Victoria County Groundwater Conservation District
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1 Directors: Mark Meek President Jerry Hroch Vice-President Barbara Dietzel Secretary Thurman Clements Kenneth Eller THE STATE OF TEXAS VICTORIA COUNTY The Board of Directors of the Victoria County Groundwater Conservation District convened a meeting at the Dr. Pattie Dodson Health Center, 2805 N. Navarro St., Room 108, Victoria, Victoria County, Texas, on November 16, 2018 at 9:00 AM. Meeting Attendance: Precinct 1: Precinct 2: Precinct 3: Precinct 4: At Large: General Manager: Legal Counsel: Mr. Jerry Hroch, Vice President Mr. Thurman Clements, Jr., Director Mrs. Barbara Dietzel, Secretary Mr. Mark Meek, President Mr. Kenneth Eller, Director Mr. Timothy Andruss Mr. James Allison Present Present Present Present Present Present Absent Agenda Items - 1. Call the meeting to order and welcome guests. Meeting Discussion: Mr. Meek called the meeting to order at 9:00 AM. The following guests were present: Mr. James Adcock, Mr. Matt Wickham, and Ms. Anna Daniels. 2. Receive public comments. Meeting Discussion: Mr. James Adcock provided written comments to the Board regarding injection disposal wells. 3. Consideration of and possible action on matters related to Groundwater Management including the permitting efforts and activities of the District. VCGCD Minutes - November 16, 2018 Page 1 of 15
2 3.1 Castleman Report Evaluation by V. Uddameri Meeting Discussion: Mr. Andruss explained that on September 20, 2018, Mr. Castleman of Castleman Power Systems notified the District that they intended to "re-start" the permitting process for brackish groundwater to support the Port of Victoria power project. The last consideration given to the Castleman matter by the District occurred during the district meeting held on February 23, At the meeting, Dr. Uddameri discussed his review of the technical report developed by lntera to support the waiver and permitting request to be submitted by Castleman. Subsequently, Castleman notified the District that it would not pursue the waiver and permit request in the immediate future. After the meeting, the District requested a final report from Dr. Uddameri. The final report was provided on October 11, A copy of the report is included in the packet. The report contained comments regarding the technical work completed by lntera to support the waiver request. These comments appeared to be relevant to lntera's resumed work on brackish groundwater characterization for the District. As such, the report was provided to lntera for review. Steve Young of lntera provided responses to the comments within Uddameri Report. A copy of the lntera response is included in the packet. Board Action: Mr. Clements moved to 1) accept the report developed by Dr. Uddameri titled Evaluation of Groundwater Modeling Study Conducted in Support of a Permit Application for a Brackish Water Well for Victoria Port Power, Victoria, Texas (dt: 10/01/2018), and 2) accept the response developed by Dr. Young titled Response to comments in the report titled Evaluation of Groundwater Modeling study Conducted in Support of a Permit Application for a Brackish Water Well for Victoria Port Power, Victoria, Texas. Mr. Eller seconded the motion. The following vote was made: 3.2 Authorized Agents for Permits and Water Wells Meeting Discussion: Mr. Andruss explained effective and efficient coordination with well owners and permit holders has grown more complicated over the years resulting in the necessity to revise how the District tracks authorized agents associated with wells and permits. The District has a need to track and direct communications with various parties that change over time and vary in terms of responsibilities associated with certain wells and permits. Therefore, a process and system for managing the authorized agent for a) permitting-related matters, b) VCGCD Minutes- November 16, 2018 Page 2 of 15
