Meeting Minutes 2019-08-14

MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 8 MINUTES OF REGULAR MEETING

AUGUST 14, 2019

The Board of Directors (the “Board” or “Directors”) of Montgomery County Municipal Utility District No. 8 (the “District” or “MUD 8”) met in regular session, open to the public, on Wednesday, August 14, 2019, at 9:00 a.m., at the Walden Yacht Club, 13101 Melville Drive, Montgomery, Texas 77356, a designated meeting place located inside the boundaries of the District, and the roll was called of the duly constituted officers and members of the Board, to-wit:

John Tryon – President
John L. Patton – Vice President
Margie Barlow – Secretary
Randolph C. Moravec – Assistant Secretary
Bob Leasure – Director

All members of the Board were present, except for Directors Barlow and Moravec. Also attending were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); Justin Abshire and Erich Peterson of Jones|Carter (“Engineer” or “Jones|Carter”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Corey Howell of The GMS Group, LLC (“Financial Advisor” or “GMS”); Charles Barron and Bob Stinnett, Directors of Montgomery County Municipal Utility District No. 9 (“MUD 9”); Elliot M. Barner, attorney, of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”); and Jim Boyd, Jim Hodges, A. W. Machann and Carlos Gutierrez, members of the public.

The President, after finding that the notice of the meeting was posted as required by law and determining that a quorum of the Board was present, called the meeting to order and declared it open for such business as may come before it.

PUBLIC COMMENT

Mr. Jim Boyd requested an update on the Board’s review of options for landscaping 3202 Woodchuck Road, which was property purchased by the District as part of the Drainage Improvements Project (the “Drainage Improvements”). Mr. Abshire then informed Mr. Boyd that there had been some preliminary discussions with the Walden Community Improvement Association (the “WCIA”) regarding options for such property now that the equipment and materials necessary for completion of Phase I of the Drainage Improvements had been removed. In response to a question, Mr. Barner explained that he needed to determine how such property might be conveyed to the WCIA.

FINANCIAL ADVISOR’S REPORT

Mr. Howell then presented his tax rate study for the proposed 2019 tax rates (the “Tax Rate Study”), a copy of which is attached hereto.

Mr. Howell discussed the Tax Rate Study, which included a total ad valorem tax rate of $0.30 per $100 of assessed value for the year 2019 that is comprised of $0.0517 per $100 assessed valuation for debt service (“D/S”) purposes and $0.2483 per $100 assessed valuation for operation/maintenance (“O&M”) purposes. Mr. Howell also recommended that the Board authorize a transfer of $375,000 to the District’s D/S fund and budget for transfers next fiscal year into such fund in the approximate amount of $780,000. A discussion then ensued regarding Mr. Howell’s recommendations in the Tax Rate Study, including: 1) the rate for the D/S and O&M components of the 2019 tax rate; 2) legal requirements and any restrictions on the amount of both components; 3) the amount of O&M revenue the District should maintain annually; and 4) publication requirements for notice of the 2019 tax rate.

Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized: 1) publication of the proposed 2019 tax rate at $0.30 per $100 of assessed value in the Conroe Courier; and 2) setting the public hearing regarding setting such rate at the regular meeting of Wednesday, September 11, 2019, at 9:00 a.m.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of July 2019, a copy of which is attached hereto, including past monthly collections and credits as reported by Tammy McRae, Tax Assessor-Collector for the District. Ms. Turner reported that 98.87% of the 2018 taxes have been collected as of July 31, 2019.

In response to a question from Ms. Turner regarding the status of delinquent tax accounts of taxpayers owing more than $250 for the 2018 tax year, Mr. Barner informed the Board that letters to such taxpayers have been sent informing them that the Board will conduct a hearing at the September 11, 2019 meeting to terminate water service unless taxes are paid or a payment arrangement is entered into with the District. In response to a question from Director Tryon, Mr. Barner informed the Board that RBAP sent out nine (9) such letters.

