HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 249 Minutes of Meeting of Board of Directors April 17, 2014 The Board of Directors (the "Board" ) of Harris County Municipal Utility District No. 249 (the "District" ) met at the Board's regular meeting place on April 17, 2014, in accordance with the duly posted Notice of Public Meeting, and the roll was called of the duly constituted officers and members of the Board, as follows: Norman C. Adamek, President Willie Hodge, Vice President Daniel Stage, Secretary Ralph V. Palermo, Assistant Secretary Charles Albright, Assistant Secretary and all of said persons were present, except Director Stage, thus constituting a quorum. Also present were John Davis of Langford Engineering Inc. ("Langford"); Eric Thiry of Environmental Development Partners, LLC ("EDP"); Brenda McLaughlin of Bob Leared Interests, Inc. ("BLI"); Michael Murr of Murr Incorporated ("MI"), who later entered the meeting, as noted herein; Caryn Adams of Municipal Accounts & Consulting. L.P. ("MAC"); Christine Crotwell of First Southwest Company ("FSW");Aimee Ordeneaux Raley of Best Trash Inc. ("BT");Mark Eyring of Roth & Eyring, PLLC ("R&E");Cindy Adamek, a resident of the District; and Christopher Skinner of Schwartz, Page & Harding, L.L.P.("SP&H"). The President called the meeting to order and declared it open for such business as might regularly come before it. MINUTES The Board first reviewed the draft minutes of its meeting held on March 20, 2014. After discussion of the minutes presented, Director Adamek moved that the March 20, 2014, minutes be approved, as written. Director Palermo seconded said motion, which can ied unanimously. COMMENTS FROM THE PUBLIC Ms. Raley next queried the Board as to whether there were any issues with regard to solid waste collection and recycling services in the District to be addressed. The Board noted that it had no issues to discuss at this time. STATUS OF AUDIT AND CONTINUING DISCLOSURE REPORT Mr. Eyring reviewed with the Board a draft of the District's audit report prepared for the fiscal year ended December 31, 2013, a copy of which report is attached hereto as Exhibit A. After discussion concerning the audit presented, Director Adamek moved that the audit report for
the fiscal year ended December 31, 2013, be approved, subject to review and comment by SPH, that the President be authorized to execute the Annual Filing Affidavit on behalf of the Board and the District, and that such audit report and Annual Filing Affidavit be filed with the appropriate governmental authorities, including the Texas Commission on Environmental Quality (the "TCEQ"). Director Albright seconded said motion, which unanimously carried. Mr. Skinner then advised the Board that the continuing disclosure report due June 30, 2014, will not be completed until after the District's audit for the fiscal year ended December 31, 2013, is completed. TAX ASSESSOR-COLLECTOR'S REPORT Ms. McLaughlin next presented to and reviewed with the Board the tax assessorcollector's report for the month of March 2014, which report is attached hereto as Exhibit B. After discussion on the report presented, Director Hodge moved that the tax assessor-collector' report be approved and that the disbursements identified in said report be approved for payment from the District's tax account. Director Adamek seconded said motion, which unanimously carried. DKLINOUENT TAX COLLECTION ATTORNEYS'EPORT Mr, Skinner presented to and reviewed with the Board a delinquent tax collection attorneys'eport, dated April 17, 2014, prepared by Perdue, Brandon, Fielder, Collins k Mott, L.L.P.,the District's delinquent tax collection attorneys; a copy of the report is attached hereto as Exhibit C, Mr. Slcinner noted that no Board action was required with respect to any of the accounts listed in such report. RESOLUTION AUTHORIZING AN ADDITIONAL PENALTY ON DELINOUENT REAL PROPERTY TAXES The Board next considered the adoption of a Resolution Authorizing an Additional Penalty on Delinquent Real