Meeting Minutes 2018-10-10

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

OCTOBER 10, 2018

The Board of Directors (the “Board” or “Directors”) of Montgomery County Municipal Utility District No. 8 (the “District” or “MUD 8”) met in regular session, open to the public, on Wednesday, October 10, 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
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” or “MAC”); Justin Abshire of Jones|Carter (“Engineer” or “Jones|Carter”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Robert Ginandt 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.

DRAINAGE REPORT

Mr. Abshire introduced himself and provided an update regarding the Drainage Improvement Project (the “Drainage Improvements”) and reported that contract for demolition of certain property located in Zone 1 will be executed at today’s meeting.  Mr. Abshire also reported that he will meet with the contractor, Cherry Moving Co., Inc., later this week or early next week so the demolition project can move forward.

Mr. Abshire next reported that bid results for the Drainage Improvements have been received and that Rebel Contractors, Inc. (“Rebel”) was the lowest bidder for such improvements, construction of which is estimated to be $999,810.50.  In response to a question, Mr. Abshire further reported that once the contract is approved by the Board, Rebel will provide the requisite insurance and bond documents for RBAP and Jones|Carter to review.  After such documents are approved, the contract may then be circulated for the Board’s execution.

In response to a question, Mr. Abshire stated that there will be pre-construction conferences scheduled with Rebel and with affected residents regarding the schedule for the Drainage Improvements and that he anticipated that Drainage Improvements would be completed by May 2019.

APPROVAL OF MINUTES

The President next directed the Board to the approval of the September 12, 2018 regular meeting minutes.  Director Moravec requested changes to the minutes and inquired whether account numbers of delinquent tax accounts should be included in the minutes.  Mr. Barner responded that it is the Board’s discretion to keep the account numbers in the minutes.  It was the consensus of the Board to exclude the account numbers on future minutes.  Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the September 12, 2018 regular meeting minutes, subject to certain corrections.

Members of the public exited the meeting at this time.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner then reviewed the Tax Assessor-Collector’s Report for the month of September 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 99.16% of the 2017 taxes have been collected as of September 30, 2018.  Ms. Turner next reported that billing of the 2018 taxes will begin in October and collections will be reported in November.

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 next reviewed current year-to-date revenues and expenditures against the budget.

Ms. Turner first reported that checks that were placed on hold at the September Board meeting have been voided.

Next, Ms. Turner discussed Entergy and CenterPoint Energy billings.  Discussion ensued regarding the due dates and penalties of such billings.  Ms. Turner discussed her conversations with CenterPoint concerning billings.  Ms. Turner also reported that invoices from Off Cinco and RBAP were received after her report was finalized and those invoices will be reflected on next month’s Bookkeepers Report.

Ms. Turner reviewed a Snap Shot Financial Report as of October 10, 2018, and Revenue and Expenditure Comparison for 2017 and 2018 as of October 10, 2018.

Director Moravec inquired regarding the invoice for security services.  Mr. Wright responded that the invoice is related to facility security.  Discussion ensued regarding facility security procedures.

Director Moravec next inquired regarding payment of a Jones|Carter invoice from the Capital Projects Fund in the amount of $37,018.25 for drainage improvements.  Mr. Abshire responded that such billing was for additional services and a percentage of construction of the Drainage Improvements.  Mr. Abshire stated that he will provide the Board with a more detailed itemization of the work described in the invoice.

Ms. Turner stated she will transmit the Utility Usage and Expenses, a copy of which is attached to the Bookkeeper’s Report, to Director Patton for publication on the District’s website.  Ms. Turner noted that publication of this information must be reported annually.

Regarding the proposed Wastewater Treatment Plant (the WWTP”) budget for Fiscal Year Ending (“FYE”) 2019 (the “FYE 2019 WWTP Budget”), Mr. Abshire presented an estimated draw schedule for the WWTP Improvement Project for budgeting purposes, a copy of which is attached, and noted the Engineer’s fee is subject to change.  Mr. Abshire stated that an inspector and an engineer will be on-site at all times during the WWTP Improvement Project and Ms. Turner indicated that related costs will be included in the FYE 2019 WWTP Budget, subject to MUD 8’s approval.

Ms. Turner reported that she will present the draft General Operating Fund budget for FYE December 31, 2019, at the November 14, 2018 Board meeting.  Mr. Barner recommended distribution of such budget before such meeting and asked the District’s consultants provide Ms. Turner with comments to such budget as soon as possible.

Mr. Barner and Ms. Turner next discussed with the Board the necessity of engaging Mark Burton to prepare additional financial statements for the District in order to comply with Texas Water Development Board (the “TWDB”) requirements.  Mr. Barner explained such requirements and recommended the District authorize engaging Mark Burton in order to satisfy such requirements.

