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

September 13, 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, September 13,2023, 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, thus constituting a quonrm. 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 Adams Barner PLLC (“Attorney” or “RAB”); Raymond Geiselhart and Curt Harris, Directors of Montgomery County Municipal Utility District No. 9 (“MUD 9”); and Kelly Dickens and Joe Austin, members of the public.

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. Mr. Dickens introduced himself to the Board and noted that the District owns the property and building where the Montgomery County Emergency Services District No. 2 (“ESD 2”) currently operates from within Walden. Mr. Dickens stated that the Walden Community Church is interested in purchasing such property from the District when ESD 2 vacates such building. Mr. Austin then stated that he is also interested in hearing what the District intents to do with such property once ESD 2 vacates such building.

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

2023 TAX RATE

Director Tryon next declared the public hearing open to discuss the District’s proposed tax rate for 2023.

Director Moravec reminded the Board that it previously voted to publish a proposed total 2023 taxrate at $0.3080 per $100 of assessed valuation. Mr. Barner stated that notice regarding the public hearing on such tax rate was published in the Conroe Courier at least seven (7) days prior to today’s public hearing.

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 2023 and the District’s proposed budget for the Fiscal Year Ending (“FYE”) December 31, 2024. Director Moravec recommended that the Board adopt a2023 tax rate of $0.2974 per $100 of assessed valuation, which would be comprised of a debt service tax rate of $0.1814 per $100 of assessed valuation and an operations and maintenance tax rate of $0.1160 per $100 of assessed valuation.

Mr. Barner next presented for the Board’s approval and adoption an Order Setting Rate and Levying Tax for 2023 (the “2023 Tax Rate Order”). Upon a motion by Director Tryon, seconded by Director White, after full discussion and with all Directors present voting aye, the Board: l) adopted the 2023 Tax Rate Order; and 2) approved a total ad valorem tax rate of $0.2974 per $100 of assessed value for the year 2023, comprised of $0.1814 per $100 assessed valuation for debt service pu{poses and $0.1160 per $100 assessed valuation for operation/maintenance purpo ses.

Mr. Dickens exited the meeting at this time.

Next, Mr. Bamer 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 Patton, seconded by Director Tryon, 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 Barlow, 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 2023 tax tate has been adopted, an amendment to the ADIF is necessary. Mr. Bamer funher 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 Tryon, 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.

APPROVAL OF MINUTES OF AU IIST 9. 2023 REGULAR MEETING

Director Tryon next directed the Board to the approval of the August 9, 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 August 9, 2023 regular meeting minutes, as presented.

Mr. Austin exited the meeting at this time.

TAX ASSESSOR’S REPORT

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

Next, it was determined by the Board that no persons were present for a public hearing regarding terminating service to eligible customers with delinquent taxpayer accounts.

Mr. Barner then reported that RAB sent letters via certified mail to certain customers with delinquent taxpayer accounts who are eligible for termination and discussed the process for terminating such accounts. 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 Tax Assessor-Collector’s Report, as presented; and 2) authorized termination of service to eligible accounts due to non-payment of delinquent taxes, following RAB coordinating with the District’s Tax Assessor/Collector and Delinquent Tax Attomey to confirm those accounts who remain delinquent.

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 reminded the Board that it previously authorized the transfer of $270,000.00 from the General Operating Fund to the District’s debt service fund. Ms. Felder reported that such transfer is complete.

Ms. Felder next reported that pursuant to prior authorization from the Board, a “Positive Pay” progrilm was implemented for each of the District’s three (3) bank accounts.

Upon a motion by Director Barlow, seconded by Director White, after full discussion and with all Directors present voting aye, the Board: l) approved the Bookkeeper’s Report, as presented; and2) authorized payment of checks detailed therein.

In response to a question from Director Moravec regarding increased operational expenses incurred as the result of Allco, LLC’s (“Allco”) delays in completing the Wastewater Treatment Plant (“WWTP”) Improvement Project (the “WWTP Project”), Mr. Wright stated that Hays North is tracking all such expenses. Mr. Barner requested that Mr. Wright provide such information to RAB and Quiddity.

