MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 8

MINUTES OF REGULAR MEETING

April 10, 2024

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 10, 2024, 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 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”); Robert Ginandt and Ray Geiselhart, Directors of Montgomery County Municipal Utility District No. 9 (“MUD 9”); Rusty Denner, General Manager for the Walden Community Improvement Association (“WCIA”); and Bill Berin, a resident 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.

APPROVAL OF MINUTES OF MARCH 13, 2024 REGULAR MEETING

Director Tryon directed the Board to the approval of the March 13, 2024, regular meeting minutes. Upon a motion by Director Patton, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board approved the March 13, 2024, regular meeting minutes, as presented.

AUDIT REPORT FOR FISCAL YEAR ENDED (“FYE”) DECEMBER 31, 2023

Mr. Others then presented to the Board the Audit Report for FYE December 31, 2023 (the “FYE 2023 Audit”) and responded to questions from the Board. Mr. Others reported that he has issued a clean audit opinion for the District. Mr. Others further reported that the District has reserved funds in its general operating funds equivalent to over one (1) year of operating funds. Mr. Others then stated that the FYE 2023 Audit will be finalized after the Board and consultants have had time to review such audit.

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”), the Electronic Municipal Markets Access (“EMMA”) website and the State Comptroller.

Upon a motion by Director Moravec, seconded by Director Tryon, after full discussion and with all Directors present voting aye, the Board: 1) approved the FYE 2023 Audit, subject to a ten (10)-day review period by the District’s consultants; and 2) authorized the Auditor and Attorney to file the FYE 2023 Audit and the required continuing disclosure materials with the appropriate agencies, including the TWDB, TCEQ, EMMA and the State Comptroller.

Director White entered the meeting at this time.

TAX ASSESSOR-COLLECTOR’S REPORT

Director Moravec then reviewed the Tax Assessor-Collector’s Report for the month of
March 2024, a copy of which is attached hereto, including past monthly collections and credits as reported by the Tax Assessor-Collector for the District. Director Moravec reported that 95.91% of the 2023 taxes have been collected as of March 31, 2024.

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.

BOOKKEEPER’S REPORT

Director Moravec next reviewed the Bookkeeper’s Report, a copy of which is attached hereto, including the current fund balances, expenditures, and investments.

Director Moravec then reported that check no. 10694 in the amount of $100.00 for a customer refund and check no. 10695 in the amount of $52,112.00 to Texas Pride Utilities, LLC are not included in the Bookkeeper’s Report but were submitted to the Directors for approval.

Next, Director Moravec reported that the District has already expended more than was budgeted in FYE December 31, 2024 on storm sewer improvements as a result of the collapsed outfall on Ripplewind Drive. Mr. Wright noted that all repairs related to the collapsed outfall are complete except for the repair of the boat dock belonging to a homeowner on Brookhaven Drive, which was removed in order for the contractor to make the repairs to such outfall.

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

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 all work related to such project is complete and added that Allco completed the final punch list items for such project yesterday. Mr. Murphy further reported that the substantial completion date for such project was February 20, 2024. Mr. Abshire reminded the Board that last month, it withheld payment of Allco’s Pay Estimate No. 62 in the amount of $28,720.67 for work performed on the WWTP Project. Mr. Abshire recommended that the Board authorize the release of payment for such pay application and added that the District continues to withhold $1,103,783.07 in retainage.

Mr. Murphy then reminded the Board that the Stormwater Outfall Cleaning and Televising Project, Phase I, will be delayed until the summer due to the elevated water level in Lake Conroe.

Mr. Murphy next reported that Quiddity has almost completed the design of the Lift Station Nos. 5–7 Rehabilitation Project and stated that Quiddity anticipates advertising such project for bids in May 2024.

