Meeting Minutes 2022-03-09

MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 8 MINUTES OF REGULAR MEETING
March 9, 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, March 9, 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 Quiddity Engineering f/k/a JonesJCarter (“Engineer” or “Quiddity”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Charles Barron, Director of Montgomery County Municipal Utility District No. 9 (“MUD 9”); Rusty Denner, General Manager for the Walden Community Improvement Association (“WCIA”); and 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 FEBRUARY 9. 2022 REGULAR MEETING

The President next directed the Board to the approval of the February 9, 2022 regular meeting minutes. Director Moravec stated that he previously spoke with Mr. Barner regarding revising such minutes to clarify that direct deposit of the Directors’ fees of office and expense reimbursements will be made at the direction of the Board. Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the February 9. 2022 regular meeting minutes, subject to the above-noted revision.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Felder then reviewed the Tax Assessor-Collector’s Report for the month of February 2022, a copy of which is attached hereto, including past monthly collections and credits as reported by the Tax Assessor-Collector for the District. Ms. Felder reported that 94.11% of the 2021 taxes have been collected as of February 28, 2022.

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 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 then reported that the Tax Assessor-Collector’s Report was not received prior to preparation of the Bookkeeper’s Report; therefore, the collection of maintenance and operations tax is not reflected in the Bookkeeper’s report this month.

Ms. Felder next noted a line item on the District’s Balance Sheet relating to builder damage receivables and explained that such item relates to damage to a District water main caused by Cox Directional Drilling (“Cox”), a subcontractor for the internet service provider Tachus, during the installation of Tachus’ fiber optic cables. Ms. Felder reported that such damage was caused by Cox in January 2021 and added that Hays Norths repaired such water main and sent an invoice to Cox for reimbursement to the District in the amount of $15,000.00. Mr. Wright stated that Cox did not respond to Hays North’s request for reimbursement. Mr. Barner requested that Mr. Wright provide him with all invoices and correspondence between Hays North and Cox. Mr. Barner then suggested that Hays North reach out to Tachus regarding reimbursement to the District for the repair of damage caused by Cox.

Next, Mr. Wright reported that only one (1) claim in the amount of $931.72 remains outstanding against Tachus’ subcontractors for damages caused to various District water lines during the installation of Tachus’ fiber optic cables.

Ms. Felder then reported that the District received an invoice from the San Jacinto River Authority (“SJRA”) for the annual permit fee for a residential floating dock located at 3127 Poe Drive. Mr. Barner explained that such fee relates to a ramp that extends into Lake Conroe from property owned by the District. Mr. Barner further explained that such land was purchased by the District around 2007 to extend its sanitary sewer outfall line further into Lake Conroe. Mr. Barner stated that as part of the terms of the sale of such property, the District entered into an Access and Maintenance Easement Agreement (the “Easement Agreement”) with the previous property owner, granting her access to such property and the right to construct and maintain a ramp from such property into Lake Conroe. Mr. Barner further stated that such agreement does not contemplate which party is responsible for payment of the annual SJRA permit fee for such ramp. Mr. Barner reported that the District attempted to contact the previous owner regarding payment of such fee, but no response was received. Mr. Barner further reported that the previous property owner has

not been using or maintaining the ramp. A discussion ensued. Director Barlow requested that RBAP investigate whether such ramp has been abandoned by the previous owner and can be removed from the District’s property.

Mr. Denner entered the meeting at this time.

Next, Ms. Felder presented the Quarterly Investment Inventory Report for the Period Ending December 31, 2021, a copy of which is attached hereto.

Ms. Felder then stated that the Bookkeeper’s Report will be updated to reflect that Director Moravec, as the District’s Investment Officer, completed four (4) hours of training related to the Public Funds Investment Act.

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 detailed therein; and 3) approved the Quarterly Investment Inventory Report for the Period Ending December 31, 2021.

In response to a question, Mr. Barner explained that since Mr. Denner is now present, he could present his Attorney’s Report and provide updates on certain items related to the District and the WCIA.

ATTORNEY’S REPORT

Mr. Barner then reported that the WCIA executed the Agreement for Landscaping Services with the District regarding maintenance of the grounds at various District facilities. Mr. Barner further reported that the WCIA executed the Agreement for Waiver of Maintenance Fees relating to the WCIA’s claims that the District owed maintenance fees on certain tracts of land located within the District.

Mr. Barner next reported that he is 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. Denner then reported that the WCIA approved the proposed location for the new Walden Fire Station No. 54, which is operated by Montgomery County Emergency Services District No. 2. Mr. Denner further reported that construction of such station will begin in early summer.

Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board: 1) approved and authorized execution of the Agreement for Landscaping Services with the WCIA; and 2) approved and authorized execution of the Agreement for Waiver of Maintenance Fees.

