* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. SO [00:00:01] LET US GET OUR LITTLE GAVEL. GOOD AFTERNOON. I'D LIKE TO WELCOME EVERYONE TO THIS MEETING OF THE BAYTOWN AREA WATER AUTHORITY. CALL THE MEETING TO ORDER AND ANNOUNCE THAT WE DO HAVE A QUORUM. OUR FIRST ITEM OF BUSINESS IS CITIZEN COMMENTS, BUT I UNDERSTAND THAT WE HAVE NO PUBLIC, UH, SIGNED UP. OUR SECOND ITEM OF [a. Consider approving the minutes of the Baytown Area Water Authority Regular Meeting held on January 17, 2024. ] [b. Consider approving the minutes of the Baytown Area Water Authority Regular Meeting held on February 21, 2024. ] BUSINESS IS MINUTES, AND HOWEVER WE ARE GOING TO PULL THAT ITEM FOR A FUTURE MEETING. UM, [a. Consider a resolution authorizing the General Manager to negotiate and execute a Contingency Fee and Retainer Agreement with Frazer Law, PLC, and Ventura Law to perform legal services in connection with potential litigation regarding the presence of Polyfluoroalkyl substances (PFAS), including, but not limited to, PFOA and/or PFOS, in drinking water, wastewater, and soil in Baytown, Texas. The Board is considering the Agreement for the following reasons: Should detectable levels of PFAS be present, based upon revised standards issued by the United States Environmental Protection Agency, BAWA hopes to recover damages from the manufacturers. The Frazer and Ventura law firms represent municipalities and water systems in PFAS litigation across the country and have developed a specialty and competence in such litigation. The law firms are members of the Water Council for the US Conference of Mayors and, in this capacity, contacted BAWA in September 2023 regarding potential claims and recoveries from settlements with various manufacturers that were recently announced. BAWA has no previous relationship with either law firm. The General Counsel's Office of BAWA has neither the capacity, expertise, nor current license requirements, to adequately represent BAWA in the current multi-district federal litigation. Further, lawsuits of this type are generally handled on a contingency basis by firms with expertise in the area. It is uncommon for law firms with such expertise to charge an hourly rate. Moreover, an hourly rate for such complex and time-consuming litigation would not be economically feasible or in residents’ best interests, especially considering the possibility of a loss or minor recovery. Entering into a contingency fee arrangement with law firms with expertise in this area of the law and the capacity to handle large, complex cases on a nationwide basis at no cost to BAWA (unless BAWA recovers) is the most advantageous, expeditious, and economical way to protect BAWA’s rights.] OUR THIRD ITEM ON THIS AGENDA IS PROPOSED RESOLUTIONS, AND