Meeting Minutes 2020-07-08

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

JULY 8, 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, July 8, 2020, at 9:00 a.m., via telephone and video conference call pursuant to Texas Government Code, Section 551.125, as amended, and as modified by the temporary suspension of various provisions thereof effective March 16, 2020, by the Governor of Texas (the “Governor”) in accordance with the Texas Disaster Act of 1975, all as related to the Governor’s proclamation on March 13, 2020, certifying that the COVID-19 pandemic (“COVID-19”) poses an imminent threat of disaster and declaring a state of disaster for all counties in Texas, 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, thus constituting a quorum. Also attending via conference call were Katherine Turner of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); 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”); Elliot M. Barner, attorney, and Kathryn Cain, paralegal, of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”); and Phillip Bullock, member of the public.

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.

APPROVAL OF MINUTES OF JUNE 10, 2020 MEETING

The President next directed the Board to the approval of the June 10, 2020 regular meeting minutes. Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the June 10, 2020 regular meeting minutes as presented.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Turner reviewed the Tax Assessor-Collector’s Report for the month of May 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 explained that the Tax Assessor-Collector’s Report for the month of June 2020 has not yet been received. Ms. Turner reported that 97.20% of the 2019 taxes have been collected as of May 31, 2020. Ms. Turner then reported that the District’s preliminary 2020 taxable value was received, but noted that the District’s 2020 certified taxable value will not be provided by the Montgomery County Appraisal District (“MCAD”) until the end of July. Upon a motion by Director Moravec, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board approved the Tax Assessor-Collector’s Report.

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.

In response to a question by Director Moravec, Ms. Turner explained that the in the General Operating Fund line item titled June Collection-DIT refers to funds that were transferred into such fund but have not yet cleared the District’s bank.

Director Moravec informed that Board that the District’s insurance provider approved the claim filed for damage to equipment at the Waterfront Lift Station following a power surge that occurred on April 9, 2020, and added that a check for the amount of such damage was received.

Ms. Turner next explained that the Association of Water Board Directors’ (the “AWBD”) 2020 Annual Conference will be held virtually. Ms. Turner further explained that all of the Directors’ registrations for attendance at the in-person conference were cancelled by the AWBD. In response to a question by Director Moravec, Ms. Turner stated that refunds for such cancelled registrations will be issued to MAC as the initial fees for such Directors’ registrations was paid by MAC.

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 9121 through 9164 from the General Operating Fund; 3) authorized payment of checks numbered 1960 through 1967 from the Waste Water Treatment Plant (“WWTP”) Fund; and 4) authorized payment of checks numbered 1293 through 1296 from the Capital Projects Fund.

ENGINEER’S REPORT

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

Mr. Abshire next discussed the progress made by Allco, LLC (“Allco”) in the past month regarding the WWTP Improvement Project (the “WWTP Project”). Mr. Abshire then presented Allco Pay Estimate No. 17 in the amount of $1,262,735.43 and recommended payment of same.

Next, Mr. Abshire discussed the status of the removal of the debris identified beneath the Blower Motor Building at the WWTP during construction of the WWTP Project. Mr. Abshire reminded the Board that it previously authorized Allco to remove the blower pad foundation, remove the debris layer, install piers and then reinstall the foundation at a cost not to exceed $80,000.00.

Mr. Abshire reminded the Board that the District’s contract with Allco for the WWTP Project includes $200,000 for unforeseen conditions; therefore, work relating to the removal of the debris layer will not increase the cost of such contract. In response to a question by Director Patton regarding the progress of such work, Mr. Abshire stated that such blower pad foundation has not yet been removed.

Mr. Abshire then presented Allco Change Order No. 6 in the amount of $78,577.00 and recommended payment of same. Mr. Abshire reminded the Board that such change order will not increase the amount of the District’s contract with Allco since such contract includes $200,000 for unforeseen conditions. Mr. Abshire next presented Allco Change Order No. 7 in the deduct amount of $5,533.67 and stated that such change order includes: 1) removal of the cost for installation of tap for the potable water line under Walden Road since such tap was installed by Hays North; and 2) addition of one half (1/2) the cost for the rental of a security trailer at the WWTP.

