MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 8

MINUTES OF REGULAR MEETING

September 11, 2024

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 11, 2024, 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
Michael White Assistant Secretary

All members of the Board were present, thus constituting a quorum. Also attending were Mark Miller of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); Justin Abshire and Conner Murphy of Quiddity Engineering (“Engineer” or “Quiddity”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Elliot M. Barner, attorney, and Allison Dawson, paralegal, of Radcliffe Adams Barner PLLC (“Attorney” or “RAB”); and Dave Allen, Director of Montgomery County Municipal Utility District No. 9 (“MUD 9”).

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 opened the meeting to public comment. There being no public comments, the President directed the Board to proceed with the agenda.

2024 TAX RA TE

Director Tryon next declared the public hearing open to discuss the District’s proposed tax rate for 2024.

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

The Board then discussed the proposed tax rate for 2024 and the District’s proposed budget for the Fiscal Year Ending (“FYE”) December 31, 2025. Director Moravec recommended that the Board adopt a 2024 tax rate of $0.2930 per $100 of assessed valuation, which would be comprised of a debt service tax rate of $0.1746 per $100 of assessed valuation and an operations and maintenance tax rate of $0.1184 per $100 of assessed valuation. Mr. Barner next presented for the Board’s approval and adoption an Order Setting Rate and Levying Tax for 2024 (the “2024 Tax Rate Order”). Upon a motion by Director White, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board: 1) adopted the 2024 Tax Rate Order; and 2) approved a total ad valorem tax rate of $0.2930 per $100 of assessed value for the year 2024, comprised of $0.1746 per $100 assessed valuation for debt service purposes and $0.1184 per $100 assessed valuation for operation and maintenance purposes.

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

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 consider adopting a resolution re-affirming those tax collection procedures after each review. Upon a motion by Director Tryon, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved the Resolution Concerning Tax Collection Procedures.

Mr. Barner next explained that pursuant to Section 49.455 of the Texas Water Code, as amended, the District is required to amend its District Information Form (“ADIF”) any time information in such form is revised or updated and, therefore, since the District’s 2024 tax rate has been adopted, an amendment to the ADIF is necessary. Mr. Barner further stated that the ADIF is required to be filed with the Montgomery County Real Property Records (the “MCRPR”) and the Texas Commission on Environmental Quality (the “TCEQ”). Upon a motion by Director Barlow, seconded by Director White, after full discussion and with all Directors present voting aye, the Board approved the ADIF, as presented, and authorized filing of the same with the MCRPR and the TCEQ.

TAX ASSESSOR-COLLECTOR’S REPORT

Mr. Miller informed the Board that the August 2024 Tax Assessor-Collector’s Report was not available at the time of the Board meeting so Mr. Miller reviewed the Tax-Assessor Collector’s Report for the month of July 2024 briefly, a copy of which is attached hereto, including past monthly collections and credits as reported by the Tax Assessor-Collector for the District. Mr. Miller reported that 98.90% of the 2023 taxes have been collected as of July 31, 2024.

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

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

Director Moravec requested from Quiddity to review the inventory of the fixed assets. A brief discussion ensued regarding fixed assets and inventory.

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

ANNUAL REVIEW OF INVESTMENT POLICY, INCLUDING LIST OF AUTHORIZED BROKERS

Mr. Barner then explained that pursuant to Texas Government Code, Section 2256.00S(e), as amended, the District is required to review its Amended and Restated Order Designating Investment Officer and Establishing Rules, Policies and Code of Ethics for the Investment of District Funds and Review of Investments (“Investment Policy”) not less than annually. Mr. Barner stated that there were no recommended changes to such policy and that any motion by the Board only needs to acknowledge that such policy had been reviewed.

Mr. Miller reported that the List of Authorized Brokers was provided to RAB and explained that no brokers have been added to or removed from the list within the past year.

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 Investment Policy, as presented; and 2) approved the List of Authorized Brokers, as presented.

ENGAGE BURTON ACCOUNTING PLLC TO PREPARE DISTRICT FINANCIAL STATEMENTS TO COMPLY WITH SAS 115 REQUIREMENTS

Mr. Barner then presented to the Board a proposal for the engagement of 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. Director Moravec explained the purpose of the TWDB’s requirements and the necessity of preparing such additional statements. Upon a motion by Director Tryon, seconded by Director White, after full discussion and with all Directors present voting aye, the Board authorized the execution of the Burton Accounting engagement letter.

ENGINEER’S REPORT

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

Mr. Murphy reminded the Board that the Wastewater Treatment Plant (“WWTP”) Improvement Project was substantially complete as of February 20, 2024. Mr. Murphy further reminded the Board that such project was completed 834 days later than the completion date stated in the construction contract for such project. Mr. Murphy reported that RAB has received a response to the letter sent to Allco, LLC (“Allco”) regarding liquidated damages owed to the District pursuant to such contract. A brief discussion ensued.

Mr. Murphy next reminded the Board that the Stormwater Outfall Cleaning and Televising Project, Phase I will be further delayed due to the elevated water level in Lake Conroe. Mr. Abshire stated that Quiddity will see if the outfalls can be inspected once the water level decreases to 200 feet.