THE FIRST ONE IS TO CONSIDER A RESOLUTION AUTHORIZING THE GENERAL MANAGER TO NEGOTIATE AND EXECUTE A CONTINGENCY FEE AND RETAINER AGREEMENT WITH FRASER LAW, PLC AND VENTURA LAW TO PERFORM LEGAL SERVICES IN CONNECTION WITH POTENTIAL LITIGATION REGARDING THE PRESENCE OF POLYFLOR ALCOHOL SUBSTANCES, PFAS, INCLUDING BUT NOT LIMITED TO PFOA AND OR PFAS IN DRINKING WATER, WASTEWATER AND SOIL IN BAYTOWN, TEXAS. THE BOARD IS CONSIDERING THE AGREEMENT FOR THE FOLLOWING REASONS. SHOULD DETECTABLE LEVELS OF PAS BE PRESENT BASED UPON REVISED STANDARDS ISSUED BY THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, BWA HOPES TO RECOVER DAMAGES FROM THE MANUFACTURERS. THE FRASER AND VENTURA LAW FIRMS REPRESENT MUNICIPALITIES AND WATER SYSTEMS IN PFAS LITIGATION ACROSS ACROSS THE COUNTRY, AND HAVE DEVELOPED A SPECIALTY IN COMPETENCE IN SUCH LITIGATION. THE LAW FIRMS ARE MEMBERS OF THE WATER COUNCIL FOR THE US CONFERENCE OF MAYORS AND IN THIS CAPACITY CONTACTED BWA IN SEPTEMBER, 2023 REGARDING POTENTIAL CLAIMS AND RECOVERIES FROM SETTLEMENTS WITH VARIOUS MANUFACTURERS THAT WERE RECENTLY ANNOUNCED. BAWA HAS NO PREVIOUS RELATIONSHIP WITH EITHER LAW FIRM. THE GENERAL COUNSEL'S OFFICE OF BAWA HAS NEITHER THE CAPACITY EXPERTISE NOR CURRENT LICENSE REQUIREMENTS TO ADEQUATELY REPRESENT BAWA IN THE CURRENT MULTI-DISTRICT FEDERAL LITIGATION. FURTHER LAWSUITS OF THIS TYPE ARE GENERALLY HANDLED ON A CONTINGENCY BASIS BY FIRMS WITH EXPERTISE IN THE AREA. IT IS UNCOMMON FOR LAW FIRMS WITH SUCH EXPERTISE TO CHARGE AN HOURLY RATE. MOREOVER, AN HOURLY RATE FOR SUCH COMPLEX AND TIME CONSUMING LITIGATION WOULD NOT BE ECONOMICALLY FEASIBLE OR IN RESIDENT'S BEST INTERESTS, ESPECIALLY CONSIDERING THE POSSIBILITY OF A LOSS OR MINOR RECOVERY ENTERING INTO A CONTINGENCY FEE ARRANGEMENT WITH LAW FIRMS WITH EXPERTISE IN THIS AREA OF THE LAW AND THE CAPACITY TO HANDLE LARGE COMPLEX CASES ON A NATIONWIDE BASIS AT NO COST TO BWA UNLESS BWA RECOVERS IS THE MOST ADVANTAGEOUS, EXPEDITIOUS AND ECONOMICAL WAY TO PROTECT BALDWIN'S RIGHTS BOARD. YOU HAVE SEEN THIS ITEM BEFORE AND I HOPE THE THIRD TIME'S A CHARM. UM, WE'VE HAD A COUPLE, UH, ISSUES AS YOU RECALL IN GIVING THIS ITEM PROPERLY NOTICE. WE THOUGHT WE'D DONE IT RIGHT THE LAST TIME, BUT THERE WAS A, UH, DIFFERENCE OF, UM, OF SPEAKING THE RIGHT LANGUAGE BETWEEN THE LEGAL DEPARTMENT AND THE CITY CLERK'S OFFICE. UH, WE UNDERSTOOD NOTICE TO BE X AND THE CLERK'S OFFICE UNDERSTOOD NOTICE TO BE Y. SO, UH, WHEN WE WERE PREPARING THE DOCUMENTS TO GO TO THE ATTORNEY GENERAL'S OFFICE, WE REALIZED THAT WE HADN'T QUITE HIT THE MARK, SO WE DECIDED TO BRING IT BACK TO YOU AGAIN. AND, UH, AS YOU CAN SEE FROM THE UH, WAY WE POSTED THE AGENDA THIS TIME, WE HAVE ALL THE INFORMATION IN THE AGENDA ITSELF, WHICH WILL MEET THE STATUTORY