Meeting Minutes 2017-04-12

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

APRIL 12, 2017

The Board of Directors (the “Board” or “Directors”) of Montgomery County Municipal Utility District No. 8 (the “District” or “MCMUD 8”) met in regular session, open to the public, on Wednesday, April 12, 2017, 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
Bob Leasure – Vice President
Margie Barlow – Secretary
Daniel L. Davis – Assistant Secretary
John L. Patton – Director

All members of the Board were present, except for Director Tryon.  Also attending were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper”); Erich Peterson and Justin Abshire of Jones & Carter, Inc. (“Engineer” or “Jones Carter”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays”); Michael Others of McCall Gibson Swedlund Barfoot PLLC (“Auditor”); Ernie Harris and Charles Barron of Montgomery County Municipal Utility District No. 9 (“MCMUD 9”); and Elliot M. Barner of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”); and all persons on the attached Attendance Roster.

The Vice President, after finding that the notice of the meeting with 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.

DRAINAGE REPORT

Mr. Abshire first provided an updated to those in attendance regarding repairs to storm sewer street inlets within the District.

Mr. Abshire next reported that Jones Carter met with Commissioner Mike Meador on March 24, 2017, to discuss potential Montgomery County (the “County”) assistance with drainage improvements throughout the District.  Mr. Abshire went on to report that Commissioner Meador stated he was willing to participate with such assistance.  Mr. Abshire reported that Jones Carter is working to prepare an analysis of costs for such improvements within the County right-of-way to provide Commissioner Meadow.  Mr. Abshire added that as requested by the Board at the March Board meeting, Jones Carter has prepared a timeline for the design and construction of drainage improvements.  Mr. Abshire reported that the District’s Financial Advisor would attend the May Board meeting to discuss financing of the drainage improvements.  Extensive discussion with the affected residents in attendance ensued regarding the timeline for and financing of such improvements.

PUBLIC COMMENT

There were no additional public comments at this time.

APPROVAL OF MINUTES

The Vice President directed the Board to the approval of the minutes of the regular meeting of March 8, 2017.  Upon a motion by Director Barlow, seconded by Director Davis, after full discussion and with all Directors present voting aye, the Board approved the minutes of the regular meeting of March 8, 2017, as presented.

AUDIT REPORT

Mr. Others presented the draft audit report for the fiscal year ended December 31, 2016 (“FYE 2016 Audit”), and the Auditor’s management letter.  Mr. Others reviewed the draft FYE 2016 Audit and responded to various questions from the Board.  Upon a motion by Director Barlow, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the FYE 2016 Audit, subject to a 10-day comment period, and authorized submission of such FYE 2016 Audit to the appropriate regulatory authorities.

Mr. Others exited the meeting at this time.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the months of February and March 2017, copies of which are attached hereto, including past monthly collections and credits as reported by Tammy McRae, Tax Assessor-Collector for the District.  Ms. Turner reported that 96.41% of the 2016 taxes have been collected as of March 31, 2017.

Upon a motion by Director Davis, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Tax Assessor-Collector’s Report.

BOOKKEEPER’S REPORT

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

Ms. Turner next reviewed a Snap Shot Financial Report as of April 12, 2017, and a Revenue and Expenditure Comparison for 2016 and 2017 as of April 12, 2017, copies of which are attached to the Bookkeeper’s Report.

Ms. Turner then presented the Quarterly Investment Inventory Report for the Period Ending December 31, 2016, a copy of which is attached hereto.

Upon a motion by Director Barlow, seconded by Director Davis, after full discussion and with all Directors present voting aye, the Board approved the Bookkeeper’s Report, as presented; authorized payment of checks numbered 7850 through 7880 from the General Operating Fund; authorized payment of check number 1185 from the Capital Projects Fund; authorized payment of check number 1048 from the Tax Fund; and authorized payment of checks numbered 1716 through 1721 from the Sewage Treatment Plant Fund.

ENGINEER’S REPORT

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

Mr. Abshire first reported regarding the Sanitary Sewer Manhole Rehabilitation project. Mr. Abshire stated that Standard Cement Materials, Inc. (“Standard”) has completed the project.  Mr. Abshire presented Pay Estimate No. 8 and Final in the amount of $100,542.37 payable to Standard for the Board’s approval.

