Meeting Minutes 2022-01-12

MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 8
MINUTES OF REGULAR MEETING
January 12, 2022

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, January 12, 2022, 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, thus constituting a quorum. Also attending were Maria Felder of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); Justin Abshire and Conner Murphy of Jones!Carter (“Engineer” or “Jones!Carter”); Philip Wright and John Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Charles Barron and Robert Vernier, 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”); and Jessica Hollaway, a District resident.

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. Mr. Vernier introduced himself and his daughter, Jessica Hollaway, and explained that the drinking water at the house he rents to Ms. Hollaway’s home has high levels of manganese. Mr. Vernier then distributed photographs to the Board of black substances on multiple water faucets in Ms. Hollaway’s home and explained that such substances are manganese deposits. Mr. Vernier then stated that approximately 20 of Ms. Hollaway’s neighbors have also reported finding manganese deposits on their water faucets. Mr. Vernier noted that most people reporting the presence of such substance in their homes reside in close proximity to the Poe Water Plant.

In response to a question from Mr. Vernier, Mr. John Wright reported that the Buckingham Catahoula Water Well was originally placed into operation in October 2020. Mr. Vernier reported that Ms. Hollaway first noticed the manganese deposits in November or December 2020. Mr. Philip Wright then explained the method of cleaning and clearing water lines of manganese buildup through a process known as pigging. Mr. John Wright further recommended flushing the District’s water lines and/or increasing the use of phosphate at the District’s water plants to reduce the iron and manganese levels. Director Patton stated that the Poe Water Plant is scheduled to be taken out of service for three (3) months beginning in April and recommended that such plant be cleaned and its water lines flushed during such time.

A discussion then ensued regarding testing the District’s water supply for manganese levels. In response to a question, Mr. Philip Wright clarified that the District does not test such water supply for manganese; the Texas Commission on Environmental Quality (the “TCEQ”) tests for it on a regular basis. Director Moravec requested that Hays North provide the Board with a cost estimate to test such water supply for manganese on a monthly basis.

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

Ms. Hollaway exited the meeting at this time.

APPROVAL OF MINUTES OF NOVEMBER 30, 2021 SPECIAL MEETING AND DECEMBER 8, 2021 REGULAR MEETING

The President next directed the Board to the approval of the November 30, 2021 special meeting minutes and the December 8, 2021 regular meeting minutes. Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the November 30, 2021 special meeting minutes and the December 8, 2021 regular meeting minutes, as presented.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Felder then reviewed the Tax Assessor-Collector’s Reports for the months of November 2021 and December 2021, copies of which are attached hereto, including past monthly collections and credits as reported by the Tax Assessor-Collector for the District. Ms. Felder reported that 60.40% of the 2021 taxes have been collected as of December 31, 2021.

In response to a question from Director Moravec regarding the discrepancy in the values reflected in the Tax Assessor-Collector’s Reports as compared to the Montgomery County Appraisal District’s (“MCAD”) records, Ms. Felder and Mr. Barner explained that values in the MCAD’s records frequently change as adjustments are made to the appraisal rolls resulting from taxpayer protests of their property values.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Tax Assessor-Collector’s Reports, 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 then reminded the Board that following payment of the final invoices for the ground storage tank rehabilitation project at the Buckingham Water Plant, $66,200.07 remained in the District’s Series 2012 Bond Fund. Ms. Felder reported that pursuant to authorization from the Board, the remaining surplus funds were transferred from the Series 2012 Bond Fund to the Series 2018 Bond Fund.

Upon a motion by Director Leasure, seconded by Director Barlow, 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.

Director Moravec then requested that Mr. Barner notify Mr. Charlie LaConti and Mr. Mark Burton of MAC, that when MAC presents its proposed new billing structure to the Board, a member of MAC’s management should attend the Board meeting to present such information and respond to questions from the Board.

REVIEW DISTRICT’S ETHICS POLICY AND EXPENSE REIMBURSEMENTS

Mr. Barner stated that review of the District’s Ethics Policy is an annual agenda item. Mr. Barner went on to state that he recommends no changes to such policy at this time and requested that should the Board have any questions regarding such policy, to let him know.

