Meeting Minutes 2019-09-11

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

SEPTEMBER 11, 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, September 11, 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.  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 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

Mr. Jim Boyd requested an update on the Board’s review of options for landscaping at 3202 Woodchuck Road, which was property purchased by the District as part of the Drainage Improvements Project (the “Drainage Improvements”).  Mr. Barner reminded the Board and Mr. Boyd that Mr. Abshire has discussed such property with the General Manager of the Walden Community Improvement Association (the “WCIA”) and that the District is investigating options for landscaping such property.

Mr. Charles Schuetz thanked the Board for work performed to-date as part of the Drainage Improvements and requested that the Board consider making modifications to his driveway approach at 11719 Thoreau Drive (the “Approach”), which had been affected by the Drainage Improvements.  Mr. Abshire reminded the Board that such improvements had affected Approach and created an issue with the clearance of Mr. Schuetz’s vehicles over such approach.  In response to a question from Director Moravec, Mr. Abshire stated that costs for modifications to the Approach is estimated to be approximately $8,000 to $10,000.  Director Moravec informed Mr. Schuetz that the District must first look at costs before making a decision about modifying the Approach.

Members of the public exited the meeting at this time.

Regarding the Drainage Improvements, Mr. Abshire introduced Mr. Rusty Wilson of Rebel Contractors, Inc. (“Rebel”).  Mr. Abshire reported that Rebel has completed all work, except for certain punch list items, except for construction of the improvements to the storm sewer outfalls in Zones 3 and 4.  Mr. Abshire went on to explain that Rebel’s efforts to perform such improvements have been unsuccessful and that Rebel was requesting that such improvements be removed for the contract between Rebel and the District for the Drainage Improvements.  An extensive discussion ensued regarding removing such items from such contract and Rebel’s willingness to reduce the construction price in such contract.

In response to a request by Director Patton to look at street repairs in Zone 4, Mr. Wilson stated that he would look at such street repairs.

Mr. Wilson exited the meeting at this time.

APPROVAL OF MINUTES OF JULY 10, 2019 AND AUGUST 14, 2019 MEETINGS

The President next directed the Board to the approval of the July 10, 2019 and August 14, 2019 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 July 10, 2019 and August 14, 2019 regular meeting minutes, as presented.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner first reported there was no Tax Assessor-Collector’s Report this month.

It was determined by the Board that no persons were present for a public hearing regarding terminating service to customers with delinquent accounts.  Mr. Barner reviewed the number of delinquent tax accounts with the Board.  A brief discussion ensued regarding the process for terminating such accounts.  Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized termination of service to the following accounts due to non-payment of delinquent taxes, as follows:  1) Renee A. Wade, account number 00.9455.00.04700, in the amount of $564.14; 2) Scott Ledbetter, account number 00.9544.04.16500 in the amount of $2,507.35; 3) Aspen Homes LLC, account number 00.9455.05.20200 in the amount of $706.63; 4) Gail Nelson, account number 00.9455.05.28600; 5) Emelly Marrder and Thomas Saman, account number 00.9455.05.34100 in the amount of $553.45; 6) Jerrie Smith, account number 00.9455.07.04000 in the amount of $727.95; and 7) Sheila King, account number 00.9455.07.05401.

2019 TAX RATE

PUBLIC HEARING ON 2019 TAX RATE

The President next declared the public hearing open to discuss the District’s proposed tax rate for 2019.

Mr. Barner reminded the Board that the Board voted to publish a proposed total 2019 tax rate at $0.30 per $100 of assessed valuation.  Mr. Barner further reminded the Board that the Board voted to publish notice of the proposed 2019 tax rate and the public hearing (the “Notice”) on such tax rate in the Conroe Courier at least seven (7) days prior to today’s public hearing.

There being no members of the public present to discuss the proposed tax rate, the President then declared the public hearing closed.

ADOPTION OF ORDER SETTING RATE AND LEVYING TAX FOR 2019

The Board then discussed the proposed tax rate for 2019. Mr. Barner then presented for the Board’s approval and adoption an Order Setting Rate and Levying Tax for 2019 reflecting the levy of a tax rate of $0.0517 per $100 of assessed valuation for debt service purposes and $0.2483 per $100 of assessed valuation for operations and maintenance purposes, resulting in a total 2019 tax rate of $0.30 per $100 of assessed valuation.

Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved a total ad valorem tax rate of $0.30 per $100 of assessed value for the year 2019, comprised of $0.0517 per $100 assessed valuation for debt service purposes and $0.2483 per $100 assessed valuation for operation/maintenance purposes

AMENDED DISTRICT INFORMATION FORM (“ADIF”)

Mr. Barner then explained that pursuant to Section 49.455 of the Texas Water Code, as amended, the District is required to amend its District Information Form any time information in such form is revised or updated and, therefore, since the District’s 2019 tax rate has been adopted, an amendment to the District Information Form is necessary.  A copy of the ADIF is attached hereto.  Mr. Barner further stated that the ADIF is required to be filed with the Montgomery County Real Property Records (the “HCRPR”) and the Texas Commission on Environmental Quality.

