City of Laredo
                           City Council Workshop
                                M2000-W-02
                           City Council Chambers
                                1110 Houston
                               April 20, 2000
                                  4:30 P.M.


    I.  Call to order

        With a quorum present Mayor Pro Tempore Montalvo called the meeting to order 
        at 4:40 p.m. 

   II.  Roll Call

        In Attendance:
        Elizabeth G. Flores,                       Mayor
        Alfredo Agredano,                          Councilmember, District I
        Louis H. Bruni,                            Councilmember, District II
        John C. Galo,                              Councilmember, District III
        Cecilia May Moreno,                        Councilmember, District IV
        Eliseo Valdez, Jr.,                        Councilmember, District V
        Joe A. Guerra,                             Councilmember, District VI
        Consuelo "Chelo" Montalvo,                 Mayor Pro Tempore, District VIII
        Gustavo Guevara, Jr.,                      City Secretary
        Larry Dovalina,                            Acting City Manager
        Cynthia Collazo,                           Acting City Manager
        Jaime L. Flores,                           City Attorney

     Motion to excuse Cm.  Alvarado.

     Moved:  Cm. Galo
     Second:  Cm.  Bruni
     For: 4	Against:  0	Abstain:  0

     Mayor Flores, Cm.  Agredano and Cm.  Guerra were not present.

     Mayor Flores and Cm. Guerra joined the meeting at 4:46 p.m.  Cm. Agredano arrived
     at 5:10 p.m.

   I.  The first presentation was by Tejas Laredo Water Company.

     Overview
* Tejas Water Company Team
* Key Features of Project 
* Development of Project Submittal
* Source of Supply
* Collection, Conveyance & Delivery Point
* Treatment Requirements
* Cost Estimates
* Closing Statement

     Tejas Water Company Team

* H. B.  Zachry Company
* Thames Water
* San Korenzo Water Partners
* Dannenbaum Engineering (Sub Contract)
* LBG Guyton (Sub contract)

     Key Features of Project

* Secured Water Source
* Long Term Sustainability
* Affordable Cost
* Emergency Water Supply Availability
* Responsive to Growth Demands
* Reduced Risk to City 

     Development of Project Submittal

* Compliance with City Information Request
* Use of CH2M Hill Study
* Preliminary Design Information 
* Base Project
* Alternate Short Range Project
* Cost estimates for infrastructure

     Source of Supply

* Carrizo Aquifer
* Area covered by Lorenzo Water Partners
* Hydrologic Model by LBG - Guyton
* Long Term Sustainability
* High Water Quality

     Collection, Conveyance, &Delivery Points

* Well field design
* Collection system
* Transmission pipeline (route & size)
* Advantages of design
o Flexibility for emergency
o Flexibility for growth
o Reduced risk for City

     Treatment Requirements

* High Water quality indicated
* Tests and analysis at each well site
* Water quality standards will be met
* Only chlorination contemplated

     Alternate Project

* Evaluation of Alternate Project
* Aquifer close to Laredo
* Treatment needed as indicated in CH2M Hill Study
* Aquifer sustainability unknown even at 5 MGD Capacity
* Cost higher than base project due to treatment requirement

     Why Tejas Laredo Water?

* Extensive worldwide infrastructure project development and implementation 
  experience
* Secured water source
* Ability to develop financing options that make the project affordable
* Project completion within 18 - 24 months
* Long term commitment to Laredo's future
o Strong local and business roots

  II.  The second presentation was by US Filter Operating Services

     Oral Presentation Outline

* Team Introductions
* We've got it all!
* Where's the water?
* How we access the water in phases
* What we do to treat and deliver the water
* Water well quality by sources
* How much could it cost per 1,000 gallons?
* Questions and Answers

     We've got it all

* Groundwater - Technical & Legal Expertise
* Engineering Design - Construction Management and Water Treatment Hardware
* Land & Rights-of-Way - Land Owner and Exploration & Permit Experts
* Initial & future access to water
* Operation, maintenance and management 

     What we offer - Benefits the City

* Immediate in-production water
* Rapid conversion to deliverable water
* Killam Land
o Water and Rights-of-Way
o Reduced Line Cost
* Fracture-Traces for Enhanced Well Outputs
* Most Experienced Design/Build/Operate Team
* Most Comprehensive Geological Database
* Best team to serve Laredo

