RICKWOOD MUNICIPAL UTI L ITY DI STRICT Minutes of Meeting of Board of Directors January 30, 2018

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1 RICKWOOD MUNICIPAL UTI L ITY DI STRICT Minutes of Meeting of Board of Directors January 30, 2018 The Board of Directors (the "Board" ) of Ricewood Municipal Utility District (the "District" ) met at the Board's regular meeting place on January 30, 2018, in accordance with the duly posted Notice of Special Public Meeting, and the roll was called of the duly constituted officers and members of the Board, as follows: J acque Freeman, President Stephen Marcum, Vice President Carrie Prudhomme, Secretary Elaine Mundy, Assistant Secretary Shelli Flores, Director and all of said persons were present, thus constituting a quorum. Also present were Wisdom Mbaluka of M u nicipal Accounts & C onsulting, L.P. ("MA&C"); Michael Murr of Murr Incorporated ("MI") and Park Rangers, L.L,C. ("PR"); Mirna Bonilla-Odums of Inframark, LLC ("Inframark"); Pat Hall of Equi-Tax, Inc. (" Equi-Tax"); Jeff Vogler of Van De Wiele & Vogler, Inc. ("VVI"); Deputy Roy LeCompte of the Harris County Sheriffs Office ("HCSO"); and Christopher Skinner, Rick Barker and Katie Turk of Schwartz, Page & Harding, L.L.P. ("SPH"). The President called the meeting to order and declared it open for such business as might regularly come before the Board. MINUTES As the first order of business, the Board considered approval of the draft minutes of its meeting held on December 19, A fter discussion, Director Prudhomme moved that the December 19, 2017, minutes be approved, as written. Director Mundy seconded said motion, which carried unanimously, COM M E N T S FROM THK PUBLIC The Board deferred action regarding comments from the public after noting that no members of the general public were present, DEPUTY PATROL REPORT Mr. Skinner presented to and reviewed with the Board the HCSO deputy patrol report for December 2017, a copy of which report is attached hereto as Exhibit A.

2 Deputy LeCompte discussed the current status of criminal activity in the District and the surrounding area. The Board asked various questions, to which Deputy LeCompte responded. The Board thanked Deputy LeCompte for his time and service to the District. Director Mundy requested an item be added to the Board's next meeting agenda regarding discussion of the patrol hours for the District's deputies. PARK AND RECREATIONAL FACILITIES Mr. Murr presented to and reviewed with the Board the Landscape Management Report for the month of January 2018, a copy of which report is attached hereto as Exhibit B, Mr. Murr requested that the Board authorize MI to prune the trees and fertilize the grass in the District's park, Mr. Murr noted that the approximate cost to complete said work is $5,000. After discussion, it was moved by Director Prudhomme, seconded by Director Mundy and unanimously carried, that the Board authorize MI to prune the trees and fertilize the grass in the District's park in the approximate amount of $5, BOOKVXKPKR'S REPORT Mr, Mbaluka presented to and reviewed with the Board the Bookkeeper's Report, dated January 30, 2018, including the disbursements listed therein for payment; a copy of said Report is attached hereto as Exhibit C. Af t e r discussion, Director Mundy moved that the Board approve the Bookkeeper's Report and authorize payment of the disbursements listed therein. Director Prudhomme seconded said motion, which carried unanimously. Mr. Mbaluka next presented to and reviewed with the Board a Quarterly Investment Inventory Report prepared by MATC for the reporting period ended December 31, 2017, a copy of which is attached to Exhibit C, Af t er discussion, Director Mundy moved that the Board approve the Quarterly Investment Inventory Report and that the District's Investment Officers be authorized to execute same on behalf of the Board and the District. D i rector Prudhomme seconded said motion, which carried unanimously. RESOLUTION ADOPTING LIST OF U A L I F IKD BROKERS The Board next considered adopting a list of qualified brokers authorized to engage in investment transactions with the District. Mr. Skinner advised that, pursuant to the Public Funds Investment Act, the Board is required to review such list at least annually. He presented to and reviewed with the Board a Resolution Adopting List of Qualified Brokers Authorized to Engage in Investment Transactions with the District, attached hereto as Exhibit D. Mr. Skinner further noted that the broker list presented is a list of potential institutions with which the District may engage in investment transactions compiled with the input of the District's Investment Officer, but it is ultimately the Board's decision as to where the District's funds are actually placed. After discussion, Director Marcum moved that: (i) the attached Resolution Adopting List of Qualified Brokers Authorized to Engage in Investment Transactions with the District be approved by the -2