ENGINEER’S REPORT

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

Mr. Abshire next updated the Board on Allco, LLC’s (“Allco”) progress over the past month regarding the Wastewater Treatment Plant (“WWTP”) Project. Mr. Abshire then presented a cost summary showing the total amount of funds spent by the District thus far on construction and engineering fees for such project. Mr. Abshire explained that such summary also includes an estimate of the additional costs that will be incurred by the District due to the extensive delay of the completion of such project. Mr. Abshire then reported that he anticipates the startup of the new WWTP to occur in February, followed by a one (1)-month demonstration period and then final completion of Phase I of the WWTP Project. Mr. Abshire further reported that Phase II of such project is expected to begin in April 2022 and be complete in April 2023.

Mr. Abshire then presented Allco’s Pay Estimate No. 35 in the amount of $40,026.15 for work performed on the WWTP Project and recommended payment of the same. Mr. Abshire reported that electrical work is ongoing on such project and noted that additional electricians were on-site during the past month.

Mr. Abshire next reported that a Stephens Pipe & Steel, LLC (“Stephens”), Allco’s fencing material subcontractor, issued a Notice of Non-Payment to Allco, alleging that they are owed $27,111.18 by Allco.

In response to a question from Director Patton regarding the amount of bleach required at the new WWTP as compared to the old WWTP, Mr. Abshire stated that he will research such requirements and provide such information to the Board.

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. Mr. Abshire reported that Jones | Carter completed the TPDES permit renewal application and submitted such application to the TCEQ on behalf of the District.

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 Texas Pride Utilities, LLC (“Texas Pride”) completed the cleaning and televising work and submitted videos related to such work for JoneslCarter’s review. Mr. Abshire further reported that upon review of such videos, some portions of the District’s wastewater collection lines will need to be re-televised by Texas Pride. Mr. Abshire then presented Texas Pride’s Pay Estimate No. 1 in the amount of $51,219.72 for cleaning and televising work performed and recommended payment of the same. Mr. Abshire explained that such pay estimate only includes work that is considered to be complete by Jones | Carter.

Mr. Abshire then updated the Board on the Motor Control Center (“MCC”) Replacement Project for the Poe Street Water Plant (Water Plant No. 1) (the “Poe Street MCC Project”). Mr. Abshire reported that Montgomery County (the “County”) approved Jones!Carter’s design plans for such project. Mr. Abshire further reported that such project was advertised on January 7th and 14th.

Mr. Abshire went on to report that bids will be accepted until February 1st and added that JoneslCarter will present such bids to the Board at its next regular Board meeting. Mr. Abshire then presented an updated cost estimate for such project and discussed the delivery dates of the equipment that was pre-purchased for such project.

Mr. Abshire next updated the Board on the MCC Replacement Project for the Browning Street Water Plant (Water Plant No. 2) (the “Browning Street MCC Project”). Mr. Abshire reported that the County approved Jones!Carter’s design plans for such project; however, JoneslCarter intends to delay advertising such project for bids until June 2022.

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 an Emergency Response Plan (“ERP”). Mr. Abshire reported that Jones!Carter completed such ERP and certified completion of the same to the U.S. Environmental Protection Agency (“EPA”).

Mr. Abshire then reported that pursuant to Senate Bill 3, all water districts in Texas are required to submit an Emergency Preparedness Plan (“EPP”) to the TCEQ by March 1, 2022. Mr. Abshire reported that Jones!Carter is preparing such EPP on behalf of the District. Mr. Barron reported that it is his understanding that if the EPP is submitted to the TCEQ electronically, such EPP is considered to be a public record, while the District can request that such EPP remain confidential if submitted via regular mail.

Mr. Abshire next reminded the Board that the TCEQ requires the District to inspect its water plants on an annual basis. Mr. Abshire reported that Jones!Carter is underway with such inspection and added that such inspections should be complete this week. Mr. Abshire noted that signs of early corrosions were observed on the two (2) hydropneumatic tanks located at the Browning Water Plant.

