MINUTES OF MEETING OF BOARD OF DIRECTORS FLAMINGO ISLES MUNICIPAL UTILITY DISTRICT OF GALVESTON COUNTY, TEXAS

Transcription

1 MINUTES OF MEETING OF BOARD OF DIRECTORS FLAMINGO ISLES MUNICIPAL UTILITY DISTRICT OF GALVESTON COUNTY, TEXAS THE STATE OF TEXAS COUNTY OF GALVESTON FLAMINGO ISLES MUNICIPAL UTILITY DISTRICT OF GALVESTON COUNTY, TEXAS The board of directors (the "Board") of Flamingo Isles Municipal Utility District of Galveston County, Texas (the "District") met in special session, open to the public, at Floyd's on the Water, formerly Harborwalk Yacht Club, 1301 Harborwalk Boulevard, Hitchcock, Texas, on March 21, 2014 at 1:00 p.m.; whereupon the roll was called of the directors, to-wit: Arnold J. Cross, Jr., President Ronald Ray Holley, Vice President Richard Couch, Secretary Michael L. Andries, Treasurer Jane 0. McKenzie, Assistant Secretary All members of the Board were present, except Director Holley. Also attending all or portions of the meeting were Ms. Donna Bryant of Assessments of the Southwest ("ASW"), tax assessor and collector for the District; Mr. Marcus Michna of Shelmark Engineering, LLC ("Shelmark"), engineer for the District; Ms. Sissy McCoy of Municipal Accounts & Consulting, LP, bookkeepers for the District; Mr. Haythem Dawlett and Mr. Hunter Fendley of Legend Communities, Inc. ("Legends"), developer for the District; Ms. Emerald Lagow, paralegal, of Fulbright & Jaworski LLP ("F&J"), a member of Norton Rose Fulbright, attorneys for the District; and Ms. Marian Cross, Ms. Judy Andries, and Ms. Cheryl Steller, District residents. Notice of the meeting was posted in accordance with law at the locations and at the times shown on Exhibit "A" attached hereto. The meeting was called to order at 1:05 p.m. and the following business was transacted: 1. Approval of Minutes of February 7, Proposed minutes of the meeting of February 7, 2014, previously distributed to the Board, were presented for review and approval. Upon motion by Director Couch, seconded by Director Andries, after full discussion and the question being put to the Board, the Board voted unanimously to approve the minutes, as presented. 2. Discussion regarding Public Comments from prior meetings. The were no comments for discussion at this time. The President noted that Ms. Steller's request was addressed at the previous meeting, and stated that the District will not grant an over 65 or disabled homestead exemption at this time. 3. Public Comments. There were no comments from the public at this time

2 4. Developer's Report. The President recognized Mr. Dawlett, who reported on the status of development in the District. Mr. Dawlett reported that Legends is awaiting approval from the City of Hitchcock of the development plans for 37 bungalow lots, after which Legends will submit the plans to the District's Engineer for public bidding of utilities. Mr. Dawlett estimated the value of the bungalow homes to be between $300,000 and $400,000. Mr. Dawlett noted that the project contains several reimbursable items such as water and wastewater lines. Mr. Dawlett stated that Legends is currently in the process of refinancing the project, and noted that Legends had previously requested that the Board consider raising the tax rate as a means of reimbursing Legends for development within the District. Discussion ensued regarding the requested tax rate change. Director Andries stated that the $1.50 tax rate referenced in the Amended and Restated Master Sales & Lease Agreement between the District and the Developer is a maximum limit, not a recommendation, and that the District is committed to issuing bonds when the valuation is such that a $0.40 debt service tax rate will support the issuance of additional debt. Mr. Dawlett requested authorization to work with the District's financial advisor to develop a budget based on projections of development. The President stated that the Board has a fiduciary responsibility to taxpayers, as well as a responsibility to preserve value in the District through maintenance of facilities and funding of the District's current debt service. The President noted that the bulkhead situation is uniquely complicated by the mix of structures involved, and the significant property damage caused by pile drivers. He reiterated that the shift of $.0225 (2.25 cents) of the District's total tax rate from debt service to maintenance was undertaken by the Board as a short term fix to fund repairs to the bulkhead system. The President stated that the biggest maintenance expense at this time is dredging the main canal, and noted that a more realistic depth expectation that is relative to boat traffic in the channel would reduce such expenses, making it easier for the District to fund bonds. Mr. Dawlett requested authorization to work with the District's engineer to identify a more secure, durable method of bulkhead installation to reduce long term maintenance expenses for future projects. Director Andries noted that he would contact Mr. Howell in connection with the budget proposed by Mr. Dawlett. 5. Policy on Construction of Improvements in the District and coordination of such policy with the Design Review Committee. The President reviewed with the Board a draft letter to the Design Review Committee ("DRC") and Policy on Construction of Improvements in the District, copies of which are attached hereto as Exhibit "B" and Exhibit 55 "C. Director McKenzie stated that Ms. Jill Bryant of the DRC reviews the footings and foundation plans for the position of deadmen on new build lots, and noted her concern that the District's proposed policy could be redundant and/or onerous on new owners. Discussion ensued regarding the necessary qualifications to perform an inspection and it was noted that Ms