APPOINT TAX ASSESSOR-COLLECTOR

Mr. Barner next reviewed with the Board the Order Appointing Tammy McRae, the Montgomery County Tax Assessor-Collector, as the District’s Tax Assessor-Collector.

ADOPT RESOLUTION CONCERNING TAX COLLECTION

Mr. Barner then reviewed with the Board the Resolution Concerning Tax Collection Procedures and reminded the Board that the District is obligated to review its internal tax collection procedures at least once per year and adopt a resolution re-affirming those tax collection procedures after each review.

Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board:  1) approved the Order Appointing Tax Assessor/Collector; 2) approved the ADIF, as presented; and 3) approved the Resolution Concerning Tax Collection Procedures.

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 September 11, 2019, and Revenue and Expenditure Comparison for 2018 and 2019 as of September 11, 2019.

In response to a question from Director Patton, Ms. Turner stated that the District pays the Montgomery County Appraisal District for appraisals four (4) times per year.

Discussion ensued regarding wastewater treatment plant (“WWTP”) expenses and Ms. Turner stated that MUD 9 will be billed for its portion of such expenses.

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 Bookkeeper’s Report, as presented; 2)  authorized payment of checks numbered 8811 through 8849 from the General Operating Fund; 3) authorized payment of checks numbered 1891 through 1897 from the WWTP Fund; 4) authorized payment of checks numbered 1251 through 1254 from the Capital Projects Fund; 5) authorized payment of check numbered 1060 from the Tax Fund; and 6) authorized payment of a check to Mr. and Mrs. Jim Hodges as settlement for driveway repairs connected to the Drainage Improvements. .

In response to a question from Director Moravec regarding distribution of the draft WWTP budget for fiscal year ending 2020 to MUD 9, Mr. Barner stated that such item is an annual agenda item in order to document that Ms. Turner has been directed to distribute such budget.  Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized distribution of the draft WWTP budget for fiscal year ending 2020 to MUD 9.

Regarding the engagement of Burton CPA to prepare additional financial statements for the District in order to comply with certain requirements of the Texas Water Development Board (the “TWDB”) in connection with the District’s 2011 TWDB revenue bonds, Mr. Barner stated that no action is needed until the District is in receipt of an engagement letter.  Mr. Barner explained the purpose of the TWDB’s requirements and the necessity of preparing such additional statements.

ENGINEER’S REPORT

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

Regarding the WWTP Improvement Project (the “WWTP Project”), Mr. Abshire reported that Allco, LLC (“Allco”) is continuing work on the Sequencing Batch Reactor (“SBR”) basins, setting rebar for the basin and preparing wall cast-in-place piping.  Mr. Abshire presented the client/contractor onsite meeting minutes, a copy of which is attached to his report.  Mr. Abshire stated that the contract period for Phase I of the WWTP Project is 480 calendar days from January 2, 2019, which establishes the substantial completion of Phase I in April 2020.

Mr. Abshire presented Allco Pay Estimate No. 7 in the amount of $1,100,964.87.

Mr. Abshire next presented  Change Order No. 2 in the deduct amount of ($22,607.41) and 10 additional calendar days.  Mr. Abshire stated that such change order includes:  1) removal of grout between the piping and boring casing; 2) double detector check valve on the eight-inch (8″) potable water line that was replaced with an RPZ backflow preventer; and 3) credit to the owner for the contractor’s use of onsite permanent power during construction.  Mr. Abshire reported that he continues to investigate the previous change order.

Messrs. Abshire and Barner then discussed the amount of retainage remaining on the contract for Drainage Improvements with Rebel.  Mr. Abshire presented Pay Estimate No. 9 from Rebel in the amount of $44,661.67 and noted that such Pay Estimate includes five percent (5%) retainage.

Concerning the proposed second phase of the Drainage Improvements (Zones 7, 8 and 11), Mr. Abshire reminded the Board that as authorized at the July 10, 2019 Board meeting, Jones|Carter is underway with surveying and preliminary analysis and expects to have a revised cost estimate and proposal for design phase services ready to present at the October 9, 2019 Board meeting.

Concerning the investigation of a storm sewer outfall pipe adjacent to 11710 Ripplewind Drive, Mr. Abshire reported that Jones|Carter has coordinated with JD Poole to construct a coffer dam around such outfall in order to assess its condition.  Mr. Abshire also reported that JD Poole began construction of such dam on Tuesday, September 3, 2019, and that such construction was completed on Thursday, September 5, 2019.  Mr. Abshire went on to report that Jones|Carter found no breaks in the storm sewer line and that the Operator received a quote to repair such line.  Mr. Abshire further reported that Source Point Solutions televised such line.  Mr. Abshire next presented photographs of the area and reported that the property owner located at 11710 Ripplewind had recently construction encroachments on the easement where such line was located.  Director Moravec stated that the District needs to notify such property owner that District had not consented to such encroachments on the District’s easement.  Mr. Barner stated that he will prepare a letter to such property owner and discuss further at the October 9 Board meeting.

