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

March 8, 2023

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 8, 2023, 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 – Director

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 (“Engineer” or “Quiddity”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Elliot M. Barner, attorney, and Kathryn Cain, paralegal, of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”); Ray Geiselhart, Director of Montgomery County Municipal Utility District No. 9 (“MUD 9”); and Rusty Denner, General Manager for the Walden Community Improvement Association (“WCIA”).

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.

Mr. Barner entered the meeting at this time.

APPROVAL OF MINUTES OF FEBRUARY 8, 2023 REGULAR MEETING

Director Tryon next directed the Board to the approval of the February 8, 2023 regular meeting minutes. Mr. Barner stated that following distribution of the draft of such minutes, the Engineer provided RBAP with two (2) suggested revisions related to: 1) Allco Inc.’s (“Allco”) request to use non compliant backfill material on the Wastewater Treatment Plant (“WWTP”) Improvement Project; and 2) certain costs related to the Motor Control Center (“MCC”) Replacement Project for the Browning Street Water Plant (“Water Plant No. 2”). A brief discussion ensued regarding the Engineer’s proposed revisions to such 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 February 8, 2023 regular meeting minutes, with corrections.

Mr. Denner entered the meeting at this time.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Felder then reviewed the Tax Assessor-Collector’s Report for the month of February 2023, 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 94.21% of the 2022 taxes have been collected as of February 28, 2023. Ms. Felder noted that the reversals reflected in such report in the amount of $22,359.22 are refunds issued to taxpayers following such taxpayers protests of their property value appraisals.

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.

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 noted that the District has a 2.5-year reserve of funds available in its General Operating Fund.

In response to a question from Director Moravec regarding the expense related to replacement of water meters, Mr. Wright explained that Hays North is experiencing a backlog of meters due to be replaced within the District due to recent turnover of employees at Hays North. Mr. Wright further explained that numerous meters were replaced last month in an effort to reduce such backlog.

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; and 2) authorized payment of checks detailed therein.

ENGINEER’S REPORT

In response to a question from Mr. Denner regarding the effectiveness of notices sent to District customers by the WCIA regarding the pouring of concrete at the WWTP, Director Patton stated that the District received no complaints from customers regarding the noise created by such work.

Mr. Denner next reported that the WCIA is reviewing the draft of the Solid Waste Collection Billing Services Agreement that was provided last month by RBAP.

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

Mr. Murphy first updated the Board on Allco’s progress over the past month regarding the WWTP Project. Mr. Murphy reported that installation of the yard piping is underway and added that Allco poured the foundation for the dewatering building. Mr. Murphy then presented Allco’s Pay Estimate No. 49 in the amount of $273,100.17 for work performed on the WWTP Project. Mr. Murphy next reported that the most recent construction schedule submitted by Allco indicates that the substantial completion date for Phase II of such project is October 26, 2023.

Ms. Felder exited the meeting at this time.

Mr. Murphy then reminded the Board that Quiddity submitted the application for the renewal of the Texas Pollutant Discharge Elimination System Permit for the WWTP to the Texas Commission on Environmental Quality (the “TCEQ”) on behalf of the District. Mr. Murphy stated that he expects to receive the final permit soon.

Regarding the 2022 Sanitary Sewer Rehabilitation Project, Texas Pride Utilities, LLC (“Texas Pride”) completed the pipe bursting work and installation of cured-in-place-pipe liner in Walden, Section 3A. Mr. Murphy reported that Texas Pride is underway with the pre-cleaning and televising work to confirm the location of repairs in the remaining sections of Walden.

Mr. Murphy then updated the Board on the MCC Replacement Project for Water Plant No. 2. Mr. Murphy reported that such plant was placed into operation on February 24th and stated that McDonald Municipal & Industrial (“McDonald”) is addressing the punchlist items that were identified during the substantial completion inspection. Mr. Murphy next presented McDonald’s Change Order No. 2 in the amount of $10,956.55, which includes sandblasting and re-coating of the corroded cooling tower motor frames that was previously approved by the Board. Mr. Murphy explained that such change order also includes replacement of the bushing that connects the shaft of the cooling tower to the base at a cost of approximately $8,500.00. Mr. Murphy further explained that such change order also includes deductions of certain work from the contract. Mr. Murphy next presented McDonald’s Pay Estimate No. 4 in the amount of $167,145.55 for work performed on the Water Plant No. 2 MCC Replacement Project.

