02-10-16 Regular Meeting of the La Porte Area Water Authority Minutes

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LA PORTE AREA WATER AUTHORITY MINUTES February 10, 2016 The meeting was called to order at 6:02 PM by President Ken Schlather. Members Present: Ken Schlather, President; Charlie Perry, Secretary; Randy Woodard Position I; Stephen Barr (newly sworn) Position 2; Members Absent: Excused absence: Doug Martin, Vice President Others Present: Corby Alexander, General Manager; Sharon Valiante, La Porte Public Works Director; Don Pennell, La Porte Asst. Public Works Director; Michael Dolby, La Porte Finance Director; Paula Lowell (financial audit), Patillo Brown & Hill; Brian Schneider, Morgan's Point 2. Welcome of new board member, Stephen Barr and new La Porte Public Works Director, Sharon Valiante. The September 09, 2015 minutes were reviewed and unanimously approved with Randy Woodard snaking the motion to approve and Charlie Perry seconding. 4. Ken Schlather opened up the floor to Sharon Valiante to conduct election of officers. Randy Woodard made the motion to nominate the current slate of officers for President, Vice President and Secretary with Stephen Barr seconding the motion. The motion was unanimously approved. Paula Lowell summarized the financial audit, presented in draft form, explaining that the firm offered up an unmodified opinion or a clean opinion. The financial statements were presented fairly in all respects, the financial position of the Authority, as of September 30, 2015, and the respective changes in financial position and cash flows are in conformance with generally accepted accounting principles. The board was reminded that the large expense seen was for the Authority's cost participation in the South East Water Purification Plant's (SEWPP) upgrades. The Authority's net position at the close of the most recent fiscal year was at $8,235,265. The total net position increased by $203,000 and the total bonded debt decreased by $650,000. Water revenues were down by $77,133. Discussion regarding future commitments initiated by Randy Woodard. Corby Alexander mentioned future water rights, additional capacity, possible new operator for SEWPP, but no significant capital expenses. Don Pennell mentioned that the Lomax area will need a booster station, (City's expense), with water line extensions that the Authority would need to fund. Michael Dolby mentioned that future true -ups may necessitate additional funds instead of credit. Motion to accept Financial Audit from Patillo, Brown and Hill was made by Randy Woodard, seconded by Stephen Barr. Unanimously approved. 6. Don Pennell provided the background information and summarized the 2015 True -Up from City of Houston. The true -up indicated the Authority's water use was 86% below the adopted budget, but the electric and chemical usage was at 100% of the adopted budget. Typically the usage should be proportional to the water taken. Don recommended that the Authority dispute the true -up with the other co -participants. Ken Schlather asked if others were in support. Don indicated as such and informed the board that the true -up usually gave the Authority a credit. Ken asked if there ever was a true -up where the Authority had to pay. Don indicated that in 2007/2008 there was, but the City of Houston gave notice too late (the contract agreement has time limitations on true -up), and the fees were waived. The recommendation was unanimously approved with the motion by Randy Woodard and the second by Charlie Perry, Don Pennell updated the board on the contested City of Houston budget. The City of Houston as Managing Participant, presented a budget for consideration that included additional administrative fees that the co - participants were collectively concerned about. The fees included upper administrative salaries in Public Works and the Mayor's office. Don also indicated that this was something that had been earmarked in previous years, but the co -participants had not realized the inclusion until just recently. The participants, in a recent meeting voted to dispute this. There was no objection to the operating and distribution costs. The City of Houston was notified and came back with a notice to the co -participants that it was giving notice that they were going to