Meeting Minutes 2020-09-09

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

SEPTEMBER 9, 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, September 9, 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, except for Director Moravec, thus constituting a quorum. Also attending via conference call were Dietra Bonds of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); Justin Abshire and Conner Murphy 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”); Elliot M. Barner, attorney, and Kathryn Cain, paralegal, of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”).

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 AUGUST 12, 2020 REGULAR MEETING

The President next directed the Board to the approval of the August 12, 2020 regular meeting minutes. Director Patton explained that he informed the Attorney that such minutes contained a typographical error regarding the proposed 2020 tax rate. Mr. Barner confirmed that such error was corrected. Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the August 12, 2020 regular meeting minutes, subject to certain corrections.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Bonds reviewed the Tax Assessor-Collector’s Report for the month of July 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. Bonds reported that 99.03% of the 2019 taxes have been collected as of July 31, 2020.

Mr. Barner next presented a list of delinquent tax accounts of taxpayers owing more than $250 for the 2019 tax year and noted that seven (7) such accounts are eligible for termination of service.

Mr. Barner went on to remind the Board that it will need to schedule a hearing to terminate water service to those delinquent tax accounts eligible for such termination and recommended that such hearing be scheduled for the October 14, 2020 Board meeting. Mr. Barner then requested that the Board authorize RBAP to send letters to those delinquent tax accounts eligible for such termination in order to provide property owners with sufficient notice of such hearing.

Upon a motion by Director Tryon, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board: 1) approved the Tax Assessor-Collector’s Report; 2) authorized RBAP to send letters to those delinquent tax accounts eligible for such termination; and 3) scheduled the hearing regarding termination of water service to such eligible accounts for the October 14, 2020 meeting.

2020 TAX RATE

PUBLIC HEARING ON 2020 TAX RATE

The President next declared the public hearing open to discuss the District’s proposed tax rate for 2020.

Mr. Barner reminded the Board that it voted to publish a proposed total 2020 tax rate at $0.2968 per $100 of assessed value.

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

ADOPT ORDER SETTING RATE AND LEVYING TAX FOR 2020

Mr. Barner then presented for the Board’s approval and adoption an Order Setting Rate and Levying Tax for 2020 reflecting the levy of a tax rate of $0.0511 per $100 of assessed valuation for debt service purposes and $0.2457 per $100 of assessed valuation for operations and maintenance purposes, resulting in a total 2020 tax rate of $0.2968 per $100 of assessed valuation.

Upon a motion by Director Barlow, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved a total ad valorem tax rate of $0.2968 per $100 of assessed value for the year 2020, comprised of $0.0511 per $100 assessed valuation for debt service purposes and $0.2457 per $100 assessed valuation for operation/maintenance purposes.

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.

Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board approved the Order Appointing Tax Assessor-Collector.

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 2020 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 and the Texas Commission on Environmental Quality (the “TCEQ”).

Upon a motion by Director Barlow, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the ADIF, as presented.

ADOPT RESOLUTION CONCERNING TAX COLLECTION PROCEDURES

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 Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Resolution Concerning Tax Collection Procedures.

BOOKKEEPER’S REPORT

Ms. Bonds next reviewed the Bookkeeper’s Report, a copy of which is attached hereto, including the current fund balances, expenditures and investments.

Mr. Barner then discussed the distribution of the draft Wastewater Treatment Plant (“WWTP”) budget for the fiscal year ending December 31, 2021 to MUD 9. Mr. Barner stated that such item is an annual agenda item in order to document that the District’s Bookkeeper has been directed to distribute such budget. Ms. Bonds stated that such budget was prepared by Director Moravec with input from the Engineer regarding certain budgeted items. Mr. Abshire explained that certain funds in the District’s 2018 Bond account are allocated to be used for the Drainage Improvements Phase II Project. Mr. Abshire further explained that Director Moravec believes that the funding for such project would be more appropriately paid from the general operating fund, rather than the 2018 Bonds account, and would like the capital project account to be reimbursed for all expenditures paid thus far related to the Drainage Improvements Phase II Project. Mr. Barner stated that he will correspond further with Director Moravec regarding such request for reimbursement, as such action may require certain Board resolutions.

