MINUTES OF SPECIAL MEETING OF HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 168 OF HARRIS COUNTY, TEXAS. March 19,2018

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1 MINUTES OF SPECIAL MEETING OF HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 168 OF HARRIS COUNTY, TEXAS March 19,2018 The Board ofdirectors (the "Board") ofharris County Municipal Utility District No. 168 ofharris County, Texas (the "District"), met in special session, open to the public, on March 19, 2018, at 6:00 p.m., at the District office located at 9818 Paddock Court, Houston, Texas 77065, and the roll was called ofthe duly constituted officers and members ofthe Board, to-wit: Thomas L. Tanous, Sr. James S. Busch Wendell R. ("Bob") Barron Nace Peard Jo Ann Montgomery President Vice President Assistant Secretary/Investment Officer Secretary Assistant Secretary and all ofsaid persons were present with the exception ofdirectors Tanous and Barron, thus constituting a quorum. Also present during all or portions of the meeting were Paul Morgan, a member of the public; Otto Maresh and Robert Kaechler of the Steeplechase Community Improvement Association ("SCIA"); Allen Dejonge of 1190 Designs; John Sherrington ofsherrington-humble LLC ("S-H"); Cathy Falke and Laura Cortez of Environmental Development Partners ("EDP"); Jorge Diaz and Karen Sears of McLennan & Associates, L.P.; Michelle Guerrero of Bob Leared Interests, Inc. ("BLI"); and Joel Cleveland and Olivia Galvan ofjeanne H. McDonald, P.C. PUBLIC COMMENTS The Board then opened the floor to public comments. Mr. Morgan reported on a trash bash weekend event and on Emergency Services District No.9's May election. MINUTES The Board then considered the minutes of its regular meeting held on February 13,2018, and special meeting held February 21, After discussion, Director Peard moved to approve the minutes of the February 13,2018, and February 21,2018, meetings as presented. Director Montgomery seconded the motion, which passed unanimously. ACTION LIST There was no action list. Page 1 of7

2 SECURITY A copy of the Security Report was distributed. A copy ofthe Security Report for February 2018 is attached hereto. TAX ASSESSOR/COLLECTOR Ms. Guerrero presented the Tax Assessor/Collector's report for the month offebruary 2018, a copy of which is attached hereto. She stated that as of February 28,2018, the District's 2017 taxes were % collected. After discussion, Director Busch moved to approve the Tax Assessor/Collector's Report and authorize payment ofthe bills. Director Montgomery seconded the motion, which passed unanimously. DELINQUENT TAX ATTORNEY There was no report. BOOKKEEPER a. Report. Mr. Diaz then presented the Bookkeeper's Report for February 14,2018, through March 19, 2018, and an Investment Report for February 2018, copies ofwhich are attached hereto. He reported month and month reserves in the District's operating account based on budgeted expenses and actual year-to-date expenses, respectively. After discussion, Director Peard moved to approve the Bookkeeper's Report, the Investment Report, and payment ofthe bills indicated in the report. Director Busch seconded the motion, which passed unanimously. b. Proposals. This item was tabled. NHCRWA/RATE ORDER Mr. Cleveland reminded the Board that the North Harris County Regional Water Authority is increasingits purnpage fees from $2.90to $3.40 per 1,000 gallons ofwaterpumped, effectiveapril 1, He then asked the Board ifit wished to amend its Rate Order to pass along the fee increase to the District's customers. Mr. Cleveland then requested that the Board also consider amending the Rate Order to clarify potentially misleading wording regarding the assessment of late charges on delinquent accounts. After discussion, Director Peard moved to approve an Amended Rate Order, effective April 1, 2018, to increase the Charge for Regional Water Authority from $2.00 to $2.50 per 1,000 gallons, and to clarify wording in the Rate Order regarding delinquent charges, as requested. Director Montgomery seconded the motion, which passed unanimously. Page 2 of7

