Meeting Minutes 2020-02-12

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

FEBRUARY 12, 2020

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, February 12, 2020, 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 – Treasurer / Investment Officer
Bob Leasure – Assistant Secretary

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 and Robert Ginandt, Directors of Montgomery County Municipal Utility District No. 9 (“MUD 9”); and Elliot M. Barner, attorney, and Kathryn Cain, 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. Jennifer Gaston introduced herself to the Board and presented a survey of the lot that she purchased on Brookhaven Drive. Ms. Gaston requested to receive service from the District and acknowledged that her property is not located within the boundaries of the District. Alison Hale with Keller Williams Realty, Inc. introduced herself as the real estate agent who assisted Ms. Gaston in purchasing such lot. Ms. Gaston stated that she is unable to build her home in the desired location on her lot due to the location of the existing septic system drip fields. Ms. Gaston stated that she wants to receive both water and sewer from the District. Mr. Barner explained that such request will need to be included as an item on the agenda of the next Board meeting so that the Board could consider the request and authorize the Engineer to conduct a feasibility study on such property.

Director Moravec suggested that the Board re-evaluate the District’s current policies regarding whether or not to provide any services to property located outside of the District’s boundaries. Director Moravec stated that he expects that the District will receive an increase in similar requests.

Mr. Abshire informed the Board that the lot in question is located on a peninsula and sits four (4) to five (5) lots away from the boundary of the District. Mr. Abshire stated that the other residents of such peninsula receive water from private wells. Mr. Abshire explained that feasibility studies are typically funded by the owner of the land proposed to be annexed. Mr. Abshire further explained that such owner is also responsible for the cost of extending the District’s existing lines to provide service to their property. Mr. Abshire then stated that such project would likely be too expensive for Ms. Gaston to fund by herself, and recommended that she approach the other residents on the peninsula to inquire whether they would agree to share the cost to have the entire peninsula annexed into the District and receive services from the District. Mr. Abshire clarified that in order to provide service to the residents of such peninsula, the District will require easements from each of the affected property owners. Mr. Abshire stated that Ms. Gaston’s only options are to install her own private well or to persuade her neighbors to jointly fund the annexation and grant easements to the District. Ms. Hale stated that she will explain the situation to Ms. Gaston’s neighbors on the peninsula and determine their interest level in annexation by the District.
In response to a question from Director Barlow regarding the status of the proposed recreation vehicle park (the “RV Park”), Ms. Hale stated that she heard that such development is moving forward.

There being no further public comments, the President directed the Board to proceed with the agenda.

APPROVAL OF MINUTES OF JANUARY 8, 2020 MEETING

The President next directed the Board to the approval of the January 8, 2020 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 January 8, 2020 regular meeting minutes as presented.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of January 2020, 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 88% of the 2019 taxes have been collected as of January 31, 2020, and that the outstanding tax receivable is $215,967.18.

Ms. Turner explained that all future taxes collected for 2019 will include penalties and interest owed to the District. Ms. Turner added that after June 2020, delinquent accounts will be sent to the District’s Delinquent Tax Attorney for collection. In response to a question by Director Patton, Ms. Turner confirmed that penalty and interest payments made on outstanding balances are payable to the District.

Mr. Barner discussed the Order Determining Ad Valorem Tax Exemptions and explained that the Board must authorize the District’s Tax Assessor-Collector to challenge the Montgomery County Appraisal District’s (“MCAD”) records. Mr. Barner then reminded the Board that the District provides a residential homestead exemption to any individual who is disabled or is 65 years of age or older in the amount of $30,000 as provided in §11.13(d), Texas Property Tax Code.

Regarding the Resolution Authorizing Petition Challenging Appraisal Records, Mr. Barner explained that such resolution allows the District’s Tax Assessor-Collector to challenge any particular piece of data found in the MCAD’s records. Mr. Barner stated that it is his recommendation that the Board adopt such resolution so that if the Tax Assessor-Collector finds that any information in the MCAD’s records is incorrect or has been omitted, she will be able to challenge such records.

In response to a question by Director Moravec, Mr. Barner confirmed that the District’s Delinquent Tax Attorney is Linebarger Goggan Blair & Sampson, LLP and that the District has contracted with Montgomery County’s (the “County”) Tax Assessor-Collector.

