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

August 9, 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, August 9,2023, 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 – Assistant Secretary

All members of the Board were present, except Director White, thus constituting a quonrm. Also attending were Maria Felder of Municipal Accounts & Consulting L.P. (“Bookkeeper” or “MAC”); Justin Abshire, Conner Mu.phy and Josh Lee of Quiddity Engineering (“Engineer” or “Quiddity”); Philip Wright of Hays Utility North Corporation (“Operator” or “Hays North”); Corey Howell of The GMS Group,LLC (“Financial Advisor” or “GMS”), via telephone; Elliot M Barner, attomey, and Kathryn Cain, paralegal, of Radcliffe Adams Bamer PLLC (“Attorney” or “RAB”); Robert Ginandt, 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 quonrm 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. Howell entered the meeting at this time via telephone.

FINANCIAL ADVISOR’S REPORT

Mr. Howell then presented to and reviewed with the Board his tax rate study for the proposed 2023 tax rate (the “Tax Rate Study”), a copy of which is attached hereto. Mr. Howell noted that according to Montgomery Central Appraisal District, the taxable value of property within the District increased from 2022 to 2023 in the amount of $644,250. Mr. Howell explained that he recommends the Board publish a proposed total ad valorem tax rate of $0.3080 per $100 assessed valuation, which is the maximum amount that the District can adopt without triggering a roll-back election. Mr. Howell further recommended that next month, the Board adopt a total ad valorem tax rate of $0.3050 per $100 assessed valuation, comprised of $0.1890 per $100 assessed valuation for debt service purposes and $0.1160 per $100 assessed valuation for operation and maintenance purposes. Director Moravec noted that such tax rate reflects an a debt service tax rate that pays the entire amount of the District’s debt service obligations for the 2023 tax year. Mr. Howell added that, based on a total tax rate of $0.3050, the average homeowner’s tax bill would increase by approximately $70.00.

Mr. Denner entered the meeting at this time.

Mr. Howell then stated that if the District were to adopt a total ad valorem tax rate of $0.3050 per $100 assessed valuation, he would also recommend that the Board transfer $270,000 from the General Operating Fund (“GOF”) to the District’s debt service fund. Director Moravec stated that the transfer of such funds is accounted for in the District’s budget for the Fiscal Year Ending December 3I,2023. Extensive discussion then ensued regarding the Tax Rate Study, including the proposed tax rate to be published in the Conroe Courier, as is required by Texas Water Code Section a9.236(b)(1).

Mr. Howell exited the meeting at this time.

Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized: 1) publication of a proposed 2023 tAxrate at $0.3080 per $100 of assessed value in the Conroe Courier; 2) setting the public hearing regarding setting such rate at the regular meeting of Wednesday, September 13, 2023, at 9:00 a.m.; and 3) the transfer of $270,000 from the District’s GOF to the District’s debt service fund.

MISCELLANEOUS REPORT

In response to a question from Director Tryon regarding whether the WCIA had any updates to share with the Board, Mr. Denner reported that while installing fiber optic cable, Tachus recently damaged the sanitary sewer line located on the property of the WCIA’s office.

Mr. Denner then thanked Hays North for quickly repairing such line.

APPROVAL OF MINUTES OF JULY 12″ 2023 REGULAR MEETING

Director Tryon next directed the Board to the approval of the Jluly 12, 2023 regular meeting minutes. Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the July 12, 2023 regular meeting minutes, as presented.

TAX ASSESSOR.COLLECTOR’S REPORT

Ms. Felder then reviewed the Tax Assessor-Collector’s Report for the month of July 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 99.22% of the 2022taxes have been collected as of July 3I,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, as presented.

Mr. Barner next reminded the Board that annually, RAB, on behalf of the District, sends letters to delinquent taxpayer account holders that are also water service account holders in the District to inform them that the Board will conduct a hearing to terminate water service to such account holders unless taxes are paid or a payment arrangement is entered into with the District.

Ms. Felder stated that she will provide RAB with a list of those 2022 delinquent taxpayer account holders that are also water account holders and who are eligible for termination.

Upon a motion by Director Barlow, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board authorized setting a public hearing at the September 13, 2023 Board meeting for termination of water service to eligible delinquent tax account holders.

