Meeting Minutes 2018-02-14

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

FEBRUARY 14, 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, February 14, 2018, 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
[ vacant ] – Assistant Secretary
John L. Patton – Director

All members of the Board were present.  Also attending were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper”); Justin Abshire of Jones|Carter (“Engineer” or “Jones|Carter”); John Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Harry Peyton of AquaSurance, LLC; Nancy Eargle 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.

Director Tryon asked members of the public if they had any questions.  Jim Boyd inquired about a house located on Willow Bend in the District that sustained heavy damage due to a burst pipe during freezing weather.  Mr. Boyd told the Board he understands that the property owners had vacated the property as a result of the damage.

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 plans for the Drainage Improvements are complete and the District received Montgomery County’s (the “County”) verbal approval.  Mr. Abshire next reported that he is in the process of preparing bidding documents and he hopes to present bids at the April Board meeting for certain components of the Drainage Improvements.  Mr. Barner added that such timeline is dependent on acquisition of easements for certain improvements and work beginning in May 2017.

PUBLIC COMMENT

There were no additional public comments.

APPROVAL OF MINUTES

The President next directed the Board to the approval of the January 10, 2018 regular meeting minutes.  Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the January 10, 2018 regular meeting minutes.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of January 2018, 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 85.61% of the 2017 taxes have been collected as of January 31, 2018, and noted that taxes collected after January 31, 2018 are subject to penalties.

The Board then considered approval of the Order Determining Ad Valorem Tax Exemptions for the 2018 tax year, a copy of which is attached hereto.  Discussion ensued regarding the residential homestead exemption to any individual who is disabled or is 65 years of age or older in the amount of $30,000 as provided in §11.13(d), Texas Property Tax Code.  Upon a motion by Director Barlow, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the Order Determining Ad Valorem Tax Exemptions for the 2018 tax year.

The Board next discussed adopting the Resolution Authorizing Petition Challenging Appraisal Records, a copy of which is attached hereto.  Mr. Barner explained that the Board adopts this resolution on an annual basis authorizing its Tax Assessor-Collector to challenge the appraisal records on behalf of the District, if the Tax Assessor-Collector identifies a need for such challenge.

The Board then discussed adopting the Resolution Implementing Penalty on 2017 Delinquent Taxes and Contracting with Attorneys to Collect Delinquent Taxes, a copy of which is attached hereto.  Mr. Barner explained that pursuant to Sections 6.30, 33.07, 33.08 and 33.11 of the Texas Property Tax Code, as amended, the District may levy an additional 20% penalty on 2017 real property taxes that remain delinquent as of July 1, 2018, and an additional 20% penalty on 2017 personal property taxes that remain delinquent as of April 1, 2018, to help defray the costs of collection, if the Board has entered into an agreement with an attorney for the collection of delinquent taxes and if adequate notice of such penalty is provided to property owners.

Discussion ensued regarding three (3) delinquent tax accounts.  Mr. Wright reported that door tags were hung and service was terminated.  Mr. Wright went on to report that one (1) account was paid and service restored.  The Board inquired whether the other two (2) houses are occupied and Mr. Wright responded that he would investigate and report his findings to the Board.

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 Tax Assessor-Collector’s Report; 2) approved the Order Determining Ad Valorem Tax Exemptions; 3) approved the Resolution Authorizing Petition Challenging Appraisal Records; and 4) approved the Resolution Implementing Penalty on 2017 Delinquent Taxes and Contracting with Attorneys to Collect Delinquent Taxes.

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 February 14, 2018, and a Revenue and Expenditure Comparison for 2017 and 2018 as of February 14, 2018, copies of which are attached to the Bookkeeper’s Report.

Ms. Turner next discussed the Quarterly Investment Inventory Report for the Period Ending December 31, 2017, a copy of which is attached hereto.

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 8195 and 8198 through 8233 from the General Operating Fund, with checks numbered 8091, 8123 and 8166 being voided; 3) authorized payment of check numbered 1196 from the Capital Projects Fund; and 4) authorized payment of checks numbered 1769 through 1773 from the Sewage Treatment Plant Fund.

INSURANCE RENEWAL

Mr. Peyton next presented the AquaSurance, LLC Insurance Proposal for the policy term of March 15, 2018 through March 15, 2019, and responded to questions from the Board and Mr. Barner.

Discussion first ensued regarding the Wastewater Treatment Plant (“WWTP”) values since a new WWTP is being constructed.  Mr. Peyton suggested that Property insurance “Extra Expense” could be increased from $100,000 to $500,000.  In response to a question, Mr. Peyton stated that values provided by the Engineer as of March 15, 2018 must be used in the renewal proposal.  Next, Director Patton stated that the $2,500 deductible seems low and Mr. Peyton explained that an incremental reduction in the premium is not cost effective.  Mr. Peyton went on to state that the District can make the deductible at whatever amount it wants and doing so will not affect the premium by very much.