Mr. Barner next discussed the Resolution Implementing Penalty for Delinquent 2019 Taxes. Upon a motion by Director Moravec, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board adopted: 1) the Order Determining Ad Valorem Tax Exemptions; 2) the Resolution Authorizing Petition Challenging Appraisal Records; and 3) the Resolution Implementing Penalty for Delinquent 2019 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 also distributed two (2) corrected pages of the Bookkeeper’s Report, one in which the maintenance tax receivable amount was adjusted from the original report and the other being a simplified copy of the Series 2012 Bonds Cost Comparison. Ms. Turner then reviewed current year-to-date revenues and expenditures against the District’s budget for the fiscal year ended December 31, 2019.

Ms. Turner reviewed a Snap Shot Financial Report as of February 12, 2020, and the Revenue and Expenditure Comparison for 2019 and 2020 as of February 12, 2020.

In response to a question by Director Moravec regarding the increase in tap requests from the previous year, Mr. Wright stated that such increase was nominal.

Director Moravec noted that the District has already spent more of its drainage budget than is to be expected at this point in the year. Mr. Wright explained that in the last year, the District expended a higher than normal amount of funds on drainage projects, including the repair of several cracks causing sinkholes throughout the District. Mr. Wright added that there had been no major drainage issues prior to the past year. Director Moravec requested that the Operator provide the Board with a more accurate estimation of the District’s expenses associated with drainage improvements for the following year so that the Board can adopt a more adequate drainage budget.

Director Barlow noted that the $1,400 charged to the District by Antonio Lozano for the removal of dead trees seems exorbitant. Director Tryon reminded the Board that Mr. Lozano provided the lowest bid for such service.

Upon a motion by Director Moravec, seconded by Director Leasure, 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 8848 through 9002 from the General Operating Fund; 3) authorized payment of checks numbered 1924 through 1931 from the WWTP Fund; and 4) authorized payment of checks numbered 1266 through 1278 from the Capital Projects Fund.

It was the consensus of the Board to table discussion of the Quarterly Investment Report until the March 2020 meeting.

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”) continues to work on the Sequencing Batch Reactor (“SBR”) basins, setting and removing forms for the basin walls and pouring concrete. Mr. Abshire further reported that the equipment for such work will be stored at the manufacturer’s warehouse. Mr. Abshire presented information related to the January 27, 2020 meeting with Allco, a copy of which is attached to his report, and indicated that the next meeting is scheduled for February 24, 2020. Mr. Abshire acknowledged that Jones|Carter provided residents with only a twenty-four (24) hour notice of Allco’s recent concrete pour due to the unpredictable weather, and agreed to provide more advanced notice regarding future concrete pours. Mr. Abshire reported that Allco should be able to avoid overnight concrete pours going forward on such project as the major pours have already been completed. Mr. Abshire added that in the summertime, Allco may need to revert back to overnight concrete pours to avoid extreme heat. Mr. Abshire presented Allco Pay Estimate No. 12 in the amount of $919,625.81.

Mr. Abshire next presented Allco Change Order No. 3 in the amount of $18,716.00 and stated that such change order includes costs associated with installing a proposed eight-inch (8″) potable water line under Walden Road. Mr. Abshire reported that such line needs to be extended across Walden Road before the District can build any vertical structures. Mr. Abshire added that such extension needs to occur within the next month and stated that Allco estimated that such project would require five (5) days to complete. Mr. Abshire acknowledged that the bid received from Allco is high but stated that the project needs to be completed soon. Mr. Abshire reported that he requested a bid from Rebel Contractors, LLC (“Rebel”) for such project, and expects to have such bid within the next few days. Mr. Abshire requested the Board’s approval to contract with Rebel for such project if Rebel’s bid is lower than Allco’s. Director Patton stated that he is willing to approve Allco’s proposed Change Order for such project, provided that Rebel’s bid is higher than Allco’s bid. Mr. Patton reported that the County’s engineer informed him that the County will repave the damaged section of Walden Road following completion of the water line extension. Director Moravec stated his agreement with Director Patton’s proposal. In response to a question by Mr. Barner, Mr. Abshire confirmed that Jones|Carter will obtain a written bid from Rebel for such project. Director Moravec suggested that the Board authorize Jones|Carter to proceed with Rebel or Allco, depending on whose bid is lower, so that the project is able to progress forward prior to the next month’s Board meeting.