Upon motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved repair of the line by the cured-in-place piping method at a cost not to exceed $24,000.

Upon a motion by Director Moravec, seconded by Director Patton, 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. 7 in the amount of $1,100,964.87; 3) approved Allco Change Order No. 2 in the deduct amount of ($22,607.41) and 10 additional calendar days; and 4) approved Rebel Pay Estimate No. 9 in the amount of $44,661.67.

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 96.05%.  Mr. Wright next reported that the District installed no new taps last month and the District has a total of 1,740 equivalent single-family connections.

Mr. Wright next reviewed the list of service termination notices, noting that 144 such notices were mailed to customers and two (2) delinquent accounts were terminated.

Regarding valve inspections, Mr. Wright stated that Hays North performed additional survey work the past month.

Director Patton noted that the number of e-statements has increased.  Mr. Wright stated that Hays North was asked to remind anyone contacting its office about e-statements.

Mr. Wright next reported that the clarifier arm at the WWTP collapsed and the motor burned out.  Mr. Wright added that repair of the clarifier arm is not an expensive repair.

Mr. Wright reviewed the Notable Activity Report with the Board, including replacement of the controller, logic board and annunciator at the Poe Water Plant.  Director Patton inquired regarding pulling the pump on Chaucer Drive.

Mr. Wright then presented a write-off list and reported that some accounts on such list do not have a deposit on file.

Director Moravec exited the meeting at this time.

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.

DISTRICT WEBSITE

Mr. Barner discussed a new tab added to the District website regarding the District’s elections and that information related to such elections was posted under such tab as required by new legislation affecting municipal utility districts.

MUD 9 REGULAR MEETING

Director Leasure updated the Board regarding MUD 9’s regular meeting and stated that drainage issues were discussed at such meeting.  Director Leasure reported that MUD 9 adopted its 2019 tax rate and anticipates a 2020 bond issue.

Director Barron reported that MUD 9 received a request to provide service to an assisted living facility.  Discussion ensued.

WALDEN FIRE STATION PROPERTY (THE “FIRE STATION PROPERTY”)

Mr. Barner updated the Board regarding conveyance of the Fire Station Property.  Messrs. Barner and Abshire explained that recent survey work revealed that the legal description of such property was incorrect. An extensive discussion ensued regarding options for correcting such description. Mr. Abshire went on to state the surveyor for Montgomery County Emergency Services District No. 2 (“MCESD 2”) also offered to do the work.  Mr. Barner stated that the deed to MCESD 2 needs to be corrected.

Discussion ensued regarding installation of utilities in public utility easements.  Mr. Barner discussed requests for line locations.  Mr. Wright stated that Hays North has been contacted twice regarding repair of broken lines by Tachus, LLC and stated that such lines are not located near District lines and should not be a District issue.  Extensive discussion ensued.

LEGISLATIVE MATTERS

Mr. Barner discussed the Cyber Security Seminar hosted by RBAP and Jones|Carter on Saturday, September 14, 2019.

Mr. Barner next discussed House Bill 3834 and explained that officers of local governmental entities may be required to attend annual cyber security training.  Mr. Barner stated that RBAP is trying to determine if such requirements will apply to the District and that RBAP will update the Board at a future meeting.

Next, Mr. Abshire discussed 3202 Woodchuck Road and reported that the WCIA is interested in such lot.  Mr. Barner stated that if the District wants to convey the property to the WCIA, then the deed must have a reversion clause.  The Board indicated it is interested in RBAP communicating with the WCIA regarding conveyance of such property.

Messrs. Barron and Wright 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 11:31 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, except for Director Moravec; Justin Abshire and Mason Mueller of Jones|Carter (“Engineer” or “Jones|Carter”); Mr. Barner; and Ms. Brewer.  The Board declared the Executive Session was ended at 11:53 p.m.

RECONVENE IN OPEN SESSION

As of 11:53 p.m., the President declared the Executive Session was ended and the public session was resumed.

Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board:  1) authorized the Attorney and Engineer to proceed with discussions with Rebel to relieve the responsibility for the four (4) line items totaling $174,000; 2) authorized rebidding the project; 3) approved the District to hold the check payable to Rebel; and 4) resolve liquidated damages.

In response to a question from Mr. Abshire, the Board authorized Mr. Abshire to proceed with preparation of a bid package.

Director Patton discussed the riprap installed at each new overflow swale, including the Zone 1 swale, both Zone 2 swales and the Zone 6 swale.  Mr. Abshire noted that the riprap was required by the San Jacinto River Authority and inquired if the Board was interested in flagging options.  The Board stated that it is interested in flagging options since District residents have raised concerns about the riprap.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 12:03 p.m.

PASSED AND APPROVED this the 9th day of October, 2019.

 

                                                                                                                                                                        Secretary, Board of Directors

September 11, 2019 Minutes Signature

September 11, 2019 Minutes Signature