PUBLIC COMMENTS OF AUDITOR APPROVAL OF MINUTES ENGAGEMENT HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 341, OF HARRIS COUNTY, TEXAS
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1 HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 341, OF HARRIS COUNTY, TEXAS Minutes of Meeting of Board of Directors August 8, 2016 The Board of Directors (the "Board" ) of Harris County Municipal Utility District No. 341, of Harris County, Texas (the "District" ), met at the Board's regular meeting place on Jtdy 11, 2016, in accordance with the duly posted notice of public meeting, and the roll was called of the duly constituted officers and members of said Board, as follows: Russell Rush, President Annette M. Edmonds, Vice President Christine Mink, Secretary Robert Wegner, Assistant Secretary Mark Durka, Assistant Secretary and all of said persons were present, except Director Mink, thus constituting a quorum, Director Mink entered the meeting at a later time as reflected herein. Also present were Cindy Grimes of Municipal Accounts & Consulting, L.P. ("MA&C"), Avik Bonnerjee of B&A Municipal Tax Service, LLC ("B&A");Brian Krueger of BKD, LLP ("BKD"); Brian Chovanec and Saib Saour of Benchmark Engineering Corporation ("Benchmark" ); Phillip Dautrich of TNG Utility Corp. ("TNG"); Phil Halbert and Bill Stevenson of Champions Hydro-Lawn, Inc. (" Champions" ); and Bryan Yeates and Katherine Edwards of Schwartz, Page & Harding, L.L.P.("SPH"). The meeting was called to order and declared open for such business as might regularly come before it. PUBLIC COMMENTS The Board deferred consideration of comments from the public, as no comments were offered. APPROVAL OF MINUTES As the next order of business, the Board considered the review and approval of the minutes of its meeting held on Jtdy 11, After chscussion of the minutes presented, Director Rush moved that the minutes of the Board of Directors meeting held on July ll, 2016, be approved, as written. Director Edmonds seconded said motion, which unanimously carried. ENGAGEMENT OF AUDITOR The Board considered the engagement of an auditor to prepare the District's audit report for the fiscal year ending August 31, In connection therewith, Mr, IQueger presented to and reviewed with the Board a proposal prepared by BKD, a copy of which is attached hereto as
2 Exhibit A. He then advised that BIZD's fee for conducting the audit and the preparation of said audit report is estimated at $16,500, plus an administrative fee of $600 to cover items such as report production, copies, postage and delivery charges, and technology related costs, and a cost of $1,000 - $1,200 to cover the inclusion of schedules reflecting any new bond sale during the fiscal year. After discussion on the matter, Director Rush moved that BKD be engaged to prepare the District's audit report for the fiscal year ending August 31, 2016, in accordance with the terms of the proposal presented. Director Edmonds seconded said motion, which unanimously carried, Director Mink entered the meeting during the above discussion. RKOUIREMKNTS UNDER HOUSE BILL 1378 Mr, Yeates reminded the Board that House Bill 1378, as passed by the 84'" Texas Legislature and promulgating Texas Local Government Code II , requires the District and other political subdivisions to file certain financial information with the Texas Comptroller of Public Accounts (the "Comptroller" ) following each fiscal year expiring on or after January 1, This financial information may be submitted as a separate report, or alternatively, districts subject to Chapter 49 of the Texas Water Code (including the District) may submit its annual audit to the Comptroller. Mr. Yeates further explained that those districts with a website should also make the financial information available on such website or provide a link to the information on the Comptroller's website. Lastly, Mr. Yeates explained that the Comptroller has not yet adopted its rules or constructed the website onto which the financial reports will likely be uploaded but has advised that its intention is to accomplish the same in the near future. Given this fact, the Comptroller has advised that the initial report is due within 210 days of the District's fiscal year end and the second and subsequent reports will be due within 180 days of the District's fiscal year end. Upon a motion made by Director Edmonds, seconded by Director Rush, and unanimously carried, the Board authorized SPH to file the District's annual audit for the fiscal year ending on August 31, 2016, with the Comptroller by the appropriate deadline. TAX ASSESSOR-COLLECTOR REPORT Mr. Bonnerjee next presented the tax assessor-collector report for the period ending July 31, 2016, a copy of which is attached hereto as Exhibit B, including the checks presented for payment. After discussion, Director Rush moved that said report be approved and that the checks identified in the report be approved for payment, Director Edmonds seconded said motion, which carried unanimously. Mr. Bonnerjee also presented a Delinquent Tax Roll as of July 31, 2016, a copy of which is attached hereto as Exhibit C. Mr. Bonnerjee next reported that Harris County Appraisal District's Report of Appraised and Taxable Values for tax year 2016 is expected to be released by the end of the month. CONSIDER REPORT AND LEGAL ACTION TAKEN BY THE DISTRICT'S DKLINOUKNT TAX COLLECTIONS ATTORNEY Mr. Yeates presented to and reviewed with the Board a Delinquent Tax Collections Report, dated August 1, 2016, prepared by Ted A. Cox ("Cox"), the District's delinquent tax attorneys, a