REVIEW AND APPROVE INSURANCE PROPOSAL SUBMITTED BY GALLAGHER INSURANCE (“GALLAGHER”)

A brief discussion ensued regarding the insurance proposal from Gallagher. In response to a question from Director Patton, Mr. Abshire stated that Allco, LLC (“Allco”) will insure the District’s new Wastewater Treatment Plant (“WWTP”) during the first (1st) year of operation. Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the insurance renewal proposal.

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’s progress over the past month regarding the WWTP Project. Mr. Abshire reported that the startup of the new WWTP occurred on March 1st and will be followed by a one (1) month demonstration period. Mr. Wright then discussed the operation of the WWTP thus far during the demonstration period and noted that no major problems have occurred at such plant during such time.

Mr. Abshire then presented Allco’s Pay Estimate No. 37 in the amount of $21,361.95 for work performed on the WWTP Project. Mr. Abshire reminded the Board that it previously authorized the Bookkeeper to withhold payment to Allco for Pay Estimate No. 36 until Allco reimbursed the District for costs incurred by the District to repair a bypass pump and clean wastewater discharge at the WWTP that resulted from negligence by Allco’s subcontractor. Mr. Abshire recommended that the District authorize payment to Allco for Pay Estimate No. 36 and further recommended withholding payment to Allco for Pay Estimate No. 37 until Allco reimburses the District for such costs.

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 Quiddity submitted the TPDES permit renewal application to the Texas Commission on Environmental Quality (the “TCEQ”) on behalf of the District. Mr. Abshire further reported that he anticipates receiving a preliminary permit from the TCEQ in May.

Next, Mr. Abshire updated the Board regarding the cleaning and televising of a certain portion of the District’s wastewater collection lines. Mr. Abshire reminded the Board that some portions of the District’s wastewater collection lines had to be re-televised by Texas Pride Utilities, LLC (“Texas Pride”). Mr. Abshire reported that once Quiddity reviews such videos, they will likely recommend final payment to Texas Pride and provide the Board with recommendations regarding a sanitary sewer rehabilitation project to repair any defects identified during such televising.

Mr. Abshire then updated the Board on the Motor Control Center (“MCC”) Replacement Project for the Poe Drive Water Plant (Water Plant No. 1). Mr. Abshire reminded the Board that it previously awarded the contract for such project to McDonald Municipal & Industrial (“McDonald”) in the amount of $352,469.00. Mr. Abshire then reported that RBAP is reviewing

McDonald’s bonds and insurance for such project. Mr. Abshire further reported that Quiddity will hold a pre-construction meeting with McDonald within the next few weeks. Mr. Abshire then stated that the delivery of certain materials necessary for such project will be delayed from April to June but should not affect the project schedule.

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

Mr. Abshire then reminded the Board 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 Quiddity completed such EPP on behalf of the District and submitted the same to the TCEQ.

Mr. Abshire next updated the Board regarding the annual inspection of the District’s water plants as required by the TCEQ and presented the inspection report to the Board. In response to a question from Director Moravec regarding the timeline for resolving the defects identified in such report, Mr. Abshire stated that while certain minor repairs will be address immediately, certain other repairs to the District’s hydropneumatic tanks (“HPT”) are included in the District’s Capital Improvements Plan for the Fiscal Year Ending December 31, 2025. Mr. Abshire further reported that Hays North is coordinating with a contractor to touch-up the interior coating of the two (2) HPTs located at the Browning Water Plant and one (1) HPT at the Poe Water Plant. Director Patton requested that Quiddity provide the Board with a cost estimate to complete all repairs recommended by Quiddity in the inspection report.

Next, Mr. Abshire reminded the Board that Quiddity received a request from Safe Harbor Marinas (“Safe Harbor”) for a Will Serve Letter from the District for the Walden Marina on Lake Conroe.

Mr. Abshire reported that Safe Harbor submitted a deposit of$ I ,500.00. Mr. Abshire further reported that Quiddity completed an initial review of Safe Harbor’s design plans and provided comments to be addressed by Safe Harbor.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board: I) approved the Engineer’s Report; and 2) approved Allco’s Pay Estimate No. 37 in the amount of $21,361.95, with payment for such pay estimate being withheld until Allco reimburses the District for costs incurred by the District to repair the bypass pump at the WWTP and clean the wastewater discharge resulting from such failed pump.

OPERATOR’S REPORT

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

Mr. Wright then reported that 655 customers are receiving electronic billing statements, which is an increase of 25 customers from last month.

Mr. Wright next reported that the combined water accountability for the District and MUD 9 was 95.0%. Mr. Wright further reported that there were seven (7) new taps last month and that the District has a total of 1,800 connections.

Mr. Wright then reported that performance tests will be performed this month on the District’s water wells.

