Min CC 10/04/2010 - Joint Workshop MINUTES
SPECIAL JOINT WORKSHOP
OF THE CITY COUNCILS OF
CIBOLO,CONVERSE,LIVE OAK, SCHERTZ,SEGUIN,AND SELMA
AND THE BOARD OF DIRECTORS OF THE
SCHERTZ SEGUIN LOCAL GOVERNMENT CORPORATION
BALLROOM, SCHERTZ CIVIC CENTER
1400 SCHERTZ PARKWAY,BUILDING#5
SCHERTZ TEXAS 78154
October 4,2010
A Special Joint Workshop was held by the Schertz City Council of the City of Schertz, City
Council City of Cibolo, City Council City of Live Oak, City Council City of Seguin, City
Council City of Selma and the Schertz Seguin Local Government Corporation, Texas, on
October 4, at 6:30 p.m., in the Ballroom of the Schertz Civic Center, Schertz, Texas. The
following members present to-wit:
CALL TO ORDER- WELCOME
Mayor Baldwin welcomed all in attendance this evening.
CITY OF SCHERTZ - Mayor Baldwin called the Schertz Special Joint
Workshop to Order at 6:30 P.M. The following members were in attendance:
Mayor Hal Baldwin Mayor Pro Tem Cedric Edwards
Councilmember Jim Fowler Councilmember George Antuna
Councilmember Michael Carpenter
Staff Present: City Manager Don Taylor Assistant City Manager John Bierschwale
Assistant City Manager David Harris City Attorney Michael Spain
Assistant to the City Manager Bob Cantu City Secretary Brenda Dennis
Councilmember David Scagliola absent.
CITY OF CIBOLO - Mayor Hartman called the Cibolo Special Joint
Workshop to Order at 6:30 P.M. The following members were in attendance:
Mayor Jennifer Hartman Mayor Pro-Tem Mark Winn
Councilmember Ron Pedde Councilmember Tony Krasnai
Councilmember Larry Carlton Councilmember Richard Hetzel
Councilmember Steve Liparoto
Staff Present: City Manager Bruce Pearson City Attorney Charlie Zech
City Secretary Peggy Cimics Committee Chair Bruce Winter
CITY OF CONVERSE - Mayor Suarez called the Converse Special Joint
Workshop to Order at 6:30 P.M. The following members were in attendance:
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Mayor Al Suarez Mayor Pro-Tem John Shadron
Councilmember Steve Brown' Councilmember Renee Paschall
Councilmember Robin Benbrook Councilmember Randy Pannell
Councilmember Grant Lopez
Staff Present: Interim City Manager John Quintanilla
City Attorney Ray Ortiz Finance Director Gerald Wilson
EDC Director Mark Luft City Secretary Penny Hieronymus
Director of Facilities Karl Hoppes
CITY OF LIVE OAK - Mayor Dennis called the Schertz Special Joint
Workshop to Order at 6:30 P.M. The following members were in attendance:
Mayor Mary Dennis Councilmember Eric Sanchez
Councilmember Ed Cimics
Staff Present: City Manager Matt Smith Assistant City Manager Scott Wayman
EDC Director Carol Buttler Financial Advisor Mark Seal
Finance Director Leroy Kowalik City Attorney Charlie Zech
Former Councilmember Anne Jorrie Former Councilmember Pat Kauts
CITY OF SEGUIN - Mayor Matthies called the Seguin Special Joint Workshop to
Order at 6:30 P.M. The following members were in attendance:
Mayor Betty Ann Matthies Councilmember Don Keil
Councilmember Tomas Castellon, Jr. Councilmember Steve Tschoepe
Councilmember Bob Pees Councilmember Carlos Medrano
Former Mayor Mark Stautzenberger
Staff Present: City Manager Douglas Faseler Assistant City Manager Ricardo Cortes
City Attorney Andy Quittner Financial Advisor Duane Westerman
Financial Advisor Allen Westerman City Secretary Thalia Stautzenberger
Water Utility Manager Emery Gallagher Bond Council Jeff Kuhn
Water System Superintendent Shawn Shimek Seguin Gazette Newspaper Bob Thaxton
Finance Director Susan Caddell
CITY OF SELMA—No Quorum - The following members were in attendance:
Mayor Tom Daly Mayor Pro-Tem Melba Gregory
Councilmember Charlie Eads
Staff Present: City Administrator Ken Roberts City Engineer Larry Verner
SSLGC Board Members - President Greenwald called the SSLGC Special Joint
Workshop to Order at 6:30 P.M.
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President Ken Greenwald Vice-President Robin Dwyer
Secretary Patricia Ramirez Treasurer Andrew Koenig
Director Jim Wolverton General Manager Alan Cockerell
Shawn Shimek, Water Systems Superintendent Administrative Assistant Georgia Hanks
Also present:
City Attorney Michael Spain (Fulbright &Jaworski)
City Bond Attorney Jeff Kuhn (Fulbright &Jaworski)
Financial Advisor Mark McLiney(Southwest Securities)
SSLGC Hydrologist Consultant Bill Klemt
Engineering Consultant(Walker Partners) John Winkler
Legal Counsel (Davidson &Troilo)Patrick Lindner
Canyon Regional Water Authority Craig Hines
M& S Engineering Keith Strimple
Tom Koch, C. Thomas Koch, Inc.
Mayor Baldwin welcomed Mayor John Williams Universal City and Public Works Director
Discussion and/or Action Items
1. Future water needs in South-Central Texas (Mayor Baldwin)
Mayor Baldwin stated that all of those that were here twelve (12 to fifteen (15) years ago
might recall when the City of Schertz went to all the cities in the Randolph community
about the possibility of forming a corporation to go together and seek water in the area. At
that time the Edwards Aquifer Authority was cutting back on the water that would be
available to all the cities, everyone saw that this was a serious problem, that if all were
going to maintain growth in the area and continue to grow then everyone could not sit still
in cut backs in water we were receiving. Back in those days, the instructions were, so if
you need more water to grow, then you need to find some somewhere.
