Meeting Minutes 2021-06-09

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

JUNE 9, 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, June 9, 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, 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, Director of Montgomery County Municipal Utility District No. 9 (“MUD 9”); Scott Sustman, interim General Manager for the Walden Community Improvement Association; and Ross J. Radcliffe and Elliot M. Barner, attorneys, 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 MAY 12, 2021 REGULAR MEETING

The President next directed the Board to the approval of the May 12, 2021 regular meeting minutes. Upon a motion by Director Leasure, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the May 12, 2021 regular meeting minutes, as presented.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Felder reviewed the Tax Assessor-Collector’s Report for the month of May 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 97.36% of the 2020 taxes have been collected as of May 31, 2021.

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.

In response to a question from Director Moravec regarding the balance in the District’s operating fund account, Ms. Felder explained that such balance is currently higher than normal because customers’ payments for the May billing cycle were deposited into such account, and those funds have not yet been transferred to the District’s money market account.

Next, Ms. Felder discussed the Unclaimed Property Report and explained that such report is required to be filed with the State Comptroller’s Office (“Comptroller”) annually regarding customer funds that remain uncollected for the period of March 1, 2019 through February 28, 2020. Ms. Felder stated that the Unclaimed Property Report and a check in the amount of $554.29 have been prepared and will be sent to the Comptroller following the Board’s approval of the same.

In response to a question from Director Moravec regarding the delay in the District’s receipt of Jones|Carter’s invoice for the previous month, Mr. Abshire explained that Jones|Carter submits its invoice to the Bookkeeper at the beginning of each month, but noted that such invoice is not always received early enough to be included on the Bookkeeper’s Report if the District meeting date falls early in the month.

In response to a question from Director Moravec regarding the reallocation of the balance of $72,335.11 remaining in the District’s Series 2012 Bond Fund, Mr. Abshire reported that a portion of such funds are still being utilized to fund the ground storage tank (“GST”) rehabilitation project at the Buckingham Water Plant and added that the District should receive the final invoices for such project within the next two (2) months. Mr. Barner reminded the Board that following completion of the GST rehabilitation project, the remaining surplus funds will be re-allocated for the Wastewater Treatment Plant (“WWTP”) Improvement Project (the “WWTP Project”), which is a project that has already been approved by the Texas Commission on Environmental Quality (the “TCEQ”).

Upon a motion by Director Moravec, 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 detailed therein; and 3) authorized filing of the Unclaimed Property Report.

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 Project. Mr. Abshire reported that he received a complaint from a District resident regarding the noise caused by the on site lift station being on bypass and noted that such lift station will remain on bypass for at least one (1) more month. Mr. Abshire stated that Jones|Carter continues to hold monthly progress meetings with Allco. Mr. Abshire next presented Allco Pay Estimate No. 28 in the amount of $521,062.94 for work performed on the WWTP Project.

Mr. Abshire then presented Allco Change Order No. 11 in the amount of $17,645.00 for: 1) the removal of a deteriorated effluent manhole (as was discussed during the Board meeting held on April 14, 2021); 2) the deduct of four (4) four-inch (4″) diameter concrete pavement core samples, including labor and testing fees; and 3) the installation of two (2) 5′ x 5′ x 5′ traffic-rated concrete electrical junction boxes.

In response to a question, Mr. Abshire then reminded the Board that certain electrical junction boxes were ordered last year despite the fact that such boxes were not needed until Phase II of the WWTP Project. Mr. Abshire further reminded the Board that in August 2020, the Board approved Change Order No. 8, which authorized Allco to install larger boxes than originally designed and beyond the National Electric Code, which would allow for better access for maintenance within such boxes. Mr. Abshire added that the original boxes should be able to be utilized in Phase II and result in some sort of a deduction in the overall contract amount. Mr. Abshire went on to state that Allco is unwilling to agree on a deduction amount for a Phase II item until Phase I is complete. Discussion then ensued regarding the amount of time by which the WWTP Project schedule has been delayed past the originally scheduled completion date.

Next, discussion ensued regarding scheduling a tour of the WWTP Project. Director Moravec recommended that the Directors tour such site during the 30 days demonstration period immediately preceding the date that the WWTP is placed into operation.

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 the amount of rainfall received last month delayed such project, but noted that the work in Zone 8 will be substantially complete within the next month. Director Tryon then presented photographs of flooding in such area. Mr. Abshire explained that such flooding will be alleviated by the drainage improvements along the GSU easement that are being completed by MUD 9. Mr. Abshire then reminded the Board that an outfall in Zone 7 drains into a roadway intersection, but noted that the District widened the stormwater drainage inlets along such roadway. Mr. Abshire reminded the Board that Jones|Carter proposed installing a stormwater drainage outfall to allow excess water in such area to drain into Lake Conroe, but such proposal was not pursued because the excess water does not pose a flooding risk to the homes in such area.