Mr. Barner reported that he is currently reviewing the amended Agreement for Bookkeeping Services with Municipal Accounts & Consulting, L.P. and it will provide MAC with comments prior to the November 14, 2018 meeting.

Ms. Turner presented the Texas Class Resolution to Participate, a copy of which is attached hereto, for Board execution.

Discussion then ensued about purchasing Certificates of Deposit and Tex Pool and Texas Class investments.  Ms. Turner stated that she will withdraw funds from the Tex Pool account with the lowest interest rate and deposit such funds in a Texas Class account.  Ms. Turner went on to state that she will then alternate months between Tex Pool and Texas Class investments.  Ms. Turner also stated that she will further investigate investment information for Certificates of Deposit.

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 Tax Assessor-Collector’s Report, as presented; 2) approved the Bookkeeper’s Report, as presented; 3) authorized payment of checks numbered 8458 through 8486 from the General Operating Fund; 4) authorized payment of checks numbered 1814 through 1818 from the WWTP Fund; 5) authorized payment of check number 1214 from the Capital Projects Fund; 6) authorized execution of the Resolution to Participate in Texas Class; 7) authorized engaging Mark Burton to prepare the necessary financial statements for satisfaction of the TWDB requirements; 8) authorized the Bookkeeper to distribute the draft FYE 2019 WWTP budget to MUD 9; and 9) authorized the Bookkeeper to withdraw half of the funds from an existing Tex Pool fund with the lowest interest rate and deposit such funds into a Texas Class fund offering a higher interest rate.

ENGINEER’S REPORT

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

Mr. Abshire reported that contracts for the WWTP Improvement Project will be signed outside of today’s meeting.

Mr. Abshire next presented a proposal for supplemental construction management services for the WWTP Improvement Project (“Additional Services Proposal”), a copy of which is attached to the Engineer’s Report.  Director Tryon stated that he reviewed the Additional Services Proposal and it meets with his approval.  Director Tryon also directed the Engineer to keep in close contact with the Walden Community Improvement Association (“WCIA”) General Manager.  Director Patton recommended a meeting with Jones|Carter and the WCIA General Manager.

Mr. Abshire presented a Bid Tabulation for the Drainage Improvements Project, a copy of which is attached to his report.  Mr. Abshire reported that Jones|Carter received two (2) bids for the Drainage Improvements Project and noted that one (1) bid arrived too late and was not considered.  Mr. Abshire added that the envelope containing the late bid will remain sealed.  Mr. Abshire went on to report that the low bid was submitted by Rebel, as discussed earlier in the meeting, in the base bid amount of $999,810.50.  Discussion ensued regarding the difference in bids between Rebel and Solid Bridge Construction, LLC.  Mr. Abshire stated that Rebel spent a great amount of time in the District investigating the project area.  Mr. Abshire did not recommend the Board’s approval of the alternate bid.  Mr. Wright discussed his recent experience with Rebel and stated Hays North has a good working relationship with Rebel.

Mr. Abshire next updated the Board on his investigation into stormwater flow on Ripplewind Drive.  Mr. Abshire informed the Board that while Jones|Carter did not disagree with the drainage study provided by Mr. and Mrs. Ausmus, Jones|Carter had not determined whether or not the District could make any improvements to drainage on Ripplewind Drive or if such improvements were private property owner’s responsibility.

Mr. Abshire then reported that Jones|Carter was scheduled to receive bids for the Water Plant Nos. 1 and 2 Improvements Project on October 9, 2018, but issued an addendum to postpone the bid date by a couple of weeks.  Mr. Abshire reported the Operator informed Jones|Carter of an issue at Water Plant No. 1 earlier this week related to one of the hydrotanks that may need to be added to the project.  Mr. Abshire also reported that the additional time will allow Jones|Carter to properly identify a solution and include it, as necessary, into the project.  Mr. Abshire went on to report that he expects to present bids results and a recommendation of award at the November 14, 2018 Board meeting.

Mr. Abshire reported that the Capital Improvement Plan should be ready for presentation at the November 14, 2018 Board meeting.

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 Engineer’s Report, as presented; 2) authorized Director Tryon and one (1) available Director to execute the WWTP contract upon City of Conroe approval; 3) awarded the contract for the Drainage Improvements Project to Rebel, subject to the Attorney’s review of the contract, and authorized Jones|Carter to immediately commence getting the contract ready for execution by Director Tryon and one (1) available Director; 4) authorized Directors Tryon and Barlow to execute the contracts for the demolition of property within Zone 1 of the Drainage Improvements Project; and 5) approved the Additional Services Proposal.

OPERATOR’S REPORT

Mr. Wright 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 95.26%.  Mr. Wright next reported that the District had one (1) new tap last month and the District has a total of 1,725 connections.

Mr. Wright then reported there were 70 e-statements sent out and 309 online bill payments made during the month of September.  Discussion ensued regarding a prompt on the District’s website for e-statements.  Director Barlow indicated that she will add a notation on the Walden newsletter regarding e-statements and online bill payments.