BOOKKEEPER’S REPORT

Ms. Turner next reviewed the Bookkeeper’s Report, a copy of which is attached hereto, including the current fund balances, expenditures and investments. Ms. Turner then reviewed current year-to-date revenues and expenditures against the District’s budget for the fiscal year ending December 31, 2019.

Ms. Turner then reviewed a Snap Shot Financial Report as of August 14, 2019, and Revenue and Expenditure Comparison for 2018 and 2019 as of August 14, 2019.

Ms. Turner next presented the Quarterly Investment Inventory Report for the Period Ending June 30, 2019, a copy of which is attached hereto.

Ms. Turner presented a copy of the draft budgets (the “Budget”) for fiscal year ending 2020, a copy of which is attached hereto, a reviewed certain budget line items with the Board.

Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board: 1) approved the Tax Assessor-Collector’s Report, as presented; 2) approved the Bookkeeper’s Report, as presented; 3) authorized payment of checks numbered 8776 through 8810 from the General Operating Fund; 4) authorized payment of checks numbered 1884 through 1980 from the Wastewater Treatment Plant (“WWTP”) Fund; 5) authorized payment of checks numbered 1245 through 1250 from the Capital Projects Fund; 6) scheduled the public hearing to consider termination of water accounts for customers with delinquent tax accounts at 9:00 a.m. on Wednesday, September 11, 2019; and 7) approved the Quarterly Investment Inventory Report for the Period Ending June 30, 2019.

ENGINEER’S REPORT

Mr. Abshire presented the Engineer’s Report, a copy of which is attached hereto.

Regarding the Wastewater Treatment Plant Improvement Project (the “WWTP Project”), Mr. Abshire reported that ALLCO, LLC (“ALLCO”) is continuing work on the Sequencing Batch Reactor (“SBR”) basins, setting rebar and preparing to pour concrete for the foundation. Mr. Abshire stated that notice to surrounding residents was provided informing them of the two (2) upcoming concrete pours on August 14 and 17, respectively, beginning at 2:00 a.m. Mr. Abshire further stated that the contract period for Phase I of the WWTP Project is 480 calendar days from January 2, 2019, which establishes the substantial completion of Phase I in April 2020. Mr. Abshire next explained to the Board that Jones|Carter had identified certain issues with the condition of piping provided by Ferguson Plumbing Supply, ALLCO’s supplier. Mr. Abshire went on to explain that Jones|Carter has informed ALLCO that it needed to inspect such piping more carefully when it arrived at the WWTP Site to confirm Ferguson’s statements on the condition of such piping.

Mr. Abshire then presented ALLCO Pay Estimate No. 6 in the amount of $265,477.18.

Concerning the Drainage Improvements of Phase I (Zones 1-4 and 6), Mr. Abshire reported that Rebel Contractors, LLC (“Rebel”) has substantially completed construction in Zones 1, 2 and 6 and are also nearing such completion in Zones 3 and 4. Mr. Abshire stated that the remaining construction includes installation of the cured-in-place liner in the existing storm outfalls in both Zones 3 and 4.

Mr. Abshire then presented Pay Estimate No. 8 from Rebel in the amount of $67,777.20 and a Change Order No. 7 in the amount of $19,600.00.

Concerning the Drainage Improvements of Phase II (Zones 7, 8 and 11), Mr. Abshire reminded the Board that as authorized at the July 10, 2019 Board meeting, Jones|Carter is underway with surveying and preliminary analysis and expects to have a revised cost estimate and proposal for design phase services ready to present at the September Board meeting.

Concerning the investigation of a storm sewer outfall pipe adjacent to 11710 Ripplewind Drive (the “Outfall”), Mr. Abshire reported that Jones|Carter has coordinated with JD Poole to construct a coffer dam around the Outfall in order to assess its condition. Mr. Abshire also reported that JD Poole is scheduled to begin construction of such dam on Monday, August 19th and that such construction will take approximately three (3) days. Mr. Abshire further reported that following completion of such dam, Source Point Solutions will televise of such pipe and that depending on the results of the televising, the Outfall would repaired the week of August 26th.

Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board: 1) approved the Engineer’s Report, as presented; 2) approved ALLCO Pay Estimate No.3 in the amount of $265,477.18; 3) approved Rebel Pay Estimate No. 8 in the amount of $67,777.20; and 4) approved Rebel Change Order No. 7 in the amount of $19,600.00 .

OPERATOR’S REPORT

First, Director Tryon discussed with the Board and Mr. Wright an entry on the Hays North’s invoice related to certain costs associated with landscape repair as part of repairs to the District’s water and sewer system. The Board reminded Mr. Wright that Hays North should discuss any landscaping repairs it considers necessary with the Board prior to performing such repairs.

Mr. Wright presented the Operator’s Report, a copy of which is attached hereto.

Mr. Wright reported that the combined water accountability for the District and MUD 9 was 95.94%. Mr. Wright next reported that the District installed three (3) new taps last month and the District has a total of 1,737 equivalent single-family connections.

Mr. Wright next reviewed the list of service termination notices, noting that 153 such notices were mailed to customers and two (2) delinquent accounts were terminated.

Regarding valve inspections, Mr. Wright stated that Hays North performed additional survey work the past month.

Mr. Wright next reported that installation of Dedicated Bacteriological Sampling Sites is completed and a list of such sampling sites will be filed with the Texas Commission on Environmental Quality pending further coordination with Mr. Abshire.

Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the Operator’s Report, as presented, including a $648.57 adjustment to a customer’s account.

DISTRICT WEBSITE

Director Patton reported that he met with Hays North about options for increasing e-statement sign-up, including inclusion of water and sewer bill inserts and making customers aware when they pay at Hays North’s office. Mr. Barner recommended that Hays North add information into the District’s water and sewer service application. Mr. Barner further recommended mentioning the availability of e-statements at upcoming community events. Discussion ensued.

Director Patton also reported that the website traffic is consistent, but that such traffic includes certain traffic from China and Eastern Europe, which indicates that hackers are attempting to hack the District’s website.

MUD 9 REGULAR MEETING

Director Barron updated the Board regarding the MUD 9 regular meeting and explained that Bleyl Engineering continues preparation of the design documents required for certain Buckingham Catahoula Water Well improvements. Director Barron went on to explain that MUD 9 is also in the process of preparing for certain drainage improvements and rehabilitation of its groundwater storage tanks.

The Board was reminded of MUD 9’s August 15, 2019 regular meeting. Director Leasure will attend such meeting on behalf of the District.

WALDEN FIRE STATION PROPERTY (THE “PROPERTY”)

Mr. Barner reported that closing the sale of the Property will be scheduled soon and that Alamo Title Company has requested a resolution evidencing Director Tryon’s authority to execute the requisite closing documents, including the deed conveying the Property to Montgomery County Emergency Services District No. 2.

Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved a resolution authorizing Director Tryon to execute closing documents, including the deed.

CYBER SECURITY SEMINAR

Messrs. Barner and Peterson next presented information related to RBAP and Jones|Carter’s Cyber Security Seminar on Saturday, September 14, 2019, at the Hyatt Regency Intercontinental from 10:00 a.m. to noon. Upon a motion by Director Leasure seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized the Directors’ attendance to the Cyber Security Seminar on behalf of the District.

ASSOCIATION OF WATER BOARD DIRECTORS (“AWBD”) FALL SEMINAR AND MID-WINTER CONFERENCE

Mr. Barner next reminded the Board that it needed to approve attendance at the AWBD’s Fall Seminar on Wednesday, October 30, 2019, and Mid-Winter Conference in Dallas, Texas, on Friday, January 17, 2020 through Saturday, January 18, 2020. Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized the Directors’ attendance at the AWBD Fall Seminar and the AWBD Mid-Winter Conference for two (2) nights on behalf of the District.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned.

PASSED AND APPROVED this the 11th day of September 2019.

Secretary, Board of Directors

August 14, 2019 Minutes Signature

August 14, 2019 Minutes Signature