Next, Mr. Abshire updated the Board regarding the cleaning and televising of a certain portion of the District’s sanitary sewer lines. Mr. Abshire reminded the Board that it previously awarded such project to Texas Pride Utilities, LLC (“Texas Pride”). Mr. Abshire reported that the contract was executed by Texas Pride and will be provided to the Board for execution following the Attorney’s review of the required bonds and insurance information for such project.

Mr. Abshire then discussed the replacement of the motor control center (“MCC”) for both the Poe Street Water Plant and the Browning Street Water Plant. Mr. Abshire reminded the Board that the cost of the replacement of the MCC at the Browning Street Water Plant will be shared with MUD 9 because such plant includes the Catahoula Water Well that is part of the District and MUD 9’s joint alternative water supply facilities. Mr. Abshire reported that Jones|Carter held a site meeting with MUD 9’s engineer to discuss the design layout of such project.

Next, Mr. Abshire reminded the Board that the America’s Water Infrastructure Act of 2018 (“AWIA”) 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 discussed the same with the District and MUD 9’s joint AWIA Committee. Mr. Abshire then requested authorization from the Board to submit the necessary certificate of completion to the U.S. Environmental Protection Agency (“EPA”) prior to the deadline of June 30, 2021. Mr. Barner recommended that Mr. Abshire present the RRA to the full Board during a closed session at the next regular Board meeting, as such RRA contains security related information regarding the District’s facilities that all of the Directors should be aware of.

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, as presented, 2) approved Allco Pay Estimate No. 28 in the amount of $521,062.94; 3) approved Allco Change Order No. 11 in the amount of $17,645.00; and 4) authorized Jones|Carter to certify completion of the RRA to the EPA.

OPERATOR’S REPORT

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

Mr. Philip Wright reported that the combined water accountability for the District and MUD 9 was 94.50%. Mr. Philip Wright next reported that there were (7) new taps last month and that the District has a total of 1,780 connections.

Mr. Philip Wright then reported that 468 customers are receiving electronic billing statements, which is an increase of 17 customers from last month.

Next, Mr. Philip Wright reported that five (5) accounts are 60 days delinquent and added that there are no accounts delinquent by 90 or more days. Mr. Philip Wright then reminded the Board that the District has not terminated service to any delinquent accounts since the beginning of COVID 19, approximately one (1) year ago. Discussion then ensued regarding whether to resume termination of service to delinquent accounts. It was the consensus of the Board to continue suspension of termination of service to delinquent accounts and to require that Hays North contact customers whose accounts become delinquent by at least 90 days to make payment arrangements.

Mr. Philip Wright then reported that a sample taken from the WWTP shows the amount of total dissolvable solids (“TDS”) in the effluent is 1,020 milligrams per liter (“mg/l”), whereas the average amount of TDS in the effluent is approximately 700 mg/l. Mr. Philip Wright stated that the TCEQ does not have any requirements related to the amount of TDS contained in the District’s effluent, but noted that Hays North will retest such effluent to determine whether such amounts have returned to normal levels.

In response to a question from Director Tryon 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 is permitted to pump from the Catahoula Water Well, Mr. John Wright explained that pursuant to new LSGCD rules, MUD 9 must justify the need for such increase. Mr. Philip Wright further explained that pursuant to such new rules, the LSGCD now considers permits for pumpage from the Jasper Aquifer and the Catahoula Aquifer jointly, and MUD 9 must provide evidence of its need for the total amount pumped from both aquifers. Mr. Philip Wright reported that Hays North is gathering data to support such application, including the acreage of the district, the current number of customers served by the district, and possible future development. Mr. Philip Wright stated that such supporting data must be provided to the LSGCD by June 24th. Mr. Barner requested that Hays North coordinate with RBAP regarding the application and supporting documentation prior to submitting the same to the LSGCD.

Mr. Philip Wright then discussed the Notable Activity Report contained within the Operator’s Report and explained that Hays North cleared a blockage in the District’s main line along Hunters Landing, which was causing problems with the lift station pump. Mr. Philip Wright explained that such blockage was caused by tree roots, and added that such line will be televised to determine whether such roots punctured the line and if there are any additional blockages in such line. Mr. Abshire stated that such televising can be included in the scope of the current cleaning and televising project.

Mr. John Wright next discussed a sewer line issue along a portion of Thoreau Drive. Mr. Philip Wright reported that a customer complained of repeated backflow to her home. Mr. Philip Wright explained that there is a dip in such customer’s private sewer line. Mr. Philip Wright reported that Hays North will have the District’s line televised to determine if the blockage is occurring in such line or in the customer’s private line.

