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

April 12, 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, April 12, 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”); Michael Others of McCall Gibson Swedlund Barfoot PLLC (“Auditor”); Elliot M. Barner, attorney, and Kathryn Cain, paralegal, of Radcliffe Adams Barner PLLC (“Attorney” or “RAB”); Ray Geiselhart, Director of Montgomery County Municipal Utility District No. 9 (“MUD 9”); Rusty Denner, General Manager for the Walden Community Improvement Association (“WCIA”); Brian Trachtenberg and Anna Phillips of Greathouse Holloway McFadden Trachtenberg; Trevor Shuman of Today’s Integration, Inc. (“Today’s Integration”); and Emma Hill and Robert Hill, residents of the District.

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. Ms. Hill introduced herself and Mr. Hill as residents of the District and requested that the District construct drainage improvements to mitigate flooding caused by stormwater along Ripplewind Drive. Ms. Hill explained that during heavy rainstorms, stormwater flows from surrounding properties unto her property. Ms. Hill stated that, in her opinion, the stormwater inlets along Ripplewind Drive do not provide adequate drainage for the area and added that the direction in which the culverts along Ripplewind Drive were constructed directs the stormwater onto her property. Ms. Hill went on to explain that water pools on her property even when rainstorms have not recently occurred and that it is her opinion that poorly maintained bulkheads located on surrounding properties causes water from Lake Conroe to flow unto her property. In response to a question from Ms. Hill regarding the District’s construction of improvements to mitigate such flooding, Mr. Barner explained that the District cannot spend public funds to construct drainage improvements that only benefit private property owners and that any improvements constructed by the District must be for the benefit of the public. Ms. Hill then stated that the WCIA advised her to construct a wall between her property and her neighbor’s property to prevent the flow of stormwater onto her property; however, her neighbor is opposed to the construction of such wall.

Mr. Abshire stated that the District performed drainage studies in 2007 and 2016, but found no significant risk of flooding to homes on Ripplewind Drive; therefore, no drainage improvements were constructed in such areas. Director Moravec requested that Hays North inspect the stormwater inlets located on and around Ripplewind Drive to ensure that they are not obstructed in any way.

Ms. Hill and Mr. Hill exited the meeting at this time.

There being no further public comments, the President directed the Board to proceed with the agenda.

APPROVAL OF MINUTES OF MARCH 8, 2023 REGULAR MEETING

Director Tryon next directed the Board to the approval of the March 8, 2023 regular meeting minutes. Mr. Barner stated that following distribution of the draft of such minutes, the Engineer provided RAB with suggested revisions related to McDonald Municipal & Industrial’s (“McDonald”) Change Order No. 2 for 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 March 8, 2023 regular meeting minutes, with corrections.

AUDIT REPORT FOR FISCAL YEAR ENDED (“FYE”) DECEMBER 31, 2022

Mr. Others then presented the Audit Report for FYE December 31, 2022 (the “FYE 2022 Audit”) and responded to questions from the Board. Mr. Others reported that the District’s revenue increased by approximately $300,000 from the previous year and added that the District paid approximately $745,000 towards the principal of its outstanding bonds.

Mr. Others then stated that the FYE 2022 Audit will be finalized after the Board and consultants have had time to review such audit.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the FYE 2022 Audit, subject to a ten (10)-day review period by the District’s consultants.

AUTHORIZE PREPARATION AND SUBMITTAL OF CONTINUING DISCLOSURE REPORT

Mr. Barner next explained that the District has an ongoing obligation to update, on an annual basis, certain financial information, as required by the District’s Bond Orders, which information will serve to keep bondholders and other interested parties apprised of the financial status of the District. Mr. Barner then requested the Board’s authorization to prepare and file such materials with the appropriate agencies, including the Texas Water Development Board (the “TWDB”), the Texas Commission on Environmental Quality (the “TCEQ”) and the Electronic Municipal Markets Access (“EMMA”) website.

AUTHORIZE SUBMITTAL OF AUDIT REPORT FOR FYE DECEMBER 31, 2022 TO STATE COMPTROLLER (THE “COMPTROLLER”)

Mr. Barner next requested approval to submit the FYE 2022 Audit to the Comptroller.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board authorized the Attorney to file the FYE 2022 Audit and the required continuing disclosure materials with the appropriate agencies, including the TWDB, TCEQ, EMMA and the Comptroller.