     Apples vs. Oranges

     Why USFOS/Killam Water are In-Close for Water

* Sustainability of Far Northwest Webb/Dimmit Co.  Water is absolutely questionable
* Pumping test and modeling of Northwest Aquifers will confirm lack of sustainability
* If such NW water is used, it will have a near-term negative impact on others wells
* NW Water has a high likelihood of causing mixing and pipe scaling problems
* Investment in NW Water/system is risky and will ultimately require R. O.  Treatment

     Advantages of USFOs/Killam In-Close Water

* Shortest distance to convey water for City use
o Even though known to be Brackish
* Requires dealing with the fewest landowners
o Expedites and simplifies water delivery to the city
* Most likely quantities of water
o Allows for a yield of 20-MGD along optimal production line
* Most likely capable of providing sustainability
o Can meet 100 year City Objective
* Very low likelihood of producing Major Negative Impact on current and future wells
* Fracture traces are everywhere
o Pumping tests will confirm benefits
* Location and availability of treatable water
o Can serve Aquifer storage and recovery strategies. 

     How we access water in phases

* Wellfield in well pairs to 60 
o 5-MGD to 20-MGD
* Collection and Conveyance
o Deliver water for treatment
o Go from 5-MGD to 20-MGD
* Typical well pairs site

     Summary of preliminary costs per 1,000 gallons

Capacity               Source               Cost/1,000 gal.
Base - 5-MGD           Laredo/Carrizo           $ 2.03
Alternative 5-MGD      Laredo/Queens City       $ 1.96
Base - 7.5 MGD         Laredo/Carrizo           $ 1.98
Alternative - 7.5 MGD  Laredo/Queens City       $ 1.91
Base - 20-MGD          Laredo/Carrizo           $ 2.00
Alternative - 20-MGD   Laredo/Queens City       $ 1.96 
*  Does not include the Cost of Water or Right-of-Way. 

     Why our prices are realistic

* Treatment costs are dramatically lower than CH2Mhill's Estimates
o Ours = $1.91/1,000 gallons
o CH2Mhill's Study = $3.07/1,000 gallons
* Water wells are 12-inch bores and based on quotes friom experienced drillers
o Ours = $343,300
* Line Costs are based on most recent material and construction costs
* Ours = $66/Foot - Including pipeline and construction costs 
* Strict Adherence to sizing pipes
* Keep conveyance losses to 2.5 feet of loss per 1,000 feet of line
* Example:  A 51 mile conveyance line with no water treatment and no wells would 
  put water at $1.32
* Total treatment and disposal costs for reverse osmosis = $1.91/1000 gallons
* Laredo area Brine Water at 2,500 ppm
* Ours = $0.75/1,000 gallons
* CH2Mhill Study = $1.67/1,000 gallons

How much could it cost per 1,000 gallons - Base 5-MGD (Laredo/Carrizo)
Capital Cost                  Base 5-MGD
Development                   $25,865,800
Water Wells
Collection
Conveyance
Pumping
Treatment
Subtotal

Operating Costs               Base 5-MGD
Management
Operations
Subtotal
Estimated cost per 1,000 gallons * = $2.03
*without water rights ROW or permits

How much could it cost per $1,000 - Base 7.5-MGD (Laredo/Carrizo)

Capital Cost                  Base 7.5 - MGD
Development                   $33,817,100
Water Wells
Collection
Conveyance
Pumping
Treatment
Subtotal

Operating Costs               Base 7.5 - MGD
Management                    $3,012,700
Operations
Subtotal
Estimated cost per 1,000 gallons * = $1.98

*without water rights ROW or permits

How much could it cost per $1,000 - Base 7.5-MGD (Laredo/Queens)

Capital Cost                   Base 7.5 - MGD
Development                    $31,266,600
Water Wells
Collection
Conveyance
Pumping
Treatment
Subtotal

Operating Costs                 Base 7.5 - MGD
Management                      $3,012,700
Operations
Subtotal
Estimated cost per 1,000 gallons * = $1.91

*without water rights ROW or permits


How much could it cost per $1,000 - Base 7.5-MGD (Laredo/Carrizo)

Capital Cost                  Base 20 - MGD
Development                   $70,573,900
Water Wells
Collection
Conveyance
Pumping
Treatment
Subtotal