Mr. Wright next reminded the Board that it previously amended the District’s Rate Order to assess a fee of $1.00 per month for customers who receive billing statements by mail. Mr. Wright stated that AVR, Hays North’s billing software provider, is still determining how to implement the $1.00 fee for receiving billing statements by mail. In response to a question from Mr. Barner, Mr. Wright stated he believes that AVR is charging the District $1,500.00 to program AVR’s software to include the assessment of such fee.

Mr. Wright then reported that Hays North is having to remove a build-up of rags from the lift station on Twain Drive approximately four (4) times per month. Mr. Wright further reported that the District expended $1,700.00 last month clearing rags from such lift station. Director Moravec requested that Hays North prepare a cost-benefit analysis and provide the Board with a recommendation as to whether it would be more cost effective to replace the pumps at lift stations where such build-up of rags is a common occurrence.

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

Mr. Wright then presented to the Board a spreadsheet indicating the number of customers who used at least 50,000 gallons of water during the past month.

AUTHORIZE E-STATEMENT INCENTIVE PROGRAM OFFERED BY FIRST BILLING SERVICES, LLC (“FIRST BILLING”)

Director Patton then reported that First Billing, the vendor responsible for processing credit card payments to the District, is offering to give a $100.00 gift certificate to a customer of the District who enrolls in paperless billing during the month of April as a means of incentivization. Mr. Barner then clarified that such gift certificate will be funded by First Billing and added that the District will incur no costs for its participation in such incentive program. Director Barlow recommended that Director Patton prepare an article for inclusion in the community newsletter promoting such incentive program and notifying customers that the District will begin charging customers a fee of $1.00 per month to receive their billing statements by mail. Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board authorized the District’s participation in First Billing’s e-statement incentive program.

REVIEW AND APPROVE JOINT AGREEMENT WITH MUD 9 AND OFF CINCO

Mr. Barner then presented to and reviewed with the Board an Agreement between Off Cinco, the District and MUD 9 for the development and maintenance of a joint website

(the “Agreement”). A discussion ensued regarding such agreement. Upon a motion by Director Patton, seconded by Director Leasure, after full discussion and with all Directors present voting aye, the Board approved the Agreement.

MISCELLANEOUS REPORTS

Mr. Denner then reported that he is aware of a developer who may submit an application for service to a proposed gas station which appears to be located within the GSU easement. A discussion then ensued regarding whether such location is within the District or MUD 9.

Director Leasure next briefly updated the Board regarding MUD 9’s Board meeting held on March 2nd.

Mr. Barner then reported that the Board of Directors of the Lone Star Groundwater Conservation District (“LSGCD”) held a meeting yesterday and briefly reviewed the LSGCD’s annual report.

AUTHORIZE ATTENDANCE AT ASSOCIATION OF WATER BOARD DIRECTORS – TEXAS (“A WBD”) SPRING BREAKFAST AND 2022 SUMMER CONFERENCE

Mr. Barner reminded the Board that it needs to authorize the Directors’ attendance at the AWBD Spring Breakfast, which is being held in Houston, Texas on April 22, 2022, and the 2022 Summer Conference in Fort Worth, Texas from June 23, 2022 through June 25, 2022. Director Moravec requested that the Board authorize him to attend the Government Finance Officers Association’s (“GFOA”) Annual Conference in Austin, Texas from June 5, 2022 through June 8, 2022. Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board: 1) authorized the Directors’ attendance at the AWBD Spring Breakfast and 2022 Summer Conference on behalf of the District; and
2) authorized Director Moravec’s attendance at the GFOA’s Annual Conference.

ELECTION AGENDA

Mr. Barner then reminded the Board that the deadline by which to file an application for a place on the ballot of the Saturday, May 7, 2022 (the “Election”) was 5:00 p.m. Friday, February 18, 2022 and the deadline for placement on the list of approved write-in candidates for the Election was 5:00 p.m. on February 22, 2022. Mr. Barner then reported that RBAP has certified that no applications for a place on the ballot were received from any candidates other than the incumbent Directors; therefore, such directors must be declared elected to office Mr. Barner then presented to and reviewed with the Board an Order Declaring Unopposed Candidates Elected to Office and Canceling the Election (the “Order Canceling Election”).

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 Canceling Election.

EXECUTIVE SESSION

Pursuant to Section 551.071 of the Texas Government Code, Subchapter D, of the Open Meetings Act, the President called the executive session to order at 10:57 a.m. to discuss matters of attorney-client privilege. Present for all or portions of the Executive Session were the Board of Directors, Mr. Abshire, Mr. Murphy, Mr. Barner and Ms. Cain.

RECONVENE IN OPEN SESSION

As of 11:18 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 11:18 a.m.

PASSED AND APPROVED this the 13th day of April, 2022.

Margie Barlow
Secretary, Board of Directors