At that time, the City of Schertz tried to get this group together to seek some water. There
were plenty of good reasons why some could not do it, one being this was going to be a
very expensive process and at that time. Had no idea where the water was and no plan at
that time of finding it. The City of Schertz opinion at that time was, we are in such
desperate straights, the Council directed the City Manager to find some water. The City
hired Consultant Crockett Camp, he and his group went out seeking water. They found
water in the Carrizo-Wilcox Aquifer area. The City of Seguin was also is desperate need of
water and basically were working out of the river and had a huge corporation coming in
that needed a tremendous amount of water. The timing was perfect, the City of Schertz and
the City of Seguin were able to join forces, split the costs of developing a well field and
pipeline to get the water back to our areas. Twelve years later, everyone knows the success
both cities have had. Over the years, the City of Schertz, and City of Seguin have been
able to do a lot of thing that they were not able to before, gained a lot of experience in what
has already been done.
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Mayor Baldwin stated that the purpose of tonight is to share that experience and to ask each
of you to think and talk about joining together as a group. Itis difficult and very expensive
to find water and to try to pipe it in from other areas is expensive, and a small city cannot
do it one their own. The City of Schertz feels partnerships and partnering in these things is
the best opportunity for everyone to have the amount of water they need to continue to
grow and continue to lead the Northeast side of greater San Antonio in growth and
development.
Mayor Baldwin introduced Former Mayor Mark Stautzenberger, City of Seguin who was
here when they formed the corporation, and lead his Council along with the City of Schertz
in the search for water.
Mayor Baldwin introduced Schertz City Attorney Michael Spain, who has been with the
City for over twenty years and has been with the city during the water situation and the
formation of the Corporation.
Mr. Spain stated that the different city staffs of the cities have been meeting for sometime
to come up with some ideas to put together a new water source that can benefit the cities
of the region. He stated this workshop is designed for information for the various
Councils to participate and give you a common set of data. We would expect that this
meeting tonight will be followed up with individual meetings at each of the Councils and
then perhaps another one or two other joint meetings.
Mr. Spain further stated that this is a big project and is a critical need for the future needs
of all the cities in the region. This is a big commitment and he wants all the cities to
understand what is involved and how long it might take, and what benefits it will bring to
the cities. Mr. Spain welcomed everyone and will be the MC for this evening. Mr. Spain
stated that they just learned that Mr. Crockett Camp is stuck out of town and will not be
with us this evening and his presentation will be covered by others.
Mr. Spain stated that this is a workshop with the cities to discuss and ask questions and is
not a public hearing; therefore, the citizens in attendance can listen and gather
information. He stated that there would be other opportunities for citizen input.
2. The SSLGC experience (Alan Cockerell, General Manager SSLGC) — Provided a brief
PowerPoint presentation summarizing milestones covering the following:
• Concept - The Schertz-Seguin Local Government Corporation (SSLGC) was created
to develop and operate a wholesale water supply system from the Carrizo Aquifer for
the benefit and well-being of the cities of Schertz and Seguin. SSLGC's original
project and expansion plans are included in the regional and state water plans.
• History - The idea of using Carrizo water began with an independent water supply
study in 1998 conducted by the City of Schertz. The City of Seguin also had an
interest in developing the same resource. Each city was not able to implement this
massive project on its own, but was able to join together and form a separate local
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government corporation. Project cost over $80 million to implement (including 2010
expansion)
• Organization - SSLGC was formed under Subchapter D of Chapter 431 of the Texas
Transportation Code in December 1998. SSLGC is governed by a Board of Directors
(5) appointed by each City Council. Staggered five-year terms with majority control
shifting each year between owner cities. One ex-officio member from each City
Management Services Agreements were developed between each city and SSLGC.
• Implementation - Seguin began receiving water in Sept 2002. Schertz began
receiving water in Feb 2003 when the pipeline was completed. In 2004 SSLGC
became a wholesale water supplier to the City of Selma, City of Universal City and
Springs Hill Water Supply Corporation.
• Current Operation - SSLGC provides the primary water supply for Schertz and
Seguin. Both cities maintain secondary supplies for peaking and emergency
situations. Schertz maintains Edwards Aquifer rights and Edwards Aquifer wells.
Seguin maintains Guadalupe River rights and a surface water treatment plant for
industrial customers.
• Water Quality - Iron and manganese are removed with potassium permanganate/sand
filters. pH is adjusted with lime & caustic soda. Chlorine is added for disinfection.
Carrizo water is very low in total dissolved solids and blends well with Edwards
water and Guadalupe river water.
• Current Facilities - Wellfield in Gonzales County. 19 MGD water treatment plant,
storage facility, high service pump station northwest of Nixon. 43 miles of 42, 36 &
30 inch pipeline from treatment plant to storage tanks in Schertz and Seguin. Booster
pump station and storage facility on Leissner School Road in Seguin.
• Expansion - SSLGC currently has 12,910 ac-ft/yr permitted and in production with
eight 1000 GPM wells. Permit for 6,452 ac-ft/yr has been issued for four additional
1000 GPM wells. Water rights are secured by contiguous properties. Purchased:
4,339 acres, Leased: 13,544 acres, Project total: 19,362 ac-ft/yr from twelve wells
• Summary - Partnerships can work to solve problems. Organization needs to be well
defined. Cooperation and Trust are necessary. Groundwater permits must be
obtained by local groundwater -conservation districts. Include projects in Regional
Plan.
3. The New LGC concept (Scott Wayman, John Bierschwale and Bruce Pearson)
Mr. Scott Wayman provided a brief PowerPoint presentation discussing the needs of the
cities as well as discussing the formation of the new Local Government Corporation. Mr.
Wayman covered the following information:
• City of Cibolo - Green Valley serves water to a portion of the City. Currently,
87% of water usage is residential, 80% of Cibolo is undeveloped; this year added
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400 new homes and anticipating 250 homes next year. Boundaries currently
extend south of IH 10, however, with the economic development activities that
are underway, it is anticipated that residential usage will be around 70% in the
future and commercial at 30%.
In the last ten years, Cibolo's population has increased by 500%. Currently has
2550 a/f of water available and current usage is 2050 acre/feet per year.
