Meeting Minutes 2019-12-11

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

DECEMBER 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, December 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, except for Directors Tryon and Leasure. 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 and Robert Ginandt, Directors of Montgomery County Municipal Utility District No. 9 (“MUD 9”); and Elliot M. Barner, attorney, and Diane F. Brewer, paralegal, of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”).

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.

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

APPROVAL OF MINUTES OF NOVEMER 13, 2019 MEETING
The Vice President next directed the Board to the approval of the November 13, 2019 regular meeting minutes.
Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the November 13, 2019 regular meeting minutes, as presented.

TAX ASSESSOR-COLLECTOR’S REPORT
Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of November 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 6.71% of the 2019 taxes have been collected as of November 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 reviewed a Snap Shot Financial Report as of December 11, 2019, and Revenue and Expenditure Comparison for 2018 and 2019 as of December 11, 2019.

The Board then discussed then the General Operating Fund (“GOF”) Budget and Wastewater Treatment Plant (“WWTP”) Budget for Fiscal Year Ending (“FYE”) December 31, 2020. Ms. Turner and Director Moravec discussed such director’s final revisions to the GOF budget and financial plan, a copy of which is attached hereto. Director Moravec indicated that nothing is currently budgeted for the Phase II drainage project (Zones 7, 8 and 11) for FYE December 31, 2020. After discussion, it was the consensus of the Board to add $600,000 to the GOF budget FYE 2020 for such project.

In response to a question regarding improvements to the District’s outfalls, Mr. Abshire discussed such improvements and prioritizing such outfalls.

Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Order Adopting General Operating Budget for FYE December 31, 2020, a copy of which is attached hereto, including the addition of $591,000 for drainage improvements in 2020.

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 Adopting Wastewater Treatment Plant Budget for FYE December 31, 2020, a copy of which is attached hereto.

In response to a question from Ms. Turner, the Board declined to take any action regarding the Montgomery County Central Appraisal District election.

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 Bookkeeper’s Report, as presented; 2) authorized payment of checks numbered 8915 through 8942 from the General Operating Fund; 3) authorized payment of checks numbered 1913 through 1917 from the WWTP Fund; and 4) authorized payment of checks numbered 1264 through 1267 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 and removing forms for the basin walls and pouring concrete. 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 December 16, 2019. Mr. Abshire stated that the contract period for Phase I of the WWTP Project is 480 calendar days and began on January 2, 2019, which establishes the substantial completion of Phase One (1) in April 2020. Discussion ensued regarding project costs, the project schedule and quality of work.

Mr. Abshire presented Allco Pay Estimate No. 10 in the amount of $1,079,930.98.

Regarding Phase One (1) of the Drainage Improvements Project (the “Drainage Improvements”), Mr. Abshire reported that Rebel Contractors, LLC (“Rebel”) has completed all improvements except for the storm sewer outfall rehabilitation in Zones 3 and 4.

Discussion ensued regarding Rebel Pay Estimate No. 9 and releasing the check for such pay estimate to Rebel.

Mr. Abshire next presented Rebel Pay Estimate No. 10 and Final in the amount of $103,053.35. The Board directed the Bookkeeper to hold the check payable to Rebel for Pay Estimate No. 10 and Final in trust.

Mr. Abshire then presented Rebel Change Order No. 8 in the deduct amount of ($162,870.00) and stated that such change order includes: 1) Rebel’s contribution to the driveway modifications at 11711 Thoreau; 2) the cost of divers used to attempt plugging Zones 3 and 4 storm outfalls in lieu of cofferdams; and 3) removal of bid items related to Zones 3 and 4 cofferdam and Cured-in-Place Piping (“CIPP”).

Ms. Turner exited the meeting at this time.

Mr. Abshire reviewed the Thoreau Drive Storm Sewer Rehabilitation Projects and reported that Jones|Carter held the pre-construction meeting with both contractors on November 25, 2019. Mr. Abshire went on to report that JD Poole is handling the cofferdam contract portion of such project and Texas Pride Utilities, LLC (“Texas Pride”) is handling the CIPP contract portion of the storm sewer rehabilitation. Mr. Abshire noted that the Notice to Proceed was issued for both contracts on December 2, 2019 and the contract time for this project is 60 calendar days, although he anticipates all work to be completed before December 23, 2019. Mr. Abshire reported that construction of the Zone 3 cofferdam is currently underway and the CIPP for the Zone 3 storm sewer is scheduled to be delivered and installed on December 12, 2019.

Mr. Abshire presented JD Poole Pay Estimate No. 1 in the amount of $6,750.

Mr. Abshire next presented Texas Pride Change Order No. 1 in the amount of $3,000 and explained that such change order includes the cost required to expedite the delivery of the CIPP liner in order to be delivered the week of December 3, 2019.

Mr. Abshire then reviewed the Drainage Improvements, Phase Two (2) (Zones 7, 8 and 11) in detail. Mr. Abshire stated that he has coordinated with MUD 9’s engineer related to potential joint drainage improvements along the GSU easement. Discussion ensued. The Board concurred with the request of MUD 9’s engineer and authorized the Attorney to discuss with MUD 9’s attorney and prepare an agreement.

Mr. Abshire updated the Board regarding the MUD 9 Buckingham Water Plant Project and reported that the Notice to Proceed was issued to Gemini Contracting on November 4, 2019. Mr. Abshire added that site work began with demolition of the existing structures. Mr. Abshire noted that the contract period is 270 calendar days and the contract completion date is July 31, 2020.