3 reporting-related matters, and c) well-access matters would substantially improve the District's operations. Board Action: Mr. Eller moved to authorize the General Manager to develop system and process, including any necessary forms, for managing authorized agents for registered water wells and district permits. Mr. Hroch seconded the motion. The following vote was made: 3.3 Production Permit Renewals Meeting Discussion: Mr. Andruss explained the District has received and reviewed the Applications to Renew a Production Permit listed above. The applications are administratively complete and contain the information necessary to review the requests relative to the Rules of the District. In order for the District to approve the request to renew a production permit, the Rules of the District require the permit holder to be current in paying any fee required by the district; b) not subject to a pending enforcement action for a substantive violation of a district permit, order, or rule that has not been settled by agreement with the district or a final adjudication; or c) current in paying any civil penalty or otherwise comply with any order resulting from a final adjudication of a violation of a district permit, order, or rule. Board Action: Mr. Clements moved to authorize the general manager to issue production permit renewals in association with applications: VCGCD - GMa - Pe - Permitting Request Cases - PRC ARPP Dacosta Sons of Hermann - Pending VCGCD - GMa - Pe - Permitting Request Cases - PRC AAPC , ARPP Craig D. Staff- Pending VCGCD - GMa - Pe - Permitting Request Cases - PRC ARPP Victoria County Port Facilities Corporation - Pending VCGCD - GMa - Pe - Permitting Request Cases - PRC ARPP Valentin Perez - Pending VCGCD - GMa - Pe - Permitting Request Cases - PRC ARPP QES Pressure Control - Pending VCGCD - GMa - Pe - Permitting Request Cases - PRC ARPP Industrial ISD - Pending. Mr. Eller seconded the motion. The following vote was made: VCGCD Minutes- November 16, 2018 Page 3 of 15
4 4. Consideration of and possible action on matters related to Groundwater Protection including complaints, investigations, violations and enforcement related to disposal and injection wells, contamination and waste, and permitting. 4.1 Review of Protested Fluid Injection Permitting Cases Meeting Discussion: Mr. Andruss explained the District is currently processing eight active projects related to the evaluation of potential risk to groundwater resources by fluid injection (RRC Injection Well Applications) open. 4.2 Review of Active Groundwater Protection Investigations Meeting Discussion: Mr. Andruss explained the District presently has 8 active investigations related to possible groundwater contamination or water quality degradation. The District is in the process of gathering information related to these investigations. The District supplied the collected information associated with INV :1138 to Mr. Wickham and requested that he review the information and provide guidance regarding next steps and an assessment of the preliminary information collected in the investigation. Mr. Wickham provided a response to the District's request. While evidence indicating that the groundwater quality tested under investigation INV :1138 is the result of land development or land use in the vicinity of the investigation site has not been gathered, additional sampling would enable the District to better evaluate the water quality issue identified by the landowner, Mr. Terrance Wortham. Board Action: Mr. Eller moved to authorize the General Manager to continue investigation INV :1138 with the collection of additional groundwater samples and test for additional analytes as suggested by Mr. Wickham and to authorize Mr. Wickham to do further sampling of INV :1138, FM 616 and King Rd. Mr. Clements seconded the motion. The following vote was made: VCGCD Minutes- November 16, 2018 Page 4 of 15
5 5. Consideration of and possible action on matters related to Groundwater Monitoring. 5.1 Water Level Assessment Project Meeting Discussion: Mr. Andruss explained the Board previously authorized Mr. Wickham of Golder Associates to complete a project intended to analyze historic water levels within Victoria County and compare interpolated water level surface of various years to evaluate water level changes overtime. Mr. Wickham has completed the work associated with the project and submitted a final report to the District. A printed copy of the full report will be available in the office of the District if accepted by the Board. For the purposes of explaining the report, the District requested that Mr. Wickham attend the meeting. The groundwater elevation change figures beginning on page 38 of the report may be of particular interest to the Board and include metrics such as mean groundwater elevation change (i.e., average water level change over time). Board Action: Mr. Eller moved to accept the technical memorandum associated with Project No from Mr. Wickham dated October 23, Mr. Clements seconded the motion. The following vote was made: 5.2 Drought Monitoring Meeting Discussion: Mr. Andruss explained the U.S. Drought Monitor, produced through a partnership between the National Drought Mitigation Center at the University of Nebraska-Lincoln, the United States Department of Agriculture, and the National Oceanic and Atmospheric Administration, indicates that no portions of Victoria County are experiencing drought conditions as of November 6, The seasonal outlook does not indicate that any part of Texas will likely develop drought conditions through January 31, Consideration of and possible action on matters related to Groundwater Conservation. 