MINUTES OF MEETING OF THE BOARD OF DIRECTORS February 6,2014 THE STATE OF TEXAS COUNTY OF HARRIS BILMA PUBLIC UTILITY DISTRICT $ $ $ The Board of Directors (the "Board") of Bilma Public Utility District (the "District") of Harris County, Texas, met in regular session, open to the public, in the upstairs meeting room, at the Spring Creek Oaks Clubhouse II, 6002 Bur Oak, Spring, Texas, on Thursday, February 6, 2014, at 5:00 p.m.; whereupon, the roll was called of the members of the Board, to-wit: John P. Chamberlain H. Mark Stoebner Cynthia D. Day Dennis E. Winkler David W. Simpson President Vice President Secretary Assistant Secretary Director All members of the Board were present, thus constituting a quorum. Also attending the meeting were: Ms. Christina Cole of Myrtle Cruz, Inc., bookkeepers for the District; Ms. Sara Ahlschlager of Wheeler & Associates, Inc., tax assessor/collector for the District; Messrs. Don Hays and Michael Potter and Ms. Robin Secrest of Hays Utility South Corporation ("Hays"), operators for the District; Messrs. Ed Shackelford, P.8., and Justin Abshire, P.E., of Jones & Carter. Inc. ("Jones & Carter"), engineers for the District; Mr. Ron Brooks of Chesmar Homes, developer of Country Lake Estates Village ("CLEV"), Sections 1 and 2; li4r. Grant Williamson of Environmental Allies; and Ms. Robin S. Bobbitt, attorney, and Ms. Brooke T. Dold, paralegal, of Johnson Radcliffe Petrov & Bobbitt PLLC, attorneys for the District. Also in attendance was Mr. Don Athedon, a resident of the Spring Creek Oaks subdivision within the District. Whereupon, the meeting was called to order and evidence was presented that public notice of the meeting had been given in compliance with the law. The posted notices of the meeting are attached hereto. HEAR FROM PUBLIC No one was present to address the Board. CONSENT AGENDA Director Chamberlain first reviewed with the Board the items reflected on the Consent Agenda. Director Chamberlain explained that this portion of the agenda deals with routine matters of the Board, and that no separate discussion of such items will occur unless a Board member or a rnember of the public requests that an item be moved to the regular portion of the agenda. Mr. Abshire noted that Change Order No. 5, in the amount of 5950.74, had been 00 I 56925
submitted by T&C Construction ("T&C") for the modification of the air lift differential pressure gauge at the Wastewater Treatment Plant (the "WWTP"). Mr. Abshire explained that Jones & Carter had previously reported that the modification was due to an engineering design miscalculation and that Jones &. Carter has issued a check in the amount of $950.74 to T&C to provide payment for Change Order No. 5. Upon motion by Director Winkler, seconded by Director Stoebner, after full discussion and the question being put to the Board, the Board voted unanimously to approve the minutes of the regular meeting of January 9,2014, as written, and authorize Jones &.Carter to advertise for bids for the following projects: a) construction of the CLEV, Section I detention facilities; and b) construction of the CLEV, Section 1 water, sanitary sewer and drainage facilities. REGULAR AGENDA DEVELOPER'S REPORT Mr. Abshire then explained that Jones &. Carter is very close to adverlising for bids for the detention facilities and water, sanitary sewer and drainage facilities to serve CLEV, Section 1. Mr. Brooks added that he has been waiting to receive comments on the plans from the City of Houston. TAX ASSESSOR/COI,T,trCTOR'S REPORT AND DELINOUENT REP RT TAX ATTORNEY'S Ms. Ahlschlager then reviewed with the Board the Tax Assessor/Collector's Report for the month of January, a copy of which is attached hereto. Ms. Ahlschlager apologized to the Board concerning the three (3) checks that were not printed correctly at the January meeting. Ms. Ahlschlager stated that the checks were voided and reprinted and are included in the checks being presented this evening for payment. Ms. Ahlschlager next reported that the District has collected 93.22% of its 2013 taxes to date. Ms. Ahlschlager then noted that there is no Delinquent Tax Attorney's Report this month. Upon motion by Director Simpson, seconded by Director Day, after full discussion and the question being put to the Board, the Board voted unanimously to approve the Tax Assessor/Collector's Report and the checks reflected therein. M TAXATION FO The Board then considered adoption of a Resolution Concerning Exernptions from Taxation for 2014 Tax Year. Ms. Ahlschlager explained that the Board has not previously granted exemptions from taxation. Ms. Ahlschlager further explained that in 2073,19 property owners would have qualified for a disability exemption and the District had 223 property owners that would have qualified for an over-65 exemption. Further discussion ensued. Ms. Bobbitt advised the Board that they may want to consider granting an exemption this year to individuals who are disabled or are 65 years or older. Upon motion by Director Stoebner, seconded by Director Simpson, after full discussion and the question being put to the Board, the Board voted unanimously to adopt a Resolution Concerning Exemptions from Taxation for 2014 Tax Year 00 I 5ó925 2