Mr. Denner exited the meeting at this time.

PRESENTATION FROM TODAY’S INTEGRATION REGARDING SECURITY AT DISTRICT FACILITIES

Mr. Shuman then presented a proposal from Today’s Integration regarding security at the District’s facilities and responded to questions from the Board. Mr. Shuman discussed the various security equipment and monitoring services offered by Today’s Integration. Director Moravec requested that Mr. Shuman provide RAB with marketing information regarding Today’s Integration’s qualifications and history of providing security services. Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized Directors Tryon and White to coordinate with Today’s Integration regarding the proposal presented by Today’s Integration and the scope of security equipment and services that the Board desires at its facilities.

Messrs. Others and Shuman exited the meeting at this time.

TAX ASSESSOR-COLLECTOR’S REPORT

Ms. Felder then reviewed the Tax Assessor-Collector’s Report for the month of March 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 96.55% of the 2022 taxes have been collected as of March 31, 2023.

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 28-month reserve of funds available in its General Operating Fund.

In response to a question from Director Moravec regarding the amount expended on chemicals at the District’s wastewater treatment plant (“WWTP”), Mr. Wright explained that a large quantity of aluminum sulfate was used for the past several months to remove phosphorus from the District’s influent because the new WWTP was not yet effectively able to treat influent without the addition of such chemical. Mr. Wright then stated that Hays North was recently able to refine the phosphorus removal process so that less aluminum sulfate will be required.

Ms. Felder next stated that payment was made on March 31, 2023, for the principal and interest due on the District’s outstanding bonds.

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 Bookkeeper’s Report, as presented; and 2) authorized payment of checks detailed therein.

ENGINEER’S REPORT

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

Mr. Murphy first updated the Board on Allco, LLC’s (“Allco”) progress over the past month regarding the WWTP Improvement Project (the “WWTP Project”). Mr. Murphy reported that Allco finished pouring the foundation for the dewatering building and is currently working on the masonry for such building. Mr. Murphy then presented Allco’s Pay Estimate No. 50 in the amount of $371,080.05 for work performed on the WWTP Project. Mr. Abshire next reported that the most recent construction schedule submitted by Allco indicates that the projected substantial completion date for Phase II of such project is November 13, 2023.

In response to a question from Director Moravec regarding the failure of certain equipment within the Sequencing Batch Reactor basin at the WWTP, Mr. Abshire explained that such equipment is redundant and the operation of the WWTP will not be affected. Mr. Abshire further stated that such equipment is under warranty and will be replaced at no cost to the District.

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 TCEQ on behalf of the District. Mr. Murphy stated that Quiddity was informed by the TCEQ that such application was approved, and he expects to receive the final permit soon.

Regarding the 2022 Sanitary Sewer Rehabilitation Project, Mr. Murphy reported that such project is approximately 30% complete.

Ms. Felder exited the meeting at this time.

Mr. Murphy then updated the Board on the MCC Replacement Project for Water Plant No. 2. Mr. Murphy reported that such project is complete, and that McDonald has addressed punchlist items that were identified during the substantial completion inspection. Mr. Murphy reported that Water Plant No. 2 was placed back into operation; however, the Catahoula well at such plant remains out of operation due to a problem with the chemical injection feeder line that injects disinfectant into such well. Mr. Murphy stated that he anticipates such line to be repaired next week, at which time the Catahoula well will be placed back into operation. Mr. Murphy next presented McDonald’s Pay Estimate No. 5 in the amount of $51,430.00 for work performed on the Water Plant No. 2 MCC Replacement Project.

Mr. Abshire next updated the Board regarding the annual inspection of the District’s water plants as required by the TCEQ. Mr. Murphy reminded the Board 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 then stated that Quiddity will perform an inspection of Water Plant No. 1 once the re-coating of Hydropneumatic Tank No. 2 is complete and following the seven (7) day curing period.

In response to a question from Director Patton regarding the notice of violation issued to the District by the TCEQ due to the odor at the WWTP, Mr. Wright reported that the District has complied with the TCEQ’s recommendations to reduce such odor. Mr. Wright explained that the portion of the WWTP’s headworks where the bar screen is located was covered, and a bagging system was installed on the dumpster in which debris collected by such bar screen is discarded. Mr. Barner recommended that the Operator provide photos to the TCEQ evidencing the District’s compliance.

