Meeting Minutes 2021-07-14

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

JULY 14, 2021

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 14, 2021, at 9:00 a.m., at the Walden Community Church, 12400 Walden Road, Montgomery, Texas 77356, a designated meeting place located outside 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, except for Director Leasure, thus constituting a quorum. Also attending were Maria Felder of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); Justin Abshire and Conner Murphy of JoneslCarter (“Engineer” or “JoneslCarter”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Charles Barron, Director of Montgomery County Municipal Utility District No. 9 (“MUD 9”); and Elliot M. Barner, attorney, Cooper Montgomery, summer associate, 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 JUNE 9, 2021 REGULAR MEETING

The President next directed the Board to the approval of the June 9, 2021 regular meeting minutes. Director Patton pointed out a typographical error on page five (5) of such minutes. Mr. Barner reported that following the distribution of such minutes to the Board, Director Moravec noted a typographical error on page seven (7) of such minutes, which has since been corrected. Mr. Barner further reported that Ms. Felder requested such minutes be revised to clarify that the Unclaimed Property Report is filed annually on behalf of the District with regard to customer funds that remain uncollected for the period of March 1st through February 28th.

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 9, 2021 regular meeting minutes, subject to certain corrections.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Felder then reviewed the Tax Assessor-Collector’s Report for the month of June 2021, 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. Felder reported that 98.09% of the 2020 taxes have been collected as of June 30, 2021.

In response to a question, Mr. Barner explained that he anticipates that the District’s 2020 certified taxable values will be provided by the Montgomery County Appraisal District next month. Mr. Barner further explained that once the District’s Financial Advisor reviews such values, he will prepare a report that provides the Board a recommendation regarding the District’s ad valorem tax rate for the 2021 tax year.

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

BOOKKEEPER’S REPORT

Ms. Felder next reviewed the Bookkeeper’s Report, a copy of which is attached hereto, including the current fund balances, expenditures and investments. Ms. Felder reported that check nos. 9585-9588 and check no. 1343 are not included on such report but were submitted to the Directors for signature.

Ms. Felder next reported that following discussion with Director Moravec, $3,001.00 will be re-coded from a Wastewater Capital Expense to an Engineering Fee.

Director Moravec then stated that he will soon begin preparing a draft of the District’s budget for the Fiscal Year Ending (“FYE”) December 31, 2022, and will coordinate with the District’s Engineer and Operator regarding such budget.

Upon a motion by Director Barlow, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board: 1) approved the Bookkeeper’s Report, as presented; and 2) authorized payment of checks detailed therein.

ENGINEER’S REPORT

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

Mr. Abshire next update the Board on Allco, LLC’s (“Allco”) progress over the past month regarding the Wastewater Treatment Plant (“WWTP”) Improvement Project (the “WWTP Project”). Mr. Abshire stated that JoneslCarter continues to hold monthly progress meetings with Allco. Mr. Abshire next presented Pay Estimate No. 29 in the amount of $210,601.17 for work performed by Allco on the WWTP Project.

Mr. Abshire then reported that the District’s Operator will begin training next week on the new filtration system installed as part of the WWTP Project. Mr. Abshire further reported that the Operator will begin training in a few weeks on the Sequencing Batch Reactor installed as part of such project.

In response to a question from Director Moravec regarding whether repairs recently made to the District’s lift station located at the WWTP were paid from the Capital Projects Fund (“CPF”) or the District’s Operating Fund, Mr. Abshire reported that such lift station repairs were considered to be a capital project and therefore paid from the CPF. Mr. Wright then noted that the cost associated with the recent hauling of sludge from such lift station was unrelated to the WWTP Project and was paid from the District’s Operating Fund.

Mr. Abshire then reminded the Board that the District’s current Texas Pollution Discharge Elimination System (“TPDES”) permit for the WWTP expires on June 1, 2022, and that the renewal application is due to the State 180 days before expiration, or by December 3, 2021.

Mr. Abshire reported that Jones[Carter is preparing the TPDES permit renewal application on behalf of the District.

Regarding the Drainage Improvements, Phase II (Zones 7, 8 and 11 ), Mr. Abshire reported that the work in Zone 8 is substantially complete. Mr. Abshire further reported that only minor items remain outstanding regarding the completion of a stormwater drainage inlet located in Zone 8; however, such work has been delayed by the amount of rainfall received last month.

Mr. Abshire explained that such inlet was poured incorrectly, although water still flows at such location and does not pose a flooding risk. Mr. Abshire stated that the final inspection of such project will be conducted next week. In response to a question from Director Patton, Mr. Abshire confirmed that the District has not received any pay applications from the contractor on such
project.

Next, Mr. Abshire updated the Board regarding the cleaning and televising of a certain portion of the District’s wastewater collection lines. Mr. Abshire reported that a pre-construction meeting was held with Texas Pride Utilities, LLC (“Texas Pride”), the contractor on such project.