Mr. Murphy then reminded the Board that on February 20, 2024, Quiddity conducted the annual inspection of Water Plant No. 2 and completed internal inspections of Ground Storage Tank (“GST”) No. 2 and Hydropneumatic Tank (“HPT”) Nos. 1 and 2. Mr. Murphy further reported that Hays North completed repairs for most of the items identified during such inspections as needing repair. Discussion then ensued regarding the frequency with which the District’s HPTs need recoating. In response to a question from Director Tryon regarding whether it is more economical to repair GST No. 2 or abandon it, Mr. Wright explained that abandoning such GST would reduce the District’s water storage capacity by 150,000 to 200,000 gallons. Mr. Abshire stated that while certain deficiencies in GST No. 2 were noted during Quiddity’s inspection, it is not necessary to make repairs to such GST at this time as such deficiencies do not adversely affect the functionality of such GST.

Next, Mr. Murphy reminded the Board that the TCEQ requires that WWTPs with a permitted flow of at least 1.0 million gallons per day (“MGD”) obtain a multi-sector general permit, which includes the development of a stormwater pollution prevention plan (“SWP3”). Mr. Murphy reported that Quiddity completed a draft of the SWP3 and will schedule a meeting with the Board liaisons to review the same.

Mr. Murphy then reminded the Board that the stormwater line and junction box located between 11711 and 11715 Thoreau Drive overflowed due to a recent rapid increase in the water level of Lake Conroe. Mr. Abshire explained that the water level was at the rim of the manhole, which is preventing the District from inspecting the interior of such line. Mr. Murphy reported that Hays North will plug the storm sewer outfall and pump the water out of the line to allow for inspection of the junction box manhole.

Mr. Murphy next reminded the Board that Quiddity submitted an exception request to the TCEQ’s requirement that all chemicals stored on-site at Water Plant No. 2 must be stored in double-walled containers. Mr. Murphy reported that the TCEQ granted such request; however, the TCEQ is requiring submittal of engineering plans and specifications for the containment tanks. Mr. Murphy explained that such tanks were installed approximately 20 years ago, and as built drawings and specifications do not exist. Mr. Murphy further explained that due to the Water Plant No. 2 Motor Control Center Replacement Project that was performed in 2022, Quiddity has site drawings, which will be submitted to the TCEQ.

Mr. Murphy then reminded the Board that once the District WWTP was permitted to discharge over 1.0 MGD, the District was required to test samples of such discharge more frequently, including biomonitoring. Mr. Murphy presented to the Board a letter to the TCEQ requesting authorization to reduce the frequency of biomonitoring at the District’s WWTP to once per six (6) months for the invertebrate test species and once per year for the vertebrate test species. Mr. Murphy reported that biomonitoring results were submitted to the TCEQ for
four (4) consecutive quarters, all of which complied with TCEQ limits.

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

Next, Mr. Abshire reminded the Board that last month, a customer requested the District’s assistance in paying for the repairs to the bulkhead located on his property. Mr. Abshire reported that upon investigation of such bulkhead, Quiddity found no evidence that the District’s storm sewer system contributed to the deterioration of such customer’s bulkhead. Mr. Abshire stated that he does not recommend that the District contribute any funds toward the repair of such bulkhead.

LANDSCAPING IMPROVEMENTS AT THE WWTP

Director Barlow reminded the Board that it previously agreed to plant 11 trees outside the fence along the north side of the WWTP. Director Barlow stated that Hays North will purchase the trees from Williamson Tree Farm.

Director Barlow then presented to the Board a proposal from Sprinkles Irrigation & Aerobic Systems, L.L.C. (“Sprinkles”) in the amount of $2,250.00 for an irrigation system that includes an underground control box that can be operated remotely. Director Barlow next presented a proposal from Mel’s Sprinkler Service in the amount of $3,445.00 for an irrigation system with an above-ground control box. Director Barlow noted that Sprinkles will charge an additional $400.00 to install a spicket so that a hose can be attached to the irrigation system for manual watering.

Upon a motion by Director Moravec, seconded by Director Patton, after full discussion and with all Directors present voting aye, the Board approved Sprinkles’ proposal for an irrigation system and spicket in an amount not to exceed $2,800.00.

Mr. Denner entered the meeting at this time.