3 SECONDARY DISCLOSURE Mr. Cleveland reported that it is time for the District to complete the annual update of its financial and operating information ("Annual Report") as the District covenanted to do when it sold bonds and pursuant to Securities and Exchange Commission Rule 15c2-12. He then presented the 2017 Annual Report and requested that the Board approve the report and authorize its filing with the Municipal Securities Rulemaking Board via its online Electronic Municipal Market Access system. Director Busch moved to approve the Annual Report and authorize its filing. Director Peard seconded the motion, which passed unanimously. OPERATOR Ms. Falke then presented the Operator's report dated March 13, 2018, a copy ofwhich is attached hereto. She reported a 91.9% accountability for January 2018, and a twelve-month accountability average of 95.4%. Action was taken below. a. M&R Report: Maintenance and Repair Report Ms. Falke reviewed the maintenance and repair items with the Board. She reported that fire hydrants have been painted and that two hydrants were removed, as previously directed by the Board. Ms. Falke also reported that Harris County Municipal Utility District No. 170 ("MUD 170") is currently making in-kind repayment to the District for water the District previously sold to MUD 170 through its interconnect. Action was taken below. b. Annual Reports This item was tabled. c. Chlorine and Bacteriological Reports Ms. Falke reviewed the chlorine and bacteriological reports for February d. STP: Steeplechase Joint Operations Sewage Treatment Plant Matters Ms. Falke reported on maintenance and repair items at the STP. After discussion, no action was necessary. e. Utility Termination Ms. Falke presented the delinquent report dated March 2, below. Action was taken Ms. Falke then presented a customer request from a customer at Autumn Chase Drive for a water bill adjustment due to a leak on the customer's side ofthe meter that was repaired December 19, After discussion, Director Busch moved to approve the Operator's Report, terminate service to those customers on the delinquent list, and deny the request from the customer Page 3 of7

4 at Autumn Chase Drive for a water bill adjustment, in keeping with the District's policy of not making water bill adjustments when leaks occur on the customer's side ofthe meter. Director Peard seconded the motion, which passed unanimously. ENGINEER'S REPORT Mr. Sherrington reviewed with the Board the Engineer's Report dated March 19, 2018, a copy ofwhich is attached hereto. a. HCMUD 170 Regional Wastewater Treatment Plant Mr. Sherrington reviewed the status ofthe construction, reporting that the contractor, N&S Construction Company, L.P., ("N&S") installed the new automated gate, is removing and replacing concrete pavement, and transferred power to the new MCC. He also reported that N&S plans to remove and replace the lift station control panel and place the new non-potable water pump station on-line. Mr. Sherrington then reported that CenterPoint Energy LLC's crews installed the gas service line to the generators. Mr. Sherrington reported that N&S was instructed to procure and install a new gear drive at Plant No.3 and to furnish operation and maintenance manuals. He then reported that MUD 170 approved payment ofpay Estimate No. 17 to N&S in the amount of$51, and inspector's invoice from Project Surveillance, Inc. in the amount of$1, After discussion, no action was necessary. b. Rehabilitation ofsanitary Sewer Line Mr. Sherrington reviewed the status ofthe project to rehabilitate sanitary sewer collection facilities on Steepleway,reporting thatthe contractor, Texas Pride Utilities, LLC, continues the rehabilitation ofthe collection system and is preparing to start the lining ofthe 30" clay pipe sections. He then presented and recommended approval of Pay Estimate No.2 to Texas Pride Utilities, LLC, in the amount of$168, Action was taken below. c. WaterPlantNo.2 Mr. Sherrington reported that S-H has prepared a fmal version ofthe site plan and presented a copy for the Board's review. No action was necessary. d. Telemetry Mr. Sherrington reported that S-H is working with Hahn Equipment Co. to make use ofexisting telemetry facilities at the District's water plants, pending the installation of Page 4 of7

