Meeting Minutes 2017-07-12

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

JULY 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, July 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 Barlow.  Also attending were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper”); Justin Abshire of Jones & Carter, Inc. (“Engineer” or “Jones Carter”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays”); David Hartman, General Manager of Walden Community Improvement Association (the “WCIA”); Elliot M. Barner of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”); and all persons on the attached Attendance Roster.

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

Mrs. Peggy Duryea, owner of a condominium at the Lodge at Walden (the “Lodge”) located on Melville Road, informed the Board that the recent expansion and clean-out of a nearby storm sewer inlet (“Inlet”) improved drainage near the Lodge, but that the Lodge’s parking lot flooded during the most recent rain July 10, 2017 rain event (the “Event”).  Mrs. Duryea also informed the Board that Montgomery Independent School District has engaged an engineer to review the effect of storm drainage from Madeley Ranch Elementary School further.

Ms. Cheryl Langley next requested an update on the status of online customer bill pay for the District’s customers. Director Patton stated that the District currently has automatic bill pay through customer checking accounts, but is currently looking into additional options for providing such services and there will be more discuss at the August Board meeting.

Ms. Patricia Gordon then informed the Board that the easement located behind her home doesn’t appear to drain properly.  Messrs. Barner and Wright informed the Board that they would research the ownership of the easement in question to determine who was responsible for the drainage of such easement.

Ms. Whitney Jackson next informed the Board that the Inlet near her home on Fitzgerald is unable to intake the flow of storm water that resulted from the Event.

Mr. Abshire then provided a brief history of the District’s evaluation of drainage within the District during past rain events and update regarding the status on design of improvements to drainage facilities located inside the District (the “Drainage Improvement Project”).  Mr. Abshire explained that such project was: 1) currently in the design phase; 2) in the process of being funded through a bond issuance; and 3) anticipated to begin construction in the 1st quarter of 2018.  Mr. Abshire requested that those members of the public in attendance for the first (1st) time provide him with descriptions of the Event’s impact on their property so that Jones Carter can include it for further evaluation of drainage in the District.

Mr. Jim Hodges stated that the recently expanded Inlet near his property on Thoreau did not appear to improve drainage during the Event.  Mr. Abshire informed Mr. Hodges that enlargement of the storm sewer outfall near his property is included in the Drainage Improvement Project.

Mr. Luke Helwig next requested an update on the District’s wastewater treatment plant rehabilitation and expansion project (the “WWTP Project”).  Mr. Abshire informed Mr. Helwig that surveying for the clearing of the site had been completed and such clearing was scheduled to begin by the beginning of next week.

Mr. David Eason and Ms. Heather Reyes, Montgomery County Municipal Utility District No. 9 (“MCMUD 9”) residents, asked the Board who was responsible for storm water drainage within Walden.  Mr. Abshire responded that although Jones Carter reviews plans for development as they relate to connection to the District’s water and wastewater systems, Montgomery County (the “County”) is responsible for reviewing a development’s impact on storm water drainage.  Mr. Barner added that the District decided to evaluate drainage within its boundaries to determine what improvements might be made in light of last year’s storm events.  Mr. Barner then explained that the District was in the process of designing the Drainage Improvement Project, which includes evaluation of the costs of such project’s impact on the District’s financial position and tax rate.  Mr. Barner further explained that an application for bond funds was in the process of being prepared and would be sent to the Texas Commission on Environmental Quality (“TCEQ”) for expedited review.  Upon the TCEQ’s approval of the application, bond documents would be prepared; such bonds would then be approved for sale.  Mr. Barner added that such approval included review of such bond documents by the Texas Attorney General’s office.  Mr. Barner anticipated that the bonds would be issued by the end of 2017.

Mr. Eason then asked if the WCIA is required to review drainage plans prior to construction in the District.  Mr. Barner added that the WCIA does have limited authority to review construction within Walden, but that he would defer to Mr. Hartman for additional comment on the WCIA’s authority.  Mr. Maguire added that the home builders in Walden are constructing homes on lots and increasing the elevation on such lots.

In response to questions regarding whether there are any applicable deed restrictions preventing property owners or home builders from elevating such lots and the WCIA’s review of development with Walden, Mr. Hartman responded that the WCIA is in the process of reviewing and recommending deed restrictions that include changes to address drainage issues and the WCIA’s review of development, but that existing deed restrictions only allow a limited scope of review for such development.

In response to a question from Ms. Stacy Spreen, Mr. Barner stated that it is possible that private property owners might be at fault for directing storm water flow to other property owners’ lots and recommended that property owners seek the advice of an attorney to determine if they had a potential claim against another property owner.

Ms. Lorrie Parker, a local real estate agent added that drainage issues are not isolated to the District.

Mr. Charles Barron, a director from MCMUD 9, informed the Board that he disagrees with Jones Carter’s assessment regarding replacement of the pump at the Browning Catahoula Water Well.  Mr. Barron asked that the MCMUD 9 Engineer and Jones Carter conduct further evaluation including an economic analysis.

Mr. Rudy Okruhlik expressed his gratitude that the Board was in the process of designing the Drainage Improvement Project in the homes that such project would improve drainage in the District. He encouraged the Board to proceed as quickly as possible with such project, as tensions were high in Walden due to the flooding caused by the Event.

Director Davis and all members of the public but for Mr. Barron, exited the meeting at this time.

