MINUTES FORT BEND COUNTY LEVEE IMPROVEMENT DISTRICT NO. 11 Novenaber10,2014 The Board of Directors (the "Board") of Fort Bend County Levee Inaprovenaent District No. 11 (the "District") naet in regular session, open to the public, on the 10th day of Novenaber, 2014, inside the boundaries of the District, at Mike Stone Associates, Inc., 19875 Southwest Freeway, Suite 270, Sugar Land, Texas, and the roll was called of the naenabers of the Board: Justin Ring Jared Janaeson Stuart Rinaes President Vice President! Assistant Secretary Secretary! Assistant Vice President and all of the above were present, thus constituting a quoruna. Also present at the naeeting were Clark Carruth of Levee Managenaent Services, LLC ("LMS"); Christina Garcia of Myrtle Cruz, Inc.; Michael Rusk of LJA Engineering, Inc.; Pat Naff of CDC Unlinaited LLC; Jina Lawless, architect for the District; Chris Elliott of Anaerex Energy; Craig RathLnann and Julie Willianas of RathLnann & Associates, L.P.; and Lynne B. Hunaphries and Nikole Cales of Allen Boone Hunaphries Robinson LLP (" ABHR"). MINUTES The Board considered approving the nainutes of the October 7, 2014, regular naeeting, which were provided in advance of the naeeting. Following review and discussion, Director Janaeson naoved to approve the nainutes as sublnitted. Director Ring seconded the naotion, which was approved by unaninaous vote. COMMENTS AND QUESTIONS FROM THE PUBLIC There were no conanaents rona the public. TAX ASSESSMENT AND COLLECTION MA TIERS No report was presented. FINANCIAL AND BOOKKEEPING MATTERS Ms. Garcia distributed and reviewed the bookkeeper's report, including the naonthly budget conaparison and list of checks presented for approval. A copy of the bookkeeper's report is attached. Ms. Garcia presented and reviewed an anaended budget for the fiscal year ending Septenaber 30, 2015 reflecting a $0.06 naaintenance and
operations tax revenue. Following review and discussion, Director Jameson moved to (1) approve the bookkeeper's report and authorize payment of the bills listed therein; and (2) amend the District's budget for the fiscal year ending September 30, 2015 to reflect $0.06 maintenance and operations tax revenue. Director Ring seconded the motion, which passed unanimously. OPERATION OF DISTRICT FACILITIES Mr. Carruth distributed and reviewed the monthly operator's report, a copy of which is attached. He reviewed and discussed work completed by LMS during the last month as reflected in his report. Mr. Carruth updated the Board regarding the pool construction and Right of Entry access easement granted to Mr. Ducayet, a District resident residing at 9119 Morning Star Drive. He stated LMS is monitoring all access on the District's levee and will make any necessary repairs. Mr. Carruth stated he will notify the District's bookkeeper of the cost for all repairs to be deducted from Mr. Ducayet's deposit. Mr. Carruth stated there has been hog activity on the District's levee. He stated LMS will continue to monitor the situation. Following review and discussion, Director Ring moved to approve the operator's report as submitted. Director Jameson seconded the motion, which was approved by unanimous vote. LEVEE AND DITCH MOWING Mr. Naff updated the Board regarding mowing and fertilization in the District. ENGINEERING MA TIERS Mr. Rusk discussed and reviewed the engineer's report, a copy of which is attached. After review and discussion, Director Jameson moved to approve the engineer's report. Director Ring seconded the motion, which passed unanimously. DISCUSS ELECTRICITY CONTRACT AND AUTHORIZE REVISION AND FILING OF CRITICAL LOAD SPREADSHEET Mr. Elliot stated the District's electricity contract is expiring shortly. He then presented and reviewed a fixed price bid summary, a copy of which is attached. Mr. Elliott also presented a Letter of Agreement ("LOA") for the Board's consideration. Discussion ensued. The Board concurred to renew its contract with CenterPoint Energy ("CPE") and requested Mr. Elliot contact CPE to request a rate match from the previous electricity contract. After review and discussion, Director Jameson moved to approve the LOA and authorize Director Ring to execute the necessary documents to renew the -2
