Meeting Minutes 2018-01-10

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

JANUARY 10, 2018

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, January 10, 2018, at 11:00 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, attorney, and Diane F. Brewer, paralegal, 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 the District should receive Montgomery County (the “County”) approval by the end of February 2018 and the Engineer is moving forward with acquiring drainage easements.  Mr. Abshire went on to report that once all plan approvals are obtained, Jones Carter will proceed with advertising for bids.  In response to a question, Mr. Abshire stated that Zone 1 is currently on hold pending resolution of certain property acquisition matters.

PUBLIC COMMENT

There were no additional public comments.

DIRECTOR RESIGNATION

Director Tryon announced Daniel L. Davis’ resignation from the MCMUD 8 Board.  Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board accepted the resignation of Director Davis.  Director Tryon indicated that a letter of thanks should be sent to Mr. Davis for his many years of work with the District and the Walden community.

APPROVAL OF MINUTES

The President next directed the Board to the approval of the December 13, 2017 regular meeting minutes.  Upon a motion by Director Barlow, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the December 13, 2017 regular meeting minutes.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of December 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 59.13% of the 2017 taxes have been collected as of December 31, 2017.

In response to a question concerning changes in Federal income tax laws, Ms. Turner stated that tax collections are higher than they were at this time in 2016.

Upon a motion by Director Barlow, seconded by Director Leasure, 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 January 10, 2018, and a Revenue and Expenditure Comparison for 2016 and 2017 as of January 10, 2018, copies of which are attached to the Bookkeeper’s Report.

Upon a motion by Director Barlow, seconded by Director Leasure, 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 8164 through 8196 from the General Operating Fund, with check number 8141 being voided; 3) authorized payment of check numbered 1193 from the Capital Projects Fund; 4) authorized payment of checks numbered 1765 through 1768 from the Sewage Treatment Plant Fund; and 5) authorized payment of checks numbered 1194 through 1195 from the Capital Projects Fund.

ENGINEER’S REPORT

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

Concerning the wastewater treatment plant (“WWTP”) improvement project, Mr. Abshire reported that Jones Carter expects to submit preliminary construction plans to the local agencies for review.  Mr. Abshire next reported that Jones Carter expects to obtain plan approval by the end of February 2018, begin advertisement in March 2018 and present bids for Board review in April 2018.

Mr. Abshire next reported that he expects the final WWTP permit to be issued by the TCEQ within the month.

Mr. Abshire then reported that annual water plant inspection of Water Plant Nos. 1 and 2 took place on January 8, 2018, and noted no major issues.  Mr. Abshire went on to report that he expects to have the inspection reports available for presentation to the Board at the February Board meeting.  Mr. Abshire added that the inspection was a mechanical and electrical inspection of both water plants.

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 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 96.60%.  Mr. Wright next reported that the District had no paid taps last month and the District has a total of 1,701 connections.

Mr. Wright reviewed the list of service termination notices and noted that 216 such notices were mailed to customers.

Mr. Wright reported a total of 21 taps was installed in 2017.  In response to a question, Mr. Wright reported that no taps have been installed so far this month.

Corey Howell entered the meeting at this time.

2018 UNLIMITED TAX BONDS

Mr. Howell presented the bids for the District’s $14,000,000 Unlimited Tax Bonds, Series 2018.  Mr. Howell reported that six (6) bids were received.  Mr. Howell went on to report that the lowest net effective interest rate and recommended bid came from SAMCO Capital Markets, Inc. (“SAMCO”) at the rate of 3.43%.  Mr. Howell discussed combined cash flows and the present favorable borrowing environment.  Mr. Howell reported that the District received a Standard & Poor’s bond rating of A+.  Mr. Howell also reported that SAMCO bid insurance in the amount of $77,900.

Ms. Turner reported that $255,000 was transferred to the District’s Debt Service fund as discussed at the December Board meeting.  Mr. Howell recommended transferring $190,000 to the District’s Debt Service Fund around the date of closing on February 8, 2018.