Mr. Wright next reviewed the list of service termination notices, noting that 179 such notices were mailed to customers and no delinquent accounts were terminated.

In response to a question, Mr. Wright reported that he will add monthly wastewater effluent testing results to the Operator’s Report.

Mr. Wright then discussed a recent repair near 3707 Pine Hollow Lane and reported that the Operator is trying to collect funds for damages caused by a contractor.

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

WATER SMART PROGRAM

Mr. Wright reported that he has all documentation needed for the application.  Director Moravec stated that he will give a presentation at the men’s breakfast and the Rotary Club before the end of the year.  Discussion then ensued regarding other prerequisites for the application.

LONE STAR GROUNDWATER CONSERVATION DISTRICT (“LSGCD”)

Mr. Barner updated the Board regarding the LSGCD directors’ election on November 6, 2018, and stated that all positions are contested except for Position 1.  Mr. Barner informed the Board there is additional information on the LSGCD website regarding the election.

MUD 9 REPORT

MUD 9 director Ginandt provided an update regarding MUD 9’s September meeting and the September 11, 2018 town hall meeting to discuss the November 6, 2018 bond election.  MUD 9 director Ginandt also reported that MUD 9 is moving forward with a minor drainage project.

MUD 9 director Ginandt reported that funds for major drainage projects need to come from the bond election funds based.

MUD 9 director Ginandt discussed the settlement with Alsay Incorporated and completion of the well.  Discussion ensued.

MUD 9 director Ginandt reported that Judy Sanders resigned from the MUD 9 board.

Director Barlow further updated the Board regarding various operational issues reported at the MUD 9 board meeting.  Director Barlow further stated that the possibility of a new restaurant was to be constructed at Grand Harbor and Walden Road.

WEBSITE REPORT

Mr. Barner updated the Board regarding the District website’s compliance with the Americans with Disabilities Act and stated he will follow-up with Off Cinco regarding comments to the Website Accessibility Statement.

INVESTMENT POLICY

Mr. Barner presented the Investment Policy and explained that reviewing such policy is an annual requirement of the Texas Public Funds Investment Act.  A discussion ensued regarding the investment strategies included in the policy and the various types of instruments allowed for investment of funds according to the Investment Policy and the TPFIA.  A further discussion ensued regarding investing bond proceeds in treasuries and other instruments backed by the federal government.

Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the Order Amending List of Qualified Brokers, a copy of which is attached hereto, and approved changes to the Investment Policy to amend the District’s investment strategy, Exhibits “A-1” and “A-2” of the Investment Policy, regarding operating, capital project and tax funds, to increase the number of days from one hundred eighty (180) days after the date of purchase to 365 days or [one (1) year] and remove “provided that the District’s Board of Directors may authorize an investment with a longer maturity” from “Exhibits A-1” and “A-2.”

ANNUAL REVIEW OF RATE ORDER

Mr. Barner discussed procedures for the annual review of the Rate Order.  The Board determined no amendments were necessary at this time.

GOVERNMENT FINANCE OFFICERS ASSOCIATION OF TEXAS (“GFOA”) FALL CONFERENCE

Director Moravec explained his attendance at the GFOA from October 23-28, 2018 in Galveston, Texas.  Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board authorized Director Moravec’s attendance at the GFOA Fall Conference, including Director fees.

BED AND BANKS

Director Patton inquired regarding the Bed and Banks Permit.  Discussion ensued.  Director Leasure recommended organizing a study team consisting of two (2) directors from MUD 8 and MUD 9 and the District’s consultants.  Director Barlow suggested scheduling a town hall meeting with the WCIA.  Director Patton asked Ms. Turner to add $30,000 to the 2019 budget for research.  Mr. Abshire stated that he will investigate costs and provide his findings to Ms. Turner.

Ms. Turner, Mr. Abshire, Mr. Wright and Mr. Ginandt exited the meeting at this time.

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 11:54 a.m. to discuss matters within the attorney/client privilege and real estate.  Present for all or portions of the executive session were the Board of Directors; Mr. Barner; and Ms. Brewer.  The Board declared the Executive Session was ended at 12:20 p.m.

RECONVENE IN OPEN SESSION

As of 12:20 p.m., the President declared the Executive Session was ended and the public session was resumed.

WALDEN FIRE STATION PROPERTY (the “PROPERTY”)

Discussion ensued regarding Montgomery County ESD No. 2’s (“ESD 2”) offer to purchase the Property.  Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board authorized Mr. Barner to communicate with ESD 2 as discussed in closed session.

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

PASSED AND APPROVED this the 14th day of November, 2018.

 

                                                                                                                                                                        Secretary, Board of Directors

October 10, 2018 Minutes Signature

October 10, 2018 Minutes Signature