REQUIREMENTS. WE'LL GET THE REPORT OFF TO ATTORNEY GENERAL'S OFFICE, UH, EITHER TOMORROW OR NEXT WEEK. AND, UH, THEN WE WILL WAIT TO HEAR FROM THE ATTORNEY GENERAL'S OFFICE TO SEE IF THEY'LL ALLOW US TO MOVE FORWARD. UH, CITY COUNCIL DID THE SAME THING LAST WEEK AND ALSO APPROVED A SIMILAR, UH, RESOLUTION. SO WE SHOULD BE HEARING FROM THE AGS OFFICE ON BOTH OF THOSE ITEMS IN THE, IN THE SHORT FUTURE. ALRIGHT, THANK YOU. DO I HAVE A MOTION TO APPROVE THE RESOLUTION? I'LL MAKE THE MOTION. SECOND. MOTION IS SECOND QUESTIONS OR DISCUSSION? I'M SORRY, BUT NEW, BEING NEW TO THE BOARD BY ONLY QUESTION IS WHY DO WE HAVE TWO LAW FIRMS REPRESENTING US? DO THEY DO THIS IN TANDEM ALL THE TIME? I CAN'T SAY THAT THEY DO IT IN TANDEM ALL THE TIME. THEY'RE DOING IT FOR THIS PARTICULAR PIECE OF LITIGATION. IT'S VERY COMPLEX, UH, AND IT IS MULTI-JURISDICTIONAL. SO, UH, ALL OF THE, UH, CITIES, ALL OF THE WATER SUPPLIERS, UM, ARE, UH, BEING HERDED INTO A SINGLE FEDERAL COURT. UH, SO IT'S A, A VAST AMOUNT [00:05:01] OF LITIGATION. UH, SO THESE TWO FIRMS HAVE PULLED THEIR RESOURCES, UH, TO BETTER GET A HANDLE ON THE CLIENTS THAT THEY'RE REPRESENTING. THANK YOU. ALRIGHT, ANY OTHER QUESTIONS? HEARING NONE. ALL THOSE IN FAVOR OF THE RE RESOLUTION? SAY AYE. AYE. AYE. UH, MOTION CARRIES UNANIMOUSLY. [b. Consider a resolution delegating approval of the Preliminary Official Statement; appointing underwriters; and the paying agent/registrar.] UM, NEXT WE WILL CONSIDER A RESOLUTION DELEGATING, UH, DELEGATING APPROVAL OF THE PRELIMINARY, PRELIMINARY OFFICIAL STATEMENT APPOINTING UNDERWRITERS AND THE PAYING AGENT REGISTRAR. UM, GOOD EVENING, AS YOU MAY RECALL. CAN YOU HEAR ME? AS YOU MAY RECALL, THERE HAS BEEN MENTIONED, UM, THE NEED TO ISSUE DEBT AND THE AMOUNT OF $23.5 MILLION FOR THE BWA EAST EXPANSION PROJECT AND THE BWA REHABILITATION, THE WALL WATER REHABILITATION PROJECT. UM, THIS RESOLUTION, UM, ALLOWS OR PROPOSES THE GENERAL MANAGER TO BE GRANTED THE AUTHORITY TO APPROVE THE PRELIMINARY OFFICIAL STATEMENT KNOWN AS THE POS. UM, THE POS SERVES AS THE INFORMATIONAL DISCLOSURE DOCUMENT RELEASED PRIOR TO THE SALE OF BONDS. IT OUTLINES THE PROPOSED NEW DEBT BOND ISSUANCE, PROVIDING CRUCIAL DETAILS FOR OUR POTENTIAL, UH, ADVISORS. UM, THIS RESOLUTION ALSO, UM, AUTHORIZES OUR FINANCIAL ADVISOR, WHICH IS HILLTOP SECURITIES AND OUR BOND COUNCIL BRAS WELL, UM, IT AUTHORIZES THEM TO PROCEED WITH THE ARRANGEMENTS OF THE BOND SALE IN ACCORDANCE WITH THE, UM, INFORMATION THAT'S OUTLINED IN THE POS THIS RESOLUTION. LASTLY, UM, APPOINTS OUR, UH, PAYING AGENT WHO IS BANK OF NEW YORK MELLON AND UNDERWRITERS, WHICH WE HAVE A LEAD WHO IS BAIRD, RAYMOND JAMES AND FHN. AND SO THIS, UM, RESOLUTION STREAMLINES THE PROCESS OF ISSUING THE BONDS AND IT DELEGATES THE APPROVAL