GUADALUPE-BLANCO RIVER AUTHORITY Minutes of the Board of Directors The Board of Directors of the Guadalupe-Blanco River Authority met in a regular monthly meeting on December 16, 2009, at the GBRA River Annex Board Room, 905 Nolan, Seguin, Guadalupe County, Texas. Directors present were T. L. Walker, Grace G. Kunde, Oscar H. Fogle, James L. Powers, Arlene N. Marshall, Frank J. Pagel, Myrna P. McLeroy, and Michael D. Schultz. Director Clifton L. Thomas, Jr. was absent. Also present were W. E. West, Jr., General Manager; James Lee Murphy, Executive Manager of Water Resources and Utility Operations; Alvin Schuerg, Executive Manager of Finance and Administration; Todd Votteler, Executive Manager of Intergovernmental Relations and Policy; Bruce Wasinger, General Counsel; David Welsch, Executive Manager of Business Development and Resource Management; Gary Asbury, Project Development Manager; Barbara Gunn, Human Resources Manager; Tommy Hill, Chief Engineer; Debbie Magin, Director of Water Quality Services; Bryan Serold, Operations Manager-Lower Basin; John Smith, Operations Manager-Upper Basin; LaMarriol Smith, Manager of Communications and Education; Cricket Dietert, Executive Assistant to the General Manager; Tammy Beutnagel, Public Communications Assistant; Connie Rothe, Board Relations Assistant; Leigh Crettenden, Web Master; Susan Hubbert, Accountant; Sandra Terry, Accountant; Darel Ball, Division Manager Hays-Caldwell; Roger Nevola, legal counsel; Jim Dublin and Rose Marie Eash representing Dublin and Associates, Inc.; David P. Engel representing Engel and Associates; Janet Pitman representing Thompson, Williams, Biediger, Kastor and Young, L.C.; Mike Nichols representing Freese and Nichols; David McMullen representing Maxwell Water Supply Corporation; LVI 12/16/09 17
Joe P. Cooper representing Lost Pines Groundwater Conservation District; Frankie Limmer, John Doerfler, Paul Bennett, Melissa Boettcher, Joel Katz, and Jerry Roncinske representing End Ops, LP; Chris Steele from Austin, Texas; Rod Smith representing Pate Engineering; Keith Parkan representing Cobb Fendley; Christopher Shawhan representing American Innovations; and Asher Price representing the Austin American Statesman. Chair Walker called the meeting to order at 10:04 a.m., and took note of the certifications presented by the General Manager that notice of the meeting had been properly posted in the office of the Secretary of State, in the Guadalupe County Courthouse, and at the GBRA main office and river annex in Seguin, Texas, pursuant to Title 5, Chapter 551 of the Government Code. A quorum being present, the following proceedings were had: Director McLeroy led the Pledge of Allegiance to the United States flag and Texas flag. The Chair called for comments from the public. Mr. Joe Cooper representing Lost Pines Groundwater Conservation District addressed the Board regarding End Op s application for permits to drill in the Simsboro Aquifer within the Lost Pines Groundwater Conservation District s area of Bastrop and Lee Counties. The Chair called for Items from the Chair 1 - Report from the Nominating Committee and Election of Officers of the Board of Directors for calendar year 2010. Director Powers presented the following slate of officers for calendar year 2010: Chair T. L. Walker; Vice-Chair Grace G. Kunde; and Secretary-Treasurer Oscar H. Fogle. Upon motion by Director Marshall, seconded by Director McLeroy, the LVI 12/16/09 18
Board unanimously approved by acclamation the slate of officers for calendar year 2010 as recommended by the Nominating Committee. Next, the Chair called for Consent Item 2 - Consideration of and possible action approving the November 18, 2009, Board meeting minutes; Consent Item 3 - Consideration of and possible action approving the monthly financial report for November 2009; Consent Item 4 - Consideration of and possible action approving the monthly operations report for November 2009; and Consent Item 5 - Consideration of and possible action approving Directors expense vouchers. Upon motion by Director Kunde, seconded by Director Schultz, the Board unanimously approved Consent Items 2, 3, 4, and 5. The Chair then called for Items from the General Manager 6 - Discussion of the Executive Report addressing matters relating to safety, utility operations, discussions regarding activities, flooding and log jam issues, water resource operations, engineering, coordination with the U.S. Army Corps of Engineers regarding Canyon Reservoir operations, Nueces Recharge Study, the seasonal deviation study for Canyon Reservoir and Cibolo Watershed Study, work on Region L Planning Group for 2011 Water Plan, FEMA remapping projects, work on development of the Hydroelectric Division emergency action plan, project to digitize historical bay and estuary biological data is on-going, development of Hazard Mitigation Action Plan update, San Marcos Water Treatment Plant issues with filters, Canyon Park Estate Wastewater Treatment Plant expansion is about complete, Regional Laboratory continues to modify the Laboratory Information Management System, Fiscal Year 2010 Clean Rivers monitoring has begun, Plum LVI 12/16/09 19
