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

October 11, 2023

The Board of Directors (the “Board” or “Directors”) of Montgomery County Municipal Utility District No. 8 (the “District” or “MUD 811) met in regular session, open to the public, on Wednesday, October 11, 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 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 Adams Barner PLLC (“Attorney” or “RAB”); Raymond Geiselhart and Curt Harris, Directors of Montgomery County Municipal Utility District No. 9 (“MUD 9”); and Trevor Shuman of Today’s Integration, Inc. (“Today’s Integration”).

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 SEPTEMBER 13, 2023 REGULAR MEETING

Director Tryon next directed the Board to the approval of the September 13, 2023 regular meeting minutes. Upon a motion by Director Moravec, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board approved the September 13, 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 September 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 99.41% of the 2022 taxes have been collected as of September 30, 2023.

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 reported that checks were prepared for the Board’s approval for payment to Off Cinco, RAB, and for Director Moravec’s fee for registration for the Association of Water Board Director’s (“AWBD”) Mid-Winter Conference; however, such checks were not prepared prior to the Bookkeeper’s Report being printed, so such payments are not reflected in such report.

In response to a question from Director Moravec regarding the analysis fee charged to the District by Woodforest Bank, Ms. Felder stated that she will reach out to such bank to determine the purpose of such fee.

Director Moravec next stated that he will coordinate with the District’s consultants to prepare a draft of the District’s budget for the Fiscal Year Ending December 31, 2024, and added that he will present such draft budget to the Board next month. Director Moravec further stated that the District’s revenue and expenses have both increased as compared to last year.

Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board: I) approved the Bookkeeper’s Report, as presented; and 2) authorized payment of checks detailed therein.

ANNUAL REVIEW OF INVESTMENT POLICY, INCLUDING LIST OF AUTHORIZED BROKERS

Mr. Barner then explained that pursuant to Texas Government Code, Section 2256.00S(e), as amended, the District is required to review its Amended and Restated Order Designating Investment Officer and Establishing Rules, Policies and Code of Ethics for the Investment of District Funds and Review of Investments (“Investment Policy”) not less than annually. Mr. Barner stated that there were no recommended changes to such policy and that any motion by the Board only needs to acknowledge that such policy had been reviewed.

Next, Mr. Barner reported that the Bookkeeper provided RAB with the Amended List of Authorized Brokers. Mr. Barner explained that certain brokers have been added to or removed from the list within the past year.

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 Investment Policy, as presented; and 2) approved the Amended List of Authorized Brokers, as presented.

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 Wastewater Treatment Plant (“WWTP”) Improvement Project (the “WWTP Project”). Mr. Murphy reported that Allco poured the remainder of the pavement around the dewatering building and digester basins and installed the thickener pumps. Mr. Murphy further reported that Allco expects to pave the driveway at such plant next week. Mr. Murphy next reported that the start-up period for Phase II of such plant is scheduled to begin at the end of the month. Mr. Abshire explained that following the start-up of the WWTP, such plant will be in a one (1)-month demonstration period. Mr. Murphy then presented Allco’s Pay Estimate No. 57 in the amount of $326,024.20 for work performed on the WWTP Project.

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 installation of the remaining cured-in-place piping (“CIPP”) this month. Mr. Murphy then presented Texas Pride’s Pay Application No. 4 in the amount of $121,433.58 for work performed on the 2022 Sanitary Sewer Rehabilitation Project. Mr. Murphy further reported that Quiddity determined that in 14 of the line segments installed by Texas Pride, the CIPP liner thickness did not conform to Quiddity’s specifications for minimum thickness measurements. Mr. Murphy next presented Texas Pride’s Change Order No. 1 in the deduct amount of $7,513.80 and explained that the District is only required to pay Texas Pride for the percentage of CIPP liner thickness that was installed as compared to the specified minimum thickness. Mr. Abshire stated that the thickness of the CIPP liners will not negatively impact the life expectancy of the sanitary sewer lines.

