MINUTES HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 18. January 18, 2016

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1 MINUTES HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 18 January 18, 2016 The Board of Directors (the Board ) of Harris County Municipal Utility District No. 18 of Harris County, Texas (the District ), met in regular session, open to the public, on the 18th 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: Arved White Robert A. Bernardini Michael L. Murr Karl Skarboszewski Vally Swann President Vice President Secretary Assistant Vice President Assistant Secretary and all of the above were present, thus constituting a quorum. Also present at the meeting were Jennifer Wienecke of Sandersen Knox & Co., LLP; Ryan Fortner of Sales Revenue Inc.; Wendy Austin of District Data Services, Inc.; Yvonne Luevano of Wheeler & Associates, Inc. ( Wheeler ); Nancy Blackwell of AEI Engineering, Inc. ( AEI ); Tracy Riley of Eagle Water Management, Inc. ( Eagle ); and Adisa Harrington and Rebecca Hudman of Allen Boone Humphries Robinson LLP ( ABHR ). COMMENTS FROM THE PUBLIC MINUTES There were no comments from the public. The Board considered approving the minutes of the December 14, 2015, regular meeting. After review and discussion, Director Bernardini moved to approve the minutes of the December 14, 2015, regular meeting. Director Skarboszewski seconded the motion, which passed unanimously. PROPOSAL FROM SALES REVENUE INC. Mr. Fortner presented a proposal from Sales Revenue Inc. ( SRI ) to update inventory required by the Strategic Partnership Agreement with the City of Houston, a copy of which is attached. Discussion ensued and the Board concurred to take action on the proposal at the next Board meeting.

2 AUTHORIZE AUDITOR TO CONDUCT AUDIT FOR FISCAL YEAR END DECEMBER 31, 2015 Ms. Wienecke discussed an engagement letter with Sandersen Knox & Co., LLP, to perform the District s audit for the fiscal years ending December 31, 2015, 2016, and Following review and discussion, Director White moved to (1) engage Sandersen Knox & Co., LLP, to conduct the District s audits for the fiscal years ending December 31, 2015, 2016, and 2017; and (2) authorize the auditor to conduct the audit for fiscal year end December 31, Director Bernardini seconded the motion, which carried unanimously. FINANCIAL AND BOOKKEEPING MATTERS Ms. Austin reviewed the bookkeeper s report, including the energy consumption report, budget comparison, and schedule of investments, and presented the District s bills for payment. A copy of the bookkeeper s report is attached. Following review and discussion, Director Skarboszewski moved to approve the bookkeeper s report and payment of the bills. Director Murr seconded the motion, which passed unanimously. ACCEPT ANNUAL DISCLOSURE STATEMENTS FOR INVESTMENT OFFICER AND BOOKKEEPER Ms. Harrington stated that, in accordance with the District s Investment Policy, Wendy Austin, as the District s bookkeeper and investment officer, is required to execute Disclosure Statements that disclose any relationships with banks and brokers who seek to sell investments to the District. After review and discussion, Director Skarboszewski moved to accept the Disclosure Statements under the Public Funds Investment Act, direct that the Statements be filed with the Texas Ethics Commission, and direct that the Statements be filed appropriately and retained in the District s official records. Director Murr seconded the motion, which passed unanimously. REVIEW LIST OF LOCAL GOVERNMENT OFFICERS Ms. Harrington stated that pursuant to Chapter 176 of the Texas Local Government Code, the District will maintain a List of Local Government Officers. She reviewed the List of Local Government Officers. After review and discussion, Director Skarboszewski 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 Bernardini seconded the motion, which passed by unanimous vote. ANNUAL REPORT REGARDING POST-ISSUANCE COMPLIANCE POLICY Ms. Harrington reported on the District s compliance activities during the prior calendar year related to bond financings. She stated that no corrective action is required at this time. -2-

