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

MAY 12, 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, May 12, 2021, at 9:00 a.m., via telephone and video conference call pursuant to Texas Government Code, Section 551.125, as amended, and as modified by the temporary suspension of various provisions thereof effective March 16, 2020, by the Governor of Texas (the “Governor”) in accordance with the Texas Disaster Act of 1975, all as related to the Governor’s proclamation on March 13, 2020, certifying that the COVID-19 pandemic (“COVID 19”) poses an imminent threat of disaster and declaring a state of disaster for all counties in Texas, 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 via video conference 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”); 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 APRIL 14, 2021 REGULAR MEETING

The President next directed the Board to the approval of the April 14, 2021 regular meeting minutes. Director Moravec requested that page five (5) of such minutes be revised to reflect that the total $1,100,000.00 estimated cost for the replacement of the motor control centers at Water Plant Nos. 1 and 2 will be shared by the District and MUD 9. Director Moravec further requested that page eight (8) of such minutes be revised to reflect that Scott Sustman is the “interim” General Manager for the Walden Community Improvement Association.

Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the April 14, 2021 regular meeting minutes, subject to certain corrections.

In response to a question, Mr. Barner explained that there is no legal requirement that the Board require a roll-call vote for voting on motions made during a Board meeting held via video and telephone conference.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Felder reviewed the Tax Assessor-Collector’s Report for the month of April 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 96.85% of the 2020 taxes have been collected as of April 30, 2021.

Upon a motion by Director Leasure, seconded by Director Tryon, 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 funds were transferred from the District’s Series 2012 Bond account and Series 2018 Bond account into the Capital Projects Fund.

Ms. Felder next reported that all Directors are registered to attend the Association of Water Board Directors (“AWBD”) 2021 Annual Conference in person and stated that she will provide each

Director with an expense reimbursement form.

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

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 March 31, 2021.

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 Wastewater Treatment Plant (“WWTP”) Improvement Project (the “WWTP Project”). Mr. Abshire reported that work continues related to the chemical pumps, piping, and concrete paving at such site. Mr. Abshire stated that Jones|Carter continues to hold monthly progress meetings with Allco. Mr. Abshire explained that Allco’s project manager and certain members of the construction crew recently contracted COVID 19 and had been unable to perform certain work on the WWTP Project during this last month; however, it did not result in additional delays to the schedule of such project. Mr. Abshire then reported that he received a complaint from a District resident regarding noise at the existing WWTP site. Mr. Abshire explained that such noise was caused when Magna Flow, the District’s sludge hauling services provider, was vactoring the existing WWTP Lift Station in order to make modifications to connect to the new WWTP’s headworks. Mr. Abshire noted that the noise level in the area near the Walden Tennis Center would increase during demolition work that will occur in Phase II of the WWTP Project.

Mr. Abshire next presented Allco Pay Estimate No. 27 in the amount of $410,647.80 for work performed on the WWTP Project. Mr. Abshire stated that $70,000.00 of the total amount of such pay estimate is for the construction equipment required for such project and added that next month’s pay estimate for such project will be significantly higher because it will include a larger amount of such equipment. Director Patton noted that certain amounts of equipment to be installed in the new WWTP are currently not stored properly and that Allco needs to correct such storage immediately. Mr. Abshire reported that Allco is bringing an air-conditioned storage container on site to store such equipment. Mr. Abshire further reported that the District will not pay Allco for such equipment until it is properly stored.

Mr. Abshire then reported that Tachus provided a quote of $1,700.00 to extend fiber optic cable required for the WWTP Project in order to provide service to the motor control building. Mr. Abshire further reported that Tachus only accepts payment via credit card and explained that Hays North agreed to use its corporate credit card to pay the cost for Tachus to extend fiber optic cable to such site and will pass such cost to the District.

Next, Mr. Abshire reported 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 then presented a memorandum to the Board outlining the cost and scope for the work related to such renewal.

Mr. Abshire explained that the cost for Jones|Carter to prepare such application is $18,000.00 and added that there will be an additional cost of $6,000.00 associated with such renewal for the State’s application fees, advertising of such project, and sampling of the District’s effluent. Mr. Abshire requested authorization from the Board to prepare 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 will be substantially complete within the next month. Mr. Abshire further reported that following substantial completion of such project, Jones|Carter will conduct a walk thru inspection.

