Meeting Minutes 2019-05-08

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

MAY 8, 2019

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, May 8, 2019, at 9:15 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
John L. Patton – Vice President
Margie Barlow – Secretary
Randolph C. Moravec – Assistant Secretary
Bob Leasure – Director

All members of the Board were present. Also attending were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); Erich Peterson, Justin Abshire and Mason Mueller of Jones|Carter (“Engineer” or “Jones|Carter”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Charles Barron, Robert Vernier, Curt Harris and Robert Ginandt, Board of Directors of Montgomery County Municipal Utility District No. 9 (“MUD 9”); Ross J. Radcliffe and Elliot M. Barner, attorneys, 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.

PRESENTATION REGARDING REQUEST FOR SERVICE FROM TRIPLE-B RV PARK, LAKESIDE (“TRIPLE-B”) AND TAKE ANY NECESSARY ACTIONS ON SAME

Mr. Barner first introduced himself and the Board to those members of the public in attendance. Mr. Barner then explained that Triple-B will first make a presentation to the Board regarding their request for service from the District and that following such presentation, Mr. Scott Sustman would make a presentation requesting that the Board deny Triple-B’s request for service. Mr. Barner further explained that those members of the public wishing to address the Board would have the opportunity and requested that such members hold any questions until both presentations were concluded.

Phil Bullock of Triple-B then introduced himself and presented information related to the intended use of the property to be served and Triple-B’s request for service, a copy of which is attached hereto. Mr. Bullock next explained that such property is an approximately 3.29-acre tract of land located at the end of Brookhaven Drive and that Triple-B intends to develop a luxury recreational vehicle (“RV”) park on such tract (the “RV Park”).

Mr. Bullock went on to explain that the deed for the RV Park property does not contain any restrictions that prohibit Triple-B’s use of the property as an RV park and that such property, which is not platted, is not located within the District’s boundaries or the Walden Community Improvement Association (“WCIA”). Mr. Bullock further explained that Triple-B is requesting water and sanitary sewer service from the District because it prefers receiving public service as opposed to having to install private water and wastewater systems to serve the property.

Mr. Sustman then introduced himself and presented information requesting that the Board deny Triple-B’s request for service, a copy of which is attached hereto. Mr. Sustman explained that in his opinion and the opinion of certain residents, such request should be denied based on several factors, including, but not limited to: 1) the location of the RV Park adjacent to a residential subdivision; 2) traffic congestion and conflicts arising from the use of a residential street being used to access the RV Park; 3) Triple-B’s enforcement of the RV Park’s rules and regulations and failure of such enforcement’s effect on property values within the District; and 4) issues with vehicle, watercraft and trailer storage at/near the RV Park.

Mr. Barner then requested that those members of the public that wished to make comments be as brief as possible. Extensive comments then ensued regarding the RV Park and Triple-B’s request for service to such park.

In response to a question from Director Moravec to those members of the public, a majority of approximately 100 of such members indicated by a show of hands that they did not want the District to provide service to the RV Park.

In response to a question regarding the basis for the District’s evaluation of Triple-B’s request, Mr. Barner stated that the Board does consider the property owners’ concerns. Mr. Barner next stated that there is no mandated criteria and it is the Board’s discretion to serve water and sewer service to the RV Park property. Mr. Barner added that timing of the Board’s decision is up to the Board. Mr. Radcliffe stated that as the District’s attorney, he will not recommend the Board make any decisions until an agreement setting forth the parameters is presented and reviewed by the Board. Mr. Barner then explained preparation of a feasibility study, subject to the Board’s approval. Mr. Barner also stated that the District has never provided service to other RV parks.

Director Tryon then informed those members of the public in attendance that the Board needed to move forward with its meeting agenda and reiterated the Board will consider Triple- B’s request and consider such request further at the District’s June 10, 2019 meeting.

Members of the public in attendance for the presentation exited the meeting at this time and the Board declared a brief recess.