Mr. Philip Wright then reported that Hays North completed flow testing on the District’s fire hydrants. Mr. Philip Wright stated that he has not yet provided the Board with the inspection report, but will email such report to the Board immediately. Mr. Philip Wright then discussed the repairs that need to be made to certain District fire hydrants, and recommended that the Board authorize Hays North to perform such repairs at a total cost of $12,650.00. Mr. Philip Wright additionally requested authorization from the Board to purchase 116 reflectors to be installed in the street at the location of certain hydrants.

Regarding the status of the valve location project, Mr. Philip Wright stated that he provided Jones|Carter with drawings for such project, but noted that he still needs to finalize the maps and provide the same to Jones|Carter.

Mr. Philip Wright then reminded the Board that two (2) sinkholes developed near the District’s stormwater drainage outfalls located in the Estates of Walden. Mr. Philip 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 $30,000.00. Mr. Philip Wright then reported that the contractor on such project determined that longer beams than were previously anticipated will be required in order replace the bulkhead and install a coffer dam to prevent further erosion. Mr. Philip Wright stated that the cost for such repairs will be approximately $4,500.00 more than the amount originally proposed by the contractor.

Upon a motion by Director Moravec, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board: 1) approved the Operator’s Report, as presented; 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 $35,000.00; and 3) authorized Hays North to proceed with all fire hydrant repairs identified in the inspection report.

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. Wright reported that Hays North and Mr. Barner continue to coordinate with the insurance provider for Structure Communications, one of Tachus’ subcontractors, regarding reimbursement to the District for such damages. Director Moravec requested that Hays North resolve all disputes by the end of the year with Tachus’ subcontractors related to such damaged water lines.

The Board took a brief recess from 10:30 a.m. to 10:39 a.m.

Mr. Barner exited the meeting at this time.

UPDATE ON STATUS OF DISTRIBUTION OF DRINKING WATER QUALITY REPORT (“CCR”)

Mr. Philip Wright reported that pursuant to the TCEQ’s requirements, a direct URL link for the CCR was included in customers’ water bills last month. Mr. Wright further reported that the CCR was posted on the District’s website. Director Barlow then recommended including an item in the community newsletter promoting the existence of the District’s website.

UPDATE ON INCENTIVES TO INCREASE USE OF E-STATEMENTS BILLING

Director Patton reported that approximately 200 customers submit payments for their water/sewer bills online but are not enrolled to receive electronic statements. Director Moravec requested that Hays North promote the availability of electronic billing statements and the District’s one-time incentive of $12.00 for enrollment in paperless billing whenever a District customer calls Hays North.

CONSIDER AMENDING RATE ORDER

Director Moravec reported that he will soon begin preparing a draft of the District’s budget for the Fiscal Year Ending December 31, 2022, and will review the District’s Rate Order simultaneously in order to determine whether the District’s water and sewer rates are sufficient to cover increasing operations and maintenance expenses.

MISCELLANEOUS REPORTS

Mr. Sustman stated that the Walden Yacht Club should be open to the public prior to the next regular Board meeting scheduled for July 14, 2021.

Director Leasure reported that MUD 9 will be applying for a Federal grant for the purpose of completing repairs to such district’s outfalls. Director Barron reported that MUD 9’s storm water outfall on Windswept Drive failed recently and will cost $100,000.00 to repair. Mr. Barron further reported that MUD 9 is considering a project to re line outfall pipes throughout such district.

Director Leasure further reported that mediation was not successful between MUD 9 and Tachus regarding the damage to such district’s water lines during Tachus’ installation of fiber optic cables, and that a trial date is set for July 8th in small claims court.

Mr. Barron then reported that he and Director Moravec will coordinate regarding potential amendments to the districts’ respective Rate Orders as they pertain to water and sewer rates.

Next, Mr. Barron reminded the Board that the Groundwater Management Area 14 (“GMA 14”) recently adopted its Desired Future Conditions for such area, which are intended for use in establishing the availability of groundwater for such area. Mr. Barron reported that the LSGCD is requesting that water districts operating within the jurisdiction of the GMA14 support a resolution opposing such Desired Future Conditions and promoting subsidence monitoring efforts in the area. Director Patton recommended that the District avoid getting involved in the dispute between the GMA 14 and the LSGCD because the GMA 14’s Desired Future Conditions do not affect the District.

ATTORNEY’S REPORT

Mr. Radcliffe next presented a proposed Amended and Restated Order Establishing a Records Management Program and Designating Records Management Officer. Mr. Radcliffe explained that the State of Texas issued new guidelines regarding the length of time for which records are to be retained. Extensive discussion then ensued regarding the current process of retaining various District records. Mr. Radcliffe stated that the Attorney will provide the Board with the proposed order for review prior to its next regular Board meeting.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 11:09 a.m.

PASSED AND APPROVED this the 14th day of July, 2021.

Secretary, Board of Directors