Meeting Minutes 2017-12-13

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

DECEMBER 13, 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, December 13, 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 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”); Corey Howell of The GMS Group, LLC (“Financial Advisor” or “GMS”); 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 reported that Jones Carter has determined the requisite easements needed for the Drainage Improvements and has discussed such easements with the affected property owners.

PUBLIC COMMENT

There were no additional public comments.

APPROVAL OF MINUTES

The President next directed the Board to the approval of the September 29, 2017 special meeting and November 8, 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 September 29, 2017 special meeting and November 8, 2017 regular meeting minutes, subject from property owners within the District certain revisions.

FINANCIAL ADVISOR’S REPORT

Mr. Howell addressed the Board in connection with: 1) approving the Preliminary Official Statement (“POS”); 2) approving the Notice of Sale (“NOS”); and 3) authorizing distribution of same for the $14,000,000 Unlimited Tax Bonds, Series 2018 (the “Series 2018 Bonds”).

Next, Mr. Howell discussed GMS’ role as Financial Advisor in accordance with Municipal Securities Rulemaking Board (the “MSRB”) Rule G-23.  Mr. Howell also discussed the G-42 Disclosure Information.

Mr. Howell first explained that the projected debt service requirements for the Series 2018 Bonds are based on  the assumption that there is no increase in property values within the District for the life of such bonds. Mr. Howell explained that such assumption is a conservative assumption. To illustrate, Mr. Howell further explained that there are currently an estimated 480 undeveloped lots in the District and that if 380 of such lots were developed, the value of such lots (based on 2017 tax values) would produce an estimated sixty percent (60%) of the property value required to generate the tax revenue for the Series 2018 Bonds.

Discussion then ensued regarding the Series 2018 Bond’s offering documents, including the POS and NOS, and anticipated sale date of January 10, 2018.

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 Order Adopting POS, approving NOS and Authorizing Distribution Thereof, a copy of which is attached as hereto; 2) authorized advertisement for the sale of the District’s bonds; and 3) established a meeting date of January 10, 2018, for the sale of the District’s bonds.

Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the MSRB Rule G-23 and G-42 Disclosure Information letters.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner then reviewed the Tax Assessor-Collector’s Report for the months of October 2017 and November 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 6.84% of the 2017 taxes have been collected as of October 31, 2017.

Discussion ensued concerning the termination of water service to 2016 delinquent tax accounts.  Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board authorized termination of service on January 5, 2018, due to non-payment of delinquent taxes.

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

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 December 13, 2017, and a Revenue and Expenditure Comparison for 2016 and 2017 as of December 13, 2017, copies of which are attached to the Bookkeeper’s Report.

Ms. Turner then presented the General Fund Budget and Wastewater Treatment Plant (“WWTP”) Budget for Fiscal Year Ending (“FYE”) December 31, 2018.  Discussion ensued.  Mr. Barner presented to the Board an Order Adopting General Operating Budget for FYE December 31, 2018 and Order Adopting Budget for the WWTP for FYE December 31, 2018.  Upon a motion by Director Leasure, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Order Adopting General Operating Budget for FYE December 31, 2018 and Order Adopting Budget for the WWTP for FYE December 31, 2018, copies of which are attached hereto.

Upon a motion by Director Patton, seconded by Director Barlow, 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 8137 through 8139 and 8141 through 8165 from the General Operating Fund, with check number 8103 being voided; 3) authorized payment of check numbered 1193 from the Capital Projects Fund; and 4) authorized payment of checks numbered 1759 through 1764 from the Sewage Treatment Plant Fund.

ENGINEER’S REPORT

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

Mr. Abshire reported that Jones Carter awaits data from R. W. Harden regarding the Buckingham Catahoula Well.

Mr. Abshire then further discussed the Drainage Improvements and reported that Jones Carter continues to meet with each of the affected property owners to discuss such improvements.  Mr. Abshire also reported that Jones Carter continues to coordinate with the Attorney on the necessary easement and property acquisitions.  Mr. Abshire went on to report that according to the current project schedule, Jones Carter expects to begin advertising in January 2018, receive bids and prepare contracts in February 2018 and begin construction in the second quarter of 2018.  Mr. Abshire requested the Board’s authorization to proceed with advertisement of the Drainage Improvements.