Mr. Abshire reported that Jones|Carter will send a letter to Allco stating that Allco is several months behind the schedule set forth in the contract for the WWTP Project and that penalties will be assess. Mr. Barner requested that Mr. Abshire provide a copy of such letter to RBAP prior to sending it to Allco. Mr. Barner further requested that Mr. Abshire confirm the amount of the retainage that the District will have in its possession once the project is complete and before the final payment is made to Allco.

Mr. Abshire reported that he will inform MUD 9’s engineer about what was discussed at today’s Board meeting regarding the WWTP Project so that such information can be provided to the MUD 9 Directors.

Regarding the status of completion of Phase I of the Drainage Improvements, Mr. Abshire reported that Rebel has completed the work of driveway modifications at 11719 Thoreau Drive. Mr. Abshire presented information showing the final costs for the storm sewer rehabilitation work in Zones 3 & 4, a copy of which is attached to his report. Mr. Abshire reported that the actual total costs were lower than the amount of the contract; therefore, such project can be closed-out. Mr. Abshire then presented Rebel Pay Estimate No. 10 & Final in the amount of $113,097.35.

Mr. Abshire next presented Rebel Change Order No. 8 in the deduct amount of ($152,826.00) and stated that such change order includes: 1) Rebel’s work completed on the driveway modifications at 11719 Thoreau Drive; 2) the cost of divers used in an to attempt to plug Zone 3 & 4 outfalls in lieu of cofferdams; 3) removal of bid items related to Zone 3 & 4 cofferdams and Cured-in-Place Piping (“CIPP”) installation; and 4) the lowering of the crest of the driveway at 11719 Thoreau Drive.

Regarding the Drainage Improvements, Phase II (Zones 7, 8 and 11), Mr. Abshire reported that Jones|Carter continues with the design of such improvements. Mr. Abshire further reported that Jones|Carter continues to coordinate with MUD 9’s engineer regarding potential joint drainage improvements along the GSU easement located near Heatherglen. Mr. Abshire next reported that Jones|Carter is in the process of modeling various drainage options for such potential improvements. Mr. Abshire explained that the model being tested by Jones|Carter is based on MUD 9 installing a swale along the GSU easement. Mr. Abshire stated that such model was run using the level of rainfall received during the Memorial Day flood. Mr. Abshire explained that the model included the level of flow that the MUD 9 engineer expects to travel down such swale. Mr. Abshire further explained that the model is being used to determine whether such swale can successfully accommodate the increased flow from the District’s drainage system. Mr. Abshire confirmed that such model was successful in Zone 8, but that the size of the pipeline used will have to be increase for the model of Zone 9.

Director Moravec exited the meeting at this time.

Mr. Abshire requested the Board’s opinion regarding whether to increase the size of the pipeline used in the Zone 9 model to handle the amount of flow from a twenty-five (25) year flood or to continue to upsize such pipeline. Mr. Abshire noted that the District’s other drainage improvements have been sized to handle the amount of flow from a twenty-five (25) year flood. Mr. Abshire added that overflow from the drainage system will make its way to the lake, and stated that Jones|Carter proposes to raise the crest of residents’ driveways so that they are not the lowest point along such route.

Director Moravec entered the meeting at this time.

Mr. Abshire reported that a District resident contacted him regarding concerns of flooding due to the drainage work being done in Heatherglen. Mr. Abshire presented an aerial photograph showing the location of the proposed joint drainage improvements. Mr. Abshire stated that any costs for such improvements above the amount that the District was already planning to spend on drainage projects in Heatherglen will be paid for by MUD 9 because the cost of the joint improvements is less than MUD 9’s alternative drainage route. Mr. Abshire stated that he does not yet have an estimate for the cost of such improvements. Mr. Abshire noted that the District’s existing pipeline is located beneath a road, and that such road will have to be excavated.

In response to a question from Mr. Barron regarding the drainage channel, Mr. Abshire stated that it is not practical to construct a drainage channel on top of the existing pipeline because the space is narrow and is not a low point to which water would drain. Mr. Barner reported that he is coordinating with Clark Lord, MUD 9’s attorney, regarding preparing contracts between the District and MUD 9 relating to the joint drainage improvement project.