Estimates by Canyon Regional Water Authority in the last ten years included the
following:
Year 2010 2020 2030 2040 2050 2060
Acre Feet 2,050 3,030 8,230 8,730 9,230 9,230
• City of Converse: Currently has Permits and Leases for 2,550 a/f of Edwards and
pretty much pumping it all. Since 2007, they have issued 782 residential Building
Permits, 600 + Units residential on horizon, New Plats Pending. Economic
Development efforts include potential for Hotel" Convention Center and New
Business Development along Loop 1604. JISD Opened New Judson High School
with 3,300 students and 301 staff. JISD set to construct new elementary school @
Loop 1604 &Thornton Lane.
Council seeking to solve tomorrow's water needs today by considering long-term
growth trends necessitates an additional 3,000 acre-feet. They do have an
alternative supply 300 a/f of Schertz's Edwards water. Council set it as goal to
progress as they grow. Council is committed to securing water resources to ensure
out growth and progress as a community.
• City of Schertz: Schertz is looking for this water supply for redundancy purposes
to insure water stability as they grow. Staff is looking for continual growth
through next 50 years. The Sysco development along with additional retail and
commercial will drive the demand. There are several hundred lots platted not built
on as well. Half of City's land area is yet to be developed and they have extensive
extraterritorial jurisdiction.
Schertz has 10,000 a/f of Schertz Seguin water, 1700 a/f of Edwards that is used
as supplemental supply. Continued expected growth.
• City of Selma: Platted as of yesterday 801 lots, Selma currently has 1200 a/f of
Edwards Water, 800 a/f Schertz Seguin Water. Concerned with Edwards
Junior/Senior rights and possible reductions, 300 a/f of additional rights would
make them comfortable.
• City of Live Oak: Live Oak owns rights to 1752 a/f Edwards water and is
contracting to purchase additional 40 a/f. Leases out through 2017 additional
Edwards water. Currently expanding commercial and residential customers and
calendar year 2008/2009 pumped 1419 a/f.
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Concerned with Junior/Senior and drought reduction measures. Need
approximately 1,600 a/f additional for ultimate growth Bexar Met line is in place
to provide non-Edwards alternative 1000 a/f at $782-$1,140 per a/f. Half the City
served by Live Oak and half by SAWS.
• City of Seguin: Currently has 10,000 a/f from Schertz Seguin Corporation.
Additional rights from 7,000 a/f Guadalupe water, 1,000 a/f Canyon Lake
Guadalupe Blanco River Authority.
Future expansion of the City is planned, anticipating growth from development of
State Highway 130. City staff planning for growth 40 and 50 years out.
Interim City Manager John Quintanilla (Converse) provided the following information on
case studies and what the City of Converse has been doing and the needs for the next few
years:
• Currently have permits and leases for about 25/50 acre feet per year from the
Edwards
• Since 2007, the city has issued 782 residential building permits, slowed down
now but projecting consistent residential construction. At least 600 plus units on
the horizon, several new plats pending.
• Economic Development is a critical component, hoping for a hotel/convention
center. With the expansion of Loop 1604 will attract new business development.
• JISD Opened New Judson High School with 3,300 students and 301 staff. JISD
set to construct new elementary school @ Loop 1604&Thornton Lane.
• Their Council is looking to solve the problem today and not tomorrow. They are
seeking to lease an additional 3000 feet and is committed to securing the
additional water supply needs to secure their future.
City Manager Bruce Pearson (Cibolo) provided the following information regarding
"Why create the new Local Government Corporation:"
• Regionalization approach
• To provide an immediate resource
• To accommodate future growth in the corridor
• Economics
o 1. Positive Impact on Development
o 2. Economies of Scale
o 3. Strength in Numbers
• To diversify water resource inventories:
1. The Allowance for the Sharing of a Water Resource
2. Reduce the Possibility of Competition.
3. Eliminate Competition against Each Other
• "The Right Thing to Do "
Assistant City Manager John Bierschwale (Schertz) provided the following conclusion
information as to why creating a new LGC would be beneficial to all:
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• In creating a new LGC, you have to determine the cost of the project, ownership
versus the direction you want your city to seek. Mr. Bierschwale stated that it has
been a great partnership with the City of Sequin and the City of Schertz walking
hand in hand with the issues they had over the last ten years, it has been a
wonderful thing becoming united bringing the water to the two communities.
• Under the current government, we are not allowed to have other members to
become part of Schertz Seguin Local Government Corporation. That is why
everyone is here tonight, to share the perfect model to make a new Local
Government Corporation successful for all of us.
• It can be done, it will be expensive. It can be a Schertz Seguin Local Government
type of business.
City Attorney Michael Spain that the concept is the six cities, maybe more will
participate on an equal basis, equal vote, equal investment, and equal ownership. Some
cities may pay more if they use more water, but the basic concept is a full partnership of
all the participating cities. Following is start up issues:
4. Start-up issues
(a)Engineering/hydrology (John Winkler, Bill Klemt with SSLGC)
Consultant Engineer with SSLCG, John Winkler provided information on the following:
• Relevant Terms you will hear
- Acre-feet= 325,851 gallons
- 1,120 acre feet= 1 MGD
- DFC Desire Future Conditions
- GAM- Groundwater Availability Model
- MAG—Managed Available Groundwater
• SSLGC Water Quality Comparison information was provided
• Groundwater Permitting Process
- Activities: Modeling, Test wells, Configure well field, prepare the technical
report, prepare application, public notification, respond to questions and
comments, final permit sets the parameters for the project.
Mr. Bill Klemt, Hydrologist of SSLGC stated he would like to speak regarding his
favorite subject, the Carrizo-Wilcox Aquifer. One of the states major aquifers, it extends
from the Rio Grand in South Texas northeastward into Louisiana and Arkansas,
providing water to all or parts of 60 counties. The South Texas portion of the aquifer is
probably the better part of the Carrizo. Example: irrigation, that part of the aquifer stated
to be developed in the 1900's, when they got to the height of irrigation it was producing
300,000 a/f of water per year. Most of that was down in Atascosa further on south to Frio
and in Demit and De Zavala Counties. Wilson, Gonzalez did not see that large irrigation
development.