Next, Mr. Murphy reminded the Board that Quiddity completed the bid package for the Storm Sewer Outfall Cleaning and Televising Project, Phase I; however, advertisement of such project is being delayed until the water level in Lake Conroe has decreased.

Mr. Abshire next updated the Board regarding the annual inspection of the District’s water plants as required by the TCEQ. Mr. Murphy stated that Quiddity performed an inspection of Water Plant No. 2 during the time it was out of operation for the MCC Replacement Project. Mr. Murphy further stated that Quiddity will perform an inspection of Water Plant No. 1 within the next few weeks. Mr. Murphy reported that the interior coating is failing inside Hydropneumatic Tank (“HPT”) No. 1 at Water Plant No. 2. Mr. Murphy further reported that thickness measurements of such HPT indicate that the thickness is still adequate and recommended that the interior of such HPT be re-coated. In response to a question from Director Moravec regarding a touch-up of the coating in 2021, Mr. Abshire explained that such coating touch-up was performed to patch a hole within such coating; however, the failure inside such HTP is now more significant and cannot be repaired with a simple patch. Mr. Murphy then presented a proposal from A&H Coating Services, LLC (“A&H”) for the sandblasting and re coating of the interior and exterior of HPT No. 1 in the amount of $22,400.00.

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’s Pay Estimate No. 49 in the amount of $273,100.17 for the WWTP Project; 3) approved McDonald’s Change Order No. 2 in the amount of $10,956.55 for the Water Plant No. 2 MCC Replacement Project; 4) approved McDonald’s Pay Estimate No. 4 in the amount of $167,145.55 for the Water Plant No. 2 MCC Replacement Project; and 5) authorized A&H to proceed with sandblasting and re-coating of the interior and exterior of HPT No. 1 at Water Plant No. 2.

In response to a question from Director Moravec regarding the Montgomery County Fire Marshal’s approval of Phase II of the WWTP Project, Mr. Abshire reported that Quiddity is coordinating with the Fire Marshal to obtain such approval. Director Patton stated that such phase will include construction of one (1) additional fire hydrant.

STATUS OF LANDSCAPING IMPROVEMENTS AT THE WWTP

Director Barlow reported that 12 pine trees were planted outside the fence along the north side of the WWTP. Director Moravec requested that Hays North coordinate with its landscaping subcontractor to perform the ongoing maintenance of such trees. Director Barlow then recommended that the Board consider purchasing seven (7) additional pine trees at a later date to plant along the north side of the WWTP.

In response to a question from Mr. Denner regarding the availability of reclaimed water for use by the WCIA, Director Patton stated that the District does not have the facilities necessary to store such water at this time.

OPERATOR’S REPORT

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

Mr. Wright then reported that 831 customers are receiving electronic billing statements which is an increase of 13 customers from last month.

Mr. Wright next reported that the combined water accountability for the District and MUD 9 was 94.49%.

Mr. Wright then reported that there was one (1) new tap last month and that the District has a total of 1,817 connections. Mr. Wright then stated that no accounts were terminated last month due to delinquent payment.

Mr. Wright next reminded the Board that it previously increased the District’s water and wastewater rates. Mr. Wright stated that the new rates were applied to customers’ usage for the billing cycle that closed on February 28th.

Mr. Wright then reported that the District received a request from one (1) customer for an adjustment to their water bills for a leak that occurred during the recent Winter Storm Elliott. Mr. Wright further reported that such leak was repaired. Mr. Wright went on to report that Hays North adjusted such customer’s water bill pursuant to the District’s leak adjustment policy that was recently adopted by the Board.

Mr. Wright next reported that Hays North submitted the Water Smart application to the Association of Water Board Directors (“AWBD”) on behalf of the District.

Mr. Wright then reviewed the Notable Activity Report contained in the Operator’s Report and noted that such report includes the repair of breaks in one (1) main water line and one (1) sanitary sewer line. Mr. Wright further noted that Hays North performed a significant amount of work last month at Water Plant No. 2, including preparing the HPT and ground storage tank and pulling booster pump no. 1 for inspection by Quiddity.