Mr. Abshire next discussed drainage improvements in Zone 2, including the extreme event overland swale (the “Swale”) between the properties at 12339 Browning Drive and 12331 Browning Drive.  After meeting with the property owners affected by the Swale, Mr. Abshire suggested the Swale be designed as a short-width vertical wall, concrete structure.  Discussion ensued regarding the effectiveness and costs of such design.  It was the consensus of the Board that the Swale be designed as recommended.

Concerning the WWTP improvement project, Mr. Abshire first reported that Jones Carter is scheduled to submit the preliminary construction plans to local agencies for review the week of December 18, 2017.  Mr. Abshire added that Jones Carter anticipates obtaining agency approvals and to begin advertising in early February 2018, and present bids for the Board’s review at the March 14, 2018 meeting.

Mr. Abshire then reported that Bond Application Report No. 7 was approved by the Texas Commission on Environmental Quality (the “TCEQ”) and Jones Carter is providing bond sale assistance to the Financial Advisor.

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 within the next two (2) weeks.  Mr. Abshire reminded the Board that the inspection will be a mechanical and electrical inspection of both water plant facilities.

Mr. Abshire then presented the Jones Carter Rate Increase Notice effective January 1, 2018.

Upon a motion by Director Barlow, seconded by Director Patton, 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 proceed with advertisement of the Drainage Improvement Project; and 3) approved the Jones Carter Rate Increase Notice effective January 1, 2018.

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 95.70%.  Mr. Wright next reported that the District had one (1) paid tap last month and the District has a total of 1,700 connections.

Mr. Wright reviewed the list of service termination notices and noted that 218 such notices were mailed to customers.

Mr. Wright next reported that First Billing will commence providing services in January 2018 and customer bills will be mailed in February 2018.

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.

MCMUD 9

It was reported that MCMUD 9’s engineer, Mark Adam, is updating the five (5) year program for the sanitary sewer project on Section 10-17.

WEBSITE REPORT

Director Patton reported that website usage has increased and the District’s Rate Order was uploaded to the website.

ATTORNEY’S REPORT

Mr. Barner reminded the Board that the District is in the second (2nd) year of its two-year (2) engagement letter with McCall Gibson Swedlund Barfoot PLLC to perform the District’s audits for the FYEs December 31, 2016 and December 31, 2017.  Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board confirmed its engagement of McCall Gibson Swedlund Barfoot PLLC to prepare the District’s audit for FYE December 31, 2017.

Next, Mr. Barner discussed renewal of the District’s policy with AquaSurance, LLC (“AquaSurance”).  Discussion ensued.  It was the consensus of the Board the Attorney request a renewal for the next policy term from AquaSurance.

Mr. Barner then discussed Senate Bill 1812, which requires the District to file an annual eminent domain report.  Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized Mr. Barner to file the annual eminent domain report on behalf of the District.

The Board discussed renewing the District’s membership in the AWBD.  Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized the renewal of the District’s membership in AWBD and authorized payment of same.

Mr. Barner distributed the Annual Agenda for 2018 and explained that the Annual Agenda is for informational purposes only.

ELECTION AGENDA

Mr. Barner discussed the appointment of a designated agent for the May 5, 2018 Directors Election to perform the duties set forth in Sections 31.122 and 31.123 of the Texas Election Code, as amended.  Mr. Barner explained that a copy of the Notice of Appointment of Designated Agent will be posted at the Walden Yacht Club, 13101 Melville Drive, Montgomery, Texas 77356, and at the offices of Radcliffe Bobbitt Adams Polley PLLC, 2929 Allen Parkway, Suite 3450, Houston, Texas 77019-7120, the District’s designated agent.  Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board appointed Radcliffe Bobbitt Adams Polley PLLC as the District’s designated agent for the May 5, 2018 Directors Election.

Next, Mr. Barner reported that the District must post the Notice of Deadline to File Applications for Place on the Ballot no later than Monday, December 18, 2017.  Mr. Barner also reported that the first day to file an application for a place on the ballot is Wednesday, January 17, 2018, and the last day to file an application for a place on the ballot is Friday, February 16, 2018.

Mr. Barner next discussed a joint election agreement with Montgomery County and stated that the Election Services Agreement, Joint Election Agreement and estimate of election costs has not yet been received from Montgomery County.

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 11:45 a.m. to discuss matters within the attorney/client privilege and real estate.  Present for the executive session were the Board of Directors and Mr. Barner.  As of 12:26 p.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.

December 13, 2017 Minutes Signature