Discussion then ensued regarding the amount included in the draft WWTP budget for the operating expenses related to the new WWTP. Director Patton requested that the Operator coordinate with certain vendors in order to obtain a better understanding of such operating expenses so that a more accurate estimate can be included in the draft WWTP budget.

Regarding the engagement of Burton Accounting, P.L.L.C. (“Burton Accounting”) 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 the District has not yet received an engagement letter. Mr. Barner explained the purpose of the TWDB’s requirements and the necessity of preparing such additional statements. Director Leasure requested that the Board postpone taking action on such agenda item until an engagement letter is received from Burton Accounting.

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 9206 through 9238 from the General Operating Fund; 3) authorized payment of checks numbered 1975 through 1980 from the WWTP Fund; 4) authorized payment of checks numbered 1301 through 1304 from the Capital Projects Fund; and 5) authorized distribution of the draft WWTP budget for fiscal year ending December 31, 2021 to MUD 9.

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 reported that vertical construction has commenced. Mr. Abshire then presented Allco Pay Estimate No. 19 in the amount of $458,221.76 and recommended payment of same.

Mr. Abshire then reminded the Board that an electrical easement is required between the District and Entergy Corporation (“Entergy”) in order to grant Entergy access to the transformer located at the WWTP. Mr. Abshire reported that Jones|Carter prepared the legal description for such easement and that Entergy prepared the easement agreement, which was reviewed by the Attorney.

Mr. Abshire requested the Board’s approval of such agreement.

Regarding the Drainage Improvements, Phase II (Zones 7, 8 and 11), Mr. Abshire reported that the design plans submitted to Montgomery County (the “County”) by the District and MUD 9 for such project are expected to be approved within the next week. Mr. Abshire then reported that Jones|Carter will advertise and bid such project in the next two (2) weeks and will present the bid results to the Board at its October 14, 2020 meeting.

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 reported that the contract with CFG was executed and a pre construction meeting will be scheduled in the next few weeks, at which time the Notice to Proceed will be issued to CFG. Mr. Abshire further reported that the HPT is expected to be delivered in late October. In response to a question by Director Tryon regarding inspection of the coating on the HPT, Mr. Abshire stated that once the HPT is delivered, such inspection will occur on site.

Mr. Abshire next updated the Board regarding the MUD 9 Buckingham WTP Project. Mr. Abshire reminded the Board that the TCEQ denied MUD 9’s application to use the Buckingham Catahoula well, which will delay the Buckingham WTP Project by several months. Mr. Abshire next presented Gemini Pay Estimate No. 8 in the amount of $453,791.25. Mr. Abshire noted that the District’s share of such pay estimate is 50% of the total, or $226,895.62.

Next, Mr. Abshire reminded the Board that the America’s Water Infrastructure Act of 2018 (the “AWIA”) requires water districts serving more than 3,300 customers to develop and/or update their Risk and Resilience Assessments (“RRA”) and Emergency Response Plans (“ERP”). Mr. Abshire further reminded the Board that preparation of a RRA will include a detailed review of the District’s facilities by Jones|Carter. Mr. Abshire reported that Jones|Carter held a telephone conference call with the Board’s AWIA Committee, consisting of Directors Tryon and Moravec, to discuss such work. Mr. Abshire then reported that Jones|Carter will met with the AWIA Committee, a MUD 9 liaison, and MUD 9’s engineer in the next few weeks to further discuss the RRA and ERP.

In response to a question by Director Tryon regarding the electrical work being performed at the WWTP, Mr. Abshire explained that Allco’s electrical subcontractor is behind schedule and that Allco is considering replacing such subcontractor in an effort to get back on schedule.

Upon a motion by Director Leasure, seconded by Director Patton, 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. 19 in the amount of $458,221.76; 3) the electrical easement with Entergy; and 4) Gemini Pay Estimate No. 8 in the amount of $453,791.25.

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 100.56%. Mr. Wright next reported that there were no new taps last month and that the District has a total of 1,763 connections.

Mr. Wright then reported that 161 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 next reported that 275 customers are currently enrolled to receive electronic statements from the District.

