MINUTES FORT BEND COUNTY MUNICIPAL UTILITY DISTRICT NO January 20, 2016

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1 MINUTES FORT BEND COUNTY MUNICIPAL UTILITY DISTRICT NO. 151 January 20, 2016 The Board of Directors (the "Board") of Fort Bend County Municipal Utility District No. 151 (the "District") met in regular session, open to the public, on the 20th day of January, 2016, at the offices of Allen Boone Humphries Robinson LLP, 3200 Southwest Freeway, Suite 2400, Houston, Texas, outside the boundaries of the District, and the roll was called of the members of the Board: KeithGier Jennifer Keller Aaron T. Rendon James J. Bowles Michael Golding President Vice President Secretary Assistant Secretary Assistant Vice President and all of the above were present except Directors Rendon and Bowles, thus constituting a quorum. Also present at the meeting were Chris Finley of Energy Ogre; Josh Wailes of Mike Stone Associates, Inc. ("MSA"); Anthea Moran of First Southwest Company; Justin Klump of Storm Water Solutions, LP ("SWS"); Mark Yentzen and ElizaBeth Reeves of Severn Trent Services, Inc. ("ST"); Greg Ordeneaux of Tax Tech, Inc.; Clayton Black and Cheryl Rogers of Jones & Carter, Inc. ("J&C"); Mary Lutz of McLennan & Associates, L.P.; Brandon Whittaker of Clark Condon Associates ("CCA"); and Ryan Harper, Whitney Ables, and Kristen Hogan of Allen Boone Humphries Robinson LLP (" ABHR"). MINUTES The Board considered approving the minutes of the December 16, 2015, regular meeting, which were provided in advance of the meeting. Following review and discussion, Director Keller moved to approve the minutes as submitted. Director Gier seconded the motion, which passed by unanimous vote. COMMENTS FROM THE PUBLIC There were no members of the public who wished to make comments. GARBAGE COLLECTION AND RECYCLING SERVICES The Board concurred they had no issues to report regarding garbage collection and recycling services.

2 DISTRICT WEBSITE Mr. Harper reported that a notice regarding the new water rate structure and a copy of the rules and regulations governing use of facilities were posted on the District's website, as requested by the Board at last month's meeting. Mr. Yentzen reported on customer correspondence received through the District's website during the previous month. IMPLEMENTATION OF HOUSE BILL 1295 Mr. Harper presented and reviewed a memorandum from ABHR regarding implementation of House Bill 1295 that was passed by the Texas Legislature during the 84th Legislative Session, which enacted Section , Government Code, imposing new requirements for any new, amended, extended or renewed contracts entered into by governmental entities on or after January 1, A copy of the memorandum is attached. Mr. Harper stated that business entities must file a FORM 1295 with the Texas Ethics Commission and disclose certain interested parties, intermediaries, and controlling interests when seeking any contract that is in excess of $1 million or requires an action or vote by the governing body before a governmental entity may enter into a contract. He discussed FORM 1295 promulgated by the Texas Ethics Commission for a business entity to complete, execute and notarize, and provide to the governmental entity at or in advance of the meeting at which the related contract may be considered. $7,575,000 UNLIMITED TAX PARK BONDS, SERIES 2016 Ms. Moran distributed and reviewed a bid summary reflecting the nine bids received for the District's $7,575,000 Unlimited Tax Park Bonds, Series 2016 (the "Series 2016 Bonds"). A copy of the bid summary is attached. Ms. Moran stated the bids were verified for accuracy, and that good faith checks were submitted by all of the bidders. She recommended that the Board accept the bid with the lowest net effective interest rate of % submitted by Raymond James & Associates, Inc. Mr. Harper presented and reviewed the Resolution Authorizing Issuance of the District's Series 2016 Bonds and the Paying Agent/Registrar Agreement between the District and The Bank of New York Mellon Trust Company. Ms. Moran reported that the Preliminary Official Statement will be updated to include information regarding the sale of the Series 2016 Bonds and will be used as the Official Statement for the Series 2016 Bonds. The Board considered authorizing execution of a Certificate Regarding Provision of Financial Advice stating that the Board has relied on the financial advisor, First -2-