5 new telemetry equipment as part ofthe rehabilitation ofwater Plant No.2. No action was necessary. e. Utility Reservation Mr. Sherrington reported ondevelopment issues inthe District. No actionwas necessary. Mr. Sherrington then reported that contractor WW Payton Corp. has completed warranty replacement ofa booster pump motor at Water Plant No.3 and noted that performance issues were identified and are being investigated by the contractor. Mr. Sherrington then presented copies ofperformance tests conducted on all three District water wells and reported that all ofthe wells are functioning normally. Mr. Sherrington then reported that S-H investigated and determined that the District's pedestrian bridge is not insured under the District's existing insurance coverage. He then reported that the District's attorney was informed, and that Mr. Cleveland contacted the insurance agent to provide an endorsement to include coverage for the District's pedestrian bridge. After discussion, Director Busch moved to approve the Engineer's Report and approve paymentofpayestimateno.2 inthe amount of$168, to Texas Pride Utilities, LLC. Director Montgomery seconded the motion, which passed unanimously. FIBER OPTIC INSTALLATION Mr. Cleveland and Ms. Falke noted that the tabulation of costs related to the fiber optic installations conducted by AT&T is being completed. No action was necessary. LANDSCAPING MAINTENANCE Director Busch then presented a proposal from Property Services to power wash approximately 3,000 linear feet ofprefabricated concrete wall at a cost of$3, Director Buschthen stated that the scope of the project would include using a cleaning solvent and bleach. Discussion ensued regarding concerns ofthe use of cleaning agents on the fabricated concrete wall. Director Busch then requested that Mr. Sherrington confirm that bleach would be an acceptable cleaning agent by the vendor. After discussion, this item was tabled. Director Bushthen presented a proposal from illplantscapes inthe amount of$4, for tree and shrub trimming along Eldridge. After discussion, this item was tabled. PARKS Mr. Cleveland presented an engagement letter for the Board's consideration from Clark Condon Associates, Inc. ("Clark Condon") for design and construction administration of improvements to the District's three existing parks (the "Project") at an estimated cost of$71, Mr. Clevelandexplainedthatthe proposal was for additional landscape architectservices inaccordance Page 5 of7

6 with the District's existing contract with Clark Condon. Director Busch then inquired ifthe District's engineer had reviewed the proposed engagement letter and requested that Mr. Sherrington comment. In response, Mr. Sherrington stated that he had not reviewed the proposed contract and stated that the Board may want to consider requesting certain clarifications regarding the proposal. After discussion, this item was tabled pending review ofthe proposal by the S-H. WEBSITE Mr. Dejonge reported that preliminary work on the District's website was ongoing and presented the Board with a link for review of the District's website. He reported that he has requested information from District consultants for inclusion in the website. After discussion, no action was necessary DIRECTOR ELECTION Mr. Cleveland stated that the election items requiring action were onthe Supplemental Agenda. ACCEPT THE CERTIFICATION OF UNOPPOSED CANDIDATES REGARDING THE MAY 5,2018, DIRECTORS' ELECTION Mr. Cleveland reported that the May 5, 2018, Directors' Election is uncontested, resulting in the re-election of Directors Peard and Busch. Mr. Cleveland then presented the Certificate of Unopposed Candidates for the Board's consideration. Action was taken below. ADOPT ORDER DECLARING CANDIDATES ELECTED Mr. Cleveland then presented the Order Declaring Candidates Elected and cancelling the May 5, 2018, election. Action was taken below. Director Busch moved to accept the Certificate of Unopposed Candidates regarding the May 5, 2018, Director's Election, and to approve the Order Declaring Candidates Elected and the cancellation ofthe May 5, 2018, Directors' Election. Director Peard seconded the motion, which passed unanimously. EXECUTIVE SESSION The Board concurred that there was no need for an executive session. There being no further business to come before the Board, the meeting was adj oumed. Page 6 of7

7 LIST OF ATTACHMENTS TO MINUTES Minutes Security Report 2 Tax Assessor/Collector's Report 2 Bookkeeper's Report and Investment Report 2 Operator's Report 3 Engineer's Report 4 There was no action list. ACTION LIST Page 7 of7