3 copy of which is attached hereto as Exhibit D. In connection therewith, Mr. Bonnerjee advised the Board that Cox recommends that the Board forward the Investment Communications account for delinquent 2015 personal property taxes to the uncollectible roll and the Deverton Moulton account for delinquent 2013, 2014, and 2015 personal property taxes to the uncollectible roll. He noted that the Investment Communications account also has a rendition penalty in the amount of $5,53 and the Deverton Moulton account has a rendition penalty in the amount of $4.70. After discussion on the matter, Director Edmonds moved that (i) the Investment Communications delinquent personal property taxes and rendition penalties for 2015 in the total amount of $5.53 be moved to the uncollectible roll, (ii) the Deverton Moulton delinquent personal property taxes in the total amount of $51.68 be moved to the uncollectible roll, and (iii) that the Board be authorized to execute B&A's uncollectible form, a copy of which is attached hereto as Exhibit E, memorializing same on behalf of the Board and the District. Director Rush seconded said motion, which carried unanimously. FINANCIAL ADVISOR'S RECOMMENDATION CONCERNING THK DISTRICT'S PROPOSED 2016 TAX RATE The Board defened discussion concerning the District's 2016 tax rate until next month's Board meeting. BOOKKEEPER'S REPORT Ms, Grimes presented and reviewed with the Board the Bookkeeping Report dated August 8, 2016, including the checks presented for payment, as prepared by MA&C, a copy of which is attached hereto as Exhibit F, Ms. Grimes advised that check no made payable to the Lakes on Eldridge Community Association ("HOA") is a hei&hug check that will be voided. Following discussion, Director Durka moved that the Board approve the Bookkeeper's Report dated August 8, 2016, as presented and that the disbursements presented be authorized for payment with the exception of check no. 6931, Director Rush seconded said motion, which carried unanimously. ADOPTION OF OPERATING BUDGET The Board considered the adoption of a proposed operating budget for the District's fiscal year ending August 31, 2017, a copy of which is attached to the Bookkeeping Report, which had been prepared by MA&C. After discussion on the matter, Director Durka moved that the budget for the District's fiscal year ending August 31, 2017, be adopted. Director Rush seconded said motion, which unanimously carried. ANNUAL MAINTENANCE FOR ARBITRAGE ANALYSIS REPORT Mr, Yeates presented to and reviewed with the Board an Annual Maintenance for Arbitrage Analysis Repute prepared by Municipal Risk Management Group ("MRMG") for the Disbict's Series 1996, 1997, 1997-A, 1999, 2000 and 2008 Unlimited Tax Bonds, and the Series 2005, 2010 and 2016 Unlimited Tax Refunding Bonds, a copy of which report is attached hereto as Exhibit G. He stated that no further action is recommended by MRMG at this time for the
4 Series 1996, 1997, 1997-A, 1999, 2000, and 2008 Unlimited Tax Bonds and the Series 2005, 2010 and 2016 Unlimited Tax Refunding Bonds. OPERATIONS REPORT Mr. Dautrich presented to and reviewed with the Board the Operations and Maintenance Report ("Operations Report" ) dated August 8, a copy of which report is attached hereto as Exhibit H, and reviewed same with the Board, Mr. Dautrich reported that the electrical survey of the District's Water Plant and Lift Station facilities by NTS Pumps, Motors and Controls is complete. In connection with the fire hydrants located within the District, Mr. Dautrich reported that 84 of the District's 87 fire hydrants are in need of service and repainting. Following discussion, the Board requested that TNG provide proposals to service and repaint the 84 fire hydrants identified by TNG for the Board's consideration next month. ENGINEER'S REPORT Mr. Chovanec presented to and reviewed with the Board a written Engineering Report dated August 8, 2016, a copy of which is attached hereto as Exhibit I, relative to the status of various engineering and construction projects within the District. He recommended that the two (2) pay requests listed therein from Champions be approved by the Board and District. After ifiscussion, Director Mink moved that the two pay requests from Champions be approved by the Board and District, as recommended by the District's engineer. Director Edmonds seconded said motion, which unanimously carried. Mr. Halbert next presented to and reviewed with the Board a Detention and Drainage Facilities Report dated August 8, 2016, prepared by Champions, a copy of which is attached hereto as Exhibit J, and discussed same with the Board. Mr. Chovanec reported that a significant leak has occurred on the west side of Lake E causing breal&s and partial offset of approximately linear feet of the vertical wall with significant water infiltration and caving in of the dirt and sod behind the wall. Mr. Chovanec advised that the leak requires urgent repair and that the cost to repair the leak and damage to the lake is approximately $50,000 - $75,000. Mr, Chovanec then requested the Board (i) authorize Benchmark to solicit three (3) to four (4) bids to make the necessary leak and damage repairs, and (ii) delegate the Board President authority to award contract in an amount not to exceed $75,000, subject to the filling of a Texas Ethics Commission ("TEC") Form 1295 from the awarding contractor and provichng a signed and notarized original of same and a Certification of Filing from the TEC to the District. After discussion, Director Mink moved that (i) Benchmark be authorized to solicit three (3) to four (4) bids not to exceed $75,000 as outlined above, for the repair of the leak Lake "E" and (ii) the Board President be delegated with the authority to award contract on behalf of the Board and the District, subject to the filling of a TEC Form 1295 from the awarding contractor and provichng a signed and notarized original of same and a Certification of Filing from the TEC to the District. Director Edmonds seconded said motion, which unanimously carried.