Upon a motion by Director Moravec, seconded by Director Patton, 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. 10.

Mr. Barner updated the Board regarding his communications with Antonio Lozano concerning removal of dead trees at the WWTP and stated that he was not aware if such removal had occurred.

Director Patton indicated that he would discuss this matter with Director Tryon.

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 96.37%. Mr. Wright next reported that the District had four (4) new taps last month and the District has a total of 1,742 connections. Mr. Wright then reported that there were 213 e-statements sent out and 434 online bill payments made during the month of November.

Mr. Wright next reviewed the list of service termination notices, noting that out of 170 notices mailed to customers, no delinquent accounts were terminated.

Mr. Wright presented the WWTP Monthly Operations Summary and the Entergy kilowatt cost comparison, copies of which are attached to the Operator’s Report.

Mr. Wright next presented the Groundwater Reduction Plan Monthly Operations Summary, a copy of which is attached to the Operator’s Report, and discussed groundwater credits. Director Patton reviewed a comparison of 2018 and 2019 groundwater usage. Extensive discussion ensued.

Mr. Wright next presented the Notable Activity Report, a copy of which is attached to the Operator’s Report.

Discussion ensued regarding service line breaks caused by Tachus totaling approximately $10,000 and that to-date payment has not been received. Mr. Wright indicated that he will assemble information for Mr. Barner. Mr. Barner stated that he will prepare a letter to Tachus.

Mr. Wright next discussed the status of the Brookhaven storm drain that caused a sinkhole and the street to collapse.

Mr. Wright then reported regarding the District’s booth at an event in the District on December 3, 2019, and indicated that he has everything that is needed for the Water Smart application.

It was the consensus of the Board to refrain from terminating water and sewer service during the Christmas holiday.

Discussion ensued regarding encroachment in District easements and rights-of-way. Mr. Barner clarified the types of easements.

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

MISCELLANEOUS REPORTS
Director Moravec reported that he will visit the San Jacinto River Authority (“SJRA”) on December 12, 2019, with the Walden Community Improvement Association (“WCIA”) to discuss Lake Conroe water levels.

Messrs. Barron and Ginandt updated the Board regarding MUD 9’s November meeting.

AUDITOR ENGAGEMENT
Mr. Barner reminded the Board that the District is in the second (2nd) year of its two-year (2) engagement letter with McCall Gibson Swedlund Barfoot PLLC to perform the District’s audits for the FYEs December 31, 2018 and December 31, 2019. Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board confirmed its engagement of McCall Gibson Swedlund Barfoot PLLC to prepare the District’s audit for FYE December 31, 2019.

ANNUAL AGENDA
Mr. Barner then distributed the Annual Agenda for 2020 and explained that the Annual Agenda is for informational purposes only.

ASSOCIATION OF WATER BOARD DIRECTORS (“AWBD”)
The Board discussed renewing the District’s membership in the AWBD. Upon a motion by Director Patton, seconded by Director Moravec, after full discussion and with all Directors present voting aye, the Board authorized the renewal of the District’s membership in AWBD and authorized payment of same.

INSURANCE RENEWAL
Mr. Barner then reminded the Board that its insurance policies expire in March 2020 and asked the Board if it wished to request additional proposals for such policies for the 2020-2021 coverage year. Discussion ensued regarding such policies. It was the consensus of the Board to take no action on this matter.

ETHICS POLICY
Mr. Barner stated that review of the District’s Ethics Policy is an annual agenda item. Mr. Barner went on to state that he recommends no changes to such policy at this time. Discussion ensued regarding AWBD Mid-Winter Conference expenses.

WATER LOSS AUDIT
Mr. Barner stated that he will coordinate with the Operator regarding the Water Loss Audit.

POST-ISSUANCE TAX-EXEMPT DEBT COMPLIANCE OFFICER TRAINING
Mr. Barner discussed the Post-Issuance Tax-Exempt Debt Compliance Officer Training Seminar hosted by RBAP on Saturday, February 8, 2020, and stated that the District’s compliance officer is not required to attend such seminar. Mr. Barner discussed the District’s Post-Issuance Tax-Exempt Debt Compliance Policy with the Board.

ATTORNEY’S REPORT
Mr. Barner updated the Board regarding Montgomery County ESD No. 2’s purchase of property from the WCIA.

Mr. Barner next updated the Board regarding conveyance of the prior Mehl property to the WCIA.

Mr. Barner next discussed Senate Bill 1812, which requires the District to file an annual eminent domain report.

Mr. Barner then discussed the MUD 8 and MUD 9 Annual Report to SJRA and City of Huntsville.

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 Attorney’s Report, as presented; 2) authorized Mr. Barner to file the annual eminent domain report on behalf of the District; and 3) authorized submittal of the Annual Report to the SJRA and City of Huntsville.

Mr. Barner recommended communicating with Directors Tryon and Leasure regarding the review of the agreement with the City of Huntsville. Director Moravec stated that he will review such agreement if Director Leasure is unable to do so.

ELECTION AGENDA
Mr. Barner reported that candidate packages were transmitted to Directors Tryon and Patton.

Mr. Barner next discussed a joint election agreement with Montgomery County and stated that the Election Services Agreement, Joint Election Agreement and estimate of election costs have not yet been received from Montgomery County, but asked for the Board’s approval of such agreements. Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Election Services Agreement and Joint Election Agreement.

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

PASSED AND APPROVED this the 8th day of January, 2020.

Secretary, Board of Directors

December 11, 2019 Minutes Signature

December 11, 2019 Minutes Signature