Meeting Minutes 2019-10-09

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

OCTOBER 09, 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, October 9, 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 Barlow. Also attending were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); Erich Peterson and Justin Abshire 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”); Michael Sullivan of Bleyl Engineering (“Bleyl” or “MUD 9 Engineer”); 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

The President first opened the meeting to public comment. There being no public comments, the President directed the Board to proceed with the agenda.

CONSIDER REQUEST FOR LANDSCAPING AT THE WASTEWATER TREATMENT PLANT (“WWTP”)

Mr. Barner reminded the Board that Dennis Maroney, an owner of property located adjacent to the WWTP Reserve, recently contacted him and provided certain information related to recommendations for landscaping improvements on the boundary of such property and such reserve. Mr. Barner explained that Mr. Maroney requested that the Board hear a presentation regarding such improvements. Mr. Maroney then re-introduced himself, Mrs. Ruth Maroney and Ms. Elizabeth Guillot of Houston Bamboo Nursery. Mr. Maroney requested that the Board consider immediately landscaping the area of the WWTP Reserve adjacent to his home and claimed that construction on the WWTP had diminished the value of his property.

Ms. Guillot then introduced herself and explained the information previously provided to the Board regarding the use of certain non-invasive bamboo used for landscaping, which is commonly known as “clumping bamboo”. Ms. Guillot proposed installation of such bamboo along the boundary of certain properties adjacent to the WWTP Reserve. Ms. Guillot next stated that she estimates installation of approximately 200 plants at $62 each totaling $15,000, including delivery and installation. Ms. Guillot added that clumping bamboo is very cold hardy and grows to a height of 25 feet. An extensive discussion ensued regarding the time frame for landscaping the area around the WWTP once construction on such plant is completed.

In response to a question from Ms. Guillot regarding the District’s purpose and the reason for clearing the WWTP Reserve, Mr. Barner explained that the District is a governmental entity whose function is to provide water and wastewater service to those within its boundaries and that such reserve is owned by the District platted specifically for use a WWTP. Mr. Barner added that the WWTP Reserve was cleared to expand the WWTP pursuant to the requirements of the Texas Commission on Environmental Quality (the “TCEQ”).

In response to a question from Director Moravec regarding a decrease in property value, Mr. Maroney explained that he had had informal discussions with a real estate agent regarding such decrease but did not have anything in writing. Director Moravec informed Mr. Maroney and the Board that he had reviewed Montgomery Central Appraisal District records for the value of Mr. Maroney’s property and that such records did not indicate any loss of value.

In response to a question, Mr. Abshire stated that the fence to be installed around the perimeter of the WWTP will be similar to that of the fencing around other District-owned facilities. Mr. Abshire explained that the TCEQ requires the District to surround the WWTP facilities with fencing. Mr. Abshire went on to explain that while the District has no definitive plans for landscaping at this time, the Board’s intent has been to landscape upon completion of the WWTP.

Director Moravec then requested an evaluation of the area for possible beautification and the best plants for residents and the District. In response to a question from Ms. Guillot regarding attendance at a future District meeting, Director Moravec explained the parameters of the WWTP Project and that landscaping cannot be done at this time. Director Moravec asked the Engineer to provide Ms. Guillot with a site map of the section of the WWTP Reserve adjacent to the Maroney’s property in order for the Board to obtain more details of landscaping. A discussion ensued regarding maintenance of clumping bamboo. Mr. Peterson requested information regarding bamboo maintenance. Mr. Barner requested that Ms. Guillot provide a proposal for costs associated with maintenance in order for the Board to review further.

Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized the Engineer to prepare a site exhibit to provide Ms. Guillot.

Members of the public exited the meeting at this time.

Mr. Sullivan introduced himself to the Board and went on to present a recommendation of award for the MUD 9 Buckingham Water Treatment Plant (“WTP”) Upgrade Project (the “Buckingham Project”), a copy of which is attached hereto. Mr. Sullivan reported that there was one (1) bidder, Gemini Contracting Services (“Gemini”). Mr. Sullivan discussed the components of such project and reported that Bleyl requested bids from 12 companies. Mr. Sullivan added that Gemini’s bid is higher than the previous estimates due to availability and costs of electrical items in such project. Mr. Abshire indicated that Jones|Carter has no issues with Gemini and inquired regarding possibly re-bidding the Buckingham Project. In response to a question from Director Moravec, Mr. Sullivan explained the alternate bid items.

Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved Gemini’s bid, subject to MUD 9 approval.

Mr. Sullivan exited the meeting at this time.

APPROVAL OF MINUTES OF SEPTEMBER 11, 2019 MEETING

The President next directed the Board to the approval of the September 11, 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 September 11, 2019 regular meeting minutes, subject to certain corrections.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the months of August and September 2019, copies of which are attached hereto, including past monthly collections and credits as reported by Tammy McRae, Tax Assessor-Collector for the District. Ms. Turner reported that 99.21% of the 2018 taxes have been collected as of September 30, 2019.

Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the Tax Assessor-Collector’s Report, as presented.

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 October 9, 2019, and Revenue and Expenditure Comparison for 2018 and 2019 as of October 9, 2019.

Director Moravec stated that he will attend the Public Funds Investment Act Seminar presented by McCall Gibson Swedlund Barfoot PLLC.

Ms. Turner distributed the General Operating Fund and WWTP budgets for fiscal year ending December 31, 2020 (“FYE 2020”), copies of which are attached hereto. Director Moravec next presented a memorandum he prepared that includes a revised draft of the FYE 2020 WWTP budget and a financial plan for the District’ general operating fund. An extensive discussion ensued.

In response to a question from Director Leasure, Mr. Wright explained that the pumpage fees paid to Lone Star Groundwater Conservation District are estimated based on the estimated gallons of water that will be pumped in a calendar year. An extensive discussion ensued regarding options for the District to pass through more of the costs of pumpage fees to the District’s customers. Mr. Barner recommended that Ms. Turner and Mr. Wright review such fees and update the Board at the next Board meeting.

Mr. Barner then explained that pursuant to Texas Government Code Section 2256.005(e), as amended, the District is required to review its Amended and Restated Order Designating Investment Officer and Establishing Rules, Policies and Code of Ethics for the Investment of District Funds and Review of Investments (“Investment Policy”) not less than annually. Mr. Barner stated that there were no recommended changes to such policy and that any motion by the Board only needs to acknowledge that such policy had been reviewed. Upon a motion by Director Moravec, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the Investment Policy, as presented.

Discussion ensued regarding whether the List of Qualified Brokers needed to be amended. Ms. Turner stated that she would provide the Brokers List to the Board for review before the next Board meeting.

Mr. Barner stated that he awaits a proposal from Mark Burton to prepare additional financial statements for the District in order to comply with Texas Water Development Board (the “TWDB”) requirements in connection with the District’s 2011 TWDB revenue bonds.

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 Bookkeeper’s Report, as presented; 2) authorized payment of checks numbered 8850 through 8879 from the General Operating Fund; 3) authorized payment of checks numbered 1898 through 1902 from the WWTP Fund; and 4) authorized payment of checks numbered 1255 through 1258 from the Capital Projects Fund.

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 also reported that Allco completed the October 2, 2019 concrete pour. Mr. Abshire presented the client/contractor onsite meeting minutes, a copy of which is attached to his report, and indicated that the next meeting is scheduled for October 21, 2019. 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.

Regarding future concrete pours, Mr. Abshire recommended electronic delivery of correspondence to District residents rather than going door-to-door. Mr. Abshire added that there will be one (1) pour per month for the remainder of 2019.

Mr. Abshire presented Allco Pay Estimate No. 8 in the amount of $245,618.58.

Mr. Wright then reported that Hays North is coordinating installation of a tap on Walden Road along the secondary driveway and that Hays North may need to cut-off water for two (2) hours. The Engineer and Operator will coordinate installation of such tap and will contact those affected.

Mr. Abshire reported that Rebel Contractors, LLC (“Rebel”) has completed work in Zones 1, 2 and 6 and is nearing completion in Zones 3 and 4. Mr. Abshire went on to report that the remaining work includes installation of the cured-in-place liner in the existing storm water outfalls in Zones 3 and 4. Mr. Abshire further reported that a final inspection was held on September 3, 2019 and Rebel is nearing completion of the remaining punch list items.