3 Board and the District, and (ii) the President and Secretary be authorized to execute same, Director Prudhomme seconded said motion, which carried unanimously. TEXAS COM P T R O L L E R OF PUBLIC ACC O U N T S SPECIAL PURPOSE DISTRICT P UBLIC INFORM A T ION DATA B A SE Mr, Skinner next informed the Board that, pursuant to provisions of Chapter 403, Government Code, and Chapter 203, Local Government Code, the District is required to submit information to the Texas Comptroller of Public Accounts (the "Comptroller" ) for inclusion in the Special Purpose District Public Information Database. Mr. Skinner presented to and reviewed with the Board a memorandum from SPH regarding the information required to be submitted to the Comptroller, as described above, a copy of which memorandum is attached hereto as Exhibit E. Mr. Skinner then presented an engagement letter from the District's auditor, Roth & Eyring, PLLC ("R&E"), for the preparation and submission of the required information, a copy of which is attached hereto as Exhibit F. Following discussion, Director Prudhomme moved that (i) R&E be engaged to prepare the required information and submit same to the Comptroller for inclusion in the Special Purpose District Information Database, (ii) the President be authorized to execute the engagement letter on behalf of the Board and the District, and (iii) the related Texas Ethics Commission Form 1295 from R&E be accepted and acknowledged. Director Freeman seconded said motion, which carried unanimously. TAX ASSESSOR-COLLECTOR'S REPORT Ms, Hall next presented to and reviewed with the Board the Tax Assessor-Collector' s Report for the month of December 2017, a copy of which Report is attached hereto as Exhibit G, including the disbursements presented therein for payment from the District's tax account. After discussion on the matter, Director Marcum moved that the Tax Assessor-Collector's Report be approved and that the disbursements identified therein be authorized for payment from the District's tax account, Director Prudhomme seconded said motion, which carried unanimously. DKLIN U KNT TAX ATTORNEY'S REPORT Mr. Skinner next presented to and reviewed with the Board a Delinquent Tax Report from the District's delinquent tax collection attorney, Ted A. Cox, P.C, ("Cox"), dated January 10, 2018, a copy of which Report is attached hereto as Exhibit H. Mr. Skinner noted that no Board action was required at this time with respect to any of the accounts listed in the Report. RESOLUTION CONCERNING EXEM P T IONS FROM TA X A T ION Mr. Skinner next outlined for the Board the various tax exemptions available for the District, including the exemptions provided for by Article VIII, Section 1-b of the Texas Constitution, and Section 11,13 of the Tax Code, as amended. He advised that under said provisions, the District may provide for the exemption of up to 20% (but not less than $5,000, if granted) of the market value of residential homestead improvements for the year 2018, and the District may also exempt residential homesteads of persons who are under a disability for purposes of payment of disability insurance benefits under the Federal Old Age, Survivors and -3

4 Disability Insurance Act, or its successor, or persons sixty-five years of age or older from ad valorem taxes levied by the District during the calendar year 2018, and, if any such exemptions are granted, they must be for not less than $3,000 of the market value of such homesteads. After further discussion of the matter, Director Prudhomme moved that (i) the District not grant the residential homestead exemption and (ii) the District grant an exemption for persons under a disability or sixty-five years of age or older in the amount of $30,000 from ad valorem taxes levied by the District during the calendar year 2018, and (iii) the Resolution attached hereto as Exhibit I relative to same be approved and adopted by the Board and the District. Director Mundy seconded said motion, which carried unanimously. RESOLUTION A U T H O R IZING AN A D D I TIONAL P E N A L T Y O N D E L I N U K N T PERSONAL PROPERTY TAXES The Board considered the adoption of a Resolution Authorizing an Additional Penalty on Delinquent Personal Property Taxes. Mr. Skinner advised that the Board is authorized pursuant to Section of the Texas Tax Code, as amended, to impose, under certain conditions, 60 days after the date the taxes become delinquent, an additional penalty not to exceed twenty percent (20%) of the total taxes, penalty and interest due the District on personal property taxes that remain delinquent as of said 60'" day, as more fully described in said Resolution. After discussion, it was moved by D i rector Prudhomme, seconded by D irector Mundy, and unanimously carried, that the Resolution Authorizing an Additional Penalty on Delinquent Personal Property Taxes attached hereto as Exhibit J be adopted by the Board, and that Cox be authorized to collect delinquent personal property taxes beginning April 1, 2018, including the filing of lawsuits, if necessary. ENGINEER'S REPORT Mr. Vogler presented to and reviewed with the Board the Engineer's Report, dated January 30, 2018, a copy of which is attached hereto as Exhibit K, relative to the status of various engineering and construction projects within the District. Discussion ensued regarding same, Mr. Vogler next discussed the status of the Sanitary Sewer Rehabilitation, Phase II Project (" Phase II Project" ) and recommended the Board approve Pay Estimate No. 1 in the amount of $7, to Texas Pride Utilities, LLC (" Texas Pride" ). After discussion on the matter, Director Prudhomme moved that the Board approve Pay Estimate No. 1 to Texas Pride, as recommended by VVI. Director Mundy seconded said motion, which carried unanimously. Mr. Vogler informed the Board that VV I h a s r eviewed plans for a n o u tdoor Mediterranean restaurant located on the old Sam Motor's tract. Mr. Vogler stated that he has requested that the developer submit a f ormal request for utilities to serve the outdoor Mediterranean restaurant and that to date he has not received such a request.

