Meeting Minutes 2017-11-08

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

NOVEMBER 8, 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, November 8, 2017, at 9:00 a.m., at the Montgomery County Sheriff’s Office, District 5 Patrol Division, located at 11901 Walden Road, 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 Davis.  Also attending were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper”); Erich Peterson and Justin Abshire of Jones | Carter (“Engineer” or “Jones Carter”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Linda Wilson and Charles Barron of Montgomery County Municipal Utility District No. 9 (“MCMUD 9”); 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.

DRAINAGE REPORT

Mr. Abshire first provided an update to those in attendance regarding the status of the drainage improvement project (the “Drainage Improvements”).  Mr. Abshire stated that the preliminary construction drawings for such project will be submitted to local agencies for review within the week.  Mr. Abshire then reported that Jones Carter is meeting with those residents that were affected by the most recent storm event (the “Hurricane”) to discuss possible design of additional improvements in the various zones identified in the Jones Carter drainage investigation.  Mr. Abshire added that according to the current estimated project schedule, Jones Carter expects to advertise the invitation to bid on the Drainage Improvements in late December 2017 and begin construction in the first (1st) quarter of 2018.  In response to a question, Mr. Abshire also reported that the Bond Application Report (the “BAR”) submitted by the District to the Texas Commission on Environmental Quality (“TCEQ”) for funding the Drainage Improvements should be approved by the end of December.

Mr. Abshire next reported regarding Jones Carter’s meeting with Rudy Okruhlik and Garrett Ritter to discuss the details of constructing an extreme event overland swale (the “Swale”) between their properties at 12339 Browning Drive and 12331 Browning Drive.  Mr. Abshire reported that Messrs. Okruhlik and Ritter were opposed to the design of the proposed Swale because it would require tree removal and regrading between their properties.  Mr. Abshire went on to report that the proposed Swale would be approximately 25 feet (25′) in width.  Mr. Abshire reported that in lieu of the proposed Swale, Messrs. Okruhlik and Ritter requested that the District construct a storm sewer line between the two (2) properties.  Mr. Abshire also reported that although such a line would improve drainage in Zone 2, such a line would have a finite amount of capacity and would not be as effective of a solution to the drainage issues in Zone 2 as the proposed Swale.  Director Tryon then reminded those in attendance that the District had willingly agreed to investigate drainage issues within the District and to fund certain drainage improvements, but that the District’s primary function is to provide water and wastewater to customers.  Director Tryon suggested that perhaps the District should avoid construction of Drainage Improvements altogether if District customers aren’t willing to assist the District with such Drainage Improvements affecting them.

PUBLIC COMMENT

There were no additional public comments.

APPROVAL OF MINUTES

The President next directed the Board to the approval of the October 11, 2017 regular meeting minutes.  Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the October 11, 2017 regular meeting minutes, as presented.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner first reported there was no Tax Assessor-Collector’s Report this month.  Ms. Turner next reported regarding the 2017 tax base.  Ms. Turner next discussed the Montgomery Central Appraisal District ballot.

Concerning the public hearing on the termination of water service to 2016 delinquent tax accounts, Mr. Barner informed the Board that information necessary to notify those delinquent on such accounts was not received by his office until November 1, 2017 and he determined that there wasn’t sufficient time to send such out notices in advance of the November 8, 2017 meeting.  Mr. Barner recommended the public hearing be postponed until the December regular Board meeting.  It was the consensus of the Board to postpone such hearing.

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 budget.

Ms. Turner then reviewed a Snap Shot Financial Report as of November 8, 2017, and a Revenue and Expenditure Comparison for 2016 and 2017 as of November 8, 2017, copies of which are attached to the Bookkeeper’s Report.

In response to a question from Director Patton regarding reimbursement of certain expenditures related to the Drainage Improvements, Ms. Turner and Mr. Barner explained that the General Operating Fund shall be reimbursed for such expenditures from the upcoming 2018 bond issue.

Ms. Turner next discussed the Quarterly Investment Inventory Report for the Period Ending September 30, 2017, a copy of which is attached hereto.

Ms. Turner then presented the draft budget for fiscal year ending 2018 (“FYE 2018”) and the FYE 2018 draft budget for the wastewater treatment plant (“WWTP”).  Discussion ensued. Ms. Turner explained that such draft budgets will be presented to the Board for approval at the regular December Board meeting after the Directors and consultants provide any further comments.

Mr. Turner next presented an Order Amending List of Qualified Brokers for the Board’s approval, a copy of which is attached hereto.

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 Bookkeeper’s Report, as presented; 2) authorized payment of checks numbered 8055, and 8102 through 8138 from the General Operating Fund; 3) authorized payment of check numbered 1192 from the Capital Projects Fund; 4) authorized payment of checks numbered 1753 through 1758 from the Sewage Treatment Plant Fund; 5) declared its intent to reimburse certain expenditures paid out of the Operations Fund from bond funds; 6) approved the Quarterly Investment Inventory Report for the Period Ending September 30, 2017; and 7) approved the Order Amending List of Qualified Brokers.

ENGINEER’S REPORT

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

Concerning the WWTP improvement project, Mr. Abshire first reported that Jones Carter held the sixty percent (60%) progress meeting with representatives of the District, MCMUD 9 and Hays North on October 12, 2017.  Mr. Abshire further reported that Jones Carter is nearing 90 percent (90%) completion of construction plans for such project and expects to be ready to submit to local agencies for review the week of December 18, 2017.  Mr. Abshire went on to report that Jones Carter anticipates obtaining agency approvals and being ready to begin advertising in late January 2018.