Mr. Klemt stated that our area of interest is Caldwell, Gonzalez, Wilson, and Guadalupe
Counties. He stated that at this time he does not know what the groundwater availability
would be in those counties because they are still in the DFC (Desire Future Conditions)
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and MAG (Managed Available Groundwater) process. He stated that computer
simulations(that had to do with drawdown) that were conducted by the Texas Water
Development Board showed that these counties could very well produce 110,000 a/f of
water and not lower water levels significantly until the year 2060. Measured water levels
at this time are showing that modeled water levels are probably showing more draw down
then what they are measuring today. In the next five years we will show a revision of this
110,000 a/f. He stated that probably the bad news is most of the 110,000 a/f of water is
either permitted or we have permit applications pending. His opinion is that we have
approximately 10 to 20 percent of this available water that can be spoken for today, that
is primarily in Wilson and Guadalupe Counties.
(b) Acquisition of water rights (Pat Lindner) (c) Permitting(Pat Lindner)
Mr. Pat Lindner, General Council to the Schertz Seguin Local Government Corporation
provided the following information regarding the legal side of the water rights that will
be necessary for the success and the legal side of the permitting process.
Mr. Lindner stated that if the new LGC plans to produce new ground water, it will need a
Ground Water Production Permit and Transportation Department issued by Ground
Water Conservation District located in a county where the wells will be drilled. In order
to apply for a permit the new LGC will need to buy, lease, or have an option to buy or
lease approximately 5000 acres of land in Wilson County if that is where you want to
drill. In addition to acquiring the required interest land, the application will need to be
supported by considerable technical data. Once the application is filed, the districts
processing of the application will take a frustratingly long time and a costly hearing
process.
The new LGC will probably be able to get the permit, but due to local politics, there is a
risk that the application may be denied. The prospects for obtaining the permits are
improved if the application is filed relatively soon and before other competing
applications are filed by other persons.
Regarding the acquisition of water rights, the proposal of the new LGC is to create an
additional supply of non-Edwards groundwater by developing a new well field in Wilson
County to produce water from the Carrizo formation. Since Wilson County is one of
several counties with Evergreen Groundwater Conservation District, the new LGC will
need to obtain a new drilling production and transportation permit from that district.
Before filing a new application, the new LGC will need to assemble by purchase, lease,
or option to purchase or lease contiguous tracts of land with sufficient acreage to support
the application for the amount of water required to be produced. This is because the
Groundwater Districts in this area over the Carrizo set a maximum of up to but not
exceed two a/f of water for each acre of land that you own or lease. While the new LGC
may buy land an owner of approximately 5000 acres of land wants to lease his property,
and prefers to lease to those he is comfortable with, that is sufficient amount of acreage to
proceed with the initial phase of the project. Since the landowner has already leased his
land in Gonzales and Guadalupe County, the landowner will be wanting a lease with the
same general business terms. Such as, a one-time signing bonus, secondly an annual
royalty payment based either on the right to produce subject to a discount during the
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years it requires permit and develop the well field or based on the amount of production
combined with a duty to produce. A periodic adjustment of the royalty rate based on
subjected standards such as the GBRA conserve water rate or inflation rate and then the
purchase of two and half acre tracts of land for the well sites, the two and half acres
comes from and includes the required sanitary control easements for the wells, right-of-
way road access for the wells, collection line easements and power supply easements.
While the details of each business transactions are subject to negotiations, for the
purposes of preparing the cost estimates presented to you, we assume costs comparable to
the existing Schertz Seguin leases with this landowner. One adjustment is that under the
Ground Water District rule in Wilson County, the maximum amount of water a
landowner may produce for each surface acre is subject to the District's subjective
determination rather than a fixed maximum set by the Districts in Gonzalez and
Guadalupe Counties. The landowner has been patient, but is anxious to lease because he
is very familiar with the groundwater permitting process and knows if you snooze you
loose. Time is of the essence, because several Groundwater Districts will soon be
receiving from the Texas Water Development Board the amount of water that is available
for permitting by each district, based upon the desired future condition of the Carrizo
previously agreed to among the several Districts involved.
Under State law, the District is encouraged but is not required to approve applications for
the amount of managed available groundwater, but a District has reasons to deny an
application once it has permitted all the managed available groundwater.
Summary: there will soon be an amount of water available for permitting in each District
and an applicant who files first will have the best chance for having the application
approved. This begins to the permitting issues, as previously stated, if the members of
the new LGC decide to obtain additional water from the non-Edwards groundwater rather
than purchasing the water, the new LGC will need to obtain the permits. Absent a
drilling production and transportation permit, the source is not feasible. Unlike the
streamlined processes adopted by cities, Groundwater Districts exercise considerable
discretion whether they are allow to or not. Since the District is subject to only limited
supervision by the State, based upon his experience in representing applicants and
representing Groundwater Districts, every applicant is frustrated by the lack of
predictability, the time and the cost of the permitting process. There is no guarantee that
a permit will be issued.
As he mentioned earlier, the prospects for obtaining permits have been approved if the
application is filed sooner not later. In the current regulatory climate, organizers or
associations of landowners opposed to the production, and especially the export of the
water will probably protest any application. Knowing this, significant information must
be gathered in order to file an application that will be deemed administratively complete
by District, so the District will actually start the permitting process. The projected costs
included getting the new LGC to the point of actually filing an application that is
administratively complete. Once the application is deemed administratively complete,
and the District has completed its technical review, the District will schedule the
application for hearing. If the application is protested, and it will be, that starts the
contested case phase.of the proceeding. During that phase, the District hires a lawyer to
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conduct the proceedings, handle discovery disputes, hear the evidence and make a
recommendation to the District's Board of Directors. The District's Board of Directors is
not obligated to accept his recommendations and is free to choose one way or the other.