Mr. Abshire further reported that the Notice to Proceed was issued to Texas Pride and noted that the contract period consists of 120 calendar days.

Mr. Abshire then updated the Board on the Motor Control Center Replacement Projects for both the Poe Street Water Plant and the Browning Street Water Plant. Mr. Abshire reported that the design plans for such projects will be 30% complete within the next few weeks. Director Patton requested that Jones[Carter arrange a meeting with Directors Tryon and Patton and Mr. Barron to discuss the status of the design plans and the overall scope of such projects.

Mr. Abshire then reported that Jones[Carter’s design plans should be complete by December 2021 and construction on such projects is expected to occur from February 2022 through March 2023.

Next, Mr. Abshire reminded the Board that the America’s Water Infrastructure Act of2018 requires water districts serving more than 3,300 customers to develop a Risk and Resilience Assessment (“RRA”). Mr. Abshire reported that Jones[Carter completed such RRA and submitted the necessary certificate of completion to the U.S. Environmental Protection Agency prior to the deadline of June 30, 2021. Mr. Barner stated that Mr. Abshire will present the RRA to the Board during closed session.

Mr. Barron then expressed his concern regarding the amount of engineering fees associated with the WWTP Project. Mr. Abshire reported that Jones[Carter’s invoices related to such project were provided to MUD 9 and noted that such invoices include field management services beyond the time by which the WWTP Project was originally expected to be complete. Mr. Abshire stated that such project is currently estimated to be one (1) year behind schedule when it is finally complete.

Upon a motion by Director Barlow, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board: 1) approved the Engineer’s Report, as presented; and 2) approved Allco Pay Estimate No. 29 in the amount of $210,601.17.

Director Patton exited the meeting at this time.

OPERATOR’S REPORT

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

Mr. Wright then reported that 484 customers are receiving electronic billing statements, which is an increase of 16 customers from last month. Mr. Wright stated that pursuant to a request by Director Moravec, Hays North is developing a report that shows the amount that the District has saved on postage as a result of the increasing number of customers signing up to receive electronic billing statements.

Director Patton entered the meeting at this time.

Mr. Wright reported that the combined water accountability for the District and MUD 9 was 95.68%. Mr. Wright next reported that there were three (3) new taps last month and that the District has a total of 1,789 connections.

Next, Mr. Wright reported that five (5) accounts are 60 days delinquent and added that there are no accounts delinquent by 90 or more days.

Mr. Wright then reported that the sample taken from the WWTP last month shows the amount of total dissolvable solids (“TDS”) in the effluent is 705 milligrams per liter (“mg/1”), which is in line with the average amount of TDS found in such effluent. Mr. Wright reminded the Board that the Texas Commission on Environmental Quality does not have any requirements related to the amount of TDS contained in the District’s effluent.

Mr. Wright then updated the Board regarding the status of the application that Hays North submitted on behalf of MUD 9 to the Lone Star Groundwater Conservation District (“LSGCD”) to increase the amount of water that MUD 9 and the District are permitted to pump from the Buckingham Catahoula Water Well. Mr. Wright reminded the Board that pursuant to new LSGCD rules, the LSGCD now considers permits for pumpage from the Jasper Aquifer and the Catahoula Aquifer jointly. Mr. Wright stated that districts must justify the need for such requested increases and provide evidence of their need for the total amount pumped from both aquifers. Mr. Wright reported that Hays North is gathering data to support such application and added that such application will be submitted to the LSGCD later this month. Mr. Barner requested that Hays North coordinate with RBAP regarding the application and supporting documentation prior to submitting the same to the LSGCD. Mr. Barron stated that MUD 9 is pumping 82,000 gallons of water per day (“gpd”) from its Catahoula Water Well, while it is currently permitted to pump as much as 100,000 gpd from such well.

Mr. Wright next reminded the Board that two (2) sinkholes developed near the District’s stormwater drainage outfalls located in the Estates of Walden. Mr. Wright further reminded the Board that it previously authorized Hays North to proceed with the repair of such sinkholes at a total cost not to exceed $35,000.00. Mr. Wright then reported that the cost of repairs to the first (1 st) outfall were significantly higher than anticipated due to the degree of damage to the outfall pipe and the discovery of a protective cement casing around the outfall. Mr. Wright further reported that the cost to repair the first (1 st) outfall was $26,000.00 and stated that he expects that the repair of the second (2nd) outfall will cost $30,000.00. Mr. Abshire then reminded the Board that the District has not repaired any outfalls in several years and noted that similar deterioration is likely to be an issue near other outfalls throughout the District. Mr. Abshire recommended that the Board consider including funds for outfall repairs in the District’s budget for the FYE December 31, 2022.

Mr. Wright then discussed the Notable Activity Report contained within the Operator’s Report, including the repair of a diffuser at the WWTP, cleaning of a digester at such plant, and sludge hauling. In response to a question from Director Patton regarding a recent repair on Thoreau Drive that took crews approximately four ( 4) days to complete, Mr. Wright explained that the District’s main line was repaired and a clean out was installed at such site.

