Minutes
Lakeway Municipal Utility District
Board of Directors Meeting
December 19, 2008
The Board of Directors met in SPECIAL session at 9:30 a.m., 1097 Lohmans Crossing, Lakeway, Texas, with the following:
Directors Present: Kay Andrews
Jerry Hietpas
Allan Hitchcock
Tom Priddy
Tom Rogers
Staff Present: Richard W. Eason
Margaret A. Cathey
Committee Members Present: Dennis Brown, E&O
Others Present: Alan Phillips
1. Award bid for 2.0 MG Tank (E-5) and 20” transmission project.
Eason explained that the reason for this meeting was to consider awarding the bids for construction of the pipeline and E-5 water storage tank. Then Eason suggested that to award a bid, send notice of award and then decide not to do the project would be “bad form”. He said that he has heard that the City is still not happy with the tank location even though they voted 5-2 in favor of the rezoning for the site. The City has expressed interest about taking over the District and has called for his removal as GM. Eason commented that the City perception is that this project has been his idea and been pushed through by him and not the Board’s project, but rather Eason’s project. Eason wanted to remind the Board that while he provides technical advice and planning direction for facilities, capital projects are at the Board’s discretion. At the last Board meeting the Board’s position on the site zoning was clear. They were not willing to relocate the site before the City ruled on the rezoning. Rogers commented that this project has been discussed and planned for two years. The E&O Committee are all current/past engineers and have recommended moving forward. This project is for the health and safety of the District customers. Rogers also commented that you cannot please everyone all the time. If another location had been in the best interest of the District customers, then that site would have been the District’s first choice. Priddy commented that Eason had his full support on this project and was sorry that Eason had to take the brunt of the most recent incidents. Hietpas wanted the best for all “stakeholders” – members of the District, the District’s other customers, the District organization and the City. If it would be best that the City take over the District, so be it, but that has yet to be demonstrated. Hitchcock is in agreement with the decision of this project. He commented that the landscaper had indicated that the tank would be obscure within three years. The District learned late that the Mayor wanted a commercial building in front of the tank to bring in more tax money to the City. Andrews also expressed that the tank site was necessary and appropriate. Rogers stated that if the City wants the tank in a different location, then they should pay for the extra cost of moving it. Andrews wanted an explanation of why the original size was 1MG and now is 2MG. Eason explained that early modeling would be “just enough” for production. The District then looked at increasing the size to have more than just enough. The cost differential from 1MG to 2MG at that time was approximately $250K; we wanted the extra reserve capacity in case of a major line break or a power failure. The E&O Committee’s overall thinking was that they wanted to make sure we had enough capacity. With 2MG, we would have approximately ½ day’s production in storage in case of emergency. Having this storage also helps John Hastings with keeping the plant production levels consistent and meeting regulations. With a 2MG tank, we should be able to meet all currently envisioned future needs. Andrews wanted to make sure that everyone communicated the positive reasons on why we were building a 2MG. Andrews then asked why we did not ask the TWDB for financing. Eason explained that most entities go to the TWDB when they can’t get financing through the private sector. Eason further commented that many years ago, the District did get financing thru them and the paperwork was extremely time-consuming. If the District was to approach them again, he would recommend hiring another full-time person just to deal with the paperwork. The Bond Anticipation Note money was deposited into the District’s account on Tuesday. We don’t need to sell bonds until mid-summer. Eason will review all of the other proposed projects and put together a time and priority schedule for bonds. Haythem Dawlett has now “gone firm” with his earnest money and has asked for a 6-month extension. If this land sale contract goes through, the land will sell before June; we won’t need to sell bonds to repay the BAN.
Contract B is the tank bid. Only two contractors are qualified to build the tank as designed. We will be using our specified electrical contractors to interface with our SCADA and electronics; TEI Controls, T&T and TEW. The low bidder was Natgun; the other bid was only $25K more. TCEQ requires a fence around a tank. We are proposing an 8’ cedar gate and a 6’ chain link with barb security wire on top. The City has approved all of the plans in principle; they should sign off soon. The landscaping contract has been separated from the project. The City has changed some landscaping requirements and those have been submitted to our landscape consultant to update. The City has given us two months to resubmit the landscape plans for approval. Eason will carefully review the landscape plans with the preferred contractor. The fill from the cut for the tank can be used to increase the height of the berm in front of the tank. The berm may be increased and will require a change in scope. Natgun has built several tanks nearby; Bee Cave and District #17.
Contract A is for the piping and Boretex was the low bidder. They have completed two other projects for us; the S-4 flood wall and the bottleneck wastewater line. CCCarlton was the second lowest bidder and may have an edge in overall quality. They have protested Boretex’s bid. Alan Phillips has investigated the protest and is convinced that Boretex will do a good job. Boretex says they will complete the job in 90 days. The District still needs to get a license agreement to store equipment/materials on land owned by Emmaus Church. They have agreed in principle at no cost to us. The District and the Church will be added to Boretex’s insurance policy. The City wants a letter from the Village of the Hills for permission to open saw cut at the entrance off Lohmans Crossing by the guard shack; the Hills prefer us to bore. This would increase the cost of the project about $46K. About 2,000 cars go thru that entrance every day and there will be a lot of criticism about inconvenience. The options were to close the entrance while saw cutting; do 1/3 or 1/2 at a time; or work at night. The options were outlined with Boretex and he agreed to work at night 7:00pm thru 6:00am. This would be an extra cost of ~$3K per night. The Village Aldermen would prefer that we bore, but may be ok if we worked at night with a saw cut. Eason indicated the District’s preference for open cut at night. The Emmaus driveway will also need to be saw cut, but since they have two very close entrances, this should not present a problem; Eason will coordinate with the church. Eason predicts the Hills’ saw cut can be done in one night; 2-3 nights max. The entrance would be open during the day with metal plates over the cut. There are several negative aspects of boring; more cost; bigger holes; more noise; longer time frame; and uncertainty about the location. Paving can be done in a few hours over the saw cut.
Dennis Brown suggests a meeting with City leaders to hash out any concerns about the tank or Eason. Rogers will schedule a meeting.
Hietpas made a motion to award the pipeline bid to Boretex for $510,118.50. Hitchcock seconded the motion. Motion passed unanimously.
Priddy made a motion to award the tank base bid, including alternate #1, to Natgun for $1,100,650. Hitchcock seconded the motion. Motion passed unanimously.
ADJOURNMENT
The meeting was adjourned without objection at 11:05 a.m.
Respectfully Submitted,
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Margaret A. Cathey, Assistant Secretary/Treasurer
Board of Directors
Minutes approved on the ________ day of ______________, ________.
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President, Board of Directors
ATTEST:
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Secretary, Board of Directors