Next, Mr. Murphy reminded the Board that a resident’s deck is encroaching upon the District’s ten-foot (1O’) 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 for the 2022 Sanitary Sewer Rehabilitation Project. Mr. Barner reported that RAB provided the homeowner with a Consent to Encroachment Agreement last month and repeatedly reached out to such homeowner regarding the execution of such agreement. Mr. Barner explained that the District has the right to remove the encroachment in order to perform work within the District’s easement even without an executed Consent to Encroachment Agreement.

Ms. Felder exited the meeting at this time.

Mr. Murphy then rep01ied that Quiddity solicited bids from four (4) contractors for the Storm Sewer Outfall Cleaning and Televising Project, Phase I, and received one (1) bid. Mr. Murphy further reported that Kleen Environmental, LLC (“Kleen”) submitted a bid in the amount of $53,300.00 with a proposal of 75 calendar days to complete such project. Mr. Murphy explained that the scope of such project includes all of the District’s outfalls.

Mr. Murphy then reminded the Board that the Environmental Protection Agency updated their Lead and Copper Rule, 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. Murphy reported that Hays North is underway with the preliminary investigation of the water lines within the District and MUD 9.

Mr. Murphy next reminded the Board that the deadline by which to submit an application to the AWBD for a 2023 Project Award is October 31, 2023. Mr. Murphy further reported that Quiddity is coordinating with Director Patton and RAB to finalize an application on behalf of the District for the District’s WWTP.

Mr. Barner then reported that he has not yet received documentation from Allco evidencing that Allco paid its subcontractors the outstanding amounts due to them with the retainage funds previously released by the District. Director Patton suggested that the District withhold payment of Allco’s Pay Estimate No. 57 until such documentation is provided to the District by Allco.

Upon a motion by Director Barlow, 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 Estimate No. 57 in the amount of $326,024.20, with payment for such pay estimate being withheld until Allco provides documentation evidencing that Allco paid its subcontractors the outstanding amounts due to them with the retainage funds previously released by the District; 3) approved Texas Pride’s Pay Estimate No. 4 in the amount of $121,433.58; 4) approved Texas Pride’s Change Order No. 1 in the deduct amount of $7,513.80; 5) approved issuance of the Notice of Award to Kleen for the Storm Sewer Outfall Cleaning and Televising Project; 6) approved execution of the construction contract with Kleen, subject to Attorney’s review of bonds and insurance and receipt of a Form 1295 Certificate of Interested Parties; and 7) authorized issuance of the Notice to Proceed to Kleen, subject to execution of the construction contract.

APPLICATION TO THE AWBD FOR 2023 PROJECT AWARD FOR WWWTP, INCLUDING RESOLUTION AUTHORIZING SUBMITTAL OF SAME

Mr. Barner reiterated that the deadline by which to submit an application to the AWBD for a 2023 Project Award is October 31, 2023. Mr. Barner then presented to the Board a Reolution Approving Submittal of Project Award Application to AWBD (the “Resolution”). Upon a motion by Director Patton, seconded by Director White, after full discussion and with all Directors present voting aye, the Board approved the Resolution.

OPERATOR’S REPORT

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

Mr. Wright then reported that 911 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 94.73%. Mr. Wright further reported that several main line breaks and service line leaks occurred last month.

Mr. Wright then reported that there were no new taps last month and that the District has a total of 1,828 connections. Mr. Wright then stated that one (1) account was terminated last month due to delinquent payment.

Next, Mr. Wright reported that seven (7) customers requested adjustments to their water bills due to leaks that occurred on their property. Mr. Wright further reported that all such customers provided Hays North with proof of repair of such leaks. Mr. Wright stated that, pursuant to the District’s leak adjustment policy, Hays North adjusted the water bills for six (6) of the seven (7) customers who request such adjustments. Mr. Wright then reported that Hays North did not grant one (1) such customer’s request for an adjustment to her water bill because it wanted to first present such situation to the Board. Mr. Wright explained that such customer only recently moved into the District and did not realize that her sprinklers were scheduled to turn on every night. Mr. Wright reported that such customer’s current water bill is approximately $1,700.00; however, since such customer has only lived in the District for two (2) months, Hays North is unable to determine such customer’s historical average water use. Mr. Wright stated that if an adjustment is granted pursuant to the District’s leak adjustment policy, such customer will receive a credit of approximately $645.00. Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the adjustment to such customer’s water bill.

