09-10-15 Regular Meeting of the La Porte Area Water Authority minutes (2)

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LA YORTE A72FA WATER Ai1THORITY 1VIIIV UTES September 10, 2015 1 _ The meeting was called to order at 6:00 PM by President Kenneth Schlather. Members Present. Kenneth Schlather, President; Doug Martin, Vice President; Charlie Perry, Secretary; Randy Woodard Members Absents Excused absence: Dennis Steger Others Presents Corby Alexander, General Manager; David Mick, La Porte Public Works Director 2_ The August 06, 2015 minutes were reviewed and unanimously approved with Doug Martin making the motion to approve and Randy Woodard seconding. 3_ David Mick provided the background to the February 28, 2015 invoice submitted by the City o£Houston £or the Southeast Water Purification Plant ICSEWPP) improvement and expansion project bid in 2007 and constructed primarily from 2008 tbrough 201 O with some minor construction and warranty work continuing to 2012. The expansion project true -up invoice is in the amount $293,763.82_ The LPAWA share estimated in 2007 was $891,540 less a $304,980 credit for oversized items previously funded by LPAWA recouped from those entities that are participating in the 80 mgd expansion_ The project, designed to increase the capacity of the SEWPP from 120 mgd to the current capacity o£ 200 mgd, was bid at approximately $168-million with a Final cost of $171-million_ Total change orders amounted to less than 2% of the contract amount_ The co -owning entities that participated in the plant expansion portion of the project contributed additional funds at the start of the project equal to a 5% contingency_ Those entities are receiving money back_ The co -owning entities such as the La Porte Area Water Authority that did not participate in the plant expansion but did participate in the cost of e..ha.acetaents to the previously existing 120 mgd portion of the plant owed additional funds_ Staff received additional information From the City of Houston on several occasions, with the final su13mittal received September 4, 2015, as needed for staff to be comfortable recommending payment_ Motion to approve staff s request to pay the $293,763.82 trace -up invoice was made by Randy Woodard with Charlie Perry seconding. Motion was approved unanimously_ 4_ David Mick presented the background information to the FY 16 Southeast Water Purification Plant �SEWPP� budget dispute_ Continuing discussions initiated in the prior meeting_ As the Managing Owner, the City o£ Houston prepares the annual budget £or the SEWPP_ The contract between the co -owners provides a process for disputing portions of the annual budget provided that: 1) more than 50% of the plant co -owners, with the vote weighted by the percentage of water consumed over a 12-month period, are in agreement with the dispute, and 2) the disputed line items are not necessary £or the regulatory compliance, health, safety or security. The board reviewed a summary of budget line items likely to be contested by a majority of the co -owners- The disputed amount may be as high as $O.1102/1000 gallons pending fa>_rther information From the City o£Houstoa_ Sta£F is recommending joining with other co -owners in disputing the FY 16 budget line items totaling $0.1102/1000 gallons. Staff' also recommends increasing the LPAWA FY 16 budget line item For Other Professional Services by $15,000 For a total budget of $25,000 for consulting and legal Fees that may be associated with the dispute_ Staff s best estimate o£ the worst -case cost exposure to the LPAWA in terms o£ legal and consulting fees is $75,000 should the dispute goes tl r gb a Full trial. Motion to dispute the FY 16 SEWPP budget and to increase the Other Professional Services budget by $15,000 was made by Randy Woodard and seconded by Doug Martin. The motion was unanimously approved- S . Corby Alexander indicated that he had no additional comments. 6. There were no additional comments concerning the authority from the board. 7_ There being no further business, the meeting adjourned at 6:12 PM_