Regarding the annual water plant inspection of Water Plant Nos. 1 and 2 as required by the Texas Commission on Environmental Quality (the “TCEQ”), Mr. Abshire reported that such inspections took place on January 29, 2020. Mr. Abshire further reported that the inspection reports are being prepared by Jones|Carter. Mr. Abshire presented photographs of such inspections and noted that interior delamination was found in Hydrotank No. 1 at Water Plant No. 1. Mr. Abshire reported that metal debris was discovered at the bottom of Hydrotank No. 1 when such tank was drained. Mr. Abshire explained that metal debris indicates interior deterioration of the tank. Mr. Abshire stated that Jones|Carter routinely drains and inspects the District’s tanks every three (3) to five (5) years, and that this inspection was the first one performed on Hydrotank No. 1 since it was installed. Mr. Abshire explained that cathodic protection is a technique used to control the corrosion of a metal surface, but noted that if the surface were properly coated in the first place, then cathodic protection will not be necessary. Mr. Abshire stated that he does not recommend cathodic protection for Hydrotank No. 1, but instead recommends that Jones|Carter inspect such tank on a more frequent basis. Mr. Abshire reported that thickness measurements taken previously by Jones|Carter of Hydrotank No. 1 were within normal limits and did not cause concern regarding deterioration of such tank. Mr. Abshire recommended that Jones|Carter conduct another site visit to take additional thickness measurements from the top of Hydrotank No. 1 in order to determine the thinnest area of such tank. Mr. Abshire confirmed that Hydrotank No. 1 will be out of commission until Jones|Carter can determine the cause of such deterioration. Mr. Abshire stated that the records from the inspection performed by Jones|Carter immediately following installation of such tank do not indicate any deterioration, and that it is unclear what may have caused subsequent deterioration. Mr. Abshire further stated that the worst case scenario is that the second inspection may indicate that the District needs a new hydrotank. Mr. Wright stated that he has observed hydrotanks with more deterioration than Hydrotank No. 1 that are still in operation, and does not believe that the District will require a new tank. Mr. Abshire requested that the Board authorize Jones|Carter to conduct an additional inspection of Hydrotank No. 1.

Mr. Abshire next updated the Board regarding the MUD 9 Buckingham Water Plant Project and presented information related to the February 5, 2020 meeting with Bleyl Engineering. Mr. Abshire then presented Gemini Contracting Pay Estimate No. 1 in the amount of $189,870.03. Mr. Abshire noted that the District’s share of such pay estimate is fifty percent (50%) of the total, or $94,935.02.

Upon a motion by Director Barlow, seconded by Director Moravec, 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. 12; 3) approved Allco Change Order No. 3; 4) authorize Jones|Carter to obtain a written bid from Rebel for the water line extension and to accept such bid contingent upon such bid being below $15,000; 5) approved Rebel Pay Estimate No. 10 & Final; 6) approved Rebel Change Order No. 8; 7) authorized Jones|Carter to proceed with drainage system improvements in Zone 8 and determine costs for drainage improvements in Zone 9; 8) authorized Jones|Carter to conduct an additional inspection of Hydrotank No. 1; and 9) approved Gemini Contracting Pay Estimate No. 1.

STATUS OF REMOVAL OF DEAD TREES AT WWTP

Director Tryon reported that such project is complete.

OPERATOR’S REPORT

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

Mr. Wright reported that the District’s water plants have collectively pumped a total of 8.6 billion gallons, while the District has billed its customers for a total of 7.691 billion gallons in such time.

Mr. Wright noted that the discrepancy in such amounts is minimal considering that it occurred over a fourteen (14) year period.

Mr. Wright reported that the combined water accountability for the District and MUD 9 was 95.62%. Mr. Wright next reported that the District had seven (7) new taps last month and that the District has a total of 1,748 connections. Mr. Wright then reported that there were 251 e statements sent out to customers and 456 online bill payments made during the month of January. In response to a question by Director Moravec regarding online payments, Mr. Wright stated that there has been an increase in the number of customers submitting payments electronically. Director Patton stated that he is aware of certain established customers of the District who claim that they are not aware that the District accepts online payments.

Mr. Wright next reviewed the list of service termination notices, noting that out of 144 notices mailed to customers, no delinquent accounts were terminated.

Mr. Wright reported that he is taking photographs of the debris found in the District’s water plants with the intention of circulating such photographs to customers for informational purposes in the future.

In response to a question by Director Moravec regarding the $15,880.00 line item labeled as miscellaneous on the Monthly Operations Summary, Mr. Wright stated that he would research such line item and separate the charge into separate items on future Operator’s Reports. Mr. Wright further stated that such line item probably includes tap fees.

In response to a question by Director Moravec regarding the number of vacant lots within the District that may eventually be developed into residential properties, Mr. Abshire stated that many such vacant lots are owned by residents who already reside in the District and will never build on them. Director Leasure stated that the Walden Community Improvement Association (the “WCIA”) would be able to provide the number of vacant lots within the District.