granting an exemption of $ 15,000 of the appraised value of residence homesteads of individuals who are disabled or are 65 years of age or older. A copy of the resolution is attached hereto. Ms. Ahlschlager then exited the meeting at 5:30 p.m. RESOLUTION IMPLEMENTING PENAL ON 2OI3 DELINOUENT TAXES AND CONTRACTING ATTORNEYS TO COLLECT D INOI]ENT TAXES Ms. Bobbitt then explained that pursuant to Sections 6.30, 33.01,33.08 and 33.1i of the Texas Property Tax Code, as amended, the District may levy an additional 20o/o penalty on 2013 real property taxes that remain delinquent as of July 1,2074 and an additional 20% penalty on 2013 personal property taxes that remain delinquent as of April 1,2014, to help defray the costs of collection, if the Board has entered into an agreement with an attorney for the collection of delinquent taxes and if adequate notice of such penalty is provided to property owners. Upon motion by Director Winkler, seconded by Director Day, after full discussion and the question being put to the Board, the Board voted unanimously to adopt the Resolution Implernenting Penalty on 2013 Delinquent Taxes and Contracting with Attorneys to Collect Delinquent Taxes, a copy of which is attached hereto. BOOKKEEPER'S REPORT Ms. Cole next reviewed the Bookkeeper's Report with the Board, a copy of which is attached hereto, including the revenues and expenses of the District, the budget comparison for eight (8) months, the investment repoft for the month, and the checks being presented for payment. Director Chamberlain then asked why legal fees are over budget. Ms. Bobbitt stated that she would have to review the past invoices, but some of the additional costs were due to developer work items, work in connection with amendments to the District's Drought Contingency Plan, as well as the additional/special Board meetings that have been held. Ms. Bobbitt further explained that Ms. Jarmon tracks engineering and legal expenses and invoices the developer for amounts for which they are responsible. Director Stoebner then asked how the developer's payments are reflected in the Bookkeeper's Report. Ms. Cole stated that she would talk with Ms. Jarmon and send out an email to the Board providing such information. Director Winkler then briefly exited the meeting at 5:35 p.m. to take a phone call. Ms. Bobbitt next reported that the District had received a check in the amount of $30,203.88 from the North Harris County Regional Water Authority (the "NHCRWA") for the purchase by the NHCRWA of 73,668,000 gallons of the District's Series B groundwater credits. A copy of the transmittal letter regarding such payment is attached hereto. Upon motion by Director Day, seconded by Director Stoebner, after full discussion and the question being put to the Board, the Board voted unanimously to approve the Bookkeeper's Report, the investment report and the payment of the checks reflected therein. 00 I 56925 3
OPERATIONS COMMITTEE ''COMMITTEE'') REPORT Director Stoebner next repofted that the Committee conference call scheduled for January 21't was not held due to a scheduling conflict. Director Stoebner added that Mr. Abshire sent out a summary email on January 20tt', a copy of which is attached hereto. Mr. Abshire noted thatthe next Committee conference call will be February 18,2014, at 10:00 a.m., if such call is needed. OPERATOR'S REPORT Mr. Potter then presented and reviewed the Operator's Report with the Board for the period of Decernber 16, 2073, to January 76,2014, a copy of which is attached hereto. Mr. Potter reported that currently there are 1,664 connections in the District and that the District's water accountability for the month was 90.22o/o. Mr. Potter went on to report that 126 delinquent notices had been mailed during the month and that seven (7) accounts were cutoff. Mr. Potter reported that the District's interconnect meter with Harris County Municipal Utility District No. 275 was opened on January 17,2014 and is still being used. Mr. Potter next reported that Hays received a customer water quality complaint on February 6,2014 from the resident at 195 I 8 Country Village that turned out to be a problem with the resident's hot water heater and not the District's line. Mr. Potter then reviewed the Operations Budget and noted that there was one (1) item that ran over budget, in the arnount of S7,279, in connection with the installation of the rotating biological contactor two-inch (2") pump. Mr. Atherton then entered and Director Winkler re-entered the meeting at 5:40 p.m. Director Day inquired if the District flushed a lot of water lines this past reporting period. Mr. Potter responded that there was a great deal of flushing and proceeded with the