Creek Project activities including submittal of a grant proposal for further monitoring and preparation of a QAPP amendment, Kendall County and City of Fair Oaks Ranch Regional Planning Study activities include the preparation and submittal of a contract to AECOM for consulting services, Geronimo Creek Watershed Protection Plan, Caldwell County Regional Planning Study, published notices of draft permits for renewal wastewater treatment plants, water quality (general), economic development activities, events and projects, Bulverde area regional wastewater, continued meetings with Comal County WCID No. 6 for regional wastewater services and gathered data for application for wastewater CCN in Bulverde area, Wimberley Wastewater Treatment Plant improvements, options for treated water for Wimberley, Hays County water and wastewater study, Rural Utilities-Dunlap Wastewater activities including FM 725 wastewater project, processing of wastewater service agreements completed in Oasis subdivision, finalized agreements for wastewater services in Legend Pond subdivision, new lift station construction in Lake Dunlap area, Mid-Basin water supply, Caldwell County water supply, continued evaluation of new water supplies options, discussions with Tri-Community Water Supply Corporation regarding water supply, resource protection, water conservation and drought contingency issues, lake management including Lake Capacity Study, Canyon Lake operations, Canyon Lake and hydro lake access, information technology, human resources, budget activities, and accounting and finance. General Manager West requested the Board to review the report and no discussion was had on Items from the General Manager 6. LVI 12/16/09 20
The Chair called for Action Item 7 - Consideration of and possible action approving the Fiscal Year 2009 Annual Financial Audit and distribution of the Comprehensive Annual Financial Report. Alvin Schuerg recognized LaMarriol Smith, Connie Rothe, Tammy Beutnagel, Susan Hubbert, and Sandra Terry for their work on designing and compiling the Comprehensive Annual Financial Report. Section 7 of the GBRA Enabling Act and Section 7.02 of the GBRA By-Laws require that GBRA complete an annual audit of the books of account and financial records. The Board previously approved the firm of Thompson, Williams, Biediger, Kastor and Young, L.C. to conduct the Fiscal Year 2009 audit. The audit started thereafter with interim tests prior to year end and recently concluded with the final review of GBRA s basic financial statements and footnote disclosures. The audit process and results were discussed with the GBRA Audit Committee during their December 16, 2009 meeting. Thompson, Williams, Biediger, Kastor and Young have issued their unqualified opinion related to the presentation of GBRA s financial position as of August 31, 2009. The audit firm has also provided their annual Management Letter in addition to a Report on Compliance on Internal Controls, which is a required report for all federal grant recipients. Janet Pittman briefed the Board regarding the Government Finance Officers Association Certificate of Achievement, the unqualified audit opinion, continued increase in net assets, no audit adjustments, and GBRA s compliance with the Investment Act and Policy. Upon motion by Director Fogle, seconded by Director Kunde, the Board unanimously approved the Fiscal Year 2009 annual audit and distribution of the Comprehensive Annual Financial Report. LVI 12/16/09 21