Regarding the status of the valve location project, Mr. Wright stated that he provided Jones | Carter with all maps and drawings for such project.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board: 1) approved the Operator’s Report, as presented; and 2) authorized Hays North to proceed with the repair of the two (2) sinkholes in the Estates of Walden at a total cost not to exceed $60,000.00.

UPDATE ON CLAIMS FILED FOR DAMAGES AGAINST TACHUS’ SUBCONTRACTORS

Regarding the status of claims filed for damages to various District water lines during the installation of Tachus’ fiber optic cables, Mr. Barner reported that the insurance provider for Structured Communications, one of Tachus’ subcontractors, has agreed to reimburse the District $10,146.27 for such damages. Mr. Barner further reported that the District received a check in the amount of $17,779.00 from Hays North’s insurance provider for damages to various District water lines resulting from Hays North’s mismarking of water lines where Tachus was installing fiber optic cable.

Mr. Wright stated that he believes that only two (2) or three (3) claims for damages remain outstanding.

UPDATE ON INCENTIVES TO INCREASE USE OF E-STATEMENTS BILLING

Director Patton reminded the Board that since October 2020, the District has offered customers a one-time incentive of$12.00 for enrollment in paperless billing. Director Patton then 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.

Director Patton suggested that the District end the incentive program and begin charging customers a fee of $1.00 per month to receive their billing statements by mail. Director Moravec requested that the Board table further discussion on such matter until such time that the Board conducts its annual review of the District’s Rate Order.

CONSIDER AMENDING RA TE ORDER

Director Moravec reported that he will soon begin preparing a draft of the District’s budget for the FYE December 31, 2022. Director Moravec further reported that he will review the District’s Rate Order and Capital Improvement Plan simultaneously with such budget in order to determine whether the District’s water and sewer rates are sufficient to cover increasing operations and maintenance expenses. Director Patton recommended that the Rate Order be amended with enough time to provide customers with one ( 1) month notice of a rate increase before such increase
goes into effect.

STATUS OF WATER SMART PROGRAM APPLICATION, INCLUDING APPROVAL OF RESOLUTION APPROVING SUBMITTAL OF 2022 WATER SMART APPLICATION FOR INCLUSION IN ASSOCIATION OF WATER BOARD DIRECTORS (“AWBD”) WATER SMART PARTNERS PROGRAM

Mr. Barner next reminded the Board that the District’s participation in the AWBD’s Water Smart program must be renewed on an annual basis. Mr. Barner then presented a Resolution Approving Submittal of 2022 Water Smart Application for the period of January 1, 2021 through December 31, 2021, and explained that such application will be submitted by Hays North once they have assembled all necessary documentation. Director Moravec suggested that the District include information on its website regarding the District’s water conservation efforts. Mr. Wright stated that the District will receive credit in the Water Smart program for posting such information on the District’s website.

Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved a Resolution Approving Submittal of 2022 Water Smart Application for the period of January 1, 2021 through December 31, 2021.

UPDATE ON DISTRICT’S WEBSITE AND COMMUNICATIONS SERVICES

Director Patton reported that customer traffic on such website remains steady.

MISCELLANEOUS REPORTS

Mr. Barron reported that MUD 9 and Tachus attended a hearing in the Justice of the Peace Court in which MUD 9 filed suit against Tachus for damages to such district’s water lines during Tachus’ installation of fiber optic cables. Mr. Barron stated that at such hearing, the judge of such court granted Tachus’ motion for continuance of the trial.

ATTORNEY’S REPORT

Mr. Barner next discussed the proposed Amended and Restated Order Establishing a Records Management Program and Designating Records Management Officer. Mr. Barner reminded the Board that the State of Texas issued new guidelines regarding the length of time for which records are to be retained. Mr. Barner then introduced Mr. Montgomery, RBAP’s summer associate to the Board. Mr. Montgomery went on to explain the spreadsheet that he had prepared for RBAP that summarizes the various retention schedules and that such spreadsheet is intended to assist the District’s Records Management Officer and consultants in determining the length of time to maintain various types of records. Extensive discussion then ensued regarding the current process of retaining various District records. Mr. Barner then stated that he has been coordinating with Director Moravec to incorporate more comprehensive guidelines into the proposed policy for the District and would be coordinating with the District’s consultants to discuss further.

The Board took a brief recess from 11 :00 a.m. to 11 :08 a.m.

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 :08 a.m. to discuss security matters and real estate. Present for all or portions of the Executive Session were the Board of Directors, except for Director Leasure; Mr. Abshire; Mr. Murphy; Mr. Barner; Mr. Montgomery; and Ms. Cain. The Board declared the Executive Session was ended at 11 :21 a.m.

RECONVENE IN OPEN SESSION

As of 11 :21 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 11 :21 a.m.

PASSED AND APPROVED this the 11 th day of August, 2021.

Assistant Secretary, Board of Directors