Mr. Barner presented the agenda items related to the Series 2018 Bonds and explained the process for bond issuance.  Mr. Barner presented an Order Authorizing Issuance of $14,000,000 Unlimited Tax Bonds, Series 2018; a Paying Agent/Registrar Agreement; and Other Matters (the “Bond Order”) in connection with the bond sale.  Discussion ensued concerning such sale.

Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board:  1) accepted the bid from SAMCO; 2) authorized the Financial Advisor and Attorney to finalize the Official Statement; 3) approved the Order Authorizing Issuance of the Series 2018 Bonds; 4) approved and authorized execution of the General Certificate, Signature Identification and No-Litigation Certificate, Tax Exemption Certificate, Paying Agent/Registrar Agreement with ZB National Association, dba Amegy Bank and all other documents; 5) authorized the Financial Advisor and Attorney to take all other necessary actions in connection with the sale and issuance of the Series 2018 Bonds; and 6) authorized the Bookkeeper to transfer $190,000 to the Debt Service Fund.

Ms. Turner inquired regarding expenses associated with the bond issue.  Mr. Howell responded that he will circulate a draft Closing Memorandum by the end of the week.  Mr. Howell noted that since the Series 2018 bonds are over $10,000, it will not be bank-qualified.

Mr. Howell exited the meeting at this time.

OPERATORS REPORT (continued)

Mr. Wright discussed Alternative Water Source expenses.  A discussion ensued regarding First Billing.  Mr. Wright reported that First Billing is ready to move forward and presented a contract for Board execution.  Mr. Wright also reported that information will be posted on the District’s website after he communicates with First Billing.  Mr. Wright stated that he will email information from First Billing to the Board and Mr. Barner.  Discussion then ensued regarding paperless billing.

Director Tryon inquired regarding whether a drain in Lot 35, Section 7A can be cut off and Mr. Wright responded that he will investigate such drain and seal it off.

Director Barlow commended Hays for its fast response to District customers regarding meters.

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

LONE STAR GROUNDWATER CONSERVATION DISTRICT (“LSGCD”)

Director Patton discussed an article in The Courier written by an investigative reporter regarding LSGCD.  Mr. Barner reported that Lone Star’s president provided an update regarding the lawsuit which is not moving as quickly as Lone Star had hoped.

MCMUD 9

MCMUD 9 Director Wilson stated that the MCMUD 9 regular meeting is scheduled for January 25, 2018.

WEBSITE REPORT

Director Patton reported that increased usage of the District’s website continues.  Mr. Patton next emphasized a need for the Operator to provide information related to credit card billing services through First Billing in order to effectively notify the District’s customers of such services.  Mr. Wright stated that he would coordinate with Mr. Patton to provide such information.

ELECTION AGENDA

Mr. Barner presented an Order Calling Directors Election, a copy of which is attached hereto which calls a Directors Election for May 5, 2018.

Mr. Barner next presented an Election Services Agreement with Montgomery County and a Joint Election Agreement with Montgomery County, copies of which are attached hereto.

Discussion ensued regarding the appointment of a Director to fill the unexpired term of Director Davis’ position on the Board.

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 Order Calling Directors Election; 2) approved the Election Services Agreement with Montgomery County; 3) approved the Joint Election Agreement with Montgomery County; and 4) approved payment of a deposit to Montgomery County for conduct of the joint election.

At this time, a member of the public inquired regarding the timing to get Zone 1 back on track.  Mr. Barner stated that he is unable to provide an update at this time, but he will provide an update as soon as it is available.

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 12:36 p.m. to discuss matters within the attorney/client privilege and real estate.  Present for the executive session were the Board of Directors and Messrs. Peterson, Abshire and Barner.  As of 1:09 p.m., the President declared the Executive Session was ended and the public session was resumed.

JOINT MEETING WITH MCMUD 9

Mr. Barner asked the Board for available dates to meet with MCMUD 9 to discuss the Bed and Banks Permits and the Districts’ GRP Facilities.  The Board suggested meeting on Monday, February 5, 2018 or Wednesday, February 7, 2018.  Mr. Barner stated that he would verify the best date for such meeting with MCMUD 9’s general counsel and update the Board as soon as possible.

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

January 10, 2018 Minutes Signature