Property Taxes, a copy of which is attached hereto as Exhibit D. Mr. Slcinner advised that the District is authorized, pursuant to Section 33.07 of the Texas Tax Code, as amended, to impose, under certain conditions on July 1, an adchtional penalty not to exceed twenty percent (20%) of the total taxes, penalty and interest due the District on real property taxes that remain delinquent as of July 1 of the year in which they become delinquent. After discussion, it was moved by Director Hodge, seconded by Director Adamek and unanimously carried, that the attached Resolution Authorizing an Additional Penalty on Delinquent Real Property Taxes be adopted by the Board, and that the President be authorized to execute and the Assistant Secretary to attest same on behalf of the Board and the District. BOOI~EPER'S REPORT Ms. Adams presented to and reviewed with the Board the bookkeeper's report dated April 17, 2014, including (i) the disbursements presented for payment from the General Operating Fund, Capital Projects Fund and the Sewage Treatment Plant ("STP") Account, (ii) a Fund 335719 I
Balance Report, (iii) a Pledged Securities Report, (iv) an Actual versus Budget Comparison for Febmary 2014 for the Operating Fund and the STP Account, and (v) a Debt Service Payments Schedule, copies of which are attached hereto as Exhibit E. After discussion, it was moved by Director Palermo that the booldceeper's report be approved and that the various disbursements identified therein be authorized for payment, except for check no. 5883 payable to Director Stage which was voided. Director Albright seconded the motion, which carried unanimously. DETENTION AND DRAINAGE FACILITIKS REPORT The Board deferred consideration of a Detention and Drainage Facilities Report after noting that no Report had been received from Storm Water Solutions. LP. NORTHLAND SHOPPING CENTER ANNEXATION Mr. Davis next reminded the Board that he was in receipt of an inquiry from Mr. David Mafrige regarding the possible annexation of the Northland Shopping Center at IH-45 and Spring Cypress Road. In connection therewith, Mr. Skinner reminded the Board that, at last month's meeting, Mr. Davis presented and reviewed with the Board a feasibility study for said annexation. Mr. Davis then discussed with the Board the water and sanitary sewer capacity necessary to serve the tract, including the fire protection requirements for an Academy Sports and Outdoors retail store to be constructed on said tract. Mr. Davis then reviewed with the Board cost estimates for the required service. Ms. Crotwell then presented and reviewed with the Board an analysis of the feasibility study prepared by FSW, a copy of which analysis is attached hereto as Exhibit F. There then ensued a discussion regarding same. Mr. Skinner then requested that the Board consider engaging Collier's International to prepare a Broker's Estimate of Value in connection with said annexation. After discussion, Director Adamek moved that the Board engage Collier's International to prepare a Broker's Estimate of Value in connection with said annexation. Director Palermo seconded the motion, which carried unanimously. Mr. Murr entered the meeting during the discussion of the Northland Shopping Center annexation. LEXINGTON ROAD LANDSCAPING PROJECT There next ensued a discussion regarding the Lexington Road landscaping project (the "Project"). In connection therewith, Mr. Murr presented the Board a verbal Progress Report for the Lexington Road Landscape Phase II Project. There then ensued a discussion regarding the maintenance of the landscaped area of the Project. After discussion, the Board instructed Mr. Murr to prepare a proposal for maintenance of the Lexington Road Landscape Phase I Project for its consideration at a future meeting. ENGINEERING REPORT Mr. Davis presented to and reviewed with the Board a written engineering report, dated April 17, 2014, a copy of which report is attached hereto as Exhibit G, relative to the status of various projects within the District.