Mr. Abshire reported that Jones|Carter requested a proposal for modification of approximately 600 square feet of the high-crested driveway at 11719 Thoreau Drive. Mr. Abshire stated that the cost to increase the slope and re-stamp such driveway is approximately $10,000. Director Patton stated that this matter will be discussed in closed session.

Ms. Turner exited the meeting at this time.

Regarding the riprap installed at each new Zone 2 overflow swale, Mr. Abshire reported that the riprap was required by the San Jacinto River Authority (“SJRA”) to prevent erosion and the SJRA will not flag the riprap. Messrs. Abshire and Barner will coordinate preparation of a letter to the resident raising concerns about the riprap.

Mr. Abshire then reported that the storm water line rehabilitation project at 11710 Ripplewind Drive is complete, using the cured-in-place pipe method through the existing 24-inch storm sewer outfall. Mr. Abshire also reported that JD Poole constructed and removed the required coffer dam structure. Extensive discussion ensued regarding the final invoices for such project and fees associated with Hays North’s management of the contract for such project. Messrs. Abshire and Wright stated that, in the future, they will communicate more clearly regarding the process for completing projects managed by the Operator.

Concerning the proposed second phase of the Drainage Improvements (Zones 7, 8 and 11), Mr. Abshire presented the cost estimate and proposal for design phase services, a copy of which is attached hereto. Mr. Abshire stated that he will revise the legend to correctly reflect Zones 7 and 11.

Director Moravec exited the meeting at this time.

Extensive discussion ensued, including driveway profiles, street replacement, installation of more inlets and acquisition of a 25-foot drainage easement.

Director Moravec re-entered the meeting at this time and requested information from the Engineer at least three (3) days before meetings.
Discussion next ensued regarding MUD 9 drainage improvements.

Upon a motion by Director Patton, seconded by Director Moravec, after full discussion and with all Directors present voting aye, the Board approved the Engineer’s Report, as presented, and approved Allco Pay Estimate No. 8 in the amount of $245,618.58.

Director Moravec then inquired regarding consultant responses to his request concerning information about cyber liability coverage.

Extensive discussion ensued regarding the Engineer, Operator and Bookkeeper’s insurance coverages. Mr. Peterson indicated that he does not believe that Jones|Carter currently has such coverage, but will respond to Director Moravec’s request for information in writing after the meeting. Mr. Wright stated that Hays North has no cyber insurance coverage at this time, although he is confident with Hays North’s back-up program.

OPERATOR’S REPORT

Mr. Wright presented the Operator’s Report, a copy of which is attached hereto.

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

MUD 9 REGULAR MEETING

Mr. Barron reported that MUD 9 anticipates receipt of a report from the assisted living facility at MUD 9’s October 17, 2019 meeting. Mr. Barron added that an amendment to MUD 9’s Rate Order may be necessary to include the class of customers. Mr. Barner stated that out-of-District service can be handled by contract rather than a Rate Order amendment. Mr. Barron also reported that cyber insurance will be discussed at MUD 9’s October 17, 2019 meeting. Director Leasure stated that MUD 9 approved the 2019 tax rate at its September meeting.

ATTORNEY’S REPORT

Mr. Barner updated the Board regarding the Walden Fire Station Property and the Walden Community Improvement Association (“WCIA”). Mr. Barner added that he would speak with David Hartman later in the day regarding possible conveyance of certain property currently owned by the District to the WCIA for recreational purposes.

Mr. Barner reviewed the Arbitrage Rebate and Yield Restriction Compliance Service Program dated August 13, 2019.

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 12:22 p.m. to discuss matters within the attorney/client privilege. Present for all or portions of the executive session were the Board of Directors, except for Director Barlow, Erich Peterson and Justin Abshire of Jones|Carter; Mr. Barner; and Ms. Brewer.

The Board declared the Executive Session was ended at 12:46 p.m.

RECONVENE IN OPEN SESSION

As of 12:46 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 Moravec, after full discussion and with all Directors present voting aye, the Board approved matters discussed in closed session.

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

PASSED AND APPROVED this the 13th day of November, 2019.

Secretary, Board of Directors

October 9, 2019 Minutes Signature

October 9, 2019 Minutes Signature