Director Moravec exited the meeting at this time.

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 Engineer’s Report; 2) approved Allco’s Pay Estimate No. 35 in the amount of $40,026.15; and 3) approved Texas Pride’s Pay Estimate No. 1 in the amount of$51,219.72.

Director Moravec re-entered the meeting at this time.

REVIEW EPA’S RULES REGARDING LEAD AND COPPER CONTENT IN PLUMBING FIXTURES

Mr. Abshire next reported that the EPA recently updated their Lead and Copper Rule (“LCR”), which was originally established in 1991. Mr. Abshire explained that the revised LCR requires the District to prepare an inventory of all water lines within the District, both public and privately owned, by October 2024. Mr. Philip Wright stated that he is not aware of any lead service lines within the District, but noted that there may be copper lines with lead solder in older areas of the District.

Mr. Abshire then reported that JoneslCarter will be changing its company name to Quiddity.

OPERA TOR’S REPORT

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

Mr. Philip Wright then reported that 600 customers are receiving electronic billing statements, which is an increase of 33 customers from last month.

Mr. Philip Wright next reported that the combined water accountability for the District and MUD 9 was 96.81 %. Mr. Philip Wright further reported that were no new taps last month and that the District has a total of 1,798 connections. Mr. Philip Wright went on to report that the District had 28 new taps in 2021.

Discussion then ensued regarding Entergy’s billing structure and the varying electricity rates charged to the District for its facilities. Mr. Philip Wright stated that he will research such rates to determine whether the District is being billed appropriately by Entergy.

Director Moravec requested that Hays North include in the monthly Operator’s Report the number of District customer who use at least 50,000 gallons of water each month.

In response a question from Mr. Barner regarding the annual Water Loss Audit, Mr. Philip Wright stated that such audit will be prepared by Hays North and provided to RBAP for review.

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

UPDATE ON INFORMATION NEEDED FOR DISTRICT AND MUD 9’S ANNUAL REPORT TO SAN JACINTO RIVER AUTHORITY {“SJRA”) AND CITY OF HOUSTON

Mr. Barner then requested that Hays North provide him with the information necessary to complete the MUD 8/MUD 9 Annual Report to the SJRA and the City of Houston.

Mr. Barner then reminded the Board that the District’s option to purchase effluent from the City of Huntsville expires at the end of 2022 and recommended that the Board consider renewing such option.

UPDATE ON CLAIMS FILED FOR DAMAGES AGAINST TACHUS’ SUBCONTRACTORS

Mr. Philip Wright reported that only two (2) small claims remain outstanding against Tachus’ subcontractors for damages caused to various District water lines during the installation of Tachus’ fiber optic cables. Mr. Philip Wright then recommended that the Board write-off one (1) such claim against H&H as Hays North has repeatedly reached out to them but received no response.

UPDATE ON DISTRICT’S WEBSITE AND COMMUNICATIONS SERVICES

Mr. Barner next reminded the Board that it previously authorized the development of a joint website with MUD 9. Mr. Barner reported that RBAP is coordinating with Off Cinco and MUD 9’s attorney to finalize a joint agreement between Off Cinco and both districts for the development and maintenance of the joint website.

Director Patton then suggested that the District inquire to the Walden Community Improvement Association (“WCIA”) regarding placing an item on an agenda of a monthly WCIA meeting to allow the District to promote the availability of electronic billing.

SELECT WINNER FROM LIST OF DISTRICT CUSTOMERS WHO ENROLLED IN PAPERLESS BILLING DURING DECEMBER 2021 TO RECEIVE A GIFT CARD PROVIDED BY FIRST BILLING SERVICES, LLC

Mr. Philip Wright then presented an envelope containing the names of all District customers who enrolled in paperless billing during December 2021, and Ms. Cain drew a name from such envelope. Mr. Philip Wright stated that Hays North will deliver to such customer a $100.00 gift card provided by First Billing Services, LLC. Director Barlow recommended that one of the Directors be present to deliver such gift card to the winning customer and suggested that a photograph of such event be placed in the community newsletter.