3 Southwest Company, for financial advice concerning the issuance of the Series 2016 Bonds. Mr. Harper noted that it will be necessary for the President or Vice President and the Secretary or any officer of the Board to sign documents relating to the sale and closing of the District's Series 2016 Bonds, and for the attorney to submit a transcript of the bond proceedings to the Attorney General of Texas. He added that the financial advisor also will take necessary action in connection with the delivery of the Series 2016 Bonds to the purchaser. The Board considered approving a check to the Attorney General in the amount of $7,575 for review of the transcript for the Series 2016 Bonds. Mr. Harper presented an Amendment to Information Form reflecting the updated total amount of bonds issued by the District. He said the Amendment will be filed with the Texas Commission on Environmental Quality ("TCEQ") and recorded in the official public records of Fort Bend County. Mr. Black reported that the TCEQ pre-purchase inspection of the facilities being financed from proceeds from the Series 2016 Bonds is tentatively scheduled for February 9, He stated that MSA is conducting an inspection of the facilities to prepare a punch-list of the necessary repairs to be completed prior to the TCEQ prepurchase inspection. After review and discussion, Director Keller made a motion to: (1) award the sale of the District's Series 2016 Bonds to Raymond James & Associates, Inc., whose bid contained the lowest net effective interest rate; (2) adopt the Resolution Authorizing Issuance of the Series 2016 Bonds; (3) approve the Paying Agent/Registrar Agreement with The Bank of New York Mellon Trust Company; (4) approve the Official Statement; (5) authorize execution of the Certificate Regarding Provision of Financial Advice; (6) authorize the Board of Directors to sign the documents relating to the bond sale; (7) authorize the attorney and financial advisor to take all necessary action to deliver the bonds to the purchaser; (8) approve a check to the Attorney General in the amount of $7,575 for bond transcript review; and (9) authorize execution and filing of the Amendment to Information Form. Director Golding seconded the motion, which passed by unanimous vote. FIRE STATION MATTERS AND MANAGEMENT AND MAINTENANCE OF DISTRICT FACILITIES Mr. Wailes distributed and reviewed a report from MSA regarding management and maintenance of District fire station facilities and landscaping, a copy of which is attached. He reported on inspections of the facilities conducted during the prior month, -3-

4 as reflected in MSA' s report. Mr. Wailes presented a proposed contract for annual maintenance of the HV AC system at the fire station. He also presented a proposal from Lake Management Services, L.P. for purchase and installation of turtle traps for a one-time cost of $725 and ongoing servicing and maintenance of turtle traps for a monthly cost of $460. After review and discussion, the Board concurred to table consideration of the proposals for HV AC maintenance and turtle trapping services, pending receipt of Form 1295 from each of the companies. After review and discussion, Director Keller moved to approve the report from MSA. Director Gier seconded the motion, which passed unanimously. ELECTRICITY PRICING AND POSSIBLE CONTRACT EXTENSION Mr. Finley presented and reviewed a summary of the District's existing electricity contract and options for future electricity services, a copy of which is attached. He noted that the District is currently in the second year of a four-year contract with Hudson Energy at a fixed rate of $ per kilowatt hour. Mr. Finley discussed an option to "blend and extend" by blending the remaining contract term of 35 months with the future term of 29 months for a reduced rate of $ per kilowatt hour for the entire 64-month period. He then reviewed another option to approve a contract for electricity service to begin following expiration of the current contract in January 2019 in order to secure current market pricing, with a renewal rate of $ per kilowatt hour. The Board concurred to table this item, pending receipt of additional information from Mr. Finley. FINANCIAL AND BOOKKEEPING MATTERS Ms. Lutz distributed and reviewed the bookkeeper's report, including the schedule of investments, energy billing report, budget comparison, and list of checks presented for payment. Director Golding asked Jones & Carter, Inc. to update the list of eligible park project costs for reimbursement to the developer. After review and discussion, Director Keller moved to approve the bookkeeper's report and payment of the bills. Director Gier seconded the motion, which passed unanimously. A copy of the bookkeeper's report is attached. The Board considered accepting the annual disclosure statements from the District's bookkeeper and investment officer. Following review and discussion, Director Keller moved to accept the disclosure statements and direct that the disclosure statements be filed with the Texas Ethics Commission and the District's official records. Director Gier seconded the motion, which passed by unanimous vote. The Board conducted its annual review of the District's Investment Policy and determined that no changes were needed. Mr. Harper presented and reviewed a -4-