3 Bryant is not a licensed civil engineer. Mr. Dawlett recommended that the District's engineer be present at an on-site inspection at the start of new-build lots, if he does not perform the inspection himself. In response to a question from Director McKenzie, Mr. Michna stated that he would perform a careful, on-site investigation to inspect the build areas. The Board discussed whether an inspection was necessary for all lots. It was the consensus of the Board that the policy should be uniform for all lots. Discussion ensued regarding a reduction in fee for owners building multiple houses. It was the consensus of the Board that this would be left to the engineer to decide whether to offer such a discount. Discussion ensued regarding the procedure for submitting payment for the inspections. The Board decided the payment should go to the engineer rather than through the District. Discussion ensued regarding the process to collect on a claim from the $5,000 deposit which the Homeowners Association collects from the builder to cover damages during construction. Mr. Dawlett noted that this information would need to be included in the new builder packages that the DRC/HOA distributes. It was the consensus of the Board that Director McKenzie and Mr. Dawlett review and revise the new builder package to include bulkhead damage as a reason for claim on the builder deposit. Upon motion by Director Couch, seconded by Director Andries, after full discussion and the question being put to the Board, the Board voted to approve the policy as revised in accordance with the discussion at the meeting, and to authorize the President to execute and distribute the letter, as revised. Director McKenzie abstained from the vote. 6. Engineer's report and authorization of capital improvement and maintenance actions. The President recognized Mr. Michna, who presented to and reviewed with the Board the Engineer's Report, a copy of which is attached hereto as Exhibit "D." a. Review and discuss results of inspections. 1. Annual Bulkhead Inspection. Mr. Michna stated there were no actions at this time. 2. Pre-development Lot Inspection. Mr. Michna reported on predevelopment lot inspections at 13 Long Key, 5 Happy Jack, 14 Hawkeye, and 25 Sugarloaf. 3. New Construction Inspection. Mr. Michna reported that there have been no new notifications of construction. 4. Dredging. Mr. Michna reviewed with the Board a Construction Cost Summary for Maintenance Dredging of Section 6, a copy of which is attached to the Engineer's Report as Exhibit "A." Mr. Michna presented two options to the Board: dredging to 7 feet for an estimated price of $311,200 or dredging to 9 feet for an estimated price of $839,000. Discussion ensued. It was the consensus of

4 the Board to dredge the main channel after the bulkhead along the north side of the channel has been installed. Mr. Michna reviewed with the Board a Projected Five Year Budget for Dredging, a copy of which is attached to the Engineer's Report as Exhibit "B." Discussion ensued. It was the consensus of the Board not to revise the budget for dredging at this time. b. Request authorization for repairs. Mr. Michna reviewed with the Board a Schedule of Values for repairs to the bulkhead, a copy of which is attached to the Engineer's Report as Exhibit "C." c. Review proposals/bids and award contracts. No action was taken on this item. d. Approve pay estimates, change orders, and final acceptance as appropriate. Mr. Michna stated there were no actions at this time. Upon motion by Director McKenzie, seconded by Director Couch, after full discussion and the question being put to the Board, the Board voted unanimously to approve the Engineer's Report; to approve and authorize execution of the contract with Marine Inc. in an amount not to exceed $25,000 to make repairs at the following locations: Section 6 at Hawkeye, Lot 13 Sugarloaf, Lot 12 Sugarloaf, Lot 10 Little Torch, and Landscape Reserve at Long Key. 7. Tax Assessor and Collector report, payment of bills, and any necessary challenge to 2014 property values. The President recognized Ms. Bryant, who reviewed with the Board the Tax Assessor and Collector's Report, a copy of which is attached hereto as Exhibit "E." Ms. Bryant noted that the District had collected 94.74% of its 2013 taxes as of February 28, Ms. Bryant reported that the Estimate of Value for the District from Galveston County Appraisal District as of February 1, 2014 is approximately $69,300,000 and noted the previous value was approximately $67,400,000. Upon motion by Director Andries, seconded by Director Couch, after full discussion and the question being put to the Board, the Board voted unanimously to approve the tax assessor and collector's report and to authorize payment of the checks identified therein. Director McKenzie noted that residents "Hallman, James W III and Patricia J" on page one of the unpaid accounts tax roll may not have received notice of the status of their account, as they have moved from the address at 1706 Hunters Forest, Friendswood, TX 77546, and plan to move into 19 Fleming in 3 to 4 weeks. 8. Review delinquent tax attorney's report and take necessary action in connection with same. Ms. Bryant noted there are no recommendations at this time. 9. Bookkeeper's report and payment of bills. The President recognized Ms. McCoy, who reviewed with the Board the Bookkeeper's Report dated March 21, 2014, the budget comparison, and the investment report, copies of which are attached hereto as Exhibit "F." Upon motion by Director Couch, seconded by Director McKenzie, after full discussion and the question being put to the Board, the Board voted unanimously to approve the Bookkeeper's

5 Report, to authorize payment of the checks identified therein, and to approve the Investment Report. 10. Appoint agent for 2014 Directors Election. Upon motion by Director Couch, seconded by Director McKenzie, after full discussion and the question being put to the Board, the Board voted unanimously to approve the Appointment of Agent for the Directors 2014 Election, a copy of which is attached hereto as Exhibit "G." 11. Discuss and take necessary action in connection with receipt of website correspondence and s. There was nothing to report in connection with the District's website. 12. Confirm next meeting date. In order to accommodate the schedules of individual Directors, it was the consensus of the Board to schedule the next meeting for Tuesday, June 24, 2014 at 2:30 p.m. at 1301 Harborwalk Boulevard (Floyd's on the Water). 13. Document Public Comments for next Board meeting discussion. The President noted that there were no public comments to discuss at the next meeting. time. 14. Other Matters. There were no other matters to come before the Board at this THERE BEING NO FURTHER BUSINESS to come before the Board, the meeting was adjourned. *

6 The foregoing minutes were passed and approved by the Board of Directors on June 24, ATTEST: Secretary, Board of Directors (DISTRICT SEAL) (P :