Next, the Chair called for Action Item 8 - Consideration of and possible action authorizing the General Manager to negotiate and sign a Memorandum of Understanding between the Guadalupe-Blanco River Trust, the Guadalupe-Blanco River Authority, and the Upper Guadalupe River Authority. GBRA, the Guadalupe- Blanco River Trust and the Upper Guadalupe River Authority have prepared an agreement that provides for the Upper Guadalupe River Authority s participation and support of the Guadalupe-Blanco River Trust. The Upper Guadalupe River Authority has supported the continuation of the existing Memorandum of Understanding for an additional five years. GBRA and the Upper Guadalupe River Authority have recognized the significant advantages of the joint support of the Trust which include a mutual commitment to the stewardship of the Guadalupe River, mutual commitment to understand the distribution, condition of and threats to biological diversity in the Guadalupe River watershed, and a mutual commitment to working cooperatively with landowners, communities and others to identify, understand and resolve conservation challenges. Upon motion by Director Schultz, seconded by Director Powers, the Board unanimously authorized the General Manager to sign the Memorandum of Understanding between the Guadalupe-Blanco River Authority, Guadalupe-Blanco River Trust, and the Upper Guadalupe River Authority. A copy of the Memorandum of Understanding is attached and made a part of these minutes. The Chair then called for Action Item 9 - Consideration of and possible action authorizing the General Manager to negotiate and execute a Letter of Intent with End Op, L.P. through its general partner, Duration Water L.L.C. for the sale and delivery of groundwater to GBRA for use within GBRA s service area. General LVI 12/16/09 22
Manager West recognized Frankie Limmer, John Doerfler, Paul Bennett, Melissa Boettcher, Joel Katz, and Jerry Roncinske representing End Ops, LP. No discussion was had on Action 9 at this time. The Chair called for Action Item 10 - Consideration of and possible action approving a Board resolution in support of the City of New Braunfels application for grant funding for a Regional Water Facility Planning Grant from the Texas Water Development Board. The City of New Braunfels has requested GBRA s assistance in securing a grant from the Texas Water Development Board (TWDB) in order to evaluate alternatives to its reliance on the Comal River and Edwards Aquifer for irrigation of existing and future parklands. GBRA s support would be limited to $500.00 from the Fiscal Year 2009-2010 budget and $2,000.00 in kind in the form of staff time to participate in the study. The City of New Braunfels owns, operates, and maintains a system of public parklands for the recreational and economic benefit of the citizens of, and visitors to, New Braunfels and Comal County, and has heretofore irrigated their parklands with water from the Edwards Aquifer and certain water rights the City owns in the Comal River. The City now desires to evaluate alternatives, including the reuse of reclaimed wastewater, to reduce its reliance on these stressed resources for irrigation of existing and future parklands. The TWDB offers grants to political subdivisions of the State of Texas for the evaluation of the most feasible alternatives to meet water supply facility needs, estimate the costs associated with implementing feasible water supply facility alternatives, and identify institutional arrangements to provide water supply services. GBRA supports the City of New Braunfels grant application to study water reuse in recognition of the importance of conservation in the use of groundwater from LVI 12/16/09 23
the Edwards Aquifer and surface water from the Comal River. GBRA would provide funding in the amount of $500.00 to the City of New Braunfels should a grant be awarded, and would further provide in-kind services, representing staff time to review and participate in the proposed study up to $2,000.00 in value of services rendered. Upon motion by Director Kunde, seconded by Director Marshall, the Board unanimously approved a Board Resolution in support of the City of New Braunfels application for grant funding for a Regional Water Facility Planning Grant from the Texas Water Development Board. A copy of the Resolution is attached and made a part of these minutes. Next, the Chair called for Discussion Item 11 - Discussion regarding the activities and transactions of the Edwards Aquifer Authority, South Central Texas Water Advisory Committee, and the Guadalupe Basin Coalition. General Manager West briefed the Board on activities of the Edwards Aquifer Recovery Implementation Program meetings and activities of the Edwards Aquifer Authority. The Chair then called for Discussion Item 12 - Discussion regarding the activities and transactions of the Guadalupe-Blanco River Trust. No discussion was had on Discussion Item 12. The Chair called for Discussion Item 13 - Discussion regarding Base Flow Report, Water Quality Index, and condition of the Guadalupe Basin. The reports were discussed with the Board. Tommy Hill briefed the Board on the Comal Springs level, Canyon Reservoir conditions, rainfall events, and the U. S. Drought Monitor Seasonal Outlook. LVI 12/16/09 24