5 Resolution Regarding Annual Review of Investment Policy, reflecting that no changes will be made to the current Investment Policy. After review and discussion, Director Keller moved to adopt the Resolution and direct that it be filed appropriately and retained in the District's official records. Director Gier seconded the motion, which passed unanimously. The Board then considered adopting a Resolution Establishing the Authorized Depository Institutions and Adopting List of Qualified Broker/Dealers with Whom the District May Engage in Investment Transactions to update the list of qualified banks with which the District may invest funds. Mr. Harper noted that the District's bookkeeper provided the updated list of banks, which is attached as Exhibit A to the Resolution. Following review and discussion, Director Keller moved to adopt the Resolution and direct that it be filed appropriately and retained in the District's official records. Director Golding seconded the motion, which passed unanimously. TAX ASSESSMENT AND COLLECTION MATTERS Mr. Ordeneaux distributed and reviewed the tax assessor/ collector's report, including a list of bills presented for payment, a copy of which is attached. After review and discussion, Director Keller moved to approve the tax assessor/ collector's report and payment of the tax bills. Director Gier seconded the motion, which passed unanimously. ENGINEERING MATTERS AND UPDATE ON PARK BOND APPLICATION Ms. Rogers distributed and reviewed the engineer's report, a copy of which is attached. Ms. Rogers reviewed a pay estimate summary attached to the engineer's report. She recommended Board approval of Pay Estimate No. 7 in the amount of $28, for construction of the Reclaimed Water System Phase I, payable tor+ B Group, Inc. Ms. Rogers then reported on the status of development and ongoing construction projects in the District, as reflected in the engineer's report. After review and discussion, Director Keller moved to approve the engineer's report and, based on the engineer's recommendation, to approve Pay Estimate No. 7 in the amount of $28, for construction of the Reclaimed Water System Phase I. The motion was seconded by Director Golding and passed by unanimous vote. NORTH FORT BEND WATER AUTHORITY MATTERS Mr. Harper reported that the District was selected by the North Fort Bend Water Authority ("NFBWA") for two Larry's Toolbox water conservation initiatives to be paid for by the NFBW A. Discussion ensued regarding the District's proposed enrollment -5-

6 form reflecting water conservation initiatives undertaken or to be undertaken by the District, and the incentivized rates to be achieved by the District from the NFBW A for its water conservation initiatives in the Larry's Toolbox program. After review and discussion, Director Keller moved to authorize ST to submit the District's enrollment form reflecting the discussed initiatives to the NFBW A. Director Golding seconded the motion, which passed unanimously. Mr. Harper presented a legal conflicts waiver regarding ABHR's representation of the District and the NFBW A in connection with certain matters related to the preparation and review of a proposed Water Line Easement from the District to the NFBW A for NFBW A water line facilities. Mr. Harper reported on efforts to finalize the Water Line Easement for Board consideration at a future meeting. Following review and discussion, Director Keller moved to authorize execution of the legal conflict waiver. Director Golding seconded the motion, which passed unanimously. The Board discussed a memorandum from the NFBW A regarding its 2016 director nomination process and the 2016 Water Usage Reporting Form that must be submitted to the NFBW A by March 1, Following review and discussion, Director Keller moved to adopt a Resolution Nominating a Candidate to Serve as a Director on the Board of Directors of the North Fort Bend Water Authority to nominate the incumbent, Pat Hebert, for Precinct 7. Director Gier seconded the motion, which passed unanimously. Director Keller then made a motion to authorize ST to complete the 2016 Water Usage Reporting Form and submit it to NFBWA before the deadline. Director Golding seconded the motion, which carried unanimously. MAINTENANCE AND MOWING OF DISTRICT FACILITIES, ENVIRONMENTAL MONITORING OF FACILITIES, FEES FOR VIOLATION, AND HEARING AND OPPORTUNITY FOR APPEAL FOR WITHHOLDING TAP SERVICE FOR NONPAYMENTOFBACKCHARGES Mr. Klump distributed the builder inspection program and mowing and maintenance report, a copy of which is attached. He noted that 31 notices of inspection and two notices of violation were issued to builders. Mr. Klump reviewed the back charges and receivables reflected in his report. He stated that Highland Homes and Perry Homes have outstanding receivables that are more than 60 days' delinquent. Mr. Klump next reviewed a summary of the mowing and maintenance work completed at District facilities during the prior month, as reflected in his report. Following review and discussion, Director Keller moved to take the following actions: (1) approve the builder inspection program and mowing and maintenance report; and (2) direct ST to withhold taps from Highland Homes and Perry Homes until the outstanding charges in excess of 60 days are paid. The motion was seconded by Director Gier and carried by unanimous vote. -6-