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 explained that she incorrectly assumed that the Board approved increasing the Directors’ fees of office last month from $150.00 to $221.00; therefore, check nos. 10418 – 10422 are payments for the Directors’ fees of office for attendance at the July 12, 2023 Board meeting, which were written in the amount of $71.00 each, that being the difference in the current and potential fees of office.

Ms. Felder next presented to the Board the Quarterly Investment Report for the period ending June 30, 2023.

Ms. Felder then discussed instituting a “Positive Pay” program in connection with District-issued checks. Ms. Felder explained that the cost to institute such program will be $15.00 per month per account and added that the District has three (3) bank accounts for which such program could be instituted.

Ms. Felder next reminded the Board that the funds from the issuance of the Series 2018 Bonds are exhausted and requested authoization from the Board to close the District’s Capital Projects Fund account. Ms. Felder further reminded the Board that Allco, LLC’s (“Allco”) pay applications for their work on the Wastewater Treatment Plant (“WWTP”) Improvement Project (the “WWTP Project”) will be paid from the District’s GOF.

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; 2) authorized payment of checks detailed therein; 3) approved the Quarterly Investment Report for the period ending June 30, 2023; 4) authorized the Bookkeeper to implement a “Positive Pay” program in connection with all three (3) of the District’s bank accounts; and 5) authorized the Bookkeeper to close the District’s Capital Projects Fund account.

Discussion next ensued regarding whether it was beneficial for Directors to attend the Association of Water Board Directors’ (“AWBD”) conferences. Mr. Lee stated that as a member of the AWBD’s advisory council, he encourages the Directors to provide feedback to the AWBD regarding such conferences and potential topics for future seminars.

Mr. Denner exited the meeting at this time.

ATTORNEY’S REPORT

In response to a question from Ms. Felder regarding the status of approval of an increase in the fees of office payable to the Board, it was the consensus of the Board to consider such increase at this time while Ms. Felder was still present.

Mr. Barner then explained that pursuant to House Bill 2815 of the 88th Legislative Session, Section 49.060 of the Texas Water Code was amended to allow the Board to set the fees of office per day at an amount not greater than the amount of fees set by the Texas Ethics Commission (“TEC”) for members of the legislature under Section 24a, Article III, Texas Constitution, provided that fees of office may not exceed $7,200.00 per annum. Mr. Bamer stated that the current legislative per diem set by the TEC is $221.00 per day. Mr. Barner further stated that the District’s Ethics Policy currently states that Directors shall be paid fees of office of up to $150.00 per day for attending meetings or other functions in furtherance of the District’s business.

Mr. Bamer next presented to the Board proposed amendments to the District’s Ethics Policy reflecting the recent amendment to Section 49.060 of the Texas Water Code relating to Director’s fees of office. Mr. Barner further explained that the proposed amendments to the Ethics Policy also include procedures for conducting Board meetings by videoconference in situations where two (2) or less directors are unable to attend such meetings in-person. A discussion then ensued regarding the procedures for conducting Board meetings by videoconference.

Upon a motion by Director Moravec, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board authorized amending the Ethics Policy regarding Directors’ fees of office and videoconferencing procedures, effective as of June 18, 2023.

The Board took a brief recess from 10:10 a.m. to 10:15 a.m.

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’s progress over the past month regarding the WWTP Project. Mr. Murphy reported that Allco continues with construction of the roofing at the dewatering building. Mr. Murphy further reported that Allco completed the second (2nd) pour of the pavement around such building. Mr. Murphy went on to report that the electrical subcontractor completed pulling the conductors from the east plant to the west plant.

Mr. Murphy then presented Allco’s Pay Estimate No. 55 in the amount of $62,443.65 for work performed on the WWTP Project.

Mr. Abshire next presented to the Board a draft of Allco’s Change Order No. 16 in the proposed amount of $119,891.00, which includes the redesign and modification of the non-potable water system at the WWTP Project. Mr. Abshire explained that Quiddity will pay for the portion of such change order associated with the redesign of the non-potable water system and Allco’s modifications of such system. Mr. Abshire further explained that such change order also includes certain improvements unrelated to the non-potable water system that will enhance the operation of the WWTP, including installation of check valves and relief valves in the chlorine contact basin. Mr. Abshire stated that such improvements would be funded by the District.

Ms. Felder exited the meeting at this time.