Once the Board of Directors makes their decision, you can appeal the decision who ever
is dissatisfied with the decision. This is under the substantial evidence appeal, so at that
time the appealing party has to show that there is on evidence to support the decision
made by the Board of Directors or that there was a substantial procedural mistake made
during in the permitting process. Since the contested case hearing equates to a trial on
very technical issues, and the applicant is required to pay all the Districts costs
conducting the hearing regarding the permit application, he has included an estimate for
the hearing to be about $250,000 over the course of two-year period. That not just legal
fees, again that the Districts costs for conducting the hearing and expert fees to develop
testimony in support the application, and respond to the landowners who are opposing the
application. The actual cost maybe more or less, the period of time may take less than
two years, and hopefully that will be the case. Mr. Linder stated that he wants the
members of the group that will proceed to know that this is a risk; they have to factor in
regarding their decision-making. In conclusion: More likely or not, the new LGC will
probably obtain the required permits, especially if it files before the other applications but
land acquisition costs and the permitting process will take time and money.
(d) Schedule (Michael Spain and Pat Lindner)
City Attorney Michael Spain that that now the would like some dates in front of you that
give you a sense of how long a long time is. He stated that at the last staff get together,
they have divided the schedule into two parts, one is to get the new LGC created, actually
existing as a new corporation and the second part of the schedule is the permitting
process. He stated that at the last staff meeting he passed out a proposed schedule and
everyone looked at him as though he was crazy and didn't understand politics, that there
was no way it could happen that quickly. He stated that maybe, but hoped that they can
beat the schedule, because as Pat Linder, John and Bill talked to you, time is of the
essence, we are racing others who maybe filing permit applications, racing the
legislature, they will be convening early next year and the sooner we can get this off the
ground the better we all will be.
The following schedule timeline requires the following and he challenges the Councils to
beat his dates:
• First Joint Workshop tonight(October 4, 2010)
• Remaining part of October first of November individual Council follow-up
meetings where Councils will want to get more information on time costs and
what is all involved in this.
• Mid January — expectations of the staffs involved to have the cities committed to
joining or not joining the organization. Having identified their directors they
would like have to identify all the things that have to be done just to create the
organization with the Secretary of State.
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• Late January — file Articles of Incorporation with the Texas Secretary of State;
conduct the organization meeting of the Board but up and organizationally
running. At that point, the permit application can be filed, if the engineering and
hydrology work has been done. If one or more of the cities, then that can fund the
engineering and hydrology work prior to the Organization actually being in
existence, would speed up the filing time. We cannot file until the Organization is
existing and the engineering work is done. Lets assume that gets done by late
January then Mr. Lindner can tell us how long a long time is to get the permitting
done.
Mr. Linder provided the following proposed post-funding schedule:
• Preliminary.New LGC is formed, holds organizational meeting and confirms plan
to proceed with Wilson County Project.
• Day 1. Participants make initial deposits.
• Month 1. Authorize consultants required for project to proceed with work.
• Month 2-Month 3. Finalize option to lease/lease of property.
• Month 2 - Month 7 (approx. 6 mos.). Technical studies required to submit
application completed(This work may be extended if unable to finalize options to
purchase/lease.)
• Month 8. New LGC reviews, revises, and approves application.
• Month 9 —Month 33 (approx. 2 years). District review of application, contested
case hearing, and approval of application.
• Month 34.* New LGC issues bonds for design and construction.
• Month 34- Month 52 (approx. 18 months).* Prepare plans and specifications,
obtain regulatory approvals, acquire right of way, drill and equip wells, and build
collection system.
*Assumes application is approved and New LGC decides to proceed with design
and construction even if permit is appealed.
City Attorney Michael Spain stated that now Mr. Winkler will go over the costs. He
stated that there are several steps to the costs,the cost of creating the organization and the
cost of doing the preliminary work for the permitting process to get off the ground, the
cost of going through all of that permitting, and then the cost of getting operational.
(e) Costs (John Winkler)
Mr. Winkler provided the following information regarding new LGC Operational costs:
Key Points
• "There is a shortage of cheap water"
• Pricing Factors
-Utilization
- Scale Economy
-Location
-Water Quality
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Capital Costs:
Guadalupe Project ($25.7 million)
• Design 75% Complete
• Up to 6,000 acre-ft(over 3,000 ac-ft permitted)
• Includes $2.4 million SSLGC outlay rebate
Wilson Project($23.5 million)
• Permits for up to 9,000 acre-ft
• New grass roots project
36"Pipeline($18 million)
• Increase capacity to 48,000 acre-ft
• ROW in place
• Parallel Existing Pipeline
Effective Rate:
• Permit Goal— 12,000 acre-feet annually
• Annual Debt Payment- $4.4 million
✓ Fixed Payment
✓ (8,000 acre-ft annually) _ $1.12/1000 gallons
• Operating Cost
✓ Variable Costs
✓ Lease and District- $0.40/1000 gallons
✓ Electrical- $0.59/1000 gallons
✓ Operations - $0.18/1000 gallons
• Estimated Effective Rate
✓ $2.29/1000 gallons
Advantages
♦ Long Term Water Source
♦ Lower Rate for Participants
♦ Better Utilization of Facilities
♦ Redundant Water Supply
♦ Partner in System
Disadvantages
♦ Protracted Permitting Process
♦ Changing Rules
♦ Availability of Water(Timing)
5. Short-term,mid-range and long-term plans (John Bierschwale, Bruce Pearson)
Assistant City Manager John Bierschwale provided the following information:
Phase 1 —Short-term Planning
• Establish the New LCG, Partnerships' and appointment of the Board of
Directors
10-4-10 Minutes Page -13-
• Immediately apply for the water permits in Wilson County ranging from 5000
to 9000 ac/ft of water
• Begin working out details with the SSLCG to professional services, treatment
plant operation and transportation of water
• Develop a long-term financial plan for projects
• Develop a project phase-in period
Phase 2—Mid-range Planning
• Complete negotiations with the SSLGC to purchase existing Guadalupe County
underground water leases and begin construction on water treatment plant
• Complete details of second pipeline and transportation of water
• Locate additional Guadalupe County underground water leases
Phase 3—Long-term Planning
• Continue seeking long-term solutions in locating and developing water in the
Carrizo and Wilcox formations from the Guadalupe and Wilson Counties.
• Expand the water wells and water treatment plant based on water demands.