Next, Mr. Abshire updated the Board regarding the status of the ground storage tank (“GST”) rehabilitation at the Buckingham Water Plant (the “GST Rehabilitation Project”). Mr. Abshire reported that MK Painting, Inc. (“MK Painting”), the contractor on such project, completed rehabilitation on such GST last month. Mr. Abshire further reported that Jones|Carter performed a final inspection of such project, and that such project is in the process of being closed out. Mr. Abshire then presented MK Painting Pay Estimate No. 3 in the amount of $67,440.09 for work performed on the GST Rehabilitation Project. Mr. Abshire noted that the District’s share of such pay estimate is 50 percent (50%) of the total, or $33,720.05. Mr. Abshire next presented MK Painting Pay Estimate No. 4 and Final in the amount of $91,843.34 for work performed on the GST Rehabilitation Project. Mr. Abshire noted that the District’s share of such pay estimate is 50 percent (50%) of the total, or $45,921.67. Mr. Abshire then presented MK Painting Change Order No. 4 in the deduct amount of $12,000.00. Mr. Abshire explained that MK Painting Pay Estimate No. 4 and Final and Change Order No. 4 were submitted after the Engineer’s Report was prepared. Mr. Abshire stated that such pay estimate and change order will be reviewed by MUD 9 at their next Board meeting.

Regarding the cleaning and televising of a certain portion of the District’s sanitary sewer lines, Mr. Abshire reported that Jones|Carter advertised such project for bids, with the low bid coming from Texas Pride Utilities, LLC (“Texas Pride”) in the amount of $70,615.20. A copy of the bid tabulation is included with the Engineer’s Report.

Mr. Abshire next reminded the Board that the District and MUD 9’s Joint Capital Improvement Plan for the Fiscal Year Ending (“FYE”) 2021 includes the replacement of the motor control center (“MCC”) for both the Poe Street Water Plant and the Browning Street Water Plant. Mr. Abshire further reminded the Board that it previously authorized Jones|Carter to proceed with design plans for the replacement of both MCCs. Mr. Abshire reported that the combined cost for such replacement is approximately $1,100,000.00. A discussion then ensued regarding the share of costs to be paid by MUD 9 for the replacement of the MCC at the Browning Street Water Plant. Director Patton then explained that the costs associated with the replacement of the MCC at the Poe Street Water Plant is the sole responsibility of the District because there are no joint facilities at such plant, while the cost associated with the work performed at the Browning Street Water Plant should be apportioned between the District and MUD 9 because such plant included the Catahoula Water Well that is part of the District and MUD 9’s joint alternative water supply facilities.

Next, Mr. Abshire reminded the Board that the America’s Water Infrastructure Act of 2018 requires water districts serving more than 3,300 customers to develop a Risk and Resilience Assessment (“RRA”) and Emergency Response Plan (“ERP”). Mr. Abshire reported that Jones|Carter completed such RRA and will submit the necessary certificate of completion to the U.S. Environmental Protection Agency (“EPA”) prior to the deadline of June 30, 2021. Mr. Abshire then reported that following submittal of such certification, the District will have six (6) months to prepare an ERP and certify completion of the same to the EPA. Discussion then ensued regarding the practicality of developing a single comprehensive ERP for the District and MUD 9.

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 Engineer’s Report, as presented, 2) approved Allco Pay Estimate No. 27 in the amount of $410,647.80; 3) authorized Jones|Carter to prepare the TPDES permit renewal application; 4) approved MK Painting Pay Estimate No. 3 in the amount of $67,440.09; 5) approved MK Painting Pay Estimate No. 4 and Final in the amount of $91,843.34; 6) approved MK Painting Change Order No. 4 in the deduct amount of $12,000.00; 7) accepted the bid submitted by Texas Pride in the amount of $70,615.20 for the Cleaning and Televising Project; 8) approved Notice of Award to Texas Pride; 9) approved execution of the construction contract with Texas Pride, subject to Attorney’s review of bonds and insurance and receipt of a Form 1295 Certificate of Interested Parties; and 10) authorized issuance of the Notice to Proceed to Texas Pride, subject to execution of the construction contract.

OPERATOR’S REPORT

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

Mr. Wright reported that the combined water accountability for the District and MUD 9 was 99.50%. Mr. Wright further reported that such percentage is approximately five percent (5%) high due to an issue with the meter at the Catahoula Water Well, which has been resolved. Mr. Wright next reported that there was one (1) new tap last month and that the District has a total of 1,776 connections.

Mr. Wright then reported that 451 customers are receiving electronic billing statements, which is an increase of 12 customers from last month.

Next, Mr. Wright reported that seven (7) accounts are 60 days delinquent and added that there are no accounts delinquent by 90 or more days. Mr. 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 recommend that Hays North contact customers whose accounts become delinquent by at least 90 days.