Mr. Wright next reviewed the Notable Activity Report contained in the Operator’s Report and noted that most items relate to Hays North’s preparation for the Texas Commission on Environmental Quality’s (“TCEQ”) inspection of the Browning and Buckingham water plants. Mr. Wright reported that while no violations were noted during such inspections, the TCEQ informed Hays North that all chemicals stored on-site must now be stored in double-walled containers. Mr. Abshire stated that Quiddity and Hays North will coordinate to research acceptable containers and submit information regarding such containers to the TCEQ for approval.

Mr. Shuman entered the meeting at this time.

Mr. Wright reported that Hays North is reviewing its invoices to determine which costs relate to Allco’s delays in completing the WWTP Project and added that such information will be provided to RAB and Quiddity next week.

Upon a motion by Director Moravec, 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 then took a briefrecess from 9:58 a.m. to 10:03 a.m. Messrs. Geiselhart, Harris, and Shuman exited the meeting at this time.

Mr. Abshire then reminded the Board that G-M Inspections Services, Inc. (“G-M Services”) performs biannual testing of the District’s water wells and noted during the most recent inspection that the water level in the Jasper Aquifer decreased significantly. Mr. Abshire reported that the pump in water well no. 1 has 40-feet (40′) of submergence and the pump in water well no. 2 has 55-feet (55′) of submergence. Mr. Abshire suggested that the Board authorize G-M Services to inspect the District’s water wells on a monthly basis until the aquifer levels return to normal. Director Patton recommended that the District increase the amount of pumpage from the Catahoula wells and reduce the amount of pumpage from the Jasper wells.

ANNUAL REVIEW OF RATE ORDER

Director Moravec stated his opinion that the District’s water and wastewater rates are sufficient to cover the District’s expenses and maintain a healthy operating reserve.

DISTRICT WEBSITE AND COMMUNICATIONS SERVICES

Director Patton reported that Off Cinco completed the migration of the District’s email accounts to the new Google-based platform. Discussion then ensued regarding the emails and documents saved on the previous platform, and Mr. Barner stated that he will request a proposal from Off Cinco related to providing the District with such emails and documents.

MISCELLANEOUS REPORTS

Next, Director Patton reminded the Board that 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.

ANNUAL REVIEW OF POST-ISSUANCE TAX EXEMPT DEBT COMPLIANCE POLICIES

Mr. Barner briefly reviewed with the Board the District’s Post-Issuance Compliance Policies for tax-exempt debt. Mr. Barner informed the Board that a checklist relating to such compliance policies was completed by RAB and Arbitrage Compliance Specialists. Mr. Barner stated that he will schedule a meeting with the District’s Compliance Officer in order to review such checklist prior to the next regular Board meeting.

ATTORNEY’S REPORT

Mr. Barner next reviewed with the Board RAB’s Memorandum on Senate Bill 232 and discussed how such bill may impact elected officials.

AMENDMENT TO ATTORNEY FEE AGREEMENT

Mr. Barner next presented for the Board’s review an updated Attorney Fee Agreement for General Counsel Services (the “Attorney Fee Agreement”). Discussion ensued regarding such

rates, and Mr. Barner explained that such rates will be effective as of January 1, 2024. Upon a motion by Director Tryon, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the updated Attorney Fee Agreement.

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 10:42 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, Shuman, and Barner; and Ms. Cain.

RECONVENE IN OPEN SESSION

As of 11:08 a.m., the President declared the Executive Session was ended and open session was resumed.

Upon a motion by Director Moravec, seconded by Director White, after full discussion and with all Directors present voting aye, the Board approved the agreement with Today’s Integration in the amount of $14,992.76 for the installation of certain security features at Water Plant Nos. 1 and 2, including annual service costs, subject to review by RAB.

Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved the proposal from Montgomery Fencing & Exteriors in an amount not to exceed $20,000.00 for installation of fencing at Water Plant No. 1.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 11:10 a.m.

PASSED AND APPROVED this the 8th day of November, 2023.

Margie Barlow
Secretary, Board of Directors