr. Paul Lipscomb P.E. Ginn stated that if the proposal were authorized, Mr. Lipscomb would be the consultant used to develop the model. Paulson asked what type of system it would be and whether or not it would be compatible with BWSC's current system. Mr. Lipscomb stated that he had spoken with the person doing the GIS and said it can be integrated together. Greaves asked if the system could be used interactively. Lipscomb stated that it could be used for simulations. Greaves asked if additional pump stations or lines were added to the system would someone have to be hired to update the model. Lipscomb stated that they will anticipate future uses. Greaves asked if the model could be optimized to save money. Lipscomb stated when the model was run in 1997, it showed at certain times that pump stations were locking out and could not meet the pressure demand at low usage, when high usage occurred it dropped pressure in certain areas and at that time some pump stations contributed to the system, which gives a quick look and optimization and power usage. Ginn stated that the time frame to make the presentation would be at the February 2004 board meeting. Ginn stated that the presentation would be made in February and questions answered and a final plan would be presented at the March board meeting. Paulson asked if this would be soon enough for what needs to be done for Stargate. Ginn stated that he would be working with Mr. Lipscomb and that has already been considered. Paulson asked if the charges were expected to exceed $22,000 as described in the proposal. Ginn stated at this time no. Ginn stated that the cost is not projected to exceed $26,000. Ginn stated that the $26,000 consists of $22,000 for compensation for Paul Lipscomb, P.E. and that $4,000 was arbitrarily added for his time and involvement in reviewing and revising plans. Paulson stated that they needed to stay within the budget. Ginn stated that they hoped it would be less than the proposed fee since they were conservative with the estimates. Kaufman asked if BWSC would be getting a copy of the model. Lipscomb stated that it could be furnished but the software would have to be purchased that the model is run on. Kaufman asked if work could be done in the BWSC office or if it was something that they would have to do. Lipscomb stated that typically work is done in their office. Ginn stated that BWSC would not have the software. Paulson asked if BWSC could have a copy of the data files to archive. Lipscomb stated that BWSC could have a copy. Motion by Kilpatrick and second by Hanson to approve the proposal for a computer hydraulic model as submitted by The Ginn Corporation with a cost not to exceed $26,000. Motion approved unanimously.

 

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

No discussion. No action.

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

No discussion. No action.

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

No discussion. No action.

15. Management/Staff Report.

None.

16. Financial Consultant's Report.

None.

17. Engineering Consultant's Report.

None.

18. Review Future Agenda Items, Activities, Announcements, and Set the Time and Date of the November Meeting.

The next regular meeting is scheduled for Monday, November 24, 2003 at 7 p.m. at the corporation office.

19. Adjournment.

Motion by Kilpatrick and second by Alberts 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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