Mr. Abshire discussed instances of trespassing recorded by such security trailer located at the WWTP. Director Barlow reported witnessing people walking through the WWTP and added that a portion of the temporary construction fencing had been taken down by pedestrians. Mr. Abshire stated that he will inform Allco that it needs to re-secure the such fencing around the WWTP.
Regarding the Drainage Improvements, Phase II (Zones 7, 8 and 11), Mr. Abshire reported that Jones|Carter submitted design plans for such project to Montgomery County (the “County”) for review. Mr. Abshire further reported that Jones|Carter expects to advertise and bid such project in August 2020. Mr. Abshire then stated that a drainage easement will be required from the property owner at 3122 Heatherglen Road to allow for the enlargement of the storm sewer outfall pipe. Mr. Abshire reported that Jones|Carter made contact with such property owner and stated that he is receptive to granting such easement. In response to a question by Director Moravec regarding Jones|Carter’s billing for work related to the joint drainage improvements, Mr. Abshire explained that Jones|Carter submits all invoices for such work to the District for payment and that the District will be reimbursed by MUD 9 for its portion of such invoices. Mr. Abshire further explained that the portion due from each district is noted on such invoices.

Regarding hydropneumatic tank (the “HPT”) No. 1 at Water Treatment Plant (“WTP”) No. 1, Mr. Abshire reminded the Board that it authorized awarding the contract for such project to CFG Industries (“CFG”). Mr. Abshire requested authority from the Board to execute such contract with CFG following the Attorney’s review of same. Mr. Abshire stated that a Notice to Proceed will not be issued to CFG until closer to the date of delivery of the HPT.

Mr. Abshire next updated the Board regarding the MUD 9 Buckingham WTP Project. Mr. Abshire reported that MUD 9’s engineer sent a letter to the contractor on such project, Gemini Contracting Services Inc. (“Gemini”), informing Gemini that they are behind schedule and the end of the contract period for such project is approaching. In response to a question by Director Tryon regarding the status of such project, Mr. Barron explained that delivery of the motor control panel was delayed and there is not currently a scheduled delivery date, which may cause Gemini to miss the substantial completion date set forth in the contract for such project. Mr. Abshire then presented Gemini Pay Estimate No. 5 in the amount of $270,464.22. Mr. Abshire noted that the District’s share of such pay estimate is fifty percent (50%) of the total, or $135,232.11.

Next, Mr. Abshire discussed correspondence received from the homeowner at 12339 Browning Drive requesting that the District repair cracks developing in the driveway located at such property. Mr. Abshire explained that an existing grate was already in place on such driveway at the time that such driveway was raised during Phase I of the District’s Drainage Improvement project. Mr. Abshire further explained that pressure caused by vehicles driving over such grate has caused the driveway to crack. Additionally, such homeowner claims that following rain events, water ponds in the corners of the driveway. Mr. Abshire reported that work performed on such driveway by the District is no longer under warranty and further reported that the cracks were not caused by a failure of the District’s work. Discussion ensued regarding the responsibility of the District to repair such driveway and/or install a drain on such homeowner’s property. Director Moravec stated that the District should not perform work on residents’ private property as it creates the appearance that District is responsible for maintaining such improvements. Director Moravec recommended that the District offer to pay for one half (1/2) the cost of the repairs to such homeowner’s driveway and further recommended that the District insist that such homeowner hire his own contractor to perform such repair work. Director Tryon suggested that the District should be cautious about reimbursing residents for work that they have performed on their private property. Director Moravec requested that Mr. Barner prepare an agreement between the District and such homeowner releasing the District from responsibility as consideration for payment of any repairs. Upon a motion by Director Patton, seconded by Director Moravec, after full discussion and with all Directors present voting aye, the Board: 1) authorized payment in the amount of $2,500 to such homeowner for installation of a drain along such driveway; and 2) authorized the Attorney to prepare an agreement between the District and such homeowner releasing the District from responsibility for any future repairs to his property.

Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved: 1) the Engineer’s Report, as presented; 2) Allco Pay Estimate No. 17 in the amount of $1,262,735.43; 3) Allco Change Order No. 6 in the amount of $78,577.00; 4) Allco Change Order No. 7 in the deduct amount of $5,533.67;
5) the drainage easement at 3122 Heatherglen Road; 6) execution of the contract with CFG following the Attorney’s review of same; and 7) Gemini Pay Estimate No. 5 in the amount of $270,464.22.

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 95.82%. Mr. Wright next reported that the District had no new taps last month and that the District has a total of 1,757 connections.