District's electricity contract with CPE. Director Ring seconded the motion, which passed unanimously. The Board directed all necessary documents be filed appropriately and retained in the District's official records. EMERGENCY PREPAREDNESS COMMITTEE MATTERS There were no updates regarding this matter. COMMUNITY PROTECTS COMMITTEE The Board discussed the Greatwood Districts' Holiday Open House ("Open House") on December 11, 2014 from 5:30 p.m. to 7:30 p.m. at Recreation Center No.1. The Board then reviewed a draft invitation for the Open House. The Board concurred to authorize the Community Projects Committee to review and approve the final invitation and direct ABHR to post the invitation on the District's website, publish the invitation in the Greatwood Homeowners' Association newsletter and authorize the District's operator to place a message regarding the Open House in the water bills. FORT BEND FLOOD MANAGEMENT ASSOCIATION MATTERS/ACTIONS There were no updates regarding this item. PHASE II MS4 STORM WATER MANAGEMENT PLAN IMPLEMENTATION There were no updates regarding this matter. REPORTS ON GREATWOOD PRESIDENT'S MEETING AND ACTIVITIES AND FOLLOW UP ON LEVEE AND DRAINAGE FACILITIES AND OTHER DISTRICT AND GREATWOOD REGIONAL MATTERS There were no updates regarding this item. DISCUSS LETTER FROM BOSC PROPOSING REFUNDING BOND ISSUE Ms. Humphries presented a letter from BOSC, Inc. regarding a potential refunding bond issue, a copy of which is attached and filed in the District's official records. After review and discussion, the Board concurred no action was necessary. DISCUSS MUNICIPALITIES CONTINUING DISCLOSURE COOPERATION INITIATIVE -3
Ms. Humphries distributed and reviewed with the Board a memorandum prepared by ABHR concerning the Securities and Exchange Commission Enforcement Division's Municipalities Continuing Disclosure Cooperation Initiative, a copy of which is attached. Ms. Humphries also reviewed the District's annual continuing disclosure process with the Board, and noted that ABHR has overseen that process pursuant to its engagement with the District. Mter review and discussion, Director Jameson moved to accept the memorandum. Director Ring seconded the motion, which passed unanimously. All consultants except Ms. Humphries, Mr. Rathmann and Ms. Williams left the meeting. Director Rimes entered the meeting. SEPARATION AGREEMENT BETWEEN R. CRAIG RATHMANN AND RBC CAPITAL MARKETS, LLC (AS SUCCESSOR TO RBC DAIN RAUSCHER INC.), AND TEXAS ATTORNEY GENERAL SETTLEMENT RELATED THERETO Ms. Humphries distributed and reviewed with the Board: (i) a Texas Attorney General (" A.G.") press release regarding a Settlement Agreement between the A.G., Craig Rathmann and Rathmann & Associates, L.P., (the "Rathmann Settlement Agreement AG Press Release") ; (ii) the Rathmann Settlement Agreement; (iii) an A.G. press release regarding a Settlement Agreement between the A.G. and RBC Capital Markets, LLC, ("RBC Settlement Agreement AG Press Release") ; (iv) the RBC Settlement Agreement; (v) an October 13, 2014, letter from Rathmann & Associates; and (vi) an October 7, 2014, letter from RBC Capital Markets, LLC. Items (i) through (vi) are attached hereto. Mr. Rathmann also discussed items (i) through (vi). Discussion ensued. Director Jameson stated he believed the District should consider options for financial advisor services. He stated he is on the Board to serve the community and the reputation of the District's consultants is of most importance to him. Mr. Rathmann continued his presentation to the Board. He stated the planned cash redemption program is still recommended by Rathmann & Associates, L.P. and saves the District more than a refunding. Ms. Williams discussed the financial advisor services and considerations related to a cash defeasance versus a refunding. She stated the Board should make it clear to any new financial advisor that the proposed cash defeasance comes from the surplus operating fund. CONVENE IN EXECUTIVE SESSION PURSUANT TO SECTION 551.071, TEXAS GOVERNMENT CODE, TO CONDUCT A PRIVATE CONSULTATION WITH ATTORNEY TO DISCUSS PENDING OR CONTEMPLATED LITIGATION, OR A SETTLEMENT OFFER The Board convened in executive session at 6:26 p.m. -4
RECONVENE IN EXE<CUTIVE SESSION AND AUTHORIZE APPROPRIATE ACTION REGARDING PENDING OR CONTEMPLATED LITIGATION, OR SETTLEMENT OFFER The Board reconvened in open session at 6:43 p.m. Director Jameson moved to terminate the Financia] Advisor contract with Rathmann & Associates, L.P. Director Rimes seconded the mdtion, which was approved by a majority vote with Director Ring abstaining. The Board requested Ms. Humphries obtain proposals from Debbie Shelton of First Southwest Company and John Howell of the GMS Group for consideration at the next meeting. There being no,further business to come before the Board, the meeting was adjourned. (SEAL) -5
LIST OF ATTACHMENTS TO MINUTES Page No. Bookkeeper' s report...1 Operator's report...2 Engineer's Report...2 Fixed price bid summary...2 Letter from BOSC, Inc. regarding a potential refunding bond issue...3 Memorandum prepared by ABHR concerning the Securities and Exchange Commission Enforcement Division's Municipalities Continuing Disclosure Cooperation. I'" nltlatlve... 4 Rathmann Settlement Agreement AG Press Release...4 Rathmann Settlement Agreement...4 RBC Settlement Agreement AG Press Release...4 RBC Settlement Agreement...4 October 13, 2014, letter from Rathmann & Associates...4 October 7, 2014, letter from RBC Capital Markets, LLC....4-6