MISCELLANEOUS REPORTS

Mr. Barner then presented a proxy for the annual members’ meeting of the WCIA. Upon a motion by Director Patton, seconded by Director Moravec, after full discussion and with all Directors present voting aye, the Board approved submission of such proxy and designated Director Tryon as the District’s representative at such annual meeting for voting purposes.

Next, regarding the Lone Star Groundwater Conservation District, Mr. Barner reported that the Groundwater Management Area 14 (“GMA 14”) recently adopted its Desired Future Conditions for such area relating to the depletion of aquifers.

ATTORNEY’S REPORT

Mr. Barner reported that RBAP is completing the contract between the WCIA and the District for the maintenance of the grounds at various District facilities and will provide such contract to the WCIA next week. Mr. Barner reported that he coordinated with Hays North to identify all of the properties that the WCIA is maintaining.

Mr. Barner next reported that he is also preparing an agreement between the District and the WCIA relating to solid waste collection services, since the District is billing its customers for such services on behalf of the WCIA.

Mr. Barner then reminded the Board of the WCIA claims that the District owes maintenance fees on certain tracts ofland located within the District. Mr. Barner further reminded the Board that RBAP sent a letter to the WCIA requesting that they waive such fees. Mr. Barner reported that he prepared a proposed Agreement for Waiver of Maintenance Fees, which was provided to the WCIA’s General Manager and it was his understanding from statements made by the General Manager at a District Board meeting in November, that the Board of Trustees would be considering such agreement.

Mr. Barner next stated that he will coordinate with the District’s consultants regarding the procedures for maintaining the District’s records pursuant to the new guidelines issued by the State of Texas.

AUTHORIZE FILING OF FINANCIAL AND TAX-RELATED INFORMATION WITH TEXAS COMPTROLLER

Mr. Barner then reported that Texas Local Government Code, Sections 203.062 and 403.0241, requires the annual filing of certain financial and tax-related information by all special purpose districts in the Texas Comptroller’s Special Purpose District Public Information Database. Mr. Barner noted that such information must be filed with the Texas Comptroller annually by April 1st or a fine will be incurred. Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors voting aye, the Board authorized the Attorney to file the required financial and tax-related information with the Texas Comptroller by April 1, 2022.

ELECTION AGENDA

Mr. Barner then reminded the Board that a directors’ election is scheduled to be held on Saturday, May 7, 2022 (the “Election”), and that such election will be for positions held by Directors Leasure, Barlow and Moravec, since such positions’ terms of office are due to expire. Mr. Barner stated that candidate packets were provided to each of the incumbents. Mr. Barner reported that the first day to file an application for a place on the ballot is Wednesday, January 19, 2022, and the deadline by which to file an application for a place on the ballot is 5 :00 p.m. Friday, February 18, 2022.

Mr. Barner next presented an Order Calling Directors Election, which calls a Directors Election for May 7, 2022.

Mr. Barner then stated that the Election will be held jointly with the County. Mr. Barner further stated that the County will provide an Election Services Agreement and Joint Election Agreement for RBAP’s review.

Mr. Barner next discussed the estimated election cost for the County’s conducting of the joint election.

Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board: 1) adopted the Order Calling Directors Election; 2) approved the Election Services Agreement and Joint Election Agreement with the County, subject to RBAP’s review; and 3) authorized payment to the County for the joint election, as necessary.

Next, Mr. Barner recommended that the District withhold payment to Allco for Pay Estimate No. 35 for work performed on the WWTP Project until Allco provides proof that the dispute between Allco and Stephens is resolved. Mr. Barner explained that if such dispute is not resolved, Stephens could file a lien against the District’s property. Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board authorized withholding payment to Allco for Pay Estimate No. 35 until Allco provides proof that the dispute between Allco and Stephens is resolved.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 11 :20 a.m.

PASSED AND APPROVED this the 9th day of February, 2022.