6.1 UHV Reports related to NOAA Grant and District Sponsorship 2805 N. Navarro St. Suite Victoria, TX 77901, Phone (361) , FAX (361) VCGCD Minutes- November 16, 2018 Page 5 of 15
6 Meeting Discussion: Mr. Andruss explained the District recently received status reports related to the UHV Gulf Coast Guadalupe River Watershed Teacher and Student Environmental Education Project from Dr. Sobelev. For a variety of reasons, it appears that the outreach efforts to teachers and high school students has been less effective than anticipated. Mr. Adcock addressed the Board regarding water storage tanks. 7. Consideration of and possible action on matters related to Groundwater Resource Planning including Groundwater Management Area 15 Joint Planning and regional water planning. Meeting Discussion: None. 8. Consideration of and possible action on matters related to Groundwater Policy including the Management Plan of the District and the Rules of the District. Meeting Discussion: None. 9. Consideration of and possible action on matters related to Groundwater Research including reports and agreements related to active studies. 9.1 Victoria ASR Demonstration Project Status Report Meeting Discussion: Mr. Andruss explained the City of Victoria continues to work to resolve the issues associated with the failure of the re-purposed water well for ASR as part of the Victoria ASR Demonstration Project. The project is scheduled to be completed in March The reimbursements are associated with the lwdb grant have been completed except for the retainage held by lwdb and the District. 9.2 Huisache Study and Funding Agreement Meeting Discussion: Mr. Andruss explained the USGS-lead Huisache Study in entering the final year. The field work and data collection has been completed. Outstanding tasks remain related to the interpretation of data and report development. Due to funding changes for Texas Soil and Water VCGCD Minutes- November 16, 2018 Page 6 of 15
7 Conservation Board, the District has been asked to enter into an funding agreement with the Desert Research Institute instead of the USGS for the final year. The requested funding amount will be remain at the current level of $20,000 if the agreement is approved. The funding agreement has been reviewed, revised, and approved by legal counsel. Board Action: Mr. Clements moved to authorize the presiding officer to execute the funding agreement with the Desert Research Institute, encumber the necessary funds, and pay the invoices upon receipt of the deliverables as described in the funding agreement. Mr. Eller seconded the motion. The following vote was made: 10. Consideration of and possible action on matters related to Program and Project Management ESRI Managed Services 12 Month Renewal Meeting Discussion: Mr. Andruss explained the District relies upon and budgets for services provided by ESRI to provide access to mapping and database services. These services are made available to Texana GCD, Refugio GCD, and Calhoun County GCD via an annual interlocal agreement to provide groundwater management services. The Districts have approved the interlocal agreement for fiscal year with a cost-share contribution of 45% for the cost of the ESRI services. The fee for the 3rd 12-month renewal of services is $3,575 per month with the District's portion being $1, Board Action: Mr. Eller moved to approve the renewal offer, encumber the necessary funds, and authorize the General Manager to pay the monthly invoices associated with the agreement upon receipt by the District. Mr. Clements seconded the motion. The following vote was made: 10.2 Report regarding Administrative Matters The District's offices will be closed the following days during November and December 2018: VCGCD Minutes- November 16, 2018 Page 7 of 15