Mr. Wright then reminded the Board that in December 2022, a customer filed a complaint with the TCEQ regarding an odor coming from the WWTP. Mr. Wright further reminded the Board that the TCEQ inspector who subsequently inspected the WWTP issued a notice of violation to the District due to such odor and recommended that the District cover the portion of the WWTP’s headworks where the bar screen is located as well as the dumpster in which debris collected by such bar screen is discarded. Mr. Wright reported that RBAP responded last month to the TCEQ’s notice of violation. Mr. Wright further reported that the materials needed to comply with the TCEQ’s recommendations have been ordered. Director Patton requested that Hays North coordinate with the manufacturer of such materials to verify the delivery date of such materials.

In response to a question from Director Moravec regarding recent employee turnover at Hays North, Mr. Wright stated that there is an increased demand industry-wide for licensed operators. Mr. Wright explained that such increased demand has led to the need for Hays North to increase wages for such operators. Mr. Wright then stated that within the next few months, Hays North will likely present to the Board a proposed amendment to the District’s service agreement with Hays North regarding Hays North’s rates. Mr. Wright next reported that the cost to purchase water meters increased significantly within the past year. Mr. Wright stated that the District’s service agreement with Hays North includes a flat fee for Hays North to install water meters, which includes materials and labor. Mr. Wright further stated that Hays North will present to the Board a proposed amendment to the District’s service agreement with Hays North increasing the amount of such fee.

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.

The Board took a brief recess from 10:10 a.m. to 10:16 a.m.

Regarding the status of repair of items identified in the 2022 Lift Station Inspection Report, Mr. Barner reminded the Board that in November 2022, it authorized Hays North to make all necessary repairs to the District’s lift stations and to provide documentation of such repairs to the Board. Mr. Wright reported that Hays North completed approximately 25% of the repair items identified in such report; however, the remaining repairs are outstanding as a result of the previously discussed employee turnover at Hays North. Mr. Wright stated that all repairs identified in such report are minor and will be completed at a cost of less than $10,000.00.

DISTRICT’S WEBSITE AND COMMUNICATIONS SERVICES

Director Patton stated that the District’s website was update to require customers to enter their address when they submit an inquiry through such website, which has allowed Hays North to more quickly determine whether the inquiring customer resides in the District or MUD 9.

MISCELLANEOUS REPORTS

Mr. Geiselhart then reported that MUD 9 approved amending their Rate Order to increase water and wastewater rates.

Mr. Wright next reported that pursuant to new rules adopted by the Lone Star Groundwater Conservation District, if the District applies for an amendment to its water well operating permit, it will need to submit a report prepared by a certified groundwater hydrologist along with its application. Mr. Wright stated that the District has no need to amend its permit at this time.

AUTHORIZE ATTENDANCE AT AWBD SPRING SEMINAR AND 2023 SUMMER CONFERENCE

Mr. Barner reminded the Board that it needs to authorize the Directors’ attendance at the AWBD Spring Seminar, which is being held in Houston, Texas on April 13, 2023, and at the 2023 Summer Conference in Corpus Christi, Texas from June 22, 2023 through June 24, 2023. Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board authorized the Directors’ attendance at the AWBD Spring Seminar and 2023 Summer Conference on behalf of the District.

ATTORNEY’S REPORT

Mr. Barner next reminded the Board that he provided a draft of the Solid Waste Collection Billing Services Agreement to the WCIA for review last month.

EXECUTIVE SESSION

Pursuant to Section 551.076 of the Texas Government Code, Subchapter D, of the Open Meetings Act, the President called the executive session to order at 10:30 a.m. to discuss matters of District security. Present for all or portions of the Executive Session were the Board of Directors; Messrs. Abshire, Murphy, Wright and Barner; and Ms. Cain.

RECONVENE IN OPEN SESSION

As of 11:06 a.m., the President declared the Executive Session was ended and the public session was resumed.

Upon a motion by Director Moravec, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board authorized the release of information to MUD 9 regarding Director White’s presentation on security at the District’s facilities.

OPERATOR’S REPORT, CONTINUED

Mr. Wright reported that he received a complaint from a customer about stormwater flow on Alcott Drive. Mr. Wright reminded the Board it previously offered to purchase an easement from the owners of a certain vacant property located along Alcott adjacent to the WWTP; however, the property owner refuses to sell such vacant lot. Mr. Wright explained that such property is low-lying and is the location to where stormwater flows on Alcott Drive. It was the consensus of the Board not to approach the owner of the vacant lot regarding the purchase of such property.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 11:13 a.m.

PASSED AND APPROVED this the 12th day of April, 2023.

Margie Barlow
Secretary, Board of Directors