5 R IGHT OF EN TR Y A G R K K M K N T W I T H W E S T H A R R IS CO U N T Y R E G I O N A L W ATER AUTH O R ITY "W H C R W A " Mr. Skinner presented to and reviewed with the Board correspondence from the WHCRWA requesting entry to the District's Water Plant Facility to install an Automated Meter Reading ("AMR") system to read the surface water delivery meter with WHCRWA. In connection therewith, he then presented and reviewed with the Board a Right of E ntry Agreement prepared by the WHCRWA, copies of the correspondence and Right of E ntry Agreement are attached hereto as Exhibit L. Af t er discussion on the matter, Director Marcum moved that the Right of Entry Agreement be approved and that the President and Secretary be authorized to execute same on behalf of the Board and the District. D i rector Prudhomme seconded said motion, which carried unanimously. O PERATIONS AND MAINTEN A N CE REPO R T Ms, Bonilla-Odums next presented to and reviewed with the Board the Operations and Maintenance Report for the month of December 2017, a copy of which is attached hereto as Exhibit M. Ms, Bonilla-Odums requested authorization to transfer three (3) delinquent accounts in the total amount of $351,89 to Collections Unlimited ("CU") for further collection efforts, After discussion on the matter, Director Prudhomme moved that the Board authorize Inframark to forward the three (3) delinquent accounts to CU for collection, as discussed. Director Freeman seconded the motion, which carried unanimously. C ONSENT TO ASSUM PTION OF SERVICE AGRK K M K N T BY AND BETW E E N TH E DISTRICT AND INFRAMARI< LLC Mr. Skinner presented a Consent to Assumption of Service Agreement by and between the District and Inframark, LLC (the "Consent" ), a copy of which is attached hereto as Exhibit N. A f ter discussion, Director Stephen moved that the Consent be approved and that the President be authorized to execute same on behalf of the Board and the District. D i rector Freeman seconded said motion, which carried unanimously. I NFORM A T ION RELATIVE TO CONSUM E R CO N FIDENCE REPOR T The Board considered authorizing Inframark to provide required information to districts that received water from the District during 2017 by April 1, 2018, in connection with preparation of Consumer Confidence Reports. After discussion on the matter, Director Marcum moved that the Board authorize Inframark to provide the necessary information to districts that received water from the District during 2017 prior to the April 1, 2018 deadline. Director Prudhomme seconded said motion, which carried unanimously.