8 Thursday, November 22, 2018; Friday, November 23, 2018; Monda~ December24,2018;and Tuesday, December 25, In order to accommodate holiday schedules, the Board may want to consider rescheduling the December 21, 2018 meeting. Board Action: Mr. Clements moved to approve Mr. Andruss to reschedule the December 2018 meeting of the Board of Directors to Friday, December 14, Mr. Eller seconded the motion. The following vote was made: 10.3 Venki Contract Extension Meeting Discussion: None. 11. Consideration of and possible action on matters related to Performance Management including management goals and objectives of the District. Meeting Discussion: None. 12. Consideration of and possible action on matters related to Meeting Management including minutes of previous meetings Minutes of Previous Meeting Meeting Discussion: Mr. Andruss explained the minutes for the meeting held on September 14, 2018, were sent the board members prior to the meeting. In addition, a minutes record was drafted for the meeting scheduled for October 24, 2018, to coincide with the South Texas Farm and Ranch Show. The meeting was not convened as a quorum of directors were not present. Board Action: Mr. Clements moved to accept and approve the meeting minutes for September 14, 2018 and October 24, 2018, as drafted. Mr. Eller seconded the motion. The following vote was made: VCGCD Minutes- November 16, 2018 Page 8 of 15
9 13. Consideration of and possible action on matters related to Financial Management including the annual budget of the district, financial reports of the district, bills and invoices of the district Budget Performance and Transaction Reports for Fiscal Year Meeting Discussion: Mr. Andruss explained that in order to support the development of cash-basis financial reports during fiscal year , the District created a transaction tracking spreadsheet. The District entered the transaction and budget data from fiscal year into the spreadsheet. The information was used to develop a budget performance report. Based on a review of the performance report, it appears the financial activities broadly adhered the budget of the District. When reviewing a summary report of the budget performance by Operational Program, the District revenue and expenditures remained within budget with the exception of program Groundwater Research. However, the actual expenditures ($179,523.55) include the expenditures associated with the City of Victoria ASR Demonstration Project and related Texas Water Development Board Grant. The District received funds from the Texas Water Development Board during the fiscal year totaling $124,662.55, of which the District retained $12, (10%). r-~ : -=--~~-_-~; _ t~,][su~_o,fb~j -.\~~-*1-ofAc;.il![!)!~O~Q_-~dm~n}~!!:ati!)n _.. ll_. ~~~Q,?~1-2?JL -. $~-6~,!~4.20j lio~2---~i~i?~;~~~!- ~~~~~ti~;---~-----jl_.. <~~~!_o~~.qq <~~~i~_iii2j [~9~-~-Q~~~~-~~e!_Ma~a~~~ent ] r _-~--Ji~:s~Q.O~)I[= (~~;9~9~2 uj [4oo~f--_g!~~; c1~~t~~~~~it;i~~--: _- _--_: =--~-11 ($!29~500-.oo)] f ~-<~ ~2,56_~ ~ lsooo_ - Groundwater Poli~y _-.JI.-...-_J$ II,OOO.OO)Jr_ - -- ($1,9() 1.1 O)j j Groundwater Protection )l_... ($37,500.00)]1 ($16,005.38~!1000-=- Groundwater Research----~ ! c- -($%,000~0~!($-i79,S23,55)j ~000 _- Groundwater Resource Planning ---.J [_ -:--($9,500.00}j [.~ -- ($1,934.35~ ~and Tot~t-_">_ "-~ :::'=- _... :<<_:)] [.. (Sl~ft,64~.ol)J [ <stl~~73~~ In addition, several key observations include: 1. the District over-estimated the revenue budget associated with Program Administration, Function Revenue Administration, Category District Fees. The revenue budgeted for this category was $82,800. The actual revenue received during the fiscal year totaled $56, This revenue was received from Texana GCD, Refugio GCD, VCGCD Minutes- November 16, 2018 Page 9 of 15
10 and Calhoun County GCD for the services provided under the District's interlocal agreements for technical services with each district. 2. the District exceeded the expense budget associated with Program Administration, Function Personnel and Benefits, Category Employee Wages -Administrative. The expenditures exceeded the budget by $2, During the fiscal year, the Board authorized the employment of an intern. The expenditures associated with the intern totaled $2, and were not included in the budget for the category. 