City Manager Bruce Pearson (Cibolo) gave kudos to the information Mr. Bierschwale
and the ones before them for providing all the information. Mr. Pearson stated that those
who have met and been exposed to the Crockett camp over the last several weeks heard a
phrase that he brought up in one of their meetings, and it really relates to the elected
officials " it takes the political will to make the decision to secure your communities
future." Obviously, there is a lot of thought and a lot of wisdom that goes into making
those decisions. Mr. Pearson stated that if you were to ask Schertz Sequin what their
project would cost today that they bonded about fifteen years ago you would probably
hear that it would be about one and half times if not more expensive today then it was
years ago. It is not going to get any cheaper; it will continue to get more and more
expensive. The key to some of us on the short-term, mid-term and long-term range goals
are: there is water permitted right now for those who need it, the construction of the
plant, the construction of the well field in Guadalupe County would be available quickly,
long-range plan, obviously is to go into Wilson and the Wilcox formation.
There is a lot of flexibility depending upon each one of our communities of what our
desires and needs are.
City Attorney Michael Spain stated that the next part of the presentation will include
financing alternatives. As he had mentioned earlier, there are three Financial Advisory
firms that represent the six cities here tonight, two of the firms, Samco and Southwest
Securities are Co-Financial Advisors for the Schertz Seguin Local Government
Corporation.
The Corporation is represented by Duane Westerman, Mark McLiney and his partner with
Fulbright & Jaworski, Bond Council Jeff Kuhn. They will be covering some of the financial
alternatives as well as the front in costs. Mr. Spain stated that we have to get to the point
where we have water and we have a permit. There has to be an investment by all the
participating cities to get that point, that is the front end costs that everyone is going to have
10-4-10 Minutes Page -14-
to come up with, whether through available cash, financing or a combination of the two and
then beyond that, there is the financing of the plans beyond the point where you know you
have the water and permit.
6. Financing alternatives (Mark McLiney, Duane Westerman, and Jeff Kuhn)
Mr. Duane Westerman, Samco Capital Markets provided the following information:
Three different areas to cover: (1) the initial funding of the Corporation, which is the
one he will be addressing, (2) Mark McLiney with Southwest Securities will address
the Corporation once it is formed, and doing the financing from that point forward,
(3) and then Jeff Kuhn will correct them on things they didn't get right the first time
through.
Mr. Westerman stated what the initial estimates are for all the cities to get the
Corporation up and going is currently and only an estimate in the range of $1.2
Million dollars. If six cities participating in the Corporation we are looking at
dividing that by six you are looking at about a $200,000 investment per city to get
started. There are different ways for the cities to come up with this, (1) if you have
cash on hand, (2) you can do it with a reimbursement resolution, you can use cash on
hand from funds you have available. Go ahead an approve a reimbursement
resolution indicating you are going to reimburse yourself from future financing,
whether be through the corporation or through your own financing.
Finally, if you did not have the cash on hand, each city could determine whether or
not they could do a financing for the $200,000 initially on their own, through what
legal vehicle the cities want to use. It could be through taxes note it maybe through
some other financing, but they would work with the cities bond councils to determine
what method would be possible for that.
Mark McLiney with Southwest Securities stated that this could be three or four years
down the road prior to the necessity to issue future bonds. The $1.2 million will get
you through the permitting process, get the permits, and possibly through the
challenging period, the protests and court challenges. If and then you are ready to go,
you are looking at $30 to $50 million dollar bond projects, depending which avenue
is pursued.
Mr. McLiney stated that fifteen years ago, Mr. Sweat who was City Manager at that
time, Mayor Baldwin and John Bierschwale called his boss in and told them they got
this project to go out Gonzales County and do a $30 million dollar project. His boss
stated that you cannot do it, you cannot afford it, unknown to them at the time, Seguin
was doing the same thing they formed this partnership and it worked well. It has
continued to work well. We are looking at another type of investment like that, and
we can split it six ways. Split the cost, make it affordable and give everyone a chance
to grow into it. What we will be looking at is following the model, the Local
Government Corporation that was created there was a very brilliant legal mind, come
up with the Transportation Code to use as a method to create the Local Government
10-4-10 Minutes Page -15-
Corporation to give the a financing mechanism. Once that was created, they were
able to go to market and sale obligations. There several methods you can use, you
can sell the bonds to the open market, just as Schertz Seguin did where you issue a
small portion to fund the initial project to make sure there is good water, good wells,
that we can have the water and the follow-up with a transportation funding, taking
several steps along the way. He stated there is open market sales, you can sell them
out in the market, there is another alternative with the Texas Water Development
Board that does take some time and effort but it is called the States Participation Plan.
This plan is through the State through the Texas Water Development Board will have
ownership also in the project. That ownership is then transferred periodically over,a
number of years to full ownership of the Local Government Corporation. This again
allows for us to grow into the project and financing. It takes an application and there
is no guarantees that funds are available,but these are funds that will be looked at.
A third alternative, and is similar to your initial funding, each city could issue their
own debt and turn it over to the Local Government Corporation for projects to do the
actual financing. There is going to be several decisions made to proceed, the nice
thing is that you are not recreating the wheel. It has been done, and done very
successfully, and if the City Councils come together and want this project, we are
going to be able to finance this in the open market or in partnership with the Texas
Water Development Board. He believes these projects will be funding four to five
years down the road. Once the permits are done but it is something you want to be
thinking about and starting the process now so what when we have the permits and
are ready to go we are not then trying to create the mechanism of where we are going
to use. This all needs to go simultaneously with the permitting process.
Mr. Jeff Kuhn with Fulbright and Jaworski stated he is involved as far as the bond
side and can reiterated that a lot was involved, a lot of political will was there to when
the SSLGC Schertz Seguin Local Government Corporation was created. He stated his
role is to review the take or pay contracts and sheparding the process through the
Texas Attorney General to get the new debt issued by the new Local Government
Corporation.
City Attorney Michael Spain stated that the Councils have received a lot of
information this evening, there is a lot more that you need to have. Each Council will
be going back to their City, and sit down and talk with your staff, your management.
You will want to talk to your Financial Advisors, City Attorney to go through all the
issues that are going to be important to you in making a decision whether you think
you want to pursue. Mr. Spain stated that he knows that everyone will want to have
meetings internally and stated that there will most likely be one more joint meeting to
address any issues.
