Meeting Minutes 2019-07-10

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

JULY 10, 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, July 10, 2019, 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
John L. Patton – Vice President
Margie Barlow – Secretary
Randolph C. Moravec – Assistant Secretary
Bob Leasure – Director

All members of the Board were present, except for Director Tryon. Also attending were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); 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, Director 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 Vice 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 IMPROVEMENT PROJEC (THE”DRAINAGEIMPROVEMENTS”)

Regarding the Drainage Improvements, Mr. Jim Boyd informed the Board that he is happy with the such improvements’ impact on drainage in his area and also that the no-trespassing signs installed at 12515 Browning Drive appear to be preventing residents from using the property.

Mr. Abshire then introduced himself to the members of the public and went on to provide a summary of the Drainage Improvements and the District’s decision to undertake such improvements. Director Moravec explained that the District’s primary governmental provide water and sewer service within the District, but that due to flooding events affecting certain areas of the District that occurred around Labor Day 2015 and Tax Day 2016, the District determined that it was in the best interests of the District to make the Drainage Improvements.

Mr. Abshire explained that Jones|Carter performed a drainage study that identified various zones within the District where drainage appeared to be an issue and then prioritized such zones. Mr. Abshire then summarized the Drainage Improvements performed to-date and the other such improvements to be performed in the future.

In response to a question from Mr. Gary Bierhalter, Mr. Abshire stated that Jones|Carter is responsible for management of the Drainage Improvements. Mr. Abshire then explained to the Board that Jones|Carter had received complaints from approximately seven (7) residents about the appearance of certain inlets located along Thoreau Drive. Mr. Abshire then proceeded to explain that such inlets were pre-cast and installed by on-site and the differences between pre-cast drainage inlets and inlets that are cast-in-place. Mr. Abshire explained that such inlets meet the design prepared by Jones|Carter and that they are no structural issues with such inlets. Mr. Abshire further explained that they are coordinating with Rebel Contractors, LLC (“Rebel”) the contractor engaged by the District to construct the Drainage Improvements, in order to resolve the above-mentioned aesthetic issues.

In response to a question from Director Barlow regarding recently-reported drainage issues within easements located behind the certain homes on Doretta Drive, Mr. Abshire stated that Jones|Carter will need to determine whether the District has a right of access or use of such easements to determine the cause of such issues.

Mr. Jim Hodges next explained to the Board certain damages and aesthetic issues that he believes occurred to his driveway (the “Driveway”) as a result of the construction of the Drainage Improvements. Director Moravec then informed the Board that he had inspected such driveway and agreed that repairs were needed. An extensive discussion ensued regarding options for repairing the Driveway and any payment by Rebel for such damages.

In response to a question, Mr. Barner explained that if the Board could enter into an agreement with Mr. and Mrs. Hodges in order to resolve any damages and that the District could then have Rebel reimburse the District by reducing the amount owed to Rebel under the contract for the Drainage Improvements. Mr. Barner stated that he would prepare such agreement at the Board’s direction, but that he will need additional information from Mr. Hodges and Mr. Abshire to prepare such agreement. Director Leasure then expressed his concerns about setting any precedents by paying for any property damages and Mr. Barner clarified that in this instance, Rebel is actually the entity paying for such damages and not the District.

Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with three (3) Directors present voting aye and Director Leasure abstaining, the Board authorized the Attorney and Engineer to prepare a settlement agreement with Mr. and Mrs. Hodges for repairs not to exceed $3,650 and a release of claims related to the Driveway. Mr. Abshire stated that he will first need to meet with Mr. and Mrs. Hodges and take photographs of the driveway before the settlement agreement and release are prepared.

APPROVAL OF MINUTES OF JUNE 12, 2019 MEETING

The Vice President next directed the Board to the approval of the June 12, 2019 regular meeting minutes. Upon a motion by Director Moravec, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the June 12, 2019, regular meeting minutes, subject to certain corrections.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of June 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 98.05% of the 2018 taxes have been collected as of June 30, 2019.