The President then reconvened the meeting and requested public comments from those still in attendance.

PUBLIC COMMENT

In response to a question regarding the effect of heavy rain on the recently installed hydro turf for the drainage swale in Zone 6, Mr. Abshire stated that such swale is not completed and that he has no concerns about such rain. Regarding Zone 1, Mr. Abshire stated that due to the wet weather conditions, not much work has occurred and work will continue through May.

APPROVAL OF MINUTES OF APRIL 10, 2019 MEETING

The President next directed the Board to the approval of the April 10, 2019 regular meeting minutes. Upon a motion by Director Patton, seconded by Director Moravec, after full discussion and with all Directors present voting aye, the Board approved the April 10, 2019 regular meeting minutes, subject to certain corrections requested by Director Moravec.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner first presented information from the Montgomery Central Appraisal District and inquired if the Board wanted to nominate someone to the appraisal board. No action was taken by the Board.

Ms. Turner next reported that she received 2019 preliminary values that reflect a 9.33% increase in taxable values after exemptions.

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of April 2019, 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 96.50% of the 2018 taxes have been collected as of April 30, 2019.

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 District’s budget for the fiscal year ending December 31, 2019.

Ms. Turner then reviewed a Snap Shot Financial Report as of May 8, 2019, and Revenue and Expenditure Comparison for 2018 and 2019 as of May 8, 2019.

Regarding the general fund balance sheet, Ms. Turner stated that she will investigate amounts due from the WCIA regarding solid waste collection.

In response to a question from Director Moravec regarding certain work performed by Mr. Barner related to issues with the purchase of equipment by Allco, LLC (“ALLCO”) from Sanitaire, Mr. Barner indicated that such issues were related to certain concerns expressed by Jones|Carter about Sanitaire’s performance guarantee for certain equipment to be purchased by ALLCO. Mr. Barner explained that he would elaborate further later in the meeting if needed.

Ms. Turner reported that future Bookkeeper’s Reports will be updated to include the Series 2019 Unlimited Tax Refunding Bonds.

Concerning the Buckingham Water Treatment Plant Project, Mr. Abshire reported that funds have been allocated for such project and surplus funds have been approved by the Texas Commission on Environmental Quality (“TCEQ”).

Next, discussion ensued regarding payment to the San Jacinto River Authority for fees related to a jet-ski lift permit. Mr. Barner indicated that he will research the District’s responsibility for payment of such fees. Ms. Turner stated that she will provide Mr. Barner with information regarding the permit.

Ms. Turner next discussed the Quarterly Investment Inventory Report for the Period Ending March 31, 2019, 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 Tax Assessor-Collector’s Report, as presented; 2) approved the Bookkeeper’s Report, as presented; 3) approved the Quarterly Investment Inventory Report, as presented; 4) authorized payment of checks numbered 8676 through 8708 from the General Operating Fund; 5) authorized payment of checks numbered 1861 through 1869 from the Waste Water Treatment Plant (“WWTP”) Fund; and 6) authorized payment of checks numbered 1233 through 1236 from the Capital Projects Fund.

Ms. Turner exited the meeting at this time.

ENGINEER’S REPORT

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

In response to a question from Mr. Abshire regarding the Triple-B RV Park, the Board directed Mr. Abshire to refrain from doing additional work at this time.

Regarding the WWTP Improvement Project (the “WWTP Project”), Mr. Abshire reported that ALLCO is continuing work on underground piping related to the Sequencing Batch Reactor (“SBR”) basins. Mr. Abshire presented Pay Estimate No. 3 from ALLCO in the amount of $94,900.83.

Next, discussion ensued regarding relocation of the 2-inch (2″) water line serving the WCIA. Mr. Abshire reported that he found a new route within the existing easement, but he will continue to investigate such route. Mr. Abshire noted that the cost to relocate the water line is approximately $5,900.