Next, the Chair called for Discussion Item 14 - Discussion regarding local, State and national water planning and water resource issues. General Manager West briefed the Board on the South Central Texas Regional Water Planning Group Region L activities, a letter from the Victoria County Groundwater Water Conservation District reflecting their views on water management strategies, the San Antonio Water System water management strategies, water needs for the lower basin area and various proposed water projects, brush management projects, and cumulative impacts of the various proposed water projects. General Manager West briefed the Board on the recent National Water Resources Association meeting held in San Antonio, Texas. The Board was briefed on the H2O4 Texas conference held in Fort Worth, Texas. Discussion was had regarding the reorganization of the Texas Commission on Environmental Quality. General Manager West briefed the Board on the House Interim Charges. Bruce Wasinger briefed the Board on the Notice of Intent to sue the Texas Commission of Environmental Quality by The Aransas Project. Todd Votteler briefed the Board on a new Endangered Species Act lawsuit relating to the U.S. Fish and Wildlife findings on a list of nine species of freshwater mussels. Jim Murphy briefed the Board on the Environmental Flows Advisory Committee activities. The Board listened to a recorded live interview with General Manager West discussing the Notice of Intent to sue the Texas Commission on Environmental Quality relating to the Whooping Cranes. The Board was also briefed on water resources policy activities in Washington, the White House Council on Environmental Quality release on revised principles and guidelines for water resources, a letter from Governor Perry to the U. S. Environmental Protection Agency, and a press release on global warming and carbon dioxide. LVI 12/16/09 25
The Chair recessed the open meeting at 11:11 a.m. The Chair closed the open meeting and convened the meeting in executive session at 11:24 a.m. The open meeting reconvened in open session at 12:22 p.m. The Chair then called for Action Item 9 - Consideration of and possible action authorizing the General Manager to negotiate and execute a Letter of Intent with End Op, L.P. through its general partner, Duration Water L.L.C. for the sale and delivery of groundwater to GBRA for use within GBRA s service area. End Op LP through its general partner, Duration Water LLC has secured groundwater leases in Bastrop and Lee Counties and is willing to develop, withdraw and sell up to 56,000 acrefeet/year of groundwater to GBRA to a designated delivery point. The proposed Letter of Intent (LOI) has a two year term and sets out the primary terms of a proposed Water Supply Agreement between End Op and GBRA. The LOI provides the parties a two year period to negotiate and finalize the terms of a Water Supply Agreement. The proposed terms of a Water Supply Agreement set forth in the LOI are non-binding and will not be binding upon the parties until such time that the Water Supply Agreement is executed. Upon motion by Director Powers, seconded by Director Fogle, the Board unanimously authorized the General Manager to negotiate and execute a Letter of Intent with End Op LP through its general partner, Duration Water LLC for the sale and delivery of groundwater to GBRA for use within GBRA s service area. The Chair called for an Action Item Consideration of and possible action authorizing the General Manager to negotiate and enter into a Second Extension of Reservation Agreement between Exelon Generation Company, LLC, a Pennsylvania limited liability company authorized to do business in Texas LVI 12/16/09 26
(Exelon) and the Guadalupe-Blanco River Authority (GBRA) to extend that certain Reservation Agreement by and between GBRA and Exelon dated December 15, 2007 with a termination date of June 30, 2010 to a new termination date of December 31, 2013. Upon motion by Director Fogle, seconded by Director McLeroy, the Board unanimously authorized the General Manager to negotiate and enter into a Second Extension of Reservation Agreement between Exelon Generation Company, LLC, a Pennsylvania limited liability company authorized to do business in Texas (Exelon) and the Guadalupe-Blanco River Authority (GBRA) to extend that certain Reservation Agreement by and between GBRA and Exelon dated December 15, 2007 with a termination date of June 30, 2010 to a new termination date of December 31, 2013. There being no further business to be brought before the Board, the meeting was adjourned at 12:30 p.m. subject to call by the Chair. Chair Secretary LVI 12/16/09 27