Mr. Abshire explained that Quiddity will pay approximately 80% of Change Order No. 16, and the District and MUD 9 will share the cost for the remaining 20% of such change order. Mr. Abshire further explained that the District’s cost is covered by the contingency item in the construction contract for the WWTP Project; therefore, the total cost of such contract will not increase. Mr. Abshire then stated that Change Order No. 16 extends the contract schedule by 75 days due to the amount of time required for ordering equipment and installation of the modified non-potable water system. Director Patton requested that Quiddity coordinate with RAB regarding the best approach to revising such change order.

Next, Mr. Abshire explained that the non-potable water system feeds into the headworks and the belt press system, which do not require the amount of pressure created by the non-potable water system pumps. Mr. Abshire stated that the pumps will be relocated, and piping modifications will be necessary. Mr. Abshire reported that Allco estimates such relocation and modifications to cost approximately $64,000.00; however, Quiddity believes such estimate is too high. Mr. Abshire stated that Quiddity is scheduled to meet with Allco next week to further discuss the cost for such work. Mr. Abshire stated that once a value is agreed upon, Change Order No. 17 will be prepared for such amount. Mr. Abshire explained that such work is time iensitive as it affects the schedule of phase II of the WWTP Project and requested that the Board approve Change Order No. 17 subject to a certain dollar amount.

Regarding the 2022 Sanitary Sewer Rehabilitation Project, Mr. Murphy reported that Texas Pride Utilities, LLC (“Texas Pride”) continues with the rehabilitation work and expects to complete such project within the next month. Mr. Barner reminded the Board that a resident’s deck is encroaching upon the District’s ten-foot (10′) easement and is preventing Texas Pride from accessing a pottiott of the District’s sanitary sewer system in order to complete the final point repair. Mr. Barner then presented to the Board a Consent to Encroachment Agreement and stated that such agreement will be provided to the homeowner following approval by the Board.

Mr. Murphy then reminded the Board that the Walden Townhouse Association (“WTA”) hired Bleyl Engineering (“Bleyl”) to inspect the roadways within Walden on Lake Conroe Section 7, which are owned by the WTA. Mr. Murphy further reminded the Board that the storm sewers located in such subdivision are owned by the District. Mr. Murphy stated that through Bleyl, the WTA is requesting that the District repair the damaged roadways around the District’s storm sewer structures. Mr. Murphy further stated that Bleyl provided a cost estimate of $12,400.00 for such repairs. Mr. Bamer noted that Bleyl has not indicated that the damage to the WTA’s roadways was caused by the District’s storm sewer structures. Discussion then ensued regarding whether to contribute funds to the WTA for the repair of roadways around the District’s storm sewer structures within Walden on Lake Conroe, Section 7.

Mr. Murphy next reported that a homeowner on Ripplewind Drive is requesting that the District repair the bulkhead located on his property. Mr. Murphy further reported that such bulkhead was replaced during the District’s storm sewer outfall repair project in 2019.

Mr. Wright stated that Hays North inspected such bulkhead and observed a void located underneath the new portion of concrete. Mr. Wright recommended injecting a flowable fill into such void to stabilize the bulkhead and prevent further erosion. Mr. Wright stated that Hays North can perform such work at a cost of less than $2,000.00. Mr. Abshire recommended that RAB coordinate with such homeowner regarding execution of a waiver of liability for the District’s work on such bulkhead.

Next, Mr. Murphy reminded the Board that in June, certain District residents requested that the Board consider constructing additional drainage improvements adjacent to Emerson Drive in order to mitigate flooding along such drive. Mr. Murphy further reminded the Board that such residents reported that during heavy rainstorm events, stormwater flows from surrounding properties onto their properties. Mr. Murphy went on to remind the Board that Quiddity inspected such property and found that certain homes are located below the street level; therefore, mitigation of the flow of stormwater into such home is the responsibility of the homeowner. Mr. Murphy reported that Quiddity is coordinating with RAB to prepare a letter to the residents who attended the June 14,2023 Board meeting outlining Quiddity’s findings related to the flow of stormwater and the residents’ responsibility to mitigate flooding on their properties.

In response to a question from Director Patton regarding a sinkhole located at 2818 Chaucer Drive, Mr. Wright stated that such sinkhole is a small depression where the land is settling above a District water line. Mr. Wright explained that due to the location of the sinkhole, heavy equipment cannot be used for excavation. Mr. Wright recommended backfilling such sinkhole with soil to level the ground. A brief discussion ensued regarding whether the District should backfill such sinkhole or issue a check to the property owner so that he may hire a contractor to repair such sinkhole.