5 Mr. Chovanec presented to and reviewed with the Board an updated Five (5) Year Capital Improvement Plan ("CIP"), a copy of which is attached to the Engineering Report. In connection therewith, Mr. Chovanec discussed needed repairs to Lakes "G" and "H" and recommended that the Board consider hiring a geotechnical consultant to analyze the sites before proceeding further with proposed corrective action. He advised that the estimated cost of obtaining a geotechnical analysis is approximately $10,000 - $12,000. Following discussion, Director Mink moved that the Board (i) authorize Benchmark to solicit a geotechnical proposal as recommended by the District's Engineer in an amount not to exceed $12,000, and (ii) delegate the Board President authority to award proposal in an amount not to exceed $12,000, subject to the filling of a Texas Ethics Commission ("TEC")Form 1295 from the awarchng contractor and providing a signed and notarized original of same and a Certification of Filing from the TEC to the District. Director Edmonds seconded said motion, which unanimously carried. Mr. Chovanec provided an update regarding the status of the proposed hike and bike trail connection to Addicks Dam. In that regard, Mr. Chovanec advised that a survey was prepared, as authorized by the Board at its meeting last month, to determine the location of proposed sidewalk improvements, a copy of which is attached hereto as Exhibit K. He advised that Benchmark is in the process of reviewing the survey information and will update the Board once a final determination has been made regarding the location of the proposed trail. A discussion ensued regarding recent reports from the HOA of flooding on Tanner Road. In connection therewith, Mr. Chovanec advised that the drainage issues on Tanner Road are occurring out of District and is therefore a county responsibility. Following discussion, Mr, Saour advised that he will set up a meeting with Han is County to discuss the matter. ISSUANCE OF UTILITY COMMITMENTS The Board deferred consideration of the issuance of utility commitments after noting that no requests for same had been received during the month. ATTORNEY'S REPORT The Board considered the attorney's report. Mr. Yeates advised the Board that an open records request had been received fiom American Transparency requesting an electronic copy of all the District employees'ecords for 2015, a copy of which correspondence is attached hereto as Exhibit L. Mr. Yeates informed the Board that the District does not have employees and noted that SPH has prepared a response on behalf of the District advising of same, a copy of which is also attached to Exhibit L. FUTURE AGENDA ITEMS The Board next considered matters for possible placement on future agendas. In connection therewith, the Board requested that an item be added to next month's agenda for discussion regarding a proposed fence to be constructed by the HOA in connection with the HOA's Clubhouse property.
6 AD JOURNMKNT There being no further business to come before the Board, on motion made by Director Rush, seconded by Director Mink and unanimously carried, the meeting was adjourned. gl(0 all n lllirrr 7 l(e &~I Secretary, Board of Directors IIIit I I an to
7 LIST OF ATTACHMENTS TO MINUTES Exhibit A- Audit proposal from BKD, LLP Exhibit B- Tax Assessor-Collector Report prepared by B&A dated as of July 31, 2016 Exhibit C- Exhibit D- Exhibit E- Exhibit F- Exhibit G- Exhibit H- Exhibit I- Exhibit J- Exhibit K- Exhibit L- Delinquent Tax Roll dated as of July 31, 2016 Delinquent Tax Report dated August I, 2016 Uncollectible List prepared by BkA Bookkeeping Report dated as of August 8, 2016 Annual Maintenance Arbitrage Analysis Report prepared by MRMG Operations and Maintenance Report dated August 8, 2016 Engineering Report dated August 8, 2016 Detention and Drainage Facilities Report dated August 8, 2016 Topographical Survey regarding proposed Hike and Bike Trail Correspondence from American Transparency
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