7 TCEQ PHASE II SMALL MS4 GENERAL PERMIT Mr. Klump gave a brief update on the District's Storm Water Management Plan, noting that the year two annual report is due by March 31, PARK AND LANDSCAPE MATTERS Mr. Whittaker distributed and reviewed the landscape architect's report, a copy of which is attached. He updated the Board on the construction of the mail kiosk and landscaping improvements to serve Firethorne West Section 14. Mr. Whittaker presented and recommended Board approval of Pay Estimate No.5 in the amount of $73,078.91, payable to Stone Castle Constructors, LLC. Following review and discussion, Director Golding moved to approve the landscape architect's report and, based on the landscape architect's recommendation, to approve Pay Estimate No.5 in the amount of $73, for construction of the mail kiosk and landscaping improvements to serve Firethorne West Section 14. Director Rendon seconded the motion, which passed by unanimous vote. The Board discussed customer correspondence received through the District's website regarding the status of installation of shade structures at other existing playgrounds within the District. Mr. Black discussed the additional playgrounds on the District's schedule for installation of shade structures. After discussion, the Board directed J &C to obtain pricing for installation of the additional shade structures. The Board considered scheduling a special meeting for this item and items tabled under MSA' s report. After discussion, the Board concurred for ABHR to coordinate with the Board members to schedule a special meeting when a quorum is available. OPERATION OF DISTRICT FACILITIES Mr. Yentzen distributed and reviewed the operator's report, a copy of which is attached. He reviewed maintenance and repair work included in ST' s monthly invoice and reported on tap installations. Mr. Yentzen then reviewed the water production report and noted that the water accountability for the prior billing cycle was 99.15%. He then reviewed the delinquent list. Mr. Yentzen reported on calls received on the evening of January 17, 2016, regarding water quality. He reported that ST flushed the lines in the reported areas to resolve the issue. Mr. Yentzen added that ST was unable to determine the cause of the water discoloration. Mr. Y entzen then reported on customer correspondence received through the website regarding missing sidewalk segments in the extreme event swales at two locations on Havenport Drive. He presented a proposal in the amount of $2,130 to install the missing sidewalk segments, noting that ST will subcontract the work. -7-