Mr. Wright then reported that 120 notices were mailed to customers with delinquent accounts. Mr. Wright further reported that Hays North did not terminate service to such accounts last month pursuant to the Board’s decision at the April 8, 2020 Board meeting to waive customers’ late fees and suspend termination of service to delinquent accounts. Mr. Wright clarified that service to one (1) account was terminated as such customer moved from the home and payment on such account was finalized.

Mr. Wright next reported that installation of multi-smart meters is complete at certain District facilities; therefore, Hays North will now be able to remotely monitor such facilities.

Next, Mr. Wright reported that Hays North completed all item for which it was responsible on the 2020 Water Plant Inspection Action Item Summary (the “Inspection Summary”). Mr. Wright noted that electrical work included on the Inspection Summary is ongoing.

Mr. Wright then requested authorization from the Board to solicit quotes for removal of several large tree branches that are growing near the Poe WTP. Mr. Wright stated that such quotes would be presented to the Board at the August 12, 2020 meeting.

Mr. Wright next reported that Hays North re submitted invoices to several of Tachus’ subcontractors who were installing Tachus’ fiber-optic cables on the dates that the District’s water lines were damaged. Mr. Wright further reported that H&H Utilities (“H&H”), one such subcontractor, reasserted its position that certain water lines were not marked within four feet (4′) of their location, therefore then damage caused to such line was not the responsibility of H&H. Director Moravec stated that the Board believes that reimbursement for damage to the District’s water lines caused during the installation of Tachus’ fiber-optic cables should be paid by Tachus rather than its subcontractors since Tachus is the company that is responsible for such project. Director Moravec then suggested that the District try to reach an agreement with Tachus to split the cost to repair damage to the District’s water lines caused during the installation of Tachus’ fiber-optic cables.

Mr. Wright then reminded the Board that at the June 10, 2020 Board meeting, it was the consensus of the Board to deny a request from Gicor, Inc. (“Gicor”), a property management company, for an adjustment to the water bill for 3122 Canterbury Lane. Mr. Wright reported that Gicor has requested written confirmation of the Board’s decision and added that such written confirmation was prepared by Hays North, reviewed by the Attorney and subsequently sent to Gicor by Hays North on behalf of the District.

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

DISCUSS EMERGENCY RESPONSE PLAN, INCLUDING CHANGES REQUIRED BY THE AMERICA’S WATER INFRASTRUCTURE ACT (THE “AWIA”)

Mr. Barner then explained that the District’s review of its Emergency Response Plan (the “ERP”) is an annual agenda item. Mr. Barner discussed certain changes to the ERP required by the AWIA. Mr. Abshire reported that the Environmental Protection Agency (the “EPA”) requires that the District submit a Risk and Resilience Assessment (“RRA”) and its ERP by June 2021. Mr. Abshire explained that preparation of a RRA will include a detailed review of the District’s facilities by Jones|Carter. Mr. Abshire stated that he will present cost estimates for the preparation of a RRA at the Board’s August 12, 2020 meeting.

MISCELLANEOUS REPORTS

Regarding MUD 9’s board meeting, Mr. Barron reported that MUD 9 is coordinating with residents regarding drainage improvements within such district. Mr. Barron then reported that the Buckingham Water Plant Improvement Project is expected to be substantially completed by the end of July 2020, and such plant will be put into operation at such time.

UPDATE ON DISTRICT’S WEBSITE AND COMMUNICATIONS SERVICES

Director Patton reported that customer traffic on such website remains steady. Director Patton further reported that he and the Attorney regularly receive communications from District customers via such website, and added that most correspondence from such customers is forwarded to Hays North for addressing.

STATUS OF WATER SMART PROGRAM APPLICATION, INCLUDING APPROVAL OF RESOLUTION APPROVING SUBMITTAL OF 2021 WATER SMART APPLICATION FOR INCLUSION IN AWBD WATER SMART PARTNERS PROGRAM