7. Additional questions from, and discussion by, members of the City Councils,
SSLGC Board, and Staff
City Attorney Michael Spain opened it up for additional questions from, and
discussion by, members of the City Councils, SSLGC Board and Staff.
10-4-10 Minutes Page -16-
There were none at this time as all Council have a tremendous amount to think
about.
8. Commitment, cooperation, and coordination (Mayor Hal Baldwin and Mayor
Betty Ann Mattheis)
Mayor Betty Ann Matthies, City of Seguin stated that she strongly believes that in her
position as Mayor of Seguin, she has an obligation not only to work for the needs of
today but we must constantly be working for the needs of tomorrow. She stated this
type of partnership in addressing the needs of water for these communities that are so
closely connected geographically is the answer to being able to plan for the future.
She stated she recently attended the San Antonio — Austin Summit that was held in
New Braunfels and former Mayor of San Antonio Henry Cisneros talked a great deal
about the development of this region and how the success is going to be based on
communities working together. She has had the opportunity to serve as an Ex-Officio
Member of the Schertz Seguin Local Government Corporation for over ten years, and
have watched it through the years. She stated it is a remarkable partnership; it is one
that has been based on cooperation and trust and,that is the success of it. Using this
model, this group that is gathered here together could have the same success by
joining together to meet the water needs. She is very optimistic that this will happen.
She stated it is a privilege for her to be here this evening to make a comment but does
urge everyone to consider it seriously. Using the Schertz Seguin Local Government
Corporation as a model, it could be a great success and a plus for the development of
the whole area.
Mayor Hal Baldwin. City of Schertz thanked everyone who attending, he urged
everyone to take the information back to your communities talk it over with your
constituents, your administrators and try to get back together again soon and make a
decision on whether we want to go forward with this project or not. Mayor Baldwin
thanked the Board of the Schertz Seguin Local Government Corporation for being
here and joining us in the, project. Thanked all the staff representatives, finance
experts and those that are here tonight to help us make a decision. Mayor Baldwin
thanked his City Manager Don Taylor, as well as Assistant John Bierschwale for
putting this all together.
City Attorney Michael Spain stated that he expects that sometime in the next two
weeks or so the staff members of all the cities and Schertz Seguin who have been
meeting for the last couple of months will be getting back together again. If the
Councils and Senior Management of each of the cities can give your respected staff
some questions or comments that you would like for the whole group to here at our
next joint meeting, that would be very helpful in setting up individual meetings with
the various Councils to answer your questions in greater detail.
Last housekeeping matter, is that each Council will need to adjourn.
Mayor Baldwin recognized Councilmember Carpenter with the City of Schertz who
that pursuant to the comments and presentations made, he moves, seconded by Mayor
Pro-Tem Edwards that we, the City of Schertz, state our commitment to pursue the
10-4-10 Minutes Page -17-
creation of and funding of a new Local Government Corporation. The vote was
unanimous. Motion passed.
ADJOURNMENT
As there was no further discussion or action, Mayor Baldwin, City of Schertz adjourned the meeting at
8:25 p.m.
Mayor Suarez City of Converse adjourned with no action taken.
Mayor Betty Matthies City of Seguin adjourned with no action taken.
Mayor Dennis City of Live Oak adjourned with no action taken.
Mayor Hartman City of Cibolo adjourned with no action taken.
President Ken Greenwald Schertz Seguin Local Government adjourned with no action taken.
PASSED AND APPROVED THIS 12TH DAY OF OCTOBER 2010.
Jnnifer Hartman
ayor
ATTEST:
//� r
Peggy Cimics, TRMC
City Secretary
10-4-10 Minutes Page -18-
Mayor called the Public Hearing to order at 7:04 p.m. Service Plan was read. No citizen's spoke and
the Mayor closed the Public Hearing at 7:06 p.m.
B. City of Cibolo will hold a Public Hearing to hear public testimony and take action on updates to the
Unified Development Code,Article 6 Zoning Regulations.
Mayor called the Public Hearing to order at 7:06. No one wish to speak and Public Hearing closed at
7:07 p.m. No action was taken by council at this time.
7. Consent Agenda—Consent Items (General Items)
A. Approval of the minutes of the Regular Council Meeting held on July 12, 2011.
B. Approval of the minutes of the Council Workshop held on July 20, 2011.
C. Approval/disapproval of the Final Plat for Cibolo Valley Ranch Unit 6A.
Councilman Pedde moved to approve the consent agenda. Motion was seconded by Councilwoman
Hale. For: Council Members: Pedde, Castro, Hale, Liparoto and Hicks; Against: None. Motion carried
5to0.
8. Staff Updates
A. Capital Projects Schedule
B. Animal Control Department
C. Street Department
D. Parks Department
E. Utility Department
F. Drainage Utility District
Item A, C thru D as submitted. Charles Gibson, Animal Control Officer presented his report for Animal
Control to council.
9. Ordinance
A. Approval/Disapproval of an Ordinance creating a Unified Development Code Committee for the
City of Cibolo.
Councilman Castro moved to approve the Ordinance creating a Unified Development Code Committee.
Motion was seconded by Councilman Liparoto. For: Council Members: Pedde, Castro, Hale, Carlton,
Liparoto and Hicks;Against: None. Motion carried 6 to 0.
10. Discussion/Action
A. Discussion/Action on the removal, appointments and re-appointments to Planning and Zoning
Commission, Parks Commission, Streets and Drainage Commission, Board of Adjustments
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Commission, Capital Improvement Program(CIP) and Cibolo Economic Development
Corporation.
Councilman Liparoto moved to appoint Garth Coursen and Scottland Roddy from the Planning&
Zoning,Allen Dunn from Street&Drainage, Guy Barrows, Lesley Pedde and Mike Paisley from the
Board of Adjustments and Kara Heasley to the Unified Development Code Committee. Motion was
seconded by Councilman Carlton. For: Council Members: Pedde, Castro, Hale, Carlton, Liparoto and
Hicks; Against: None. Motion carried 6 to 0.