3 TAX ASSESSMENT AND COLLECTIONS MATTERS Ms. Luevano reviewed the tax assessor/collector s report and the delinquent tax roll, copies of which are attached. She reported that 63.14% of the 2015 taxes had been collected as of December 31, Following review and discussion, Director Murr moved to approve the tax assessor/collector s report and payment of the tax bills. Director Skarboszewski seconded the motion, which carried unanimously. ENGINEER S REPORT Ms. Blackwell reviewed the engineer s report, a copy of which is attached. Ms. Blackwell stated there was no update on the Grant Road widening project. Ms. Blackwell gave an update on Lake Forest Plant Advisory Council activities and reviewed the Plant engineer s report, a copy of which is attached to the engineer s report. Ms. Blackwell reviewed a summary of current and anticipated future capital projects, a copy of which is attached to the engineer s report. Ms. Blackwell reported on the status of the emergency generator project at Oak Bluff Water Plant. Ms. Blackwell and Ms. Harrington updated the Board regarding the electric meter transfer for the pump station from the Hidden Falls homeowners association ( HOA ) to the District. Ms. Harrington reviewed a Service Agreement with Storm Maintenance and Monitoring, Inc. for tractor mowing and hand work for $3, for the eight-acre future District park tract. Following review and discussion, and based on the engineer s recommendation, Director Bernardini moved to (1) approve the engineer s report; and (2) approve a Service Agreement for maintenance of the Park, subject to receipt of the executed Gift Deed from Dale Collins. The motion was seconded by Director Skarboszewski and passed unanimously. APPROVE AGREEMENT WITH HIDDEN FALLS HOMEOWNERS ASSOCIATION ( HOA ) FOR COST SHARING OF ELECTRICITY METER Director Bernardini updated the Board regarding past bills from the Hidden Falls HOA for the shared electricity meter that services the HOA s pond amenities and the District s stormwater pump station. He stated that he has contacted Public Power Pool ( P3 ) to confirm P3 s electricity rates for the meter and will report back to the Board at the next Board meeting. No action was taken. -3-

4 EMERGENCY RESPONSE PLANS Director Swann stated that she received the necessary emergency communication equipment and batteries pursuant to the District s Emergency Response Plan. OPERATION OF DISTRICT FACILITIES AND HEARING ON TERMINATION OF WATER AND SEWER SERVICE Mr. Riley presented the operator s report, a copy of which is attached, and reported on maintenance work in the District. He stated that the District s water accountability for the previous month was 93.4%. Mr. Riley stated that the customers on the termination list were mailed written notice prior to this meeting notifying them of the opportunity to appear before the Board to explain, contest, or correct the utility service bill and to show reason why utility service should not be terminated because of nonpayment, all as required by the District s Rate Order. A copy of the termination list is attached to the operator s report. After review and discussion, Director Skarboszewski moved to (1) accept the operator s report; and (2) terminate service to the customers on the termination list because no customers were either present at the meeting or had presented any written statement on the matter. Director Bernardini seconded the motion, which carried unanimously. DISCUSS WATER AND SEWER RATES AND ADOPT AMENDED RATE ORDER Mr. Riley and Ms. Harrington discussed the current Rate Order and upcoming increase in the North Harris County Regional Water Authority ( NHCRWA ) water fees. The Board discussed options for notifying customers of the fee increase, including message language on the water bill and posting notice on the District s website. The Board concurred to amend the District s Rate Order and finalize arrangements for customer notification at the next Board meeting. SALE OF SERIES B GROUNDWATER CREDITS Ms. Harrington discussed the District s groundwater credits. She noted an updated chart will be presented next month and stated the District has not received any offers to purchase Series B groundwater credits. NORTH HARRIS COUNTY REGIONAL WATER AUTHORITY ( NHCRWA ) Director Murr reported on NHCRWA matters. Ms. Harrington reviewed a notice of violation letter from the Texas Commission on Environmental Quality ( TCEQ ) to the NHCRWA, a copy of which is attached. No action was necessary. -4-