In response to a question from Mr. Geiselhart regarding the status of the WWTP facilities’budget for the FYE December 31, 2024, Director Moravec stated that he provided a draft of such budget to MUD 9 director, Robert Ginandt for review. Director Moravec further stated that he is continuing to revise such budget and will provide a draft to MUD 9’s board prior to next month’s Board meeting.

Director White exited the meeting at this time.

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 is installing the non-potable water lines and working on modifications to the non-potable water system. Mr. Murphy then presented Allco’s Pay Estimate No. 56 in the amount of $395,411.14 for work performed on the WWTP Project.

In response to a question from Director Moravec, Mr. Bamer stated that he will follow up with Allco to confirm that Allco has paid its subcontractors the outstanding amounts due to them with the retainage funds previously released by the District. Director Moravec then requested that RAB and Quiddity  coordinate to prepare a spreadsheet reflecting the total amounts owed by Allco to its subcontractors, past-due amounts owed, and payments made to such subcontractors by Allco.

Director White and Mr. Austin re-entered the meeting at this time

Mr. Abshire then reported that the blowers at the WWTP have repeatedly failed since being installed in202L Mr. Abshire further reported that Quiddity is investigating such failures and is coordinating with the blower manufacturer.

Mr. Murphy next presented to the Board Allco’s Change Order No. 17 in the amount of $52,073.00, which includes certain modifications to the non-potable water system pumps at the WWTP Project. Mr. Mqphy reminded the Board that it previously approved Change Order No. 17 in an amount not to exceed $50,000.00; however, the scope of such change order was subsequently modified. Mr. Murphy explained that such change order includes modification to the roof of the digester blower building, certain modification to the non-potable water system, and repair of the non-potable water system pumps. Mr. Murphy stated that Quiddity will pay for the portion of such change order associated with the pump repairs, which will be $7,455.00.

Mr. Abshire reported that Quiddity provided MAC with Quiddity’s portions of the cost of Allco’s Change Order Nos. 16 and 17 . Director Patton noted that such amounts will be split between the District and MUD 9.

Ms. Felder exited the meeting at this time

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 by the end of the month assuming that Texas Pride is able to complete one (1) final point repair. Mr. Murphy 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 portion of the District’s sanitary sewer system in order to complete the final point repair.

Mr. Barner reported that RAB provided the homeowner with a Consent to Encroachment Agreement last month and will reach out to such homeowner to address his comments to such agreement. Mr. Murphy then reported that due to the delay of the 2022 Sanitary Sewer Rehabilitation Project caused by the encroaching deck, Texas Pride is requesting an extension of 30 days to complete such project. Mr. Murphy explained that Texas Pride was originally scheduled to complete such project in August.

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

Mr. Murphy reported that the water level in such lake decreased approximately two feet (2′) in the past few weeks. Mr. Murphy further reported that Quiddity is updating the bid package for such project and requested authorization from the Board to solicit bids for such project.

Mr. Abshire explained that such project will only need to be advertised if the cost of such project is greater than $150,000.00.

Next, Messrs. Abshire and Murphy reviewed with the Board the District’s updated five (5) to ten (10) year Capital Improvements Plan, which is incorporated into the draft budget for the FYE December 31, 2024.

Mr. Murphy then reminded the Board that the Environmental Protection Agency updated their Lead and Copper Rule (“LCR”), and the District is required to prepare an inventory of all water lines within the District, both public and privately owned, by October 16, 2024.

Mr. Abshire reported that Quiddity’s engineering fees for the preparation of such inventory are included in the draft budget for the FYE December 31,2024. Mr. Wright stated that he is not aware of any lead service lines within the District but noted that there may be copper lines in older areas of the District. Discussion then ensued regarding the work related to such inventory that will be performed by Quiddity or the work to be performed by Hays North. Director Patton requested to hold a meeting with Director Tryon, Quiddity, and Hays North to discuss the scope of such project.