Operating Costs               Base 20 - MGD
Management                    $9,627,600
Operations
Subtotal
Estimated cost per 1,000 gallons * = $ 2.00

*without water rights ROW or permits

How much could it cost per $1,000 - Base 7.5-MGD (Laredo/Queens)

Capital Cost                Alternate 20-MGD
Development                 $65,486,700
Water Wells
Collection
Conveyance
Pumping
Treatment
Subtotal

Operating Costs             Alternate 20-MGD
Management                  $9,627,600
Operations
Subtotal
Estimated cost per 1,000 gallons * = $1.96

*without water rights ROW or permits
Summary

     US Filter and Killam Water Company have it all and have the best interests of 
     Laredo at heart.

* Water
* Land
* Scientists/Fracture Traces
* Hardware
* Operations Excellence

Summary

     US Filter/Killam team provides most experienced design-build operate team in U.S. 

* Proven experience
* The Right Resources
* Successful similar projects
* Understanding of Laredo

We want to be your Secondary Water Provider

III.  The third presentation was by American States Water Company

     Team Introduction

AWR Manager of Energy Resources - Raymond Juels
AWR Business Development Manager - Fred Cardenas
Stetson Engineers Inc.  Supervising Engineer - Jeff Helsley
Thornhill & Associates President - Michael Thornhill

     The Public/Private Partnership

The City of Laredo
American States Water Company
Capital Improvements
Water Supply
A partnership of Dedicated, Experienced, Professionals
Water Quality 
Positive Results

     Project Objectives

* Design, engineer, construct and operate a secondary water system
* Provide long-term options
* Work with City to communicate benefits to the community.

     Relevant Experience - American States Water Company

* AWR was established in 1929.
* Serving 1 million people
* Assets exceeding $500 million, including 300 wells, 5 surface water treatment 
  plants, 2,600 miles of pipeline, & 96 million gallons of storage

     Proposed Alternatives

Highest quality water sources available
Reliable water supply
Full range of options to tailor the project to your needs
Short-term stand-alone alternative

     Preliminary Pricing

Short-term Approach
                        5 MGD           7.5 MGD
Total Development
Cost                    27.9 million    32.2 Million
Estimated Cost
per 1,000 gal.          $1.37           $1.14

     Proposed Alternatives

* Full range of options to tailor the project to your specific needs
* Fully integrated long-term supply

     Proposed Alternative

First 10 MGD (phases 1 through 3 )
* Carrizo Aquifer Wellfield in Dimmit County
* Pipeline along Route 83 to north Laredo 
  Second 10 MGD (Phases 4 through 6)
* Edwards Aquifer Wellfield in Kinney County
* Shared Pipeline from Brackettville to Eagle Pass
* Pipeline to Route 83 

Facility Summary
Long-term approach

Number of wells                         20
Miles of Collection Pipelines           26
Miles of conveyance Pipelines          163

Preliminary Pricing

Long-term approach
20 MGD
Total Development
Cost                                    $ 65.7 Million
Estimated Cost per 1,000 gal.           $ 0.86

     Supplemental Alternatives

* Prepared before clarification of City's interests on March 13, 2000.
* Includes same high quality sources of supply
* Develops additional economical options through the use of Bed N' Banks Delivery

     Closing Statement

* 70 Years as an industry leader in water services with the ability to provide the 
  required ser ices to the City of Laredo.
* Critical to the  City's growth is a secondary source of high quality water which we 
  can provide
* A project tailored to your specific  needs

  IV.  The fourth presentation was by Azurix.

     Azurix Project Team Members

Azurix 		Project Manager			Dick Harville
Enron			Engineer and Const.			Michael Lucchesi
Layne			Groundwater Development		Michael Havener
Hillco			Regulatory Management		Dan Pearson
	Water Supply Evaluation					James Kowis
Affordable Housing	Community Development		David Marquez

     James Kowis

* Texas Natural Resource Conservation Commission water manager and resident expert 
  for over 25 years.
* Intimately involved in the day to day activities of the TNRCC's surface and ground 
  water management and water quality programs.
* Overseen hundreds of water supply development projects and water sales agreements
* Managed and operated the Rio Grande Water Master's Office
* Permitted the state's first aquifer storage and recovery project
* Helped Legislature create the Edwards Aquifer Authority and other ground water 
  districts
* Assisted groundwater districts with the development of their rules and procedures