5 Ms. Harrington discussed the NHCRWA make-up briefing scheduled for Tuesday, January 19. Director White indicated he plans to attend the briefing. LAKE FOREST PLANT ADVISORY COUNCIL ( LFPAC ) Director White updated the Board on LFPAC matters. CONSTABLE SECURITY PATROL MATTERS, INCLUDING RENEWAL OF CONTRACT WITH HARRIS COUNTY FOR CONSTABLE SERVICES Ms. Harrington reviewed a proposed Interlocal Agreement for Law Enforcement Services with Harris County for the services of one constable, which includes an increase in the amount of $8, from last year s rate due to Sergeant Wayne Curry s promotion. Following review and discussion, Director Skarboszewski moved to approve the Interlocal Agreement for Law Enforcement Services with Harris County and direct that the Agreement be filed appropriately and retained in the District s official records. Director Murr seconded the motion, which passed by unanimous vote. DISTRICT WEBSITE CONTENT Director Bernardini discussed the District website and stated he will update the website to reflect Director Swann s appointment to the Board. REVIEW DISTRICT INFORMATION KIT Ms. Harrington discussed the District s Information Kit. She stated that edits are currently being made by ABHR and the updated Kit will be sent electronically to Board members and consultants for review before the next regular Board meeting. No Board action was taken. REVIEW ACTION LIST The Board reviewed the action list. Director Murr reported that the trees at Lakewood Towne Center on Grant Road have been removed. The Board requested that Ms. Harrington review the District s previous agreement with the developer of the Center regarding the tree removal and report back to the Board before the next meeting. IMPLEMENTATION OF HOUSE BILL 1295 Ms. Harrington presented and reviewed a memorandum from ABHR regarding implementation of House Bill 1295 that was passed by the Texas Legislature during the 84 th 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. Ms. Harrington stated that business entities must file a Form 1295 with the Texas Ethics Commission and disclose certain interested parties, intermediaries, and controlling -5-

6 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. She 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 DIRECTORS ELECTION Ms. Harrington discussed procedures related to the 2016 Directors Election. She reviewed a Resolution Designating an Agent of the Secretary of the Board of Directors During the 2016 Directors Election Period. Following review and discussion, Director Bernardini moved to adopt a Resolution Designating an Agent of the Secretary of the Board During the 2016 Directors Election Period appointing Ms. Rebecca Hudman as the agent of the Secretary of the Board of Directors to perform the duties of the District s Directors Election, authorize the agent to post the related notice as required, and direct that the Resolution be filed appropriately and retained in the District s official records. Director Murr seconded the motion, which was approved by unanimous vote. Ms. Harrington reported on requirements to file a Notice of Deadline to File Applications for Place on the Ballot for the 2016 Directors Election. Following discussion, Director Bernardini moved to authorize the Secretary s agent to post the notice as required. Director Murr seconded the motion, which was approved by unanimous vote. Ms. Harrington discussed exemptions from using electronic voting systems during the 2016 Directors Election. She stated that the basis of the District s exemption is that the last Directors election was cancelled. Following discussion, Director Bernardini moved to authorize the Secretary s agent to publish Notice of Exemption in a newspaper of general circulation. Director Murr seconded the motion, which was approved by unanimous vote. Ms. Harrington said that in the event the District does hold an election, the Board should determine the pay for the District s election officials. Following discussion, Director Bernardini made a motion to set the pay for the election officials for the 2016 Directors Election, should the District hold an election, at $15.00 per hour. Director Murr seconded the motion, which carried unanimously. There being no further business to come before the Board, the meeting was adjourned. (SEAL) Secretary, Board of Directors -6-

7 ACTION LIST New Items: 1. Director Bernardini will confirm P3 s electricity rates for the Hidden Falls meter and report back to the Board at the next Board meeting. 2. Director Bernardini will update the District s website to reflect Director Swann s appointment to the Board. 3. Ms. Harrington will research the District s previous agreement with the developer of Lakewood Towne Center regarding the tree removal and report back to the Board before the next meeting. 4. Ms. Hudman will contact Ms. Austin regarding AWBD reservations at preferred hotels. Pending Items: 1. Ms. Harrington will present an updated chart of the District s groundwater credits at next month s meeting. 2. Eagle will install additional handrails on the District s ground storage tanks where needed for safety. LIST OF ATTACHMENTS TO MINUTES Page Proposal from SRI... 1 Bookkeeper s report... 2 Tax assessor/collector s report... 3 Delinquent tax roll... 3 Engineer s report... 3 Operator s report... 4 TCEQ Violation Notice Letter Operator s report... 4 Memorandum regarding implementation of House Bill