Mr. Wright reported that the Water Well on Walden Road experienced a decrease in the amount of gallons of water pumped per minute. Mr. Wright further reported that such well was inspected and was found to be operating at 75% capacity. Mr. Wright then clarified that the well was operating normally; however, the meter was not functioning properly. Mr. Wright reported that G-M Services will be conducting regularly scheduled performance testing on all of the District’s water wells next week.

Next, Mr. Wright requested direction from the Board regarding resumption of the assessment of late fees and termination of service to delinquent accounts. Mr. Wright reported that 13 accounts are 60 days delinquent, with a combined outstanding balance of approximately $1,300, and added that there are no accounts delinquent by 90 or more days. It was the consensus of the Board to continue waiving the assessment of late fees and termination of service to delinquent accounts.

Mr. Wright then reminded the Board that it previously authorized Hays North to file a claim with the District’s insurance provider for damage to equipment at the Waterfront Lift Station following a power surge that occurred on April 9, 2020. Mr. Barner reported a check for the amount of such damage was received yesterday.

Discussion next ensued regarding a notice to be inserted into customers’ utility bills informing them of the availability of electronic statements and electronic payments. Director Patton stated that Hays North’s invoices include a charge of $0.75 per customer for the cost of printing and mailing utility bills to those customers who receive hard copies of their bills. Director Patton further stated that Hays North will coordinate with First Billing, its third (3rd) party billing contractor, regarding posting a notice on First Billing’s website regarding signing up for electronic statements that customers will see when they make online payment of their utility bills.

Discussion further ensued regarding additional promotion of the availability of electronic statements to the District’s customers. Director Patton suggested that the District could advertise throughout the entire community if MUD 9 also agreed to offer the same incentives that the District is offering to customers who sign up to receive electronic statements, that being the issuance of a one time credit of $10.00 to customers who receive electronic billing statements. Mr. Barron stated that an item regarding electronic statements is scheduled to be included on the agenda of MUD 9’s October board meeting.

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.

MISCELLANEOUS REPORTS

Director Leasure reported that he attended MUD 9’s board meeting, at which MUD 9’s board of directors adopted a 2020 tax rate of $0.395 per $100 of assessed value.

UPDATE ON DISTRICT’S WEBSITE AND COMMUNICATIONS SERVICES

Director Patton reported that he will coordinate with Ms. Bonds regarding the annual posting on the District’s website of a notification to customers regarding energy usage.

AUTHORIZE ATTENDANCE AT ASSOCIATION OF WATER BOARD DIRECTORS’ (“AWBD”) FALL SEMINAR AND MID-WINTER CONFERENCE; REVIEW ATTENDANCE BY DIRECTORS AND REIMBURSEMENT OF EXPENSES

Mr. Barner then reported that the AWBD’s Fall Seminar and 2021 Mid-Winter Conference are currently scheduled to be held in person; however, the AWBD may ultimately decide to hold such events virtually. Upon a motion by Director Leasure, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board authorized: 1) Director attendance at the AWBD Fall Seminar; and 2) Director attendance at the AWBD 2021 Mid-Winter Conference for up to three (3) days and two (2) nights.

ATTORNEY’S REPORT

Mr. Barner reminded the Board 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 reported that the executed deed has not yet been received from the WCIA.

Discussion then ensued regarding bids received for the removal of four (4) dead trees located at the Poe Water Treatment Plant. Director Patton explained that Antonio Lozano submitted a bid of $1,900 for the removal of such trees, and Spring Tree Services submitted a bid of $2,400. Upon a motion by Director Barlow, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the bid submitted by Antonio Lozano in the amount of $1,900.

Next, Mr. Wright reported that the District’s application for inclusion in the AWBD’s Water Smart program is complete. Mr. Wright further reported that the District may be able to satisfy the AWBD’s requirements related to holding a public event by hosting a virtual meeting with the community.

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 10:34 a.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 Moravec; Mr. Barner; and Ms. Cain. The Board declared the Executive Session was ended at 10:36 a.m.

RECONVENE IN OPEN SESSION

As of 10:36 a.m., the President declared the Executive Session was ended and the public session was resumed.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 10:37 a.m.

PASSED AND APPROVED this the 14th day of October, 2020.

Secretary, Board of Directors