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

UPDATE ON IMPLEMENTATION OF SERVICE FEE FOR STATEMENT BILLING

Director Patton next discussed implementation of a service fee assessed against customers who choose to receive paper billing statements in order to encourage such customers to receive electronic billing statements and make electronic payments. Director Patton stated his preference that the District charge customers a fee of $1.00 per month to receive their billing statements by mail rather than offer a $1.00 credit on customers’ monthly utility bills to those customers who receive electronic billing statements as such additional fee is intended to cover the cost to the District for the preparation and mailing of paper billing statements. Mr. Wright stated that he will coordinate with AVR and First Billing, its third (3rd) party billing contractors, to determine whether such fee can be assessed automatically each month against the appropriate customers. Director Moravec suggested that the Board appoint a committee to meet with Hays North and its contractors regarding the assessment of such fee and ways in which to better publicize to the community the availability of electronic billing statements and electronic payments (the “Billing Committee”). Director Barlow recommended that she and Director Patton serve on the Billing Committee and added that such committee should also discuss providing adequate notice to customers regarding the assessment of such fee beginning January 1, 2021. Director Moravec requested that Hays North coordinate a meeting with the Billing Committee to discuss electronic billing statements and electronic payments, and in advance of the next regular Board meeting, provide the Board with the Billing Committee’s recommendations regarding same.

UPDATE ON POLICIES RELATED TO THE DELEGATION OF AUTHORITY

Mr. Barner reminded the Board that it previously authorized RBAP to prepare a proposed policy for the Board to review regarding the delegation of authority to an individual director or a committee of directors to approve decisions within a certain dollar value limit when a time-sensitive issue arises between Board meetings.

REVIEW DISTRICT’S ETHICS POLICY AND EXPENSE REIMBURSEMENTS

Mr. Barner stated that review of the District’s Ethics Policy and expense reimbursement policy is an annual agenda item. Mr. Barner went on to state that he recommends no changes to such policies at this time. Discussion then ensued regarding the rules related to the Directors’ fees of office and reimbursement of expenses as established by the Texas Water Code.

DISCUSS AWBD’S TRUSTEE ELECTION

Mr. Barner explained that the AWBD’s bylaws require the election of trustees to occur by August 31st of each year. Mr. Barner further explained that because the AWBD’s 2020 Annual Conference is being held virtually, the AWBD will hold the Trustee Election electronically. Mr. Barner went on to explain that each member district will need to appoint one (1) voting representative to cast a ballot in the AWBD Trustee Election. Mr. Barner stated that the AWBD will provide all members with a list of the candidates and will make such candidates’ speeches available online. Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board authorized Director Tryon to cast a ballot on behalf of the District in such election.

ATTORNEY’S REPORT

Mr. Barner next reported that he and Clark Lord, MUD 9’s attorney, continue to prepare the proposed interlocal agreement between the District and MUD 9 to set forth each district’s obligations related to the funding, construction, and operation of certain joint drainage improvements.

Mr. Barner reported that David Hartman, the General Manager of the Walden Community Improvement Association (the “WCIA”), informed him that the WCIA approved the deed for the conveyance of certain property from the District to the WCIA for use as a pocket park. Mr. Barner further reported that the executed deed has not yet been received from the WCIA.

Regarding the District’s agreement with the City of Huntsville (the “City”) for the purchase of its effluent, Mr. Barner reported that the City’s attorney informed him that the City is agreeable to granting the District an extension to its option for such purchase. Mr. Barner reported that he is in the process of drafting such option extension for such attorney’s review.

Director Patton then requested that the District’s consultants coordinate to prepare a comprehensive list of action items (“AIL”) to be circulated to the Board and such consultants at least two (2) weeks prior to each Board meetings so that the Board and consultants are able to track the status of such items between the Board’s meeting. Discussion ensued regarding preparation of such AIL. Mr. Barner stated that RBAP would begin preparing an AIL and circulating it to the consultants for review before sending it out to the Board two (2) weeks before each meeting.

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 11:18 a.m. to discuss matters within the attorney/client privilege. Present for all or portions of the Executive Session were the Board of Directors, Mr. Barner, and Ms. Cain. The Board declared the Executive Session was ended at 11:39 a.m.

RECONVENE IN OPEN SESSION

As of 11:39 a.m., the President declared the Executive Session was ended and the public session was resumed.

In response to a question by Director Barlow regarding the cyber-security training required to be completed by all Directors in order to satisfy the cyber-security training requirements established by House Bill 3834, Mr. Barner stated that the Directors’ certificates of completion of such training should be provided to RBAP as the custodian of the District’s records.

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

PASSED AND APPROVED this the _____ day of ___________, 2020.

Secretary, Board of Directors