Ms. Turner next presented a list of delinquent tax accounts of taxpayers owing more than $250 for the 2018 tax year and noted that none of the accounts are deferred. Mr. Wright stated that he will verify if any of such accounts are rental properties or receive water service through a master meter. Mr. Barner went on to remind the Board that the Board will need to schedule a hearing to terminate water service to those delinquent tax accounts eligible for such termination and recommended that such hearing be scheduled for the September 11, 2019 meeting in order to provide property owners with 30 days’ notice of such hearing.

Ms. Turner next reported that MAC received a letter from a candidate in the Montgomery County Appraisal District 2019 trustee’s election. A brief discussion ensued and it was the consensus of the Board to not vote in such election.

Ms. Turner and Mr. Barner next discussed the schedule for adopting the District 2019 tax rate. Mr. Barner reported that the Montgomery County Tax Office must receive notice of the District’s 2019 tax rate no later than September 18, 2019. Mr. Barner also reported that the Financial Advisor’s tax rate recommendation will be discussed at the August 14, 2019 meeting and recommended that the District set the 2019 tax rate to be adopted on September 11, 2019. Discussion ensued regarding operations and maintenance taxes and debt service 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 District’s budget for the fiscal year ending December 31, 2019.

Ms. Turner then reviewed a Snap Shot Financial Report as of July 10, 2019, and Revenue and Expenditure Comparison for 2018 and 2019 as of July 10, 2019.

In response to a question regarding the calculation of pumpage fees assessed by the Lone Star Groundwater Conservation District (“Lone Star”), Mr. Abshire and Ms. Turner explained that such fees are based on the amount of water identified in the District’s water well permits. Director Moravec next inquired whether the Board should commission a study on its water and sewer rates and fee so that the Board can ensure the District’s costs for service are being recouped. A discussion then ensued on the Board’s review of such rates in the past and collaborating with MCMUD9 on such review. Mr. Barner explained that while there are numerous options for performing a Rate Study, the District should first discuss such options with the District’s Financial Advisor.

Upon a motion by Director Moravec, 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 8743 through 8775 from the General Operating Fund; 4) authorized payment of checks numbered 1877 through 1883 from the Wastewater Treatment Plant (“WWTP”) Fund; 5) authorized payment of checks numbered 1242 through 1244 from the Capital Projects Fund; and 6) authorized the Attorney to send letters to delinquent tax accountholders notifying them of termination if the delinquency is not cured and termination of service to those accounts.

ENGINEER’S REPORT

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

Regarding the Wastewater Treatment Plant Improvement Project (the “WWTP Project”), Mr. Abshire reported that ALLCO, LLC is continuing work on underground piping related to the Sequencing Batch Reactor (“SBR”) basins. Mr. Abshire also reported that the substantial completion date of Phase I is April 2020. Mr. Abshire reported that four (4) bores under the pipeline were completed and three (3) bores are scheduled at the end of the project.

Mr. Abshire next reported that ALLCO has requested permission to perform work on the WWTP Project on Saturdays and that he recommended granting such request in order for ALLCO to stay on such project’s construction schedule. Mr. Abshire also recommended that the Board authorize Jones|Carter to contact property owners adjacent to the WWTP in advance of the regarding the upcoming concrete pouring for such plant, which is expected to commence around 4:00 a.m. on Tuesday, August 13, 2019.

Mr. Abshire then presented ALLCO Pay Estimate No. 4 in the amount of $251,269.78.

Concerning the Drainage Improvements, Mr. Abshire reported that Rebel continues work in Zones 3 and 4. Mr. Abshire next reported that the remaining work includes a couple of inlets and street regrading, new storm sewer outfall in Zone 4 and installation of cured-in-place liner in the existing storm outfalls in Zones 3 and 4.