6 U TILITY COMM I T M K N T RE U K S T S The Board next considered requests for utilities. In that regard, Mr. Skinner reported that Monticello Houston Properties, LLC ("Monticello") has requested water and sanitary sewer to serve its acre tract of l and located at Westfield Parkway. M r. S k i nner recommended that the Board issue a utility commitment to Monticello for two (2) equivalent single family connections ("esfc"), A f ter further discussion on the matter, Director Marcum moved that the Board (i) approve a utility commitment to Monticello for 2 esfc for a period of one (1) year from today's date, and 9ii) authorize SPH to accept TEC Form 1295 from Monticello. Director Prudhomme second said motion, which carried unanimously. RENEWAL OF DISTRICT INSURANCE POLICIES The Board discussed obtaining insurance proposals for the term. Mr. Skinner advised the Board that the District's current insurance policies brokered through Arthur J. Gallagher ("AJG"), are set to expire on March 31, After discussion on the matter, Director Marcum moved that SPH be authorized to solicit written proposals on behalf of the District from AJG and McDonald & Wessendorff Insurance to be considered at the Board's February meeting, relative to renewal of the District's insurance coverages for the policies expiring March 31, Director Freeman second said motion, which caitied unanimously. ATTORNEY'S REPORT The Board next considered the attorney's report, In that regard, Mr. Skinner presented to and reviewed with the Board correspondence from Hilltop Securities, Inc. advising that, effective January 1, 2018, FirstSouthwest, a Division of Hilltop Securities Inc., officially changed its name to Hilltop Securities, Inc., a copy of which is attached hereto as Exhibit 0, Mr. Skinner next presented to the Board an Annual Disclosure provided by Hilltop Securities Inc., relative to MSRB Rule G-10, a copy of which is attached hereto as Exhibit P. Mr. Skinner then presented to and reviewed with the Board a memorandum from the WHCRWA regarding the 2018 Appointment Process for the WHCRWA Directors and 2017 Water Usage Reporting Form, a copy of which is attached hereto as K~xhihit SUPPLEMENTAL AGENDA The Board considered the calling of a D i rectors Election in accordance with the requirements of the Texas Water Code. T h ere was presented the Order Calling Directors Election (the "Order" ) attached hereto as Exhibit R calling such election to be held on May 5, 2018, It was noted that the terms of office of Directors Freeman, Marcum and Prudhomme expire in May of this year. In reviewing the Order with the Board, Mr. Skinner advised that the Texas Water Code and the Texas Election Code authorize the Board to designate an agent to perform certain duties in connection with the Directors Election, and that the Order named Katherine Turk as such agent (the "Election Agent" ). Mr. Skinner further advised the Board that notice of the Directors Election must be given in accordance with the requirements of the Texas -6

7 Election Code. Mr. Skinner advised the Board that notice of the Directors Election could be given by one or more of the following methods: (i) publishing the notice in a newspaper published in the territory of the District or of general circulation in the District at least ten (10) days before the election, but not more than thirty (30) days before the election; (ii) posting the notice at a public place in the District at least twenty-one (21) days before the election; or (iii) mailing the notice to each registered voter in the District at least ten (10) days before the election. He further advised that, in addition to the above, notice must be posted at the location used for posting notices of the meetings at least twenty-one (21) days before the election. Following discussion of the options, the Board concurred that notice of the Directors Election be given by posting same at the locations where notice of meetings of the Board are posted, as such posting meets all legal requirements under the Texas Election Code. After discussion on the matter, Director Prudhomme moved that said Order be passed and adopted, that the President and Secretary be authorized to execute the Order, and that the Election Agent be authorized and directed to make necessary arrangements for the Directors Election in accordance with the Order. Director Freeman seconded said motion, which carried unanimously. Mr. Skinner advised the Board that if each candidate whose name is to appear on the ballot is unopposed as of 5:00 p.m. on February 23, 2018, the Board may thereafter cancel the Directors Election in accordance with the Texas Election Code. The Board considered the establishment of fees to be paid to officials for the Directors Election. Mr, Skinner advised the Board that in accordance with the Texas Election Code, the rate of pay for judges and clerks shall be determined by the Board, but shall not be less than the federal minimum wage rate. After discussion on the matter, Director Prudhomme moved that the judges and clerks for the Directors Election, including early voting clerks, be paid $20.00 per hour. Director Freeman seconded said motion, which carried unanimously. AD JOURNMENT There being no further business to come before the Board, upon motion made by Director Prudhomme, seconded by Director Mundy and unanimously carried, the meeting was adjourned. (Seal) 0 y~ssno@@q ~@QIP+ y Q Q + 0 Secretary Board of Directors e -7

8 LIST OF EXHIBITS Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F D e puty Patrol Repoit L a n dscape Management Report B o o kkeeper's Report R e solution Adopting List of Qualified Brokers M e m o randum from SPH Special Purpose District Public Information Database E n gagement Letter from Roth & Eyring, PLLC Exhibit G T a x Assessor-Collector's Repoit Exhibit H Exhibit I Exhibit J Exhibit K Exhibit L D e linquent Tax Report Re s o lution Concerning Exemptions from Taxation R e s olution Authorizing an Additional Penalty on Delinquent Personal Propeity Taxes E n gineer's Repoit C o r respondence from WHCRWA; Right of Entry Agreement Exhibit M Operator's Repoit Exhibit N Consent to Assumption Exhibit 0 C o r respondence from Hilltop Securities Inc. Exhibit P A n nual Disclosure relative to MSRB Rule G-10 Exhibit Q Appointment Process for the WHCRWA Directors and 2017 Water Usage Reporting Form Exhibit R O r der Calling Directors Election