review of the flushing log with the Board. Director Winkler then asked if the District's lower water accountability was due to the amount of line flushing that had been done during the prior month. Mr. Potter responded that the water accountability number included a calculation for the amount of water that was flushed during the reporting period. Mr. Hays then noted that the NHCRWA's surface water meter tends to "over read" when flow rates are low, which impacts the District's water accountability. Mr. Potter next reviewed the Intrusion Alarm Report for Water Plants No. 1 and No. 2, a copy of which is attached hereto. Mr. Potter stated that there had been three (3) alarms at Water Plant No. 1, two (2) of which occurred after working hours, and six (6) alarms at Water Plant No. 2, four (4) of which occurred after work hours. Mr. Potter further explained that he talked again with Mr. Howard Manson of Today's Integration, Inc,, regarding the high number of intrusion alarms the District is experiencing. Mr. Potter stated that Mr. Manson is going to set up a camera at the northwest sections of Water Plant No. 1 and Water Plant No. 2 try to get a visual of what is causing the intrusion alarms. 001 56925 4
Ms. Secrest next reported that there are two (2) %-inch (3/a") meters to be replaced in the District and briefly reviewed the Top Usage List with the Board. Ms. Secrest then reported that the District had received two (2) customer letters, copies of which are attached to the Operator's Report. Ms. Secrest stated that the first letter was from Mr. Don A. McKee of 4367 Countrytrails Court, who was requesting that the charge for the additional security deposit be waived. Ms. Secrest reported that service to the account had been terminated and, according to the District's Rate Order, Hays had charged an additional security deposit. A discussion ensued and the Board denied the waiver request. Ms. Secrest next reviewed a letter from Ms. Jaime Hinson of 16907 Butteroak Drive, who was requesting that the Board waive the $75 cut-off fee and the $100 additional security deposit imposed to her account. Ms. Secrest explained that the customer is experiencing personal difficulties and has paid the current water and sewer bill and the disconnection fee. Ms. Secrest added that the property is a rental house and Mr. Clint Headley is the owner of the property. A discussion ensued at the end of which the Board deferred action on the matter until next month's meeting. Ms. Bobbitt cautioned the Board that all customers need to be treated equally under the terms of the District's Rate Order. The Board asked Ms, Secrest to obtain additional information concerning the account, Mr. Potter then reported that the District had received a letter from the NHCRWA dated January 22,2014, regarding the new rates for well pumpage fees and surface water that go into effect on April 1,2014. Mr. Mr. Potter stated that the well pumpage fee will be increased to $2.00 per 1,000 gallons and the surface water fee will be increased to $2.45 per 1,000 gallons. A copy of the NHCRWA letter is attached hereto. Director Stoebner then noted that the District is currently charging customers less than the current 52.20 per 1,000 gallons for surface water due to the capital contributions previously made by the District. Ms. Secrest noted that the District is currently charging customers $1.25 per 1,000 gallons on billed water consumption. Mr. Shackelford then questioned whether the District is applying the correct NHCRWA credit for surface water and charging customers an adequate amount for surface water. Mr. Shackelford suggested that the District's bookkeeper analyze the surface water calculation to determine if the customer's surface water fee needs to be increased. Ms. Bobbitt reminded the Board that they have paid two (2) sizable capital contributions to the NHCRWA to earn the credit amounts. Ms. Bobbitt added that the NHCRWA will probably issue bonds this year, but it is not known yet if the NHCRWA will offer utility districts an option to make capital contributions. Ms. Bobbitt stated that she would discuss the matter with Ms. Jarmon and Mr. Shackelford to determine what surface water rate would be appropriate. Director Winkler noted that Northwest Harris County Municipal Utility District No. 36 recently sent out a notice to customers that their rates would increase, but the notice did not specify what the increased rates would be. Ms. Secrest then reviewed a water conservation brochure and customer billing inserts with the Board and noted that the brochure was scheduled to be inserted in the next customer billing and the additional insefts will be sent out monthly to customers thereafter. Copies of the billing inserts are attached hereto. Mr. Williamson then exited the meeting at 6:20 p.m. 001 56925 5