Concerning the Drainage Improvements, Mr. Abshire reported that Rebel Contractors, LLC (“Rebel”) continues work in Zones 3 and 4, and that Rebel began installation of hydro turf in Zone 1.

Mr. Abshire presented Pay Estimate No. 4 from Rebel in the amount of $6,500. Mr. Abshire also presented Change Order No. 5 from Rebel and reported that such Change Order includes additional contract time to account for weather delays, additional days to complete items from Change Order Nos. 1 through 3 related to Zone 1 bulkhead repairs and imported fill at no cost to the District.

Mr. Abshire reported that he is working on the Change Order related to Zone 3 and discussed the need for a coffer dam. Regarding the Change Order to modify the outfall, Mr. Abshire indicated that Rebel will do the work. Discussion ensued.

Mr. Abshire then reported that CFG Industries, LLC (“CFG”) is nearing completion with miscellaneous improvements and coating touch-ups at Water Plant Nos. 1 and 2, including replacement of interior ladders at the ground storage tanks at Water Plant No. 2. Mr. Abshire reported that CFG is expected to complete the contract within the next couple of weeks.

Mr. Abshire presented CFG Pay Estimate No. 2 in the amount of $14,510.25. Mr. Abshire also presented CFG Change Order No. 1 in the amount of $1,500 and stated that such Change Order includes replacement of the roof vent of Ground Storage Tank No. 1 at Water Plant No. 2. Mr. Abshire explained that the vent was originally intended to be recoated, but was found to be in worse condition from the findings of the previous water plant inspection.

Mr. Abshire next presented and reviewed the Capital Improvement Plan for 2019-2024 (the “CIP”). Extensive discussion ensued regarding budgeting, use of bond funds, general operating funds and reserve funds. Director Moravec stated that he plans to prepare a spreadsheet for presentation in the Fall 2019. Mr. Abshire then discussed large projects in the next five (5) years. Regarding water distribution, Mr. Abshire stated that the Board will need to consider a bond election since the District’s current approved bond authority is $2,200,000. Discussion ensued regarding televising sanitary sewer lines and rehabilitating truss pipe. Mr. Abshire reported that he is coordinating with the Operator regarding improvements to lift stations, including automatic transfer switches. Mr. Abshire asked for the Board’s input. Discussion ensued.

Mr. Abshire reported that G-M Services’ performance test results for the District’s water wells were received, copies of which are attached hereto, and all of the District’s water wells are performing within design parameters.

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) approved ALLCO Pay Estimate No. 3 in the amount of $94,900.83; 3) approved Rebel Pay Estimate No. 4 in the amount of $143,640.00; 4) approved Rebel Change Order Nos. 5 and 6; 5) approved CFG Pay Estimate No. 2 in the amount of $14,510.25; 7) approved CFG Change Order No. 1 in the amount of $1,500; and 8) approved the CIP.

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 95.80%. Mr. Wright next reported that the District installed one (1) new tap last month and the District has a total of 1,734 equivalent single-family connections.

Mr. Wright next reviewed the list of service termination notices, noting that 162 such notices were mailed to customers and four (4) delinquent accounts were terminated.

Mr. Wright then reported that a summary of accounts regarding the Cut-Off List Status will be included on future reports.

Mr. Wright reported regarding a chlorine leak at the WWTP and that the supplier provided a tank at no cost to the District. Mr. Wright also reported that the soft start mechanism needs to be replaced.

Mr. Wright next reported that a temporary meter was installed at the WCIA swimming pool.

Discussion ensued regarding service termination fees and garbage collection expenses.

Mr. Wright presented the fire hydrant report, a copy of which is attached hereto. Mr. Wright stated that “hard to operate” comments mean that maintenance of those hydrants is recommended. Mr. Wright did not recommend raising fire hydrants until he has an opportunity to speak with homeowners and request clearing of bushes around such hydrants. As a courtesy, Mr. Wright stated that he will send letters to homeowners and request clearing of bushes, but will first send a draft letter to Mr. Barner for review. Mr. Wright then recommended installation of 40 reflectors at a cost of $12.50 each. Mr. Wright also reported that there is not a fire hydrant at 3019 Heatherglen Road at Browning.

