Meeting Minutes 2018-04-11

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

APRIL 11, 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, April 11, 2018, at 9:00 a.m., at the Walden Yacht Club, 13101 Melville Drive, Montgomery, Texas 77356, a designated meeting place located inside the oundaries 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
John L. Patton – Assistant Secretary
Randolph C. Moravec – 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”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Michael Others of McCall Gibson Swedlund Barfoot  PLLC  (“Auditor”); Ernie Harris and Charles Barron of Montgomery County Municipal Utility District No. 9 (“MUD 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.

PUBLIC COMMENT

Judd Schleper asked if the Board had an update on the status of the Buckingham Road Catahoula Well Project jointly funded with MUD 9. Mr. Barner stated that the Board has not received any updates on the status of such project that it can discuss at this time and recommended that Mr. Schleper attend MUD 9’s next Board meeting for a possible update.

There were no additional public comments.

DRAINAGE REPORT

Mr. Barner reported that the drainage improvements project (the “Drainage Improvements”) is still in the easement acquisition phase and noted that the San Jacinto River Authority (“SJRA”) was now requesting the District obtain some easements from it along the lake front.

AUDIT REPORT

Mr. Others presented the draft audit report for the fiscal year ended December 31, 2017 (“FYE 2017 Audit”), and the Auditor’s  management  letter.  Mr. Others  reviewed  the  draft FYE 2017 Audit and responded to various questions from the Board. Discussion ensued regarding a single audit. Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the FYE 2017 Audit, subject to certain corrections and a 10-day comment period, and authorized submission of such FYE 2017 Audit to the appropriate regulatory authorities.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of March 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 95.48% of the 2017 taxes have been collected as of March 31, 2018. Ms. Turner inquired regarding service terminations due to non-payment of taxes and Mr. Wright responded that two (2) accounts have been terminated and service was restored after delinquent  taxes were paid and service remains off to one (1) other account.

BOOKKEEPER’S REPORT

Ms. Turner 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 next reviewed a Snap Shot Financial Report as of April 11, 2018, and a Revenue and Expenditure Comparison for 2017 and 2018 as of April 11, 2018, copies of which are attached to the Bookkeeper’s Report.

In response to questions from Director Moravec, Ms. Turner explained certain Debt Service Fund requirements, including the Texas Water Development Board (“TWDB”) mandated requirements for maintaining a reserve for payment of the District’s 2011 Series Revenue Notes. Ms. Turner also explained that the Operating Fund accounts noted as “Special  Reserve Accounts” were to distinguish those funds that were generated from the District’s assessment of a groundwater reduction plan (“GRP”) fee. Ms. Turner further explained that the Capital Project Fund and the TexPool Accounts listed under such funds were required to be maintained separately. Discussion ensued. It was determined that accounts noted as “Special Reserve Accounts” no longer needed such designation since the District has expended considerable funds for creating constructing facilities for complying with the District’s GRP.

Ms. Turner noted that the insurance line item on the actual versus budget comparison page needed to be corrected due to a clerical error.

In response to a question regarding the District’s cost comparison pages for bond funds, Mr. Abshire and Ms. Turner explained that certain surplus funds identified from the Series 2012 Tax Bonds are designated for other projects such as the wastewater treatment plant (“WWTP”) project and Buckingham Catahoula Well. Ms. Turner advised that she would identify the designation of such surplus funds on such comparison page going forward.

Next, Ms. Turner presented a resolution to add Director Moravec to the signature cards with the District’s banking institutions.

Upon a motion by Director Barlow, seconded by Director Moravec, 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 8266 through 8302 from the General Operating Fund; 3) authorized payment of checks numbered 1779 through 1783 from  the Sewage Treatment Plant Fund; and 4) approved the resolution adding Director Moravec to the signature cards with the District’s banking institutions.

ENGINEER’S REPORT

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

Messrs. Abshire and Barner reported that the Drainage Improvements would be discussed in closed session.

Mr. Abshire next presented the Capital Projects Schedule, a copy of which is attached to his report. Director Moravec asked that Mr. Abshire update the schedule to designate  the projects that are behind schedule in red.

Mr. Abshire next reported that JoneslCarter is in the process of addressing Montgomery County’s (the “County”) comments to the WWTP Improvement Project design plans, which includes obtaining SJRA concurrence for effluent discharge into Lake Conroe.

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 MUD 9 was 96.45%. Mr. Wright next reported that the District had no paid taps last month and the District has a total of 1,712 connections.

Mr. Wright reviewed the list of service termination notices and noted that 189 such notices were mailed to customers and three (3) delinquent accounts were terminated.

Mr. Wright next discussed a sanitary sewer line along Hemingway that appeared to be holding some water. Mr. Wright stated that he would provide the Board and Mr. Abshire  with the exact location of the sagging the line for further investigation.