Mr. Davis informed the Board that Harris County Water Control and Improvement District No. 110 ("No. 110")needs to replace the lift pump at No. 110's lift station that serves as the drainage outfall for digester basins from the joint wastewater treatment plant and discussed same in detail with the Board. Mr. Davis then advised the Board that No. 110 is requesting that the District pay 50% of the costs for the replacement of said lift pump. After discussion, Director Palermo moved that the Board grant No. 110's request for the District to pay 50% of the costs for replacement of the lift pump. Director Adamek seconded the motion, which carried unanimously. ANNEXATION RKOUEST FROM AXIS TEXAS DEVELOPMENT GROUP. LLC Mr. Davis reminded the Board that correspondence was previously received from Axis Texas Development Group, LLC ("Axis" ) regarding the possible annexation of an approximately 23.2679 acre tract of land into the boundaries of the District and that the development plans include the construction of multiple industrial warehouses. Mr. Davis noted that, should said property be annexed into the District, the construction of a forcemain and on-site lift station would be required. After discussion on the matter, the Board requested that SPH prepare and forward correspondence to Axis advising that a deposit would be required for Langford to prepare a feasibility study for the Board's consideration in connection with said tract. OTHER MATTERS Mr. Davis next informed the Board that he was in receipt of a request from Lance Chernow of Davis Development on behalf of Choice Tee for the possible annexation of approximately 21 acres into the boundaries of the District. He noted that the development plans include the construction of 250 apartment units. After discussion, the Board concurred that it is not interested in said annexation at this time. Mr. Davis noted that he would inform Mr. Chemow of the Board's decision. BAYER PARK WASTEWATER CONVEYANCE AND TREATMENT PROJECT With respect to the Bayer Park wastewater conveyance and treatment project, Mr. Skinner reminded the Board that SPH previously forwarded a draft of the Interlocal Agreement to the Harris County Attorney's Office for review and noted that comments had been received from Harris County and that SPH is in the process of reviewing said comments at this time. RELOCATION OF DISTRICT'S WATER LINE LOCATED AT THE INTERSECTION OF SPRING CYPRESS ROAD AND LEXINGTON BOULEVARD Mr. Davis next reminded the Board that the District's water line located at the intersection of Spring Cypress Road and Lexington Boulevard is located within the right-of-way of Spring Cypress Road and will need to be relocated. Mr, Davis then reminded the Board that he is working with Harris County on the design and consnuction of the water line relocation project, He additionally reminded the Board that an agreement between the District and Harris County will need to be entered into for the project.
APPLICATION FOR TYPE I RECLAIMED WATER PERMIT There next ensued a discussion regarding the status of submission of an application to the TCEQ to obtain a permit for use of reclaimed water from the wastewater treatment plant for irrigational purposes. Mr. Davis reminded the Board that the final application has been submitted to the TCEQ and noted that the authorization for said permit has been received from the TCEQ. EMERGENCY BACK-IJP GENERATOR Mr. Skinner presented to and reviewed with the Board a proposal from Stewart & Stevenson LLC ("Stewart" ), a copy of which proposal is attached hereto as Exhibit H, for a stand-by lease option for a generator for the District's wastewater treatment plant. After discussion on the matter, Director Albright moved that the Board accept Stewart's proposal for a stand-by lease of a 180 kilowatt emergency generator for use at the District's wastewater treatment plant facility and approve said lease agreement, subject to SP&H's review and approval of same. Director Adamek seconded the motion, which carried unanimously. AMENDMENT OF RATE ORDER The Board next considered amendments to the Rate Order. Mr. Skinner distributed the Memorandum attached hereto as Exhibit I and advised the Board that the Federal Reduction of Lead in Drinking Water Act, which amends the Safe Drinking Water Act, became fully effective in January, 2014, and, among other provisions, reduces the maximum allowable lead content in certain plumbing fittings and fixtures from 8% weighted average of lead to 0.25%. He further advised that the Plumbing Regulations and the form of Service Inspection Certificate included in the Rate Order require amendments to reflect the new standards. Mr. Skinner then advised the Board that the penalty for violation of the amended Plumbing Regulations is not effective or enforceable until five (5) days after a substantive statement of