     Water Source Evaluation and Development Approach

* Study expressed uncertainties about the identified alternative groundwater sources
o Limited knowledge of aquifer conditions
o Sustainability of desired amounts
o Recharge potential
o Increased competition for the water
o Expansion potential
o Specific environmental and third party impacts
o Long-term water quality

* Careful consideration of ground water supply options 
o Maximize sustainability
o Assure water quality
o Maintain reasonable costs
o Minimize risk
o Groundwater regulations

Water Source Evaluation and Development Approach

* Quickly collect critical supplemental data and information
* Perform detailed sustainability, cost/benefit and risk analysis of each selected 
  water supply option
* Provide detailed analysis to Laredo for review
* Select water supply source (s)
* Finalize implementation plan with Laredo
* Azurix Team will finalize development rights to selected water supply source (s)
* Team will complete system design and begin construction

Azurix Preliminary Price proposal - Base
Development Costs Based Upon Ultimate System Capacity

General System Description
Delivery Rate      5 MGD     7.5 MGD      20 MGD
Last Project        -1          4           24
Number of Wells      5          7           20
Added cost        $840,400     $712,86     $369,059
Total miles to con.  7          15          48
Total miles to deliv.   48      48          48

Estimated cost per $1.44        $1.09       $0.64
1,000 gallons
*Report is not complete

Full Capacity O & M Costs Based Upon Ultimate system capacity

Delivery Rate		5 MGD		7.5 MGD		20 MGD
Last Project 		0           5           24
Number of Wells	2			2			3
Estimated cost per $ 0.81       $ 0.84     $ 0.90
1,000 gallons
*Report is not complete

     Key Features of alternate Proposal

* Protected water source - infiltrated surface and ground water supply
* Environmental and health considerations - protection from catastrophic events e. g.,
  spills and storms
* Significantly reduces impact of short term variations in Rio Grande flow
* Reduced treatment plant operating expense resulting from lowered total suspended 
  solids (TSS) loading
* Allows City of Laredo to continue taking advantage of existing and available 
  surface water rights
* Protected in-take structure and increased equipment service life
* Allows the city to take advantage of available groundwater rights (Bed/ n Banks) 
  with added protection of Ranney collector wells

     Azurix's Commitments to Laredo

* The Azurix team brings to this project:
o An integrated guaranteed approach
o Team members with superior experience within individual areas of expertise
o Understanding of permitting
o Innovative financial community solution

* The Azurix team will exceed the City of Laredo's requirements for:
o The highest quality of drinking water
o A long term sustainable source of water
o The lowest possible cost.


   V.  The fifth presentation was by United Water.

     Our Team
Robert C.  Siemak - Program Director
William Turner - Groundwater Exploration & Water Rights
John Joyner - Financial Anaysis
Dana Batiste - Community Programs

     Our Objective:

o Combine global and local resources
o Deliver quality water to Laredo
o Provide the most cost effective and socially responsible solution

     Agenda

o Development Approach
o Cost Estimate
o Questions & Answers

     Three Options exist for supply development

o Low capacity wells with treatment
o High capacity wells with pipeline
o High capacity wells with longer pipeline

     Price Assumptions per RFP & City Clarifications

o Net present value approach
o 5% discount rate
o 1.6% inflation rate
o Amortized 25 years after each investment made

      Unit Cost

Annualized CapitalComponent + Annualized O & M Component = $1,000 gal
$2,041,020 Annual Principal and Interest
$320,069 Average Annual O & M Cost
5.475 Annual Volume (Billion Gallons)
$2,041,020 + $320,069 = $1,000
       
       Unit Costs

       Supply Alternative    Size         Unit Cost $1,000 gal
       Short Term           5.0 MGD            .70
                            7.5 MGD            .58
       Long-term           20.0                .43

  VI.  Adjourn                                     Time: 8:25 p.m. 

	Motion to adjourn.
	
	Moved:  Cm.  Guerra
	Second:  Cm.  Galo
	For:  5				Against:  0				Abstain:  0

I hereby certify that the above minutes contained in pages 01 to 12 are true, 
complete, and correct proceedings of the City Council Workshop held on the 20th day 
of April, 2000.

                                               _______________________________
                                               Gustavo Guevara, Jr.
                                               City Secretary