AUTHORITY SO THAT THE PROCESS CAN BE MORE EFFICIENT. AND, AND WE ARE HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE. OUR BOND COUNSEL IS HERE AND OUR FINANCIAL ADVISOR. ALRIGHT, THANK YOU. DO I HAVE A MOTION TO APPROVE THE RESOLUTION? I'LL MAKE THE MOTION. GO AHEAD DAVE. I'LL MAKE THE MOTION. SECOND MOTION AND SECOND QUESTIONS DISCUSSION. OKAY. IS YOU INSTEAD OF BANK OF NEW YORK? YEAH, SO, OKAY, SO YOU HAD MENTIONED BANK OF NEW YORK AND IT'S GONNA BE B FINANCIAL. OKAY. SO WE'RE, UM, IT'S NOT BANK OF NEW YORK MELLON IS GONNA BE B OKAY. FINANCIAL AS THE PAYING AGENT REGISTRAR FOR THE, UH, TRANSACTION. OKAY. AND WHO WAS THAT AGAIN? I I BARELY COULD HEAR YOU. I'M SORRY. BOK FINANCIAL. BOK FINANCIAL. OKAY. ALRIGHT. ALL RIGHT. ANY OTHER QUESTIONS OR DISCUSSION? HEARING NONE. ALL THOSE IN FAVOR SAY AYE. A AYE. MOTION CARRIES UNANIMOUSLY. UM, [a. Receive the Baytown Area Water Authority Quarterly Financial and Investment Reports for the Quarter Ending December 31, 2023.] NEXT WE WILL RECEIVE THE AUTHORITIES' QUARTERLY FINANCIAL AND INVESTMENT REPORTS FOR THE QUARTER ENDING DECEMBER 31ST, 2023. OKAY, THAT'S FREAKING ME OUT. WHO'S, WHO'S DOING THIS? WHAT'S HAPPENING? WHAT'S HAPPENING? OKAY. OKAY. I AM HERE TO PRESENT THE FIRST QUARTER, UH, FINANCIAL REPORT FOR A PERIOD ENDING DECEMBER 31ST, 2023. UM, THE BAWA OPERATING FUND HAS A FUND BALANCE OF $10.9 MILLION, UM, WHICH IS A RESULT OF 5.2 MILLION IN REVENUE, WHICH EQUATES TO 31% OF THE, UH, BUDGET. OUR TOTAL EXPENDITURES WERE 3.7 MILLION WITH $1.9 MILLION IN, UH, ENCUMBRANCES, WHICH EQUATES TO 23% OF THE BUDGET. THE BAWA CAPITAL FUND HAD REVENUE OF 342,000, WHICH IS SIMPLY TRANSFERS FROM THE OPERATING FUND. UM, THE EXPENDITURES ARE 713,000 WITH 666,000, UH, BEING ENCUMBRANCES, LEAVING A FUND BALANCE OF $1.6 MILLION. THE INVESTMENT BOOK VALUE, WHICH IS OUR, UM, TAX POOLS IS 4.13 MIL 3 MILLION, AND WE RECEIVED 57,000 IN EARNINGS. THE, UM, INVESTMENT RATE THAT WE ARE SEEING WITH OUR POOLS RIGHT NOW IS 5.36% AND I AM HAPPY TO ANSWER ANY QUESTIONS. [00:10:11] I'M SURE I MIGHT HIT THE RED BUTTON. BEAR, BEAR WITH ME JUST A MINUTE. I THINK DAVE HAS A QUESTION, SO I'M TURN HIS SCREEN ON RIGHT THERE ON THE LEFT. YEAH, I'VE GOT IT HERE. I JUST NEED IT TO BE BIGGER. UM, AND IN LOOKING AT THIS FINANCIAL REPORT, I, I'M SORRY, BUT I'M NEW TO THE BOARD SO I JUST HAVE A FEW QUESTIONS. IS THIS BUDGET COLUMN, IS THIS FOR THE QUARTER OR FOR THE, FOR THE ANNUAL BUDGET? IT'S FOR THE FULL YEAR. FOR THE FULL YEAR, MM-HMM . AND SO WE'VE ACHIEVED 42% OF OUR WATER SALES IN THREE MONTHS. MM-HMM . THAT'S WHAT IT'S SHOWING. YES, SIR. WHEN I LOOKED AT THE FINANCIAL STATEMENT, WHEN I LOOKED AT THE FINANCIAL STATEMENTS FROM LAST YEAR MM-HMM . I SAW THAT WE HAD, REVENUES HAD INCREASED BECAUSE OF INCREASED SALES, YET