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. 50 in the amount of $371,080.05 for work performed on the WWTP Project; and 3) approved McDonald’s Pay Estimate No. 5 in the amount of $51,430.00 for the Water Plant No. 2 MCC Replacement Project.

STATUS OF LANDSCAPING IMPROVEMENTS AT THE WWTP

Director Barlow reminded the Board that 12 pine trees were planted outside the fence along the north side of the WWTP. Director Barlow stated that she is watering such trees each week.

OPERATOR’S REPORT

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

Mr. Wright then reported that 839 customers are receiving electronic billing statements, which is an increase of eight (8) customers from last month.

Mr. Wright next reported that the combined water accountability for the District and MUD 9 was 94.59%.

Mr. Wright then reported that there were six (6) new taps last month and that the District has a total of 1,817 connections. Mr. Wright then stated that one (1) account was terminated last month due to delinquent payment.

Mr. Wright next reported that performance tests were conducted last month on the District’s water wells and stated that he will provide the report to the Board. Mr. Wright then noted that the water level in the Jasper aquifer decreased by approximately 25 feet (25′) within the past year; however, such decrease has not affected the operation of the District’s wells.

Mr. Wright then reminded the Board that last month, the Board granted an adjustment to a customer’s water bills for a leak that occurred during the recent Winter Storm Elliott. Mr. Wright reported that such leak was repaired; however, due to the timing of the billing cycle, such customer’s water bill reflected an increased water usage for a second (2nd) month as the result of such leak. Mr. Wright then requested that the Board approve an adjustment to such customer’s current water bill pursuant to the District’s leak adjustment policy. Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the adjustment to such customer’s current water bill.

Mr. Wright then reviewed the Notable Activity Report contained in the Operator’s Report and noted that such report includes sludge hauling at the WWTP and the repair of two (2) sanitary sewer line taps. Mr. Wright further noted that Hays North performed a significant amount of work last month at Water Plant No. 2 during the time that such plant was out of operation for the MCC Replacement Project.

In response to a question from Director Moravec regarding the Operator’s inspection of the stormwater inlets on Ripplewind Drive, Mr. Barner explained that he will coordinate with the Operator regarding the outcome of such inspection and will then inform Ms. Hill of the same. A brief discussion then ensued regarding increased stormwater flow due to damaged bulkheads and illegal connections to the District’s storm sewer system.

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

EMERGENCY/HURRICANE PREPAREDNESS PLAN

Regarding the District’s Emergency/Hurricane Preparedness Plan, Mr. Wright reported that Hays North prepared the District’s generators for the upcoming hurricane season.

ARBITRAGE COMPLIANCE SPECIALISTS’ (“ACS”) 5TH-YEAR REBATE REPORT FOR SERIES 2018 BONDS

Director Moravec then discussed ACS’ Arbitrage Rebate Calculations Report. Director Moravec explained that based on the findings of such report, the District has not earned above the yield on any of its investments of unspent bond funds or debt service funds than is allowable by law; therefore, the District does not owe any arbitrage rebate to the Internal Revenue Service.

DISTRICT’S WEBSITE AND COMMUNICATIONS SERVICES

Director Patton stated that customers are utilizing the District’s website to submit inquiries and/or concerns.

ATTORNEY’S REPORT

Mr. Barner reported that this morning, Mr. Denner provided him with the Solid Waste Collection Billing Services Agreement (the “Agreement”) executed by the WCIA. Mr. Barner explained that some minor revisions were made to such agreement since it was approved by the Board at the January 11th Board meeting and requested that the Board approve the final version of such agreement. Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the Agreement.

Mr. Trachtenberg and Ms. Phillips entered the meeting at this time.

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 11:36 a.m. to discuss matters of attorney-client privilege. Present for all or portions of the Executive Session were the Board of Directors; Messrs. Abshire, Murphy, Barner and Trachtenberg; and Mses. Phillips and Cain.

RECONVENE IN OPEN SESSION

As of 12:27 p.m., the President declared the Executive Session was ended and the public session was resumed.
Upon a motion by Director Patton, seconded by Director Moravec, after full discussion and with all Directors present voting aye, the Board authorized Director Patton to coordinate with the Engineer pursuant to the terms discussed in executive session.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 12:28 p.m.

PASSED AND APPROVED this the 10th day of May, 2023.

Margie Barlow
Secretary, Board of Directors