Upon a motion by Director Patton, seconded by Director White, 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 EstimateNo.56 in the amount of $395,411.; 3) approved Allco’s Change Order No. 17 in the amount of $52,073.00; a) approved the addition of 30 days to the contract for the Sanitary Sewer Rehabilitation Project; and 5) authorized Quiddity to solicit bids for the Storm Sewer Outfall Cleaning and Televising Project.

OPERATOR’S REPORT

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

Mr. Wright then reported that 903 customers are receiving electronic billing statements, which is an increase of 12 customers from last month.

Mr. Wright next reported that the combined water accountability for the District and MUD 9 was 95.28%. Mr. Wright noted that a total of 83,855,000 gallons of water was pumped from the District’s water wells during the past month, which is the largest volume of well water ever pumped by the District. Director Moravec then requested that Hays North provide the Board with information regarding the amount of water revenue received by the District from customers in each water usage tier.

Mr. Wright then reported that there were three (3) 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. Austin exited the meeting at this time.

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.

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.

LANDSCAPING IMPROVEMENTS AT WWTP

Director Barlow reported that three (3) of the pine trees recently planted at the WWTP died due to the drought despite the fact that she regularly waters such trees. Director Moravec suggested that the Board consider including the maintenance of such trees in the contract with Hays North’s landscaping contractor rather than Director Barlow being responsible for such maintenance.

DISCUSS PUBLIC CEREMONY FOR OPENING OF NEW WWTP

Mr. Abshire stated that December 2023 is the earliest date by which District’s new WWTP may be operational.

SECURITY AT DISTRICT FACILITIES

Director White reported that he and Curt Harris of MUD 9 inspected the District’s water plants to determine the security needs of each facility and requested an updated proposal from Today’s Integration, Inc. (“Today’s Integration”) for security at the Water Plant Nos. I and 2.

Director White stated that he provided the updated proposal to RAB yesterday for distribution to the Board. Director Moravec then reminded the Board that it previously approved another proposal from Today’s Integration for security at Water Plant Nos. I and 2. Director White explained that he requested an updated proposal from Today’s Integration because the original proposal included certain security features that were not necessary for the District’s facilities.

In response to a comment by Director Moravec, Mr. Barner reminded the Board that it previously chose to delay approval of either of the fencing proposals from Corbridge Fence or Montgomery Fencing & Exteriors until Director White obtained professional references from other entities for whom such companies have performed similar work. Director Moravec requested that Director White provide the Board with his recommendations regarding the Board’s acceptance ofthe proposals for security and fencing.

DISTRICT’S WEBSITE AND COMMUNICATION SERVICES. INCLUDING AUTHORIZE OFF CINCO’S PROPOSAL I]PDATES TO THE WEBSITE

Director Patton then reminded the Board that Google Analytics will no longer provide the District with a monthly report of data related to users’ use of the District’s website. Director Patton explained that Google Analytics will now provide such report annually for an initial charge of $150.00 and additional charges of $50.00 per report.

MISCELLANEOUS REPORTS

Next, Director Patton reported that due to the ongoing drought, the Lone Star Groundwater Conservation District is temporarily allowing permit-holders to pump up to 15% more well water than they are permitted without incurring penalties.

ENGAGE BURTON ACCOUNTING PLLC (‘BURTON ACCOLINTING’) TO PREPARE DISTRICT Y WITH SAS I

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 Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board authorized the execution of the Burton Accounting engagement letter.

REPORTS PREPARED BY ARBITRAGE COMPLIANCE SPECIALISTS (”ACS”)

Mr. Barner next discussed ACS’Arbitrage Rebate Calculations Report and 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. Director Moravec then reminded the Board that the District’s bond funds have been exhausted.

Mr. Abshire reported that the deadline by which to submit an application to the Association of Water Board Directors for a 2023 Project Award is October 31, 2023.

Mr. Abshire further reported that Quiddity is preparing an application on behalf of the District for the District’s WWTP.

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

PASSED AND APPROVED this the 11th day of October, 2023.

Margie Barlow
Secretary, Board of Directors