Mr. Wright reminded the Board that the lift station at the WWTP is now on bypass as part of the WWTP Project. Mr. Wright further explained that a temporary lift station is in operation and added that Hays North is performing more frequent maintenance of the sanitary sewer lines while the WWTP lift station is on bypass. Director Barlow then recommended including an item in the community newsletter regarding proper disposal of grease and wet wipes.

Mr. Wright then discussed the Notable Activity Reported contained within the Operator’s Report and explained that Hays North assisted AR Turnkee Construction Co. (“Turnkee”), the contractor working on the Drainage Improvements Project, with work related to storm drain modifications by obtaining certain materials and hanging door tags notifying customers regarding such work.

Director Patton stated that Hays North should have billed Turnkee for such work instead of the District. Director Patton further stated that the District already paid Turnkee for all work related to such project, and added that the District should receive a credit from Turnkee for the cost associated with the work that Hays North performed for Turnkee. Mr. Abshire stated that Jones|Carter will coordinate with Turnkee regarding such credit.

Mr. Wright then reminded the Board that it previously authorized Hays North to perform flow testing on the District’s fire hydrants. Mr. Wright stated that he will present an inspection report to the Board at the June Board meeting and will present recommendations regarding repairs to certain fire hydrants.

Regarding the status of the valve location project, Mr. Wright stated that he provided Jones|Carter with drawings for such project, but noted that Hays North still needs to clarify certain field notes that were included on such drawings.

Mr. Wright next reported that Hays North submitted the District’s Annual Water Loss to the Texas Water Development Board (“TWDB”) prior to the May 1, 2021 deadline. Mr. Wright reported that the District’s historical average water accountability ratio is 95% and added that the TWDB considers a ratio of 90% or higher to be acceptable. In response to a question by Director Moravec regarding whether such audit is available to the public, Mr. Barner explained that no database exists where the public can view the District’s water loss audits, but a member of the public could make an open records request to obtain such audits.

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

REVIEW AMENDMENT TO OPERATIONS CONTRACT AND FEE SCHEDULE

Mr. Wright next reminded the Board that he provided by email a proposed amendment to Hays North’s contract with the District. In response to a question, Mr. Barner explained that the Operator’s fee schedule is an exhibit to the District’s service contract with Hays North and added that if the Board accepted the Operator’s new fee schedule, it would be approved by the Board as an amendment to such service contract. Director Moravec recommended that a clause be included in such contract to prohibit Hays North from charging the District higher rates than it charges other districts to which the same services are provided. It was the consensus of the Board to review this matter further before authorizing such amendment.

UPDATE ON INSURANCE CLAIMS FOR DAMAGES RELATED TO WASTEWATER BACKFLOW

Next, Mr. Wright updated the Board regarding the claim that Hays North filed with the District’s insurance provider related to a backflow of sewage that damaged three (3) customers’ homes. Mr. Wright reported that the insurance adjuster notified Hays North that the claim filed for one (1) of the homes was denied. Mr. Barner added that a formal denial of such claim has not yet been received from Hays North’s insurance provider.

UPDATE ON CLAIMS FILED FOR DAMAGES AGAINST TACHUS’ SUBCONTRACTORS

Regarding the status of claims filed 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 reported that there have been no recent updates from the insurance provider. Mr. Wright further reported that he notified the insurance provider that the invoices sent to Tachus for such damage remain outstanding.

APPROVE DISTRIBUTION OF DRINKING WATER QUALITY REPORT (“CCR”)

Mr. Wright reported that he did not provide a copy of the CCR to the Board for review, but stated that he will email such CCR to the Board immediately. Mr. Barner recommended that the Board continue its practice of approving the CCR and authorize distribution of the same, subject to a ten (10) day review by the Board and the Attorney. Mr. Barner then reminded the Board about the process for distributing the CCR to customers pursuant to the requirements of the EPA and the Texas Commission on Environmental Quality. Mr. Barner stated that a direct URL link for the CCR must be included in customers’ water bills in order to comply with such requirements, which are in lieu of providing a physical copy of the CCR in customers’ water bills. A discussion then ensued regarding whether approval of the CCR could be tabled until the June 9th Board meeting in order to give the Board time to review and it was determined that approval of the CCR could not be made in such meeting because it would be too late to include it in customers’ water bills before the June 30th deadline. Mr. Wright then reported that he just emailed the CCR to the Board so that they could review.