3. the District exceeded the expense budget associated with Program Administration, Function Personnel and Benefits, Category Employee Benefits - Health. The expenditures exceeded the budget by $2, The exceedance arises from a miscalculation of District's contribution toward the monthly premium for health benefits plan. The District's contribution to the monthly health benefit premium was improperly calculated as a 100% instead of 90%. The miscalculations resulted in inflated amount of contributions by the District and did not result in excessive payments to employees. The payment of monthly premiums were calculated correctly. The net result was a $2, balance (as opposed to a $0.00 balance) in the expense budget associated with Program Administration, Function Personnel and Benefits, Category Employment Deductions and Withholdings. 4. the District exceeded the expense budget associated with Program Administration, Function Technology Services. The expenditures exceed the budget by $15, The expenditures are associated with phone and cellular service, internet service, website and services, workflow software, as well as mapping and database services. However, the total expenditures do not reflect the 45% cost-share for the mapping and database service provided under the interlocal agreements with Texana GCD, Refugio GCD, and Calhoun County GCD which totals approximately $19,035 and accounted for in Program Administration, Function Revenue Administration, Category District Fees. 5. the District exceeded the expense budget associated with category 31 O - Supplies in Programs Groundwater Management, Groundwater Monitoring, and 5000 Groundwater Policy by $1, The expenditures were unforeseen but critical to completing important activities of the District including continuous aquifer monitoring, water quality monitoring, and communication with members of GMA the District exceeded the expense budget associated with Program Groundwater Protection, Function Program Implementation, Category Professional and Technical Services. The expenditures exceed the budget by $5, The expenditures were unforeseen but critical to completing important activities of the District including evaluating the risk to groundwater by proposed fluid injection activities related to oil and gas production as well as processing of water samples by an VCGCD Minutes- November 16, 2018 Page 10 of 15
11 _ Victoria County Groundwater Conservation District environmental lab related to water quality investigations initiated by the District. Board Action: Mr. Eller moved to accept and approve the financial reports as presented for FY Mr. Clements seconded the motion. The following vote was made: 13.2 Budget Performance and Transaction Reports for Fiscal Year Meeting Discussion: Mr. Andruss explained the District has designed reports related to the financial transactions of the District for use in evaluating the District's financial performance relative to the District's budget. Therefore, the reports are designed to present the performance as year-to-date calculations. The underlying financial data is entered and stored on a cash-basis. Board Action: Mr. Eller moved to accept and approve the financial reports as presented. Mr. Hroch seconded the motion. The following vote was made: 13.3 Budget Revisions Meeting Discussion: Mr. Andruss explained that based on a review of the FY19 Budget Performance Report considered under Matter For Consideration - MFC , several budget performance issues have been identified. The budgeted amount of expenditures for the following line items have been exceeded: EJ~lcategory I ~~:~~~I ::~:~!Actual ~~:i~istration ~~:i~istration - Meeting Supplies EJ.oo EJo.oo 1($100.00J L... VCGCD Minutes - November 16, 2018 Page 11 of 15
12 !!Management II II II II u~-i,190_0- : Adr]'li~islf:atjpn,~ $O oo;. ($2zo Oil)&~.. ~c'i. 0 Ad!llinistl'atior't ~~'ff:!menfl l\ili~llahedqv "!,. ~z' " ~ ;i..,;f, lj : -_ o.- EJEJI Groundwater Program Training and O 00 $O 00 ($ ) Implementation Travel Expenses Management. ========== ~l]~~:~1: ~g~~~~~- ~~~T~~~rnal ~8[]!r9~s,oot. ~~-~a _ 360- I Groundwater Program Resource Implementation Sponsorships and (5,000.00) ($5,000.00)($6,250.00) Planning Cost-Sharing. Board Action: Mr. Eller moved to authorize the general manager to develop draft program adjustments, line item adjustments, and budget amendments, if necessary, to address any existing or future budget performance issues related to expenditures or encumbrances. Mr. Hroch seconded the motion. The following vote was made: 13.4 Review of Internal Controls Meeting Discussion: Mr. Andruss explained the financial reports for September 2018 and October 2018 have been compiled, reviewed, and sent to the board members prior to the meeting. All accounts reconcile with internal records. All expenditures are related to business of the District and properly authorized. A review of the District's financial records indicates that the internal controls of the District have been observed. Board Action: Mr. Hroch moved to accept and approve the Internal Controls Review Reports for September 2018 and October Mr. Eller seconded the motion. The following vote was made: VCGCD Minutes- November 16, 2018 Page 12 of 15