Mr. Abshire next reported that A&H Services is underway with recoating Hydro-Tank No. 2 at the Poe Street Water Plant.

Mr. Abshire then reported that Jones Carter is approximately 30 percent (30%) complete with the design of the 1.25 MGD Wastewater Treatment Plant (the “WWTP”) improvements.  Mr. Abshire stated that Jones Carter is in the process of scheduling a trip for early May with the District’s Operator to tour several Sequencing Batch Reactor (SBR) plants.  Mr. Abshire went on to state that Jones Carter will schedule the 30 percent (30%) progress meeting to occur after the SBR tour which is anticipated to be in mid-May 2017.  Mr. Abshire added that the clearing and grubbing bid package for the WWTP site is nearing completion and Jones Carter expects to have solicited bid results for review at the May Board meeting.

Mr. Abshire then reported that the WWTP TPDES permit renewal application was submitted to the Texas Commission on Environmental Quality (“TCEQ”) in March 2017 and it is currently under review.

Upon a motion by Director Barlow, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the Engineer’s Report, as presented.

OPERATOR’S REPORT

Mr. Wright presented a copy of the Operator’s Report, a copy of which is attached hereto.  Mr. Wright reported that the combined water accountability for the District and MCMUD 9 was 96.64%.  Mr. Wright next reported that the District had two (2) paid taps last month and the District has a total of 1,687 connections.

Mr. Wright next reviewed the list of service termination notices and noted that 193 notices were mailed and no accounts were terminated.

Mr. Wright presented information regarding online billing and payment options.  Extensive discussion ensued.  It was the consensus of the Board to research interest in such billing options and discuss further at the May Board meeting.  The Board directed Mr. Wright to bring cost estimates for online bill pay and ACH bill pay to the meeting and a copy of any such contracts for same.

Next, a discussion ensued regarding the District’s policy on repairing and replacing fencing and landscaping within District easements.  It was the consensus of the Board to place this item on the May meeting agenda.

Discussion next ensued about installation of road reflectors to identify flushing valve locations.  Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the installation of road reflectors.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Operator’s Report, as presented.

MISCELLANEOUS REPORTS

Director Patton reported that MCMUD 9 has scheduled a special meeting for April 13, 2017, to discuss status of the Buckingham Catahoula Well.

Director Patton next reported regarding the District website and noted substantial activity on the website.

Director Davis exited the meeting at this time.

ATTORNEY’S REPORT

Mr. Barner reported that Clark Lord is currently reviewing the Amendment to the WWTP Facilities Agreement and he expects comments prior to the May Board meeting.

Mr. Barner next updated the Board regarding the MCMUD 8/MCMUD 9 Bed and Banks Permit application.

Continuing Disclosure Report

The Board then discussed the continuing disclosure report.  Mr. Barner explained that under the provisions of the District’s outstanding Bond Orders, the District covenanted to make an annual disclosure filing; and pursuant to the rules of the Securities and Exchange Commission, certain material events that may have a negative financial impact upon the District’s ability to meet its financial obligations must be disclosed.  Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the continuing disclosure report and authorized the filing of the report with the securities repositories, and submittal of the FYE 2016 Audit to the State Comptroller.

Discussion next ensued regarding cyber security insurance coverage.

Mr. Barner provided to the Board a legislative memorandum prepared by RBAP, a copy of which is attached hereto.  Discussion ensued.  Mr. Barner stated that he intends to have a further update next month.

EXECUTIVE SESSION

Pursuant to Chapter 551 of the Texas Government Code, Subchapter D, of the Open Meetings Act, the Vice President called the executive session to order at 11:30 a.m. to discuss matters within the attorney/client privilege.  Present for the executive session were the Board of Directors of MCMUD 8 and Mr. Barner.  As of 12:00 p.m., the Vice President declared the Executive Session was ended and the public session was resumed.

ENGINEER’S REPORT (CONTINUED)

Discussion then ensued regarding design and priority of drainage improvements.  Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board authorized Jones Carter to commence design for drainage improvements in an amount not to exceed $25,000.

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

April 12, 2017 Minutes Signature