Mr. Wright next reported that the valve survey project is complete and that such information was provided to the Engineer in order to correct their online maps. Mr. Wright stated that the Operator will inspect and exercise the District’s valves every two (2) years going forward. In response to a question by Director Tryon regarding the type of valves being surveyed, Mr. Wright clarified that they are gate valves.

Mr. Wright then reported that booster pump no. 5 was repaired and that such repair was jointly funded with MUD 9.

Mr. Wright then reviewed costs associated with repairs of water service line breaks caused by installation of fiber-optic cable for internet service by Tachus, a copy of which is attached to the Operator’s Report. Mr. Wright reported that the District has not received any payments from Tachus for such breaks since October 2018. Mr. Barron reported that MUD 9 has tried contacting Tachus but has received no response. Mr. Barron further reported that MUD 9’s attorney has notified Tachus’ attorney that MUD 9 intends to file a claim for damages. Mr. Barner stated that Tachus claims that the information submitted by Hayes North was insufficient to prove that damage to the District’s water lines was caused by Tachus or its subcontractors. Mr. Barner further stated that all information provided to Tachus by Hayes North should also be provided to RBAP, including all related email correspondence and photographs. Mr. Barner then stated that he would coordinate with attorneys in other districts to determine whether they also have concerns regarding the quality of work performed by Tachus.

Mr. Wright stated that typically, subcontractors contact Hayes North immediately when they break a service line, and that in other districts, such notification has been sufficient in order for the contractor to reimburse such district for the needed repair to such line. Mr. Ginandt reported that MUD 9 was not initially taking photographs of the service lines damaged by Tachus’ subcontractors, but that Tachus informed MUD 9 that they require photographs of such damage. Mr. Ginandt further reported that when MUD 9 originally contracted with Tachus, they were told by a Tachus representative that any damage to the district’s lines could be reported online; however, MUD 9 has never been able to get in contact with such representative again.

Mr. Wright then stated that he prepared a presentation to the Board regarding cybersecurity. Mr. Barner recommended that such item be added to the agenda for the following month’s Board meeting.

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.

WATER SMART PROGRAM APPLICATION

The Board then discussed the status of the Association of Water Board Directors’ (the “AWBD”) Water Smart program. Upon a motion by Director Leasure, seconded by Director Moravec, after full discussion and with all Directors present voting aye, the Board authorized the Operator to prepare the AWBD Water Smart application.

Mr. Wright next presented a Flume water monitor device designed to attach to an existing water meter and track water usage using a magnet. Mr. Wright stated that such device can alert users to leaks in their water lines. Director Moravec suggested that the District could install such devices on meters of customers who frequently complain about supposedly faulty meters. Mr. Barner further stated that such topic will need to be included on the agenda of the next Board meeting so that the Board can consider amending its Rate Order. Mr. Wright noted that he needs to conduct additional testing of such device to verify its accuracy.

Mr. Wright then reported that he and the Engineer reviewed the District’s ten (10) year capital improvement plan and determined that the Operator will be under budget regarding the installation of automatic transfer switches at the District’s lift stations. Mr. Wright confirmed that the Operator will proceed with updates to the District’s facilities based upon the capital improvement plan budget.

Mr. Wright next reported that a customer contacted him recently regarding an incident that occurred in 2018 in which there was a backup of sewer water into such customer’s home. Such customer claims that the District is responsible for the damage that such backup caused to his property and is seeking $2,754 in reimbursement from the District. Mr. Abshire reported that 2012 was the last time that the District performed any work in the area where such customer resides; therefore, he does not believe that the backup was caused by the District. Director Moravec stated that such customer would need to file a claim with the District’s insurance company. Mr. Wright then offered to file a claim with the District’s insurer on behalf of such customer, and stated that the Operator typically files such claims for residents. Mr. Barner stated that the Operator cannot file a claim without the Board’s approval. Mr. Barner requested that the Operator direct any customers to RBAP who claim that the District is responsible for damage to their property.

MISCELLANEOUS REPORTS

Mr. Barner next updated the Board regarding conveyance of certain property to the WCIA for park purposes. Mr. Barner reported that he provided a special warranty deed to the WCIA’s General Manager, David Hartman, for conveying such property to the WCIA.

Mr. Barner then updated the Board regarding the status of certain easements needed for the WWTP Project and explained that the WCIA had approved and executed such easements.