APPROVAL OF MINUTE

The President next directed the Board to the approval of the minutes of the regular meeting of June 14, 2017.  Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the minutes of the regular meeting of June 14, 2017, as presented.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner then reviewed the Tax Assessor-Collector’s Report for the month of June 2017, 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 98.24% of the 2016 taxes have been collected as of June 30, 2017.  Ms. Turner next reported that the Delinquent Tax Report will be presented at the August Board meeting.  Ms. Turner went on to report that certified values should be received by the end of the month.

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 next reviewed current year-to-date revenues and expenditures against the budget.

Ms. Turner also reviewed a Snap Shot Financial Report as of July 12, 2017, and a Revenue and Expenditure Comparison for 2016 and 2017 as of July 12, 2017, copies of which are attached to the Bookkeeper’s Report.  Ms. Turner reported that she finalized the Texas Water Development Board accounting.

Upon a motion by Director Patton, seconded by Director Tryon, 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 7959 through 7988 from the General Operating Fund; 4) authorized payment of checks numbered 1187 through 1188 from the Capital Projects Fund; and 5) authorized payment of checks numbered 1735 through 1738 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 discussed the Drainage Improvements Project.  Mr. Abshire reported that Jones Carter is underway with design of the Drainage Improvement Project and is coordinating with the Attorney regarding the necessary easement and property acquisitions.  Mr. Abshire also reported that Jones Carter expects to submit the preliminary construction drawings to local agencies for review by September.  Mr. Abshire went on to report that Fitzgerald is in the scope of review for the project and that he will look at new issues mentioned under Public Comment.  Mr. Abshire added that, based on the estimated project schedule, Jones Carter expects to be ready to begin construction in early 2018.

Mr. Abshire next reminded the Board that the WWTP Permit Renewal (the “Permit”) was declared administratively complete by the TCEQ on May 30, 2017.  Mr. Abshire further reported that Jones Carter awaits the draft Permit to be issued, which typically occurs within three (3) to four (4) months, is expected in September 2017.

Mr. Abshire next reported that work is near completion with preparation of Bond Application Report No. 7 (“BAR”).  Mr. Abshire expects to have a draft of the BAR available for consultant review within the next two (2) weeks and the BAR will be submitted to the TCEQ in August 2017.

Regarding the Catahoula Well Rework Project (“Rework Project”), Mr. Abshire reported that as authorized at the District’s meeting of June 14, 2017, Jones Carter prepared a bid package for the Rework Project which includes replacement of the pump.  Mr. Abshire presented a preliminary engineering cost estimate for the Rework Project, a copy of which is attached to the Engineer’s Report.  Mr. Abshire requested the Board authorize Jones Carter to begin advertisement of the Rework Project, subject to the concurrence of MCMUD 9.  Mr. Abshire added that upon authorization, Jones Carter expects to begin advertising within the next week and receive bids in early August.  Mr. Abshire also reported that Jones Carter expects to present a summary of the bid tabulation results and recommendation of award to the August Board meeting.

Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the Engineer’s Report, as presented, and authorized the Engineer to advertise the Rework Project, subject to the concurrent of MCMUD 9.

OPERATOR’S REPORT

Mr. Wright then 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 96.61%.  Mr. Wright next reported that the District had two (2) paid taps last month and the District has a total of 1,689 connections.

Mr. Wright next reviewed the list of service termination notices and noted that 207 notices were mailed and two (2) accounts were terminated.  Mr. Wright reported there was an excursion at the berm along the fence line during the prior month and discussed pumping at the clarifier.

Mr. Wright also reported that Hays continues its research of automatic billing options.

Mr. Wright last presented a new Operations Contract and discussed a three percent (3%) increase of fees for operations services.  Directors Tryon and Leasure will review the proposed Operations Contract and meet with Hays.  Directors Tryon and Leasure will also review the Magna Flow contract.

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.

TCEQ

It was reported that the recent TCEQ roundtable discussion at the Association of Water Board Directors Conference indicates a change in the BAR review process.  Discussion ensued.

SAN JACINTO RIVER AUTHORITY (“SJRA”)

Discussion next ensued regarding flood warnings and the next SJRA meeting.

WCIA

It was then reported that closure of the Entergy easement area within the District’s WWTP Reserve, which has been used by residents of Walden, was communicated to the WCIA and would be added to the District’s website.

MCMUD 9

It was next reported that MCMUD 9 approved the Bed and Banks Permit Application at its regular meeting.

ATTORNEY’S REPORT

Mr. Barner discussed the District’s encroachment policy regarding consent to and repair or replacement of encroachments in, on, or under district easements and whether or not the Board felt it necessary to amend such policy.  A discussion ensued.  It was the consensus of the Board that such policy, which is included in the District’s Rate Order, should not be amended.

EXECUTIVE SESSION

Pursuant to Chapter 551 of the Texas Government Code, Subchapter D, of the Open Meetings Act, the President called the executive session to order at 12:40 p.m. to discuss matters within the attorney/client privilege and real estate matters.  Present for the executive session were the Board of Directors of MCMUD 8, except for Directors Barlow and Davis, and Mr. Barner.  As of 1:12 p.m., the President declared the Executive Session was ended and the public session was resumed.

Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved acquisition of property for District projects based on the terms discussed in Executive Session.

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

July 12, 2017 Minutes Signature