Mr. Murphy next reported that Quiddity has completed the design of the Lift Station Nos. 5-7 Rehabilitation Project and requests authorization from the Board to advertise for bids. Further, Mr. Murphy reminded the Board that Lift Station No. 6 on Walden Estates Drive was constructed on a very small tract of land owned by the District, which sits between a home and a vacant lot. Mr. Murphy then reported that pursuant to prior authorization from the Board, Quiddity and RAB are coordinating with Academy Development (“Academy”) regarding obtaining a ten-foot (IO’) to fifteen-foot (15′) sanitary sewer easement on the vacant tract ofland adjacent along the south side of the District’s property. Mr. Barner noted that he has corresponded with Academy, and they have agreed to grant the District a temporary construction easement. Mr. Murphy requested authorization from the Board to move forward with preparing the metes and bounds description and exhibits for the easement.

Mr. Murphy then reported that Quiddity is working on the design for Water Plant No. 2 Phosphate System. Mr. Murphy reminded the Board that the TCEQ is requiring the District to submit engineering plans and specifications for approval of the phosphate system. Mr. Murphy further reported that Quiddity should be ready submit the design plans to the TCEQ next month.

Next, Mr. Murphy reminded the Board that Quiddity had presented an inspection report and rehabilitation cost estimate from Texas Aquastore for the District’s glass-lined ground storage tanks (“GST”) at both Water Plant Nos. 1 and 2. Mr. Murphy explained that the costs previously provided have expired and Quiddity has coordinating with Texas Aquastore and presented the updated cost estimates to the Board. Mr. Murphy then requested authorization from the Board to proceed with preparation of the contracts with Texas Aquastore. Mr. Abshire stated that if the whole project cannot be completed before summer, they will split the project up into two (2) phases but the Browning location will be done first.

Mr. Murphy then presented the Capital Improvement Plan (“CIP”) to the Board. A brief discussion ensued regarding the depth of the wells.

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) authorized Quiddity preparation of metes and bounds for Lift Station Nos. 5, 6, and 7 rehabilitation; 3) authorized Quiddity to proceed with public advertisement of bids for Lift Station Nos. 5, 6, and 7 rehabilitation; and 4) authorized Quiddity to proceed with preparation of contracts with Texas Aquastore.

Mr. Miller exited the meeting at this time.

LANDSCAPING IMROVEMENTS AT THE WWTP

Director Barlow reminded the Board that trees and bushes were installed outside the fence along the north side of the WWTP. Director Barlow further stated that she was planning to purchase granular deer repellant in hopes to keep the deer away, once purchased she will provide an invoice to Mr. Miller for reimbursement. Director Tryon stated that the retention pond has a lot of brush everywhere and needs to be mowed. Mr. Wright stated that he would go to the retention pond to gauge the scope of the needed work to clear the brush.

OPERATOR’S REPORT

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

Mr. Wright then reported that 747 customers are receiving electronic billing statements, which is an increase of six ( 6) customers from last month.

Mr. Wright next reported that the combined water accountability for the District and MUD 9 was 97.76%.

Mr. Wright then reported that there were two (2) new taps last month and that the District has a total of 1,836 connections. Mr. Wright further reported that there were no accounts terminated last month due to delinquent payment.

Director Barlow reminded the Board that two (2) customers requested adjustments to their water bills last month due to a broken sprinkler system. Mr. Wright confirmed that the sprinkler system has been repaired.

Mr. Wright informed the Board that the generator at Poe is leaking from the exhaust and the cost to repair with labor would be $11,622.00. A brief discussion ensued regarding repairing the generator versus the cost of replacing the generator. Mr. Wright stated that replacing the generator would cost upward of $100,000.00.

Director Moravec discussed the WaterSmart presentation to the local elementary school and would make an appoint with the principal to arrange a date and time for the presentation.

Mr. Wright then reported on the Lead Service Line Inventory required by the Environmental Protection Agency’s (“EPA”) rules regarding lead and copper content in plumbing fixtures. Mr. Barner stated that letters need to go out to property owners in October. A brief discussion ensued.

Mr. Wright stated that there is no update to the stormwater drainage on Thoreau Drive at this time.

Upon a motion by Director Moravec, seconded by Director White, after full discussion and with all Directors present voting aye, the Board: 1) approved the Operator’s Report, as presented; and 2) approved the repairs of the generator in the amount of $11,622.00.

SECURITY AT DISTRICT FACILITIES

Director White updated the Board on security measures for the District’s facilities. Director White stated that the braces and the razor wire were currently being removed from certain locations of the security fence per the request of the property owners and the approval of the Board at the previous Board meeting.

ATTORNEY’S REPORT

Mr. Barner updated the Board regarding damage to District facilities caused by a property owner’s reckless driving. Mr. Barner reported that such owner has agreed to a payment plan. Mr. Barner stated that RAB has prepared a letter agreement and promissory note to ensure such owner compensated the District and is waiting on receiving the executed promissory note back from the owner. Mr. Barner further stated that once the executed promissory note is received it will be forwarded to Hays North to add payment plan to the owner’s bill.

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 10:32 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. Dawson.

RECONVENE IN OPEN SESSION

As of 11 :02 a.m., the President declared the Executive Session was ended and open session was resumed.

Upon a motion by Director White, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board authorized final payment of the contract with Allco, LLC.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 11:05 a.m.

PASSED AND APPROVED this the 9th day of October, 2024.

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Secretary, Board of Directors