Upon motion by Director Simpson, seconded by Director Winkler, after full discussion and the question being put to the Board, the Board voted unanimously to approve the Operator's Report, to authorize the termination of service to the delinquent accounts in accordance with the provisions of the District's Rate Order. Ms. Cole then exited the meeting at 6:22 p.m. ENGINEER'S REPORT Mr. Abshire next presented the Engineer's Report, a copy of which is attached hereto Mr. Abshire leporled that Jones & Carter sent a demand letter to T&.C, contractor for the WWTP Activated Sludge Addition project, requesting that they replace all three (3) of the blowers installed in connection with such project due to the oil leak problem with such blowers. Mr. Abshire furlher reported that Gardner Denver, the manufacturer of the blowers, has detennined that the oil leaks are due to faulty oil reservoirs. Mr. Abshire stated that each blower has two (2) oil reservoirs and Gardner Denver has offered to change out all of the oil reservoirs. Mr. Abshire stated that the replacement oil reservoirs would be new castings to correct the problerns with leaking and should be delivered by late March. In addition, Mr. Abshire reported that Gardner Denver will add an additional one (l) year warranty for a total of two (2) years wananty on the blowers from the date of acceptance. Concerning the emergency interconnect with Bridgestone, Mr. Abshire reported that Jones & Carter held the pre-construction meeting with AR Turnkee Construction Company, Inc. ("AR Turnkee") on January 23'd. Mr. Abshire stated that CenterPoint Energy has estimated that it will take them 12 or more weeks to provide permanent electric service at the interconnect meter at a cost of $10,000. Mr. Abshire reported that an alternative to this is to have the contractor install a battery power system. Mr. Abshire noted that the battery powered system would have a service life of four (4) to five (5) years and would cost $500 to replace. Mr. Abshire stated that AR Turnkee has been asked to give a cost for the installation of the battery power system. Mr. Abshire reported that the deduction to the AR Turnkee construction contract will be handled as a change order to the contract and presented for approval at the Board's March 6th meeting. Mr. Abshire next reported that bids were received from Champion Hydro-Lawn, Inc., Storm Water Solutions, LP, and Environmental Allies, for the maintenance of the Country Lake Estates trash trooper Storm Water Quality Management Plan (the "SWQMP") and stated that Environmental Allies was the low bidder based on their bid of $3,180 per year, a copy of which bid tabulations is attached to the Engineer's Report, Mr. Abshire stated that the bid package included an initial term of twelve (12) months with an option for a l2-month extension. Mr. Abshire also stated that it may be possible when CLEV is developed, that the District will be able to do away with the SWQMP. Mr. Abshire next reported that the District's Emergency Preparedness Plan (the "EPP") must be updated and submitted to the Texas Commission on Environmental Quality due to the recent changes to the District's Drought Contingency Plan. Mr. Abshire estimated a cost of $1,000 for Jones &. Carfer to prepare the updated EPP. 001 56925 6
Mr. Absliire then reviewed the results of the annual Water Plant inspections conducted in December 2013, a copy of which inspection report is attached to the Engineer's Report. Mr. Abshire stated that the suggested repairs will cost approximately $75,000 and added that Jones &. Carter will update the District's Capital Improvement Plan (the "CIP") to reflect the work. Mr. Brooks then exited the meeting at 6:32 p.m. Concerning the inspection of the Water Plant No. 2 glass-lined ground storage tank ("GST") by Texas Aquastore (the manufacturer of the glass-lined GST), Mr. Abshire noted that the cost estimate for repairs to the District's glass-lined GST is not included in the cost estimate for Water Plant inspections. Mr. Abshire noted that the cost estimate for repairs to the glasslined GST is currently not included in the cost estimate for the Water Plant inspections' Mr, Abshire reported that the glass-lined GST will most likely need repairs on the interior of the tank, including blasting and recoating and bolt replacement. A discussion ensued regarding the period of useful life for various types of GSTs, including bolted steel, welded steel, glass-lined and concrete. Mr. Shackelford stated that a 500,000 gallon concrete GST is the best value over the life of the tank. Director Simpson then asked if the Bridgestone interconnect project is over budget. Mr. Abshire responded that the low bid was $130,000, which was higher than the engineer's estimate of $100,000 for the project due to the meter requirement, but that the contractor is currently on budget. Mr. Shackelford went on to report that the booster pumps at the Water Plants need to be inspected and recommended that when the pumps are pulled for inspection, they should be refurbished. Mr. Hays then estimated that the rebuild work would cost