Mr. Peyton next discussed Inland Marine Coverage, Pollution Liability and Hired and Non-Owned Auto Liability Coverages.

Mr. Peyton reminded the Board that AquaSurance now provided Cyber Liability Coverage.  Discussion ensued regarding potential liability, cyber breach and exposure related to customer payments of utility bills by credit card.  Mr. Peyton recommended the District confirm that First Billing indemnifies the District for any damages relating to data breaches.  Discussion then ensued regarding the status of the agreement with First Billing.  Mr. Wright indicated that he would confirm that the District has been designated as an additional insured.  Director Patton stated that a disclaimer should be added to the link to First Billing on the District’s website.  It was the consensus of the Board to carry cyber coverage.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the insurance renewal proposal, a copy of which is attached hereto, and authorized increasing the Property coverage “Extra Expense” to $500,000.

PRESENTATION

At this time, Director Tryon acknowledged Dan Davis’ service to the District, the Walden community and Montgomery County presented a plaque to Mrs. Pat Davis and indicated that a plaque would also be displayed at the Walden Yacht Club.

Mr. Peyton exited the meeting at this time.

ENGINEER’S REPORT

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

Concerning the Drainage Improvements, Mr. Abshire reported that Jones|Carter is coordinating with Mr. Barner and certain property owners to obtain the necessary drainage easements.  Mr. Abshire next reported that once all easements are executed and recorded, Jones|Carter will proceed with advertising for bids.  Mr. Abshire also reported that he will investigate the house discussed during public comment.  Discussion then ensued regarding project costs.  Mr. Abshire stated that Phase I of the Drainage Improvements include Zones 3 through 6 in the amount of $3,500,000.  Mr. Abshire reminded the Board that Phase I does not include Zone 1.

Ms. Turner exited the meeting at this time.

Mr. Abshire reported that the preliminary construction plans for the WWTP Improvement Project are currently under review with the local agencies.  Mr. Abshire also reported that Jones|Carter is currently putting together the bidding matrix and he expects to have bids available for review at the April Board meeting.  Mr. Abshire next reported that although site drainage meets the requirements, Jones|Carter ran a model for the Memorial Day flood which would require detention.  Mr. Abshire presented a drawing of a one-half (1/2) acre detention pond and stated that the District has space for such detention pond.  In response to a question, Mr. Abshire stated that the detention pond would be a dry pond and can be included in the final price of the project.

Mr. Abshire next reported that the final WWTP permit was received from the Texas Commission on Environmental Quality (“TCEQ”) on January 25, 2018, and noted that the new permit will expire on June 1, 2022.  Mr. Abshire discussed the TCEQ review process.

Mr. Abshire then reported that Jones|Carter is finalizing the Annual Water Plant Inspection Reports and that such reports will be presented at the March Board meeting.

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 96.86%.  Mr. Wright next reported that the District had no paid taps last month and the District has a total of 1,708 connections.

Mr. Wright reviewed the list of service termination notices and noted that 158 such notices were mailed to customers and four (4) accounts were terminated.

Mr. Wright reported that one (1) tap was installed last month.

In response to a question regarding termination of service to the two (2) accounts due to non-payment of delinquent taxes discussed earlier in the meeting, Mr. Barner recommended keeping such accounts active.

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.

WEBSITE REPORT

Director Patton stated that publication of information related to credit card and ACH billing services through First Billing on the District’s website cannot occur until Hays provides the necessary information.  Mr. Wright informed the Board that they were still coordinating with First Billing and other Hays’s clients to make First Billing’s services available simultaneously.  Discussion ensued regarding First Billing issues before service can go live.

ATTORNEY’S REPORT

Mr. Barner requested the Board’s acceptance of seven (7) Drainage Easement Agreements for the Drainage Improvements project.  Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board accepted the seven (7) Drainage Easement Agreements.

Mr. Barner next stated that he will meet with Director Leasure to review the District’s Post-Issuance Compliance Policy.

ELECTION AGENDA

Mr. Barner discussed potential dates to canvass the May 5, 2018 Directors Election (the “Election”).  It was the consensus of the Board to canvass such Election on May 11, 2018, at 9:00 a.m.

 

 

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 11:02 a.m. to discuss matters within the attorney/client privilege and real estate.  Present for the executive session were the Board of Directors, Messrs. Abshire and Barner and Ms. Brewer.  As of 11:28 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.

February 14, 2018 Minutes Signature