Upon a motion by Director Barlow, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the Operator’s Report, as presented, and approved fire hydrant repairs at a cost not to exceed $8,000.

2018 CONSUMER CONFIDENCE REPORT (“CCR”)

Mr. Wright then presented the 2018 CCR, which the TCEQ requires be made directly available to customers annually no later than July 1.

Mr. Wright discussed lead and copper sampling coordinated by the Operator and that samples are collected by District customers. Discussion ensued concerning the process for distributing the CCR. Mr. Barner stated that an URL for the CCR must be created by Off Cinco and included on the District’s customer account bills. Messrs. Barner and Wright then reminded the Board that the District prints copies of the CCR in the event that customers wish to obtain a CCR from the Operator. Mr. Wright stated that a link to the TCEQ website could also be included on the District’s website.

Upon a motion by Director Moravec, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board authorized distribution of the CCR, subject to investigation of beta/photon emitters.

DISTRICT WEBSITE

Director Patton discussed updating information regarding water conservation links. It was the consensus of the Board that Director Patton review and update such water conservation links.

LONE STAR GROUNDWATER CONSERVATION DISTRICT (“LONE STAR”)

Director Tryon reported that he and Director Patton attended the Lone Star town hall meeting regarding aquifers.

SERIES 2019 UNLIMITED TAX REFUNDING BONDS (“2019 BONDS”)

Mr. Barner updated the Board regarding the 2019 Bonds and reported that such bonds are scheduled to close on May 30, 2019.

ETHICS POLICY

Mr. Barner reported that review of the District’s Ethics Policy is an annual agenda item. Director Moravec inquired regarding directors’ compliance with the requisite Open Meetings Act training. Mr. Barner stated that all directors on the Board have previously complied with such requirements and recommended that any director that may have questions on the requirements of the Open Meetings Act contact him for further discussion or attend any of the upcoming seminars provided by the Association of Water Board Directors.

ATTORNEY’S REPORT

Mr. Barner stated that Montgomery County ESD No. 2’s attorney is reviewing comments made by Mr. Barner to the sales contact and special warranty deed.

JONES|CARTER PROFESSIONAL SERVICES AGREEMENT (“PSA”)

Director Moravec stated that he reviewed the PSA and has questions and revisions.

Mr. Abshire explained the difficulties associated with comparing the Jones|Carter contracts since the old contract is dated in 1993 and the current PSA is a new agreement.

Extensive discussion ensued. Director Moravec asked if the Board would like to appoint a committee to review the PSA or address in an open meeting. Mr. Abshire stated that he provided the PSA for review and it can be discussed over the next month. Directors Moravec and Patton offered to review the PSA and meet with the Engineer. Mr. Peterson asked Director Moravec for his questions and Director Moravec stated that he first wants to meet with Director Patton. Mr. Peterson stated that he would appreciate receiving questions before meeting with the PSA review committee.

Regarding future projects, Mr. Abshire stated that proposals will be prepared and presented to the Board for consideration.

In response to questions raised earlier in the meeting regarding permit fees for the Jet-Ski Ramp, Mr. Barner explained that the District purchased the property where such ramp is located at 3127 Poe Drive for a District project back in 2007 as part in order to construct an outfall line. As part of the agreement for the purchase of such property, the property owner, who lives adjacent to such property, was granted an easement for the maintenance of such property and the use of the Jet-Ski Ramp. A discussion ensued. Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board authorized Mr. Barner to contact the property owner and the SJRA regarding payment of the permit fees.

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

PASSED AND APPROVED this the 12th day of June, 2019.

Secretary, Board of Directors

May 8, 2019 Minutes Signature

May 8, 2019 Minutes Signature