Regarding the sinkhole located at 12511 Browning Drive, Mr. Wright explained that such sinkhole developed several years ago over a District-owned 36-inch (36″) water line.

Mr. Abshire stated that such sinkhole has not increased in size within the past several years; therefore, he does not recommend that the District televise such line. Mr. Abshire further stated his recommendation that the District backfill such sinkhole to level the ground.

Upon a motion by Director Patton, seconded by Director Moravec, 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. 55 in the amount of $62,443.65; 3) approved Allco’s Change Order No. 16 in the amount of $119,891.00, subject to Quiddity’s coordination with RAB regarding the addition of days to the WWTP Project contract; 4) approved Allco’s Change Order No. 17 in an amount not to exceed $50,000.00; 5) approved the Consent to Encroachment Agreement; and 6) authorized Hays North to inject flowable fill to repair the bulkhead on Ripplewind Drive.

Director Patton then requested that RAB send a letter to the WTA stating that the District is not responsible for the repair of roadways within Walden on Lake Conroe, Section 7 and declines to contribute funding toward the repair of such roadways.

OPERATOR’S REPORT

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

Mr. Wright then reported that 891 customers are receiving electronic billing statements, which is an increase of 15 customers from last month.

Mr. Wright next reported that the combined water accountability for the District and MUD 9 was 92.54%.

Mr. Wright then reported that there were no new taps last month and that the District has a total of 1,824 connections. Mr. Wright then stated that no accounts were terminated last month due to delinquent payment.

Mr. Wright next reviewed the Notable Activity Report contained in the Operator’s Report and noted that the ongoing heat and dry weather are causing more breaks in the District’s water lines.

Mr. Wright then reported that Hays North is still completing minor repairs on the items identified in the 2022Lift Station Inspection Report.

Next, Mr. Wright requested direction from the Board regarding repair of the sinkhole located at l25ll Browning Drive.

Upon a motion by Director Barlow, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board: 1) approved the Operator’s Report, as presented; and 2) authorized the Operator to backfill the sinkhole at 12511 Browning Drive and continue to monitor such sinkhole.

Director Moravec exited the meeting at this time.

SECURITY AT DISTRICT FACILITIES

Ms. Cain reported that RAB previously distributed to the Board an updated proposal from Corbridge Fence that was obtained by Directors Tryon and White.

Director Barlow reminded the Board that Director White is coordinating with Corbridge Fence and Montgomery Fencing & Exteriors to obtain professional references from other entities for whom such companies have performed similar work.

DISTRICT’S WEBSITE AND COMMUNICATION SERVICES, INCLUDING AUTHORIZE OFF CINCO’S PROPOSAL FOR UPDATES TO THE WEBSITE

Director Patton reported that the domain provider for the District’s website is migrating to a Google-based platform, which requires Off Cinco to migrate the District’s email accounts.

Director Patton further reported that based upon Off Cinco’s hourly rate, it will cost approximately $800.00 to migrate the District’s eight (8) email accounts.

Director Patton went on to report that the District will incur additional charges of $25.00 per month to host the email accounts on the Google-based platform.

Director Patton then explained that Google Analytics provides the District with a monthly report of data related to users’ use of the District’s website. Director Patton further explained that Google Analytics will no longer provide such reports free of charge and added that if the Board wishes to continue receiving such reports, the District will incur an initial charge of $150.00 and additional charges of $50.00 per report.

Director Patton next reviewed with the Board a proposal from Off Cinco for the migration of the District’s email accounts and the work associated with receipt ofmonthly reports from Google Analytics. Upon a motion by Director Barlow, seconded by Director Tryon, after fulI discussion and with all Directors present voting aye, the Board approved Off Cinco’s proposal.

MISCELLANEOUS REPORTS

Mr. Ginandt then briefly updated the Board regarding the status of MUD 9’s various ongoing projects.

ATTORNEY’S REPORT (CONT.)

Mr. Barner next presented to the Board RAB’s memorandum regarding the bills passed during the 88th Legislative Session and noted those bills that affect the District.

In response to a question from Director Patton regarding the status of Addendum No. 2 to the Contract with Allco for the WWTP Project, Mr. Bamer reported that such addendum was provided to Allco.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 11:50 a.m.

PASSED AND APPROVED this the 13th day of September, 2023.

Margie Barlow
Secretary, Board of Directors