8 Mr. Y entzen reported on an offer from the chemical contractor to provide a free demonstration of its new system that provides electronic notice of bleach and water levels. After discussion, the Board concurred it had no objection to participation in the free demonstration. After review and discussion, Director Keller moved to approve the operator's report and authorize ST to have sidewalk installed at the two locations on Havenport Drive for a cost of $2,130. Director Golding seconded the motion, which carried by unanimous vote. HEARING ON TERMINATION OF SERVICE TO DELINQUENT CUSTOMERS AND AUTHORIZE TERMINATION OF SERVICE Mr. Y entzen presented and reviewed the delinquent list attached to the operator's report and reported that the persons on the termination list were mailed written notice prior to this meeting in accordance with the District's Rate Order, notifying them of the opportunity to appear before the Board to explain, contest, or correct the utility service bill and show reason why utility service should not be terminated for reason of nonpayment. The Board conducted a hearing on the termination of utility service to delinquent accounts. After review and discussion, Director Keller moved to authorize termination of service to the delinquent accounts presented if payment is not received prior to scheduled termination since none of the residents on the termination list were either present at the meeting or presented any statement on the matter, in accordance with procedures set forth in the District's Rate Order. Director Golding seconded the motion, which carried by unanimous vote. ANNUAL REPORT REGARDING POST-ISSUANCE COMPLIANCE POLICY Mr. Harper reported on the District's compliance activities during the prior calendar year related to bond financings. He stated that no corrective action is required at this time. REVIEW LIST OF LOCAL GOVERNMENT OFFICERS PURSUANT TO CHAPTER 176 OFTHETEXASLOCALGOVERNMENTCODE Mr. Harper stated that pursuant to Chapter 176 of the Texas Local Government Code, the District will maintain a List of Local Government Officers. He reviewed the List of Local Government Officers. After review and discussion, Director Keller moved to approve and authorize execution of the List of Local Government Officers and direct that the List be filed appropriately and retained in the District's official records. Director Gier seconded the motion, which passed unanimously. INTERIM ARBITRAGE REBATE REPORT FOR THE SERIES 2010A BONDS The Board reviewed the arbitrage rebate report for the District's $4,405,000-8-

9 Unlimited Tax Bonds, Series 2010A from OmniCap Group LLC, noting that there is no payment due to the Internal Revenue Service. Following review and discussion, the Board concurred to accept the report and direct that it be filed appropriately and retained in the District's official records DIRECTORS ELECTION Mr. Harper discussed procedures related to the 2016 Directors Election. He reviewed a Resolution Designating an Agent of the Secretary of the Board of Directors During the 2016 Directors Election Period. Mr. Harper reported on requirements to file a Notice of Deadline to File Applications for Place on the Ballot for the 2016 Directors Election. Mr. Harper stated that the District may contract with Fort Bend County (the "County") to conduct the District's 2016 Directors Election. Mr. Harper discussed exemptions from using electronic voting systems during the 2016 Directors Election. He stated that since the District will contract with the County for the election, there is no need to file an exemption for the use of voting machines. The Board concurred it was not necessary to set pay for election officials since the County will be appointing the election officials to assist in the elections. Mr. Harper then reviewed an Order Calling Directors Election. He discussed that a Notice of Election may be required to be posted or published and provided to the County Clerk and Voter Registrar of the County in the event the District holds the 2016 Directors Election. Following review and discussion, Director Keller moved to: (1) adopt a Resolution Designating an Agent of the Secretary of the Board During the 2016 Directors Election Period appointing Kristen Hogan as the agent of the Secretary of the Board of Directors to perform the duties of the Secretary for the District's Directors Election, and authorize the agent to post the related notice as required; (2) authorize the Secretary's agent to post the Notice of Deadline to File Applications for Place on the Ballot for the 2016 Directors Election as required; (3) contract with the County to administer the District's election; (4) adopt the Order Calling Directors Election; and (5) authorize the Secretary's agent to post or publish and provide to the County Clerk and Voter Registrar Notice of Election, if required. Director Gier seconded the motion, which was approved by unanimous vote. DIRECTORS' REPORTS There were no additional reports. -9-

10 There being no further business to come before the Board, the meeting was adjourned. Secretary, Board of Directors -10-

11 LIST OF ATTACHMENTS TO MINUTES Minutes Page Memorandum regarding implementation of House Bill Bid summary for Series 2016 Bonds....2 Report on management and maintenance of District facilities from MSA... 3 Summary of electricity service options....4 Bookkeeper's report... 4 Tax assessor/ collector's report... 5 Engineer's report... 5 Builder inspection program and mowing/ maintenance report... 6 Landscape architect's report....? Operator's report...? -11-