Mr. Abshire then reported that the existing driveway to the WWTP from Walden Road will need to be replaced after construction of the WWTP is completed.  Mr. Abshire added that replacement of the driveway was not included in the original scope of the WWTP project and requested authorization to begin the surveying of the existing WWTP access drive in order to begin preliminary design.  Mr. Abshire noted that the estimated cost of the survey is $3,500.  Mr. Abshire reported that since a portion of the driveway is located within a pipeline easement that runs through the WWTP site, Jones Carter will need to coordinate with the pipeline company to determine its requirement for construction of such driveway.  Discussion ensued regarding whether a portion of the driveway is located on the Walden Community Improvement Association’s (the “WCIA”) property and whether consent from the WCIA is needed before surveying the existing road in its entirety.  In response to a question of Director Leasure, it was reported that the District needs to survey in order to determine the appropriate construction materials.

Mr. Abshire next reported that Jones Carter received the draft WWTP permit from the TCEQ on October 12, 2017.  Mr. Abshire went on to report that the permit includes a total phosphorus (P) limit of 1.0 mg/L.  Mr. Abshire added that Jones Carter expects such permit to be issued within the next couple of months.

Mr. Abshire next reported that Jones Carter is coordinating with the Operator to schedule the annual water plant inspection of Water Plant Nos. 1 and 2.  Mr. Abshire added that prior to scheduling the inspections and taking the facilities offline, Jones Carter is waiting for cooler temperatures and reduced water usage.  Mr. Abshire indicated that Jones Carter anticipates the inspections will occur in late November/early December.

Mr. Abshire then reported that the Browning Catahoula Well pumpage is approaching the 2017 Alternative Water Source (“AWS”) limit of 225,000,000 gallons.  Mr. Abshire reported that Jones Carter has notified the Lone Star Groundwater Conservation District (“Lone Star”); Mr. Abshire noted that Lone Star has implemented a new application process for increasing AWS permits, as well as a new application fee of $820 consisting of a $750 application fee plus $70 for publication.  Mr. Abshire requested authorization to submit such an application for an increase in the AWS limit to 265 MG.  Mr. Abshire noted that the Buckingham Catahoula that is not yet operational was currently permitted for 100 MG.

In response to a question from Mr. Sustman, Mr. Abshire next explained the decision to place a temporary elevation benchmark at the WCIA office.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board the Board:  1) approved the Engineer’s Report, as presented; 2) authorized Jones Carter to begin the surveying of the existing WWTP driveway at an estimated cost of $3,500, subject to WCIA consent; and 3) authorized Jones Carter to submit the application along with the associated fee to Lone Star to increase the 2017 District AWS permit from 225 MG to 265 MG.

Mr. Abshire next presented the Drainage Investigation Update Addendum (the “Addendum”).  Mr. Abshire reminded the Board that the Addendum is the result of further analysis performed as a result of drainage issues reported by District residents after the July 10, 2017 storm event (the “July Event”).  Mr. Abshire further explained that the Addendum includes three (3) additional areas of interest, referred to in the Addendum as Zones 7, 8 and 11. Discussion then ensued regarding costs of the improvements detailed in the Addendum.

OPERATOR’S REPORT

Mr. Wright then presented 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 96.95%.  Mr. Wright next reported that the District had three (3) paid taps last month and the District has a total of 1,700 connections.

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

In response to a question about Jasper Aquifer water usage, Mr. Wright explained that use of such water was intended to balance the overall usage within the District and MCMUD 9’s water distribution system.

Mr. Wright next presented the G-M Services Report for Well Nos. 1 and 2, copies of which are attached hereto.

Mr. Wright then explained current charges and adjustments by Hays North in the amount of $7,760.56 due to the Hurricane.

Mr. Wright next presented a proposed Payment Services Agreement with First Billing. Mr. Wright explained that the purpose of such agreement was to enable Hays North to take payments for the District using credit cards and direct payments via bank accounts.  In response to a question from Director Patton regarding the costs of such direct payments, Mr. Wright stated that the direct draft through Hays Utility North will remain the same.  Mr. Barner requested that the Board allow him to review such agreement so that it may consider its approval at the December regular Board meeting.

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.

LAKE CONROE COMMUNITIES NETWORK (“LCCN”)

Mr. Sustman reported that there was no recent activity by the LCCN.

WALDEN COMMUNITY IMPROVEMENT ASSOCIATION

There was nothing new to report.

MCMUD 9

MCMUD 9 Directors Wilson and Barron had nothing to report.

WEBSITE REPORT

Director Patton reported that the MUD8.com web address is for sale at cost of $25 and an annual fee of $20.  Discussion ensued regarding purchasing such address.  Additionally, Mr. Barner reported that the District’s Rate Order had been published on the website.  Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved buying MUD8.com at cost of $25 and an annual fee of $20.

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 11:00 a.m. to discuss matters within the attorney/client privilege.  Present for the executive session were the Board of Directors and Mr. Barner.  As of 11:35 a.m., the President declared the Executive Session was ended and the public session was resumed.

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

November 8, 2017 Minutes Signature