the rules and the penalty for violation is published once a week for two (2) consecutive weeks in a newspaper of general circulation in the area in which the District is located in accordance with Sections 54.207 and 54.208 of the Texas Water Code. Following discussion, upon motion by Director Hodge, seconded by Director Adamek, and unanimously carried, the Rate Order attached hereto as Exhibit J was adopted and SPH was authorized to publish notice of the amended Rate Order in The Houston Chronicle as required. OPERATIONS AND MAINTENANCE REPORT The Board considered the Operations and Maintenance Report. Mr. Thiry presented to and reviewed in detail with the Board a written Operations Report prepared by EDP, dated as of April 16, 2014; a copy of the Report is attached hereto as Exhibit K. The Board next considered review of the District's Identity Theft Prevention Program (the "Program" ). In connection therewith, Mr. Thiry presented EDP's annual report regarding administration of the Program and advised the Board regarding the District's experience with
identity theft during the prior year, current identity theft methods, the types of accounts maintained by the District and the District's business arrangements with other entities. Mr. Thiry recommended that no changes be made to the Program. After discussion on the matter, the Board concurred that no changes were necessary to the Program at this time. AUTHORIZATION OF CONSUMER CONFIDENCE REPORT The Board considered authorizing EDP to prepare the District's Consumer Confidence Report in the format promulgated by the TCEQ. Mr. Skinner advised the Board that, pursuant to Consumer Confidence Report requirements promulgated by the United States Environmental Protection Agency and the TCEQ, the District is required to provide a report containing various information regarding the District's water supply to all customers of the District by July 1, 2014. After discussion on the matter, Director Adamek moved that EDP be authorized to prepare said Consumer Confidence Report for the Board's and SPH's review. Director Albright seconded the motion, which carried unanimously. ISSUANCE OF UTILITY COMMITMENTS The Board next deferred action regarding the issuance of utility commitments, as no requests for same had been received by the District. WKBSITE PROVIDER There next ensued a discussion regarding the District's website provider and working with said provider to improve the District's website. Mr. Skinner noted that SPH will be posting the Notice of Election for the upcoming Director's Election on the website. DISTRICT SECURITY ISSUES The Board considered the report regarding District security issues. Mr. Skinner distributed the HCSO call sheet summary for March 2014, a copy of which summary is attached hereto as Exhibit L. There next ensued a discussion about coordinating with the HCSO for security services on election day. After discussion, Director Adamek moved that SPH be authorized to coordinate with the HCSO for security services on election day. Director Palermo seconded the motion, which carried unanimously. ATTORNEY'S REPORT Mr. Skinner informed the Board that he had nothing more of a legal nature to report at this time.
STATUS OF ACOUISITION OF 6.867 TRACT ALONG CYPRESSWOOD DRIVE There next ensued a discussion regarding the status of the District's acquisition of approximately 6.867 acres of commercial property located along Cypresswood Drive (the "Property" ). Mr. Skinner reminded the Board that, the feasibility period for said property expires on May 21, 2014, and the closing for the purchase of said property is scheduled for June 5, 2014. POSSIBLE ACOUISITION OF PROPERTY FROM THE FINIAL GROUP There next ensued a discussion regarding the possible acquisition of recreational and drainage facilities property from The Finial Group ("Finial" ). Mr. Skinner informed the Board that SPH has been provided with a legal description and is in the process of runnmg a, title search on the property at this time to determine if there are any lienholders. He additionally informed the Board that SPH is in the process of preparing a Purchase and Sale Agreement in connection therewith. ADJOURN There being no further business to come before the Board, upon motion duly made by Director Adamek seconded by Director Palermo and carried unanimously, the meeting was adjourned. F Secretary
LIST OF ATTACHMENTS TO MINUTES Exhibit A Audit Report Exhibit B Tax Assessor-Collector's Exhibit C Delinquent Tax Report Report Exhibit D Resolution Authorizing an Additional Penalty on Delinquent Real Property Taxes Exhibit E Boold&eeper's Report Exhibit F Analysis of feasibility study Exhibit G Engineer's Report Exhibit H Proposal from Stewart & Stevenson Exhibit I Memorandum Exhibit I Rate Order Exhibit K Operations and Maintenance Report Exhibit L District Security Report