In response to a question from Director Moravec, Mr. Wright discussed the District’s billing cycle and collections for such billing cycle as stated in his report and stated that he would provide Director Moravec with additional information regarding collection and billing cycles prior to next meeting.

In response to a question from Director Tryon regarding increased levels of total dissolve solids at the WWTP, Mr. Wright indicated that such levels were higher than normal due to rainfall last month.

In response to a question from Director Patton regarding the amount of flow into the WWTP by the District and MUD 9, Mr. Wright responded such flow is close to equal between both districts.

Mr. Wright then reported that AVR, Inc. (“AVR”) has informed him that it will be charging a fee to transfer necessary billing data to First Billing Services. Mr. Wright stated that Hays North has agreed to absorb the costs of such fee until such time as changes can be with Hays’ agreement with AVR.

Mr. Wright next responded to questions from Directors Leasure and Patton regarding various operations charges, including charges related to flushing the District’s water distribution system.

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.

WALDEN COMMUNITY IMPROVEMENT ASSOCIATION (“WCIA”)

Director Tryon next discussed a report from a property owner on Ripplewind Drive that was complaining of a malodorous sump pump located on an adjacent property.  It  was determined that although such pump is not a District issue, that such pump may be the WCIA’s responsibility or the responsibility of the property owner. Director Tryon stated that he would inform the WCIA and the property owner that made the complaint.

MUD9REPORT

MUD 9 directors Harris and Barron had no updates regarding MUD 9.

LAKE CONROE COMMUNITIES NETWORK (“LCCN”)

A question was asked about a check in the amount of $250 payable to the LCCN for the annual renewal of the membership fee. It was the consensus of the Board to pay the membership fee for one (1) more year. It was noted that the Board would like to receive written reports from the LCCN every two (2) months.

WEBSITE REPORT

Discussion ensued regarding setting up a District email server. Mr. Barner stated that Off Cinco can establish and maintain email accounts for the District’s Directors for approximately

$25 per month and recommend that the Directors authorize setting up such accounts so that District-related business can be easily separated from personal emails. Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized Off Cinco to establish email accounts for the Directors.

ATTORNEY’S REPORT

Mr. Barner first discussed emergency preparedness and Mr. Wright indicated that the District’s facilities are in good condition and the generator operations and maintenance will be reviewed in May.

Next, Mr. Barner asked about the Board’s interest in participating in the SJRA Stormwater Inlet Marking (SwIM) Program. Director Tryon stated that there are two (2) Boy Scout troops in the District that can install the inlet markers. Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board authorized the District’s participation in and installation of inlet markers through the SwIM Program.

Mr. Barner next explained that the District has an ongoing obligation to update, on an annual basis, certain financial information, as required by the District’s Bond Orders for all bond issues after 1995, which information will serve to keep bondholders and other interested parties apprised of the financial status of the District. Mr. Barner then requested the Board’s authorization to prepare and file such materials with the appropriate agencies, including the TCEQ, the TWDB, the Texas Comptroller of Public Accounts (the “Comptroller”) and the Electronic Municipal Markets Access website.

Upon a motion by Director Moravec, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board approved unanimously to authorize the Attorney to prepare and file the required continuing disclosure materials with the appropriate agencies, including the TCEQ, TWDB and Comptroller.

Mr. Barner then presented a proxy for the election of members of the board of directors of the Build America Mutual Assurance Company (“BAM “), the insurer of the District’s Series 2013 bonds. It was the consensus of the Board to decline execution of the proxy or election of any members to the BAM board.

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 10:55 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.

Director Moravec exited the meeting at this time.

Upon a motion by Director Tryon, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board declared the Executive Session was ended at 12:01 p.m.

RECONVENE IN OPEN SESSION

As of 12:01 p.m., the President declared the Executive Session was ended and the public session was resumed. Upon a motion by Director Barlow, seconded by Director Patton, after  full discussion and with all Directors present voting aye, the Board authorized the Attorney to prepare correspondence to the City of Conroe (the “City”) regarding payment of fees for review

of WWTP plans according to the terms discussed in Executive Session and to respond to letters from Robert Spies and Garrett Ritter according to the terms discussed in Executive Session.

APPROVAL OF MINUTES

The President next directed the Board to the approval of the March 14, 2018 regular meeting minutes and the March 15, 2018 special 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 March 14, 2018 regular meeting minutes and the March 15, 2018 special meeting minutes.

ADMINISTRATIVE MATTERS

Mr. Barner then discussed filling the Assistant Secretary position on the Board.  It was the consensus of the Board to appoint Director Patton as Assistant Secretary.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting

was adjourned.

Secretary, Board of Directors Signature