Mr. Barner further reported that the WCIA requests authority to place a temporary deer trap on such easement for one (1) day. Upon a motion by Director Barlow, seconded by Director Moravec, after full discussion and with four (4) Directors present voting aye, and Director Tryon voting no, the Board authorized the WCIA to place a temporary deer trap within the easement for one (1) day, subject to the WCIA agreeing to pay all associated costs for such trap. Director Tryon stated that he disagrees with the location on which the deer trap will be placed. Mr. Barner reported that he provided the lease to Mr. Hartman conveying such property to the WCIA, and added that such lease contains a reversion clause.

Regarding MUD 9’s Board meeting, Mr. Barron reported that such district has issued refunding bonds. Mr. Barron further reported that MUD 9 continues to work on various drainage projects throughout such district. Mr. Barron stated that he contacted Arthur J. Gallagher Risk Management Services, Inc. (“Gallagher”) to obtain an insurance proposal for coverage of the district’s propane storage tanks. Mr. Abshire added that when a district applies for insurance, the insurers recently started sending questionnaires to the district’s engineer to ascertain the value of the district’s property.

Mr. Barron then reported that he attended a Lone Star Groundwater Conservation District (“LSGCD”) meeting last night and reported that there was extensive discussion on responses provided by the LSGCD to various open records requests.

ATTORNEY’S REPORT

Mr. Barner then updated the Board regarding Montgomery County Emergency Services District No. 2’s (“ESD No. 2”) purchase of property from the District. Mr. Barner reported that he recently spoke with ESD No. 2’s attorney who informed him that ESD No. 2 was in contact with the WCIA in an effort to obtain a tract of land across the street from the existing fire station; however, such land is deed restricted and can only be residentially developed. Mr. Barner stated that the District’s sale of property to ESD No. 2 is still pending.

Mr. Barner presented to the Board a Resolution Regarding Public Information Maintained on Privately Owned Devices (the “Public Information Resolution”), a copy of which is attached hereto.

Mr. Barner explained that pursuant to Senate Bill 944 of the 86th Texas Legislature, all Directors are required to preserve public information held on a privately owned devices and as such, he is recommending the District adopt the Public Information Resolution to ensure compliance with the new requirements. Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board approved the Public Information Resolution.

ANNUAL REVIEW OF AGREEMENTS WITH CITY OF HUNTSVILLE

Director Tryon updated the Board regarding his meeting with Director Leasure, Linda Wilson, Charlie Barron, and Roy McCoy regarding the District’s agreement with the City of Huntsville (“Huntsville”) for the purchase of its effluent. Director Tryon stated that it was Mr. McCoy’s recommendation that the District request from Huntsville an extension of time by which the District must agree to purchase Huntsville’s effluent. Mr. Barner reminded the Board that the current option to purchase such effluent from Huntsville expires on January 31, 2021. Mr. Barner stated that the District can request to further extend the purchase option. Director Tryon stated that Mr. McCoy expressed concern that the LSGCD may establish regulations limiting the District’s use of its Catahoula well in the future, and that extending the purchase option would be in the best interest of the District and MUD 9. 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 and MUD 9’s attorney to request from Huntsville an extension of the purchase option.

REVIEW INSURANCE PROPOSAL FROM ARTHUR J. GALLAGHER RISK MANAGEMENT SERVICES, INC.

Discussion ensued regarding the insurance proposal from Gallagher. Director Moravec suggested that the Board decline the Inland Marine coverage. In response to a question from Director Patton regarding a $900 claim filed by the District in 2012, Mr. Wright stated that such claim was likely related to a damaged bulkhead. Discussion then ensued regarding deductible amounts for the various types of coverage offered. Upon a motion by Director Barlow, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the proposed insurance policy, subject to the removal of the Inland Marine coverage.

ELECTION AGENDA

Mr. Barner updated the Board regarding the May 2, 2020 Directors Election (the “Election”) and reiterated that the filing deadline for the Election is at 5:00 p.m. on February 14, 2020. Mr. Barner reported that a gentleman contacted RBAP last week to request an application for a place on the ballot; however, a completed application has not yet been received. Mr. Barner further reported that the gentleman was informed of the date and time of the Board’s meeting.

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

PASSED AND APPROVED this the ____ day of ________________, 2020.

Secretary, Board of Directors

February 12, 2020 Minutes Signature

February 12, 2020 Minutes Signature