OPERATOR’S REPORT (CONTINUED)

Mr. Wright then stated that he had an additional item under the Operator’s Report that needed Board action and explained that two (2) sinkholes have developed near the District’s storm sewer outfalls located in the Estates of Walden. Mr. Wright then discussed the District’s options for repairing such sinkholes and preventing further erosion. Mr. Wright presented two (2) proposal for the replacement of a bulkhead and installation of a coffer dam, in the amounts of $9,200.00 and $12,500.00 per sinkhole, dependent upon which repair option the Board chooses. Mr. Wright then estimated that Hays North’s excavation of such site will cost an additional $3,500.00. In response to a question from Director Moravec regarding budgeting for the increasing frequency at which sinkholes are developing within the District, Mr. Abshire recommended increasing the maintenance budget for the FYE 2022 to include repair of additional sinkholes. Mr. Abshire then explained that Hays North inspected all of the District’s storm sewer outfalls last year, and the outfalls located in the Estates of Walden were determined to be in poor condition. Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board 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 $30,000.00.

APPROVE DISTRIBUTION OF CCR (CONTINUED)

Mr. Wright reviewed the CCR with the Board and responded to questions from the Board regarding such CCR. Upon a motion by Director Leasure, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized distribution of the CCR, subject to a ten (10)-day review period.

CONSIDER AMENDING RATE ORDER

Director Tryon reported that he is in the process of reviewing the District’s Rate Order in order to provide recommendations to the Board regarding amendments to the same.

UPDATE ON DISTRICT’S WEBSITE AND COMMUNICATIONS SERVICES

Director Patton reported that customer traffic on such website remains steady. Director Patton further reported that he and the Attorney regularly receive communications from District customers via such website and added that most correspondence from such customers is forwarded to Hays North for addressing.

MISCELLANEOUS REPORTS

Mr. Barron reported that at MUD 9’s previous Board of Directors meeting, MUD 9’s Board approved bids for a drainage project along Sleepy Hollow.

Mr. Barner then reported that the Groundwater Management Area 14 recently adopted its Desired Future Conditions for such area. Mr. Barner added that such conditions are intended for use in establishing available groundwater for such area.

DISCUSS AWBD TRUSTEE AND BYLAWS ELECTION

Mr. Barner explained that the AWBD’s bylaws require the election of trustees to occur by August 31st of each year. Mr. Barner stated that each member district may cast a ballot in the AWBD’s Trustee and Bylaws Amendment Election during the AWBD’s 2021 Annual Conference, which will be held on June 17-19, 2021. Mr. Barner went on to explain that each member district will need to appoint one (1) voting representative to cast a ballot in such election. Mr. Barner stated that the proposed amendments to the bylaws are available for members to review on the AWBD’s website. Upon a motion by Director Patton, seconded by Director Moravec, after full discussion and with all Directors present voting aye, the Board authorized Director Tryon to serve as the District’s representative for purposes of casting a ballot in the AWBD Trustee Election and Bylaws Election.

AUTHORIZE CASTING OF OFFICIAL BALLOT FOR THE MONTGOMERY CENTRAL APPRAISAL DISTRICT’S (“MCAD”) BOARD OF DIRECTORS ELECTION

Ms. Felder explained that the notice she provided to the Board regarding casting a ballot in the upcoming election of the MCAD’s Board of Directors, was provided in order to inform the Board that MCAD is accepting candidate nominations. Ms. Felder noted that such election will occur in October.

ATTORNEY’S REPORT

Mr. Barner reminded the Board that Hays North filed a claim with its 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. Barner then reported that Hays North’s insurance provider agreed to pay such claim in the amount of $17,778.39. Mr. Barner presented a Release of All Claims provided by Hays North’s insurance provider, and explained that by signing such release, the District acknowledges that it was paid for such damage to its water lines and waives all claims against Hays North. Upon a motion by Director Tryon, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Release of All Claims.

Mr. Barner next reviewed with the Board the Attorney’s Legislative Update of the 87th Legislature, a copy of which is attached hereto. Mr. Barner discussed certain bills filed that could affect the District.

Discussion then ensued regarding resuming in-person Board meetings and the location at which such meetings will be held while the Walden Yacht Club is unavailable. Mr. Barner explained that the Board may hold its meetings at the Walden Community Church pursuant to the Order Authorizing Additional Meeting Place Outside the Boundaries of the District adopted by the Board in 2017. It was the consensus of the Board that beginning in June, Board meetings will be conducted on an entirely in person basis.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 11:25 a.m.

PASSED AND APPROVED this the 9th day of June, 2021. Secretary, Board of Direct