13 13.5 Unpaid Accounts Payable Meeting Discussion: Mr. Andruss explained the District has thirteen uncontested invoices related to services and products received. Board Action: Mr. Eller moved to authorize the general manager to pay the following items: VCGCD - Adm - FM - Accounts Payable - ACCTP $ Pastor, Behling & Wheeler, LLC - Unpaid VCGCD -Adm - FM -Accounts Payable -ACCTP $2, INTERA Incorporated - Unpaid VCGCD -Adm - FM -Accounts Payable -ACCTP $45, Victoria County TAC, Rena Scherer, RTA- Unpaid VCGCD -Adm - FM -Accounts Payable -ACCTP $6, Allison, Bass & Magee, LLP - Unpaid VCGCD -Adm - FM -Accounts Payable -ACCTP $ Pastor, Behling & Wheeler, LLC {Golder Assoc. Inc) - Unpaid VCGCD -Adm - FM -Accounts Payable -ACCTP $ Pastor, Behling & Wheeler, LLC {Golder Assoc, Inc) - Unpaid VCGCD -Adm - FM - Accounts Payable -ACCTP $14, INTERA Incorporated - Unpaid VCGCD - Adm - FM - Accounts Payable -ACCTP $1, ESRI, Inc. - Unpaid VCGCD - Adm - FM - Accounts Payable - ACCTP $ Catherine L. Ozment, CPA - Unpaid VCGCD - Adm - FM - Accounts Payable - ACCTP $ Catherine L. Ozment, CPA - Unpaid VCGCD - Adm - FM - Accounts Payable -ACCTP $1, GM Ellis Law Firm PC - Unpaid VCGCD - Adm - FM - Accounts Payable -ACCTP $3, ESRI, Inc - Unpaid VCGCD -Adm - FM -Accounts Payable -ACCTP $ AT&T Mobility- Unpaid. Mr. Hroch seconded the motion. The following vote was made: 13.6 Investments Meeting Discussion: Mr. Andruss explained the District has obtained a proposal from Prosperity Bank for Certificates of Deposit of $100,000 or more with 1-year and 2-year terms. Prosperity Bank is offering a special rate in addition to posted CD rates of 0.30% and 0.20% on 1-year CDs and 2-year CDs, respectively. As of November 15, 2018, the rate for 1-year CDs of $100,000 or more is 2.00% and the rate for 2-year CDs of $100,000 or more is 2.30%. In light of the approved budget, the relatively low rate of return on money held in the District's money VCGCD Minutes - November 16, 2018 Page 13 of 15
14 market account, and the proposed interest rates, investment of a significant portion of the reserve funds in a so-called laddered CD schedule would be appropriate. Board Action: Mr. Clements moved to authorize the general manager to invest up to $1,000,000 in CDs at Prosperity Bank in accordance with the following schedule if CD rates remain favorable: November 2018: $150,000 in a 1-Year CD and $150,000 in a 2-Year CD January 2019: $150,000 in a 1-Year CD and $150,000 in a 2-Year CD April 2019: $150,000 in a 1-Year CD and $150,000 in a 2-Year CD July 2019: $150,000 in a 1-Year CD and $150,000 in a 2-Year CD October 2019: $250,000 in a 2-Year CD Mr. Eller seconded the motion. The following vote was made: 14. Consideration of and possible action on matters related to office management including personnel and staffing. Meeting Discussion: None Board Action: None 15. Consideration of and possible action on matters related to legal counsel report. 16. Adjourn. Meeting Discussion: None. Meeting Discussion: None. Board Action: Mr. Eller moved to adjourn the meeting at 10:34 A.M. Mr. Clements seconded the motion. The following vote was made: VCGCD Minutes- November 16, 2018 Page 14 of 15
15 At Large: Mr. Kenneth Eller, Director Aye Prepared by: Donna Yanta, Administrative Assistant. Victoria County Groundwater Conservation District Official THE ABOVE AND FOREGOING MINUTES WERE READ AND APPROVED ON THIS THE _ /_J-_1-ti DAY OF9~ A.D.~0/f. Director of the Victoria County Groundwater Conservation District ATIEST: 2805 N. Navarro St. Suite 210, Victoria, TX 77901, Phone (361) , FAX (361) VCGCD Minutes- November 16, 2018 Page 15 of 15
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Directors: Mark Meek President Jerry Hroch Vice-President Barbara Dietzel Secretary Thurman Clements Kenneth Eller THE STATE OF TEXAS VICTORIA COUNTY The Board of Directors' Meeting and Permit Hearings
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