OPERATOR’S REPORT

Regarding the storm sewer outfall that collapsed on Ripplewind Drive, Mr. Wright reiterated that all repairs related to the collapsed outfall are complete except for the repair of the boat dock belonging to a homeowner on Brookhaven Drive, which was removed in order for the contractor to make the repairs to such outfall. Mr. Wright stated that the total cost of all repairs is approximately $100,000.00, the invoice for which will be presented to the Board next month. Mr. Wright stated that the Notable Activity Report contained in the Operator’s Report includes Hays North’s repair of a storm sewer drain and installation of a manhole on Ripplewind Drive.

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

Mr. Wright then reported that 979 customers are receiving electronic billing statements, which is an increase of 17 customers from last month.

Mr. Wright next reported that the combined water accountability for the District and
MUD 9 was 93.43%.

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 further reported that no accounts were terminated last month due to delinquent payment.

Next, Mr. Wright reported that the non-potable water system at the WWTP is operational. Mr. Wright further reported that the belt press at the WWTP is operating with improved efficiency.

Mr. Wright then reported that MJ Enterprises completed installation of the fence at the Hunter’s Landing Lift Station and added that installation of the fence at Water Plant No. 1 should be complete next week.

In response to a question from Director Patton regarding the damaged fire hydrant located in front of his home, Mr. Wright reported that the cost to repair the hydrant and service line was approximately $11,000.00. In response to an additional question, Mr. Barner reported that RAB is going to submit an additional request to Montgomery County Sheriff’s Department for the complete incident report. Such incident occurred when a vehicle damaged a fire hydrant and the water line connected to such hydrant.

Mr. Wright next reported that there are six (6) dead trees at Water Plant No.1 and added that the owner of the adjacent property is concerned that such trees will fall on his property. Mr. Denner stated that he will provide Mr. Wright with contact information for an insured contractor who can remove such trees.

Regarding the status of the inventory of all water lines within the District, both public and privately owned, as required by the Environmental Protection Agency, Mr. Wright reminded the Board that such inventory must be completed by October 16, 2024. Mr. Wright reported that Hays North is underway with preparation of the inventory and added that such inventory will be provided to Quiddity for review in June.

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.

EMERGENCY/HURRICANE PREPAREDNESS

Regarding the District’s Emergency/Hurricane Preparedness Plan, Mr. Wright reported that Hays North is scheduled to test the District’s generators in May. Mr. Wright further reported that all contact information contained in the District’s Emergency Preparedness Plan (“EPP”) is accurate. Mr. Abshire then reported that the District’s EPP was approved by the TCEQ.

WATER CONSERVATION PLAN (“WCP”) AND DROUGHT CONTINGENCY PLAN (“DCP”)
Director Moravec then reviewed with the Board his proposed revisions to the District’s WCP. Mr. Barner reminded the Board that the deadline to submit the WCP, Water Conservation Implementation Report and/or DCP to the TCEQ and TWDB is May 1, 2024.

Upon a motion by Director Moravec, seconded by Director Barlow, after full discussion and with all Directors present voting aye, the Board approved amending the WCP.

MISCELLANEOUS REPORTS

Mr. Denner stated that Entergy is requesting easements from the WCIA on five (5) tracts of land owned by the WCIA. In response to a question from Mr. Denner, Mr. Barner explained that the District extended a counteroffer in response to Entergy’s offer of payment for an easement on a tract of land owned by the District; however, Entergy has yet to respond to such counteroffer. Mr. Barner then stated that the District is requesting that Entergy bury the utility lines within such easement.

Mr. Denner exited the meeting at this time.

Mr. Ginandt then briefly discussed MUD 9’s most recent Board meeting.

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 10:27 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 and Barner; and Ms. Cain.

RECONVENE IN OPEN SESSION

As of 11:07 a.m., the President declared the Executive Session was ended and open session was resumed.

Upon a motion by Director Patton, seconded by Director Barlow, after full discussion and with all Directors voting aye, the Board authorized RAB to communicate with Allco as discussed in executive session.

Upon a motion by Director Barlow, seconded by Director White, after full discussion and with all Directors voting aye, the Board authorized RAB to obtain an appraisal on certain property owned by the District as discussed in executive session.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned at 11:09 a.m.

PASSED AND APPROVED this the 8th day of May, 2024.

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Secretary, Board of Directors