Councilman Pedde moved to appoint Kaleea Thomas for the Economic Development Corporation.
Motion was seconded by Councilman Hicks. For: Council Members: Pedde, Hale, Liparoto, Carlton
and Hicks; Against: Councilman Castro. Motion carried 5 to 1.
Councilman Liparoto moved to appoint Cynthia Pettit,Allen Dunn, Pat Evan, Dick Hetzel, Michael
Flores and Stan Boyle to the Capital Improvement Plan Committee. Motion was seconded by
Councilman Carlton. For: Councilman Pedde, Castro, Hale, Carlton, Liparoto and Hicks; Against:
None. Motion carried 6 to Q.
Councilman Carlton moved to appoint Daniela Krotzer to the Parks Commission. Motion was seconded
by Councilman Hicks. For: Councilman Pedde, Castro, Hale, Carlton, Liparoto and Hicks; Against:
None. Motion carried 6 to 0.
Councilman Castro moved to appoint Francis Jackson to the Board of Adjustments. Motion was
seconded by Councilman Hicks. For: Council Members: Pedde, Castro, Hale, Liparoto, Carlton and
Hicks; Against: None. Motion carried 6 to 0.
B. Discussion/Action and direction to staff to accept or reject an offer regarding a proposal submitted
by Rashesh B. Rangrel &Associates for consideration through the Economic Development Director
to purchase 2 acres of City owned land located at the intersection of FM 1103 and Wiedner Road for
commercial development.
Councilman Liparoto moved to reject the offer regarding a proposal submitted by Rashesh B. Rangrel &
Associates for consideration through the Economic Development Director to purchase 2 acres of City
owned land located at the intersection of FM 1103 and Wiedner Road for commercial development.
Motion was seconded by Councilman Hicks. For Rejection: Council Member: Pedde, Castro, Hale,
Liparoto, Carlton and Hicks; Against: None. Motion to reject passed'6 to 0.
C. Discussion/Action and Approval/Disapproval of the Preliminary/Final Plat of Brannon Estates and a
variance from the UDC to allow two new residential lots without direct frontage onto a public street.
Councilman Liparoto moved to approval the Preliminary/Final Plat of Brannon Estates and a variance
from the UDC to allow two new residential lots without direct frontage onto a public street. Motion was
seconded by Councilman Castro. For: Council Members: Pedde, Castro, Hale, Liparoto, Carlton and
Hicks; Against: None. Motion carried 6 to 0.
D. Discussion/Action and direction to staff on approving the update to the Future Land Use Map.
Councilman Liparoto moved to approve the update to the Future Land Use Map. Motion was seconded
by Councilman Pedde. For: Councilman Pedde, Castro, Carlton, Liparoto and Hicks; Against:
Councilwoman Hale. Motion carried 5 to 1.
3
E. Discussion/Action and direction to staff on the City of Cibolo becoming a member of the New
Braunfels-Seguin Metropolitan Planning Organization(MPO).
Council gave staff direction to explore the City's options of becoming a member of the New Braunfels-
Seguin Metropolitan Planning Organization.
F. Discussion/Action and direction to staff on Guadalupe County Re-districting.
Council gave direction to staff to put a letter of support on proposal #6 from Cibolo to Guadalupe
County.
G. Discussion/Action and direction to staff on procedures/process to establish single member voting
districts for the City of Cibolo.
Council gave direction to staff and the City Attorney to go ahead and find a demographer to start the
single member district process for the City of Cibolo.
H. Discussion/Action and direction to staff on the hiring process/qualifications for the City Manager
position.
Staff will bring back to council a draft advertisement to place on TML, City web site and various other
professional magazines and web sites.
I. Discussion/Action and direction to staff on the Cibolo Creek Municipal Authority FY 2012 Budget.
Councilman Pedde moved to approve the Cibolo Creek Municipal Authority FY 2012 Budget. Motion
was seconded by Councilman Liparoto. For: Council Members: Pedde, Castro, Hale, Liparoto, Carlton
and Hicks; Against: None. Motion carried 6 to 0.
-J. Discussion/Action on-the review and confirmation of all upcoming special meetings and workshops
and scheduling the time, date, and place of additional special meetings or workshops.
Council went over the calendar and a Budget Workshop was placed on the calendar to take place prior
to the scheduled council meeting on Aug 9, 2011.
11. Resolution
A. Approval/Disapproval of a Resolution dedicating 42.70 acres of Parkland along Town Creek West
in Schlather Park as described in exhibit(A) attached as Open Space for perpetuity.
Councilman Liparoto moved to approve the Resolution dedicating 42.70 acres of Parkland along Town
Creek West in Schlather Park as described in exhibit(A) attached as Open Space for perpetuity. Motion
was seconded by Councilman Castro. For: Council Members: Pedde, Castro, Hale, Liparoto, Carlton
and Hicks; Against: None. Motion carried 6 to 0.
B. Approval/Disapproval of a Resolution changing the composition/appointment of member to the
Capital Improvement Plan(CIP).
4
Councilman Liparoto moved to approve the Resolution changing the composition/appointment of
member to the Capital Improvement Plan(CIP). Motion was seconded by Councilman Castro. For:
Council Members: Pedde, Castro, Hale, Liparoto, Carlton and Hicks; Against: None. Motion carried 6
to 0.
12. City Council request(s)regarding specific items or staff reports to be scheduled for future agendas.
Councilman Liparoto requested an item on the agenda to address speed humps. Council requested an
item on Single Member Districts.
Council took a recess at 8:43 P.M. Council reconvened into a Budget workshop at 8:50 P.M.
13. Discussion/Action
A. Discussion and direction to staff regarding the FY 2011/2012 Budget to include city services,
priorities,personnel and capital improvements.
Council discussed the FY 2012 budget to include city services,priorities, personnel and capital
improvements.
14. Adjournment:
Councilman Carlton moved to adjourn the meeting at 11:20 P.M. Motion was seconded by Councilman
Hicks. For: All; Against: None. Motion carried 7 to 0.
PASSED AND APPROVED THIS 9TH DAY OF AUGUST 2011
ennife man
Mayor
ATTEST:
Peggy Cimics, TRMC
City Secretary
5