WE HAD DECREASED COST OF WATER AND SUPPLIES. MM-HMM . COULD YOU EXPLAIN TO ME HOW THAT WORKS? SO WHAT WE DID, WE'VE BEEN INVESTIGATING THIS SAME INFORMATION AND UM, WHAT WE FOUND IS IN THE PRIOR YEAR, THE CITY OF HOUSTON, UM, HAD CHARGED US MORE FOR THE WATER. AND THEN IN THE FOLLOWING YEAR, WHICH WAS 23, THEY CHARGED US LESS BECAUSE THEY STARTED ESTIMATING OUR CONSUMPTION. AND SO IN AN EFFORT TO, SINCE WE'VE JUST RECENTLY BEEN, UH, HAVE IDENTIFIED THIS, WE ARE IN THE PROCESS OF CONTACTING THEM AND WORKING OUT IF THERE'S AN ISSUE WITH HOW THEY'RE BILLING US. BUT THAT IS, UH, REALLY A RESULT OF WHAT WE WERE PAYING TO THE CITY OF HOUSTON, THE REDUCTION. SO THEY WERE OVERCHARGING US AND THEN UNDERCHARGING US. I'M NOT SAYING THEY WERE OVERCHARGING US. THEY MAY BE UNDERCHARGING US. WE DO NOT KNOW AT THIS TIME. SO WE COULD HAVE, WE COULD HAVE AN UNRECORDED LIABILITY WE'RE NOT AWARE OF. YES. OKAY. THANK YOU. ALL RIGHT. ANY OTHER QUESTIONS? ALRIGHT, THANK YOU VERY MUCH. [b. Receive a report on the status of the Baytown Area Water Authority East Expansion Project.] UM, NEXT WE WILL RECEIVE A REPORT ON THE STATUS OF THE AUTHORITIES EAST EXPANSION PROJECT. ALRIGHT, I HAVE JUST A QUICK UPDATE FOR Y'ALL TODAY. WE ARE CURRENTLY IN THE RFP PROCESS FOR THE DESIGN BUILD. WE SHOULD BE GETTING THE RFP PACKAGES IN NEXT TUESDAY, MARCH 26TH. UM, WHAT WE WILL DO THEN IS IF INTERVIEWS ARE NEEDED, THOSE WILL BE SCHEDULED AND THE COUPLE WEEKS AFTER, UM, WE WILL LOOK AT THOSE AND THEY ARE SCORED. WE PROBABLY WILL NOT HAVE A SELECTION FOR Y'ALL IN APRIL BECAUSE AGAIN, WE'LL BE SCHEDULING THOSE INTERVIEWS, BUT THE GOAL IS TO HAVE THE CONTRACT DONE IN MAY. SO EVERYTHING IS MOVING ALONG AND WE'RE EXCITED TO GET THE PROPOSALS IN NEXT WEEK. ALRIGHT, THANK YOU. ANYONE HAVE ANY QUESTIONS FOR OUR REPRESENTATIVE? NO. ALRIGHT. THANK YOU. THANK YOU VERY MUCH. UM, THAT WILL [a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, April 17, 2024, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. ] BRING US TO ITEM FIVE, THE MANAGER'S REPORT. UH, THANK YOU MADAM PRESIDENT. SO, UH, THE ONLY ITEM IS TALK ABOUT THE NEXT, UH, BALLOT MEETING. IT IS, UH, THE REGULAR SCHEDULED MEETING IS APRIL 17TH. HOWEVER, UH, JUST BE ADVISED WE MAY PULL FOR A SPECIAL MEETING, UH, DEPENDING ON THE TIMING OF THE, THE BOND, UM, ISSUANCE, THERE MAY BE SOME REQUIREMENTS THAT WE HAVE TO MEET, UH, FOR THAT. SO WE WILL, UH, LET YOU KNOW IF WE DO HAVE TO HAVE A SPECIAL MEETING AND THAT WOULD PROBABLY BE IN LIEU OF THE REGULAR MEETING RATHER THAN IN ADDITION TO. ALRIGHT, THANK YOU. AS THERE IS NO FURTHER BUSINESS ON OUR AGENDA, I WOULD ENTERTAIN A MOTION TO ADJOURN. SO ADJOURN MOVED AND SECONDED. ALL IN FAVOR, THANK YOU VERY MUCH. THANK YOU. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.