Ms. Turner exited the meeting at this time.

Mr. Abshire presented Pay Estimate No. 7 from Rebel in the amount of $97,973.55.

Mr. Abshire then presented information related to the surveying and preliminary analysis for engineering of the Phase II Drainage Improvements. Mr. Abshire went on to update the Board on the status of certain coffer dams and work along certain portions of property located along Lake Conroe that should be completed within the next month. Mr. Abshire next explained an inlet in Zone 4, pipelining and an upcoming change order.

Mr. Abshire next explained certain drainage issues identified near 11710 Ripplewind Drive and reports that the home located on such street had received minor flooding the weekend of May 4, 2019. An extensive discussion ensued and it was the consensus of the Board that Jones|Carter coordinate with J. D. Poole to assess the condition of the outfall located near such drive.

Mr. Abshire next reported that CFG Industries, LLC (“CFG”) has completed improvement work at Water Plant Nos. 1 and 2. Mr. Abshire presented Pay Estimate No. 3 and Final in the amount of $20,492.00.

Upon a motion by Director Moravec, 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.5 in the amount of $251,269.78; 3) approved Rebel Pay Estimate No. 7 in the amount of $97,973.55; 3) approved CFG Pay Estimate No. 3 and Final in the amount of $20,492.00; 4) authorize Jones|Carter to coordinate with J.D. Poole to investigate the Outfall near 11710 Ripplewind Drive; and 5) authorize surveying and preliminary analysis of Phase II Drainage Improvements.

Mr. Abshire then reported that he had re-distributed the Jones|Carter Professional Services Agreement (“PSA”) to the Board that included the revisions discussed with Directors Tryon and Moravec and Mr. Barner. A brief discussion ensued. Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the Jones|Carter Professional Services Agreement.

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 94.37%. Mr. Wright next reported that the District installed no new taps 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 167 such notices were mailed to customers and two (2) delinquent accounts were terminated.

In response to a question from Director Moravec regarding valve inspections, Mr. Wright stated that he had nothing new to report.

In response to a question from Mr. Barner, Mr. Wright reported that installation of Dedicated Bacteriological Sampling Sites is nearing completion and a list of such sampling sites will be filed with the Texas Commission on Environmental Quality and copies will be provided to the Attorney and Engineer.

Extensive discussion ensued regarding tree removal necessary for certain repairs within the District. The Board requested that Hays North institute more cost-effective procedures in the future.

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.

DROUGHT CONTINGENCY/WATER CONSERVATION PLAN

Mr. Barner stated that the Water Conservation Plan has been posted on the District’s website.

MUD 9 REGULAR MEETING

Director Leasure updated the Board on MUD 9’s June regular meeting. The Board was reminded of MUD 9’s July 19, 2019 regular meeting. Director Tryon will attend such meeting on behalf of the District.

WATER SMART APPLICATION

Mr. Barner reminded the Board that the District’s participation in the Association of Water Board Director’s (“AWBD”) Water Smart program must be renewed on an annual basis and then presented a Resolution Approving Submittal of a Water Smart Application for the period of January 1, 2020 through December 31, 2020.

Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved a Resolution Approving Submittal of a Water Smart Application for the period of January 1, 2020 through December 31, 2020.

WALDEN FIRE STATION PROPERTY (the “PROPERTY”)

Mr. Barner reported that documents related to the sale of the Property are being sent to the Alamo Title Company. Mr. Barner also reported that during preparation of such documents, it was discovered that the deed conveying such property from Deutser and Weil, the developers of the District, to the District, had never been recorded in the Montgomery County Real Property Records. Mr. Barner informed the Board that RBAP had contacted such developers to obtain a new deed and that such deed had now been recorded.

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

PASSED AND APPROVED this the 11th day of September, 2019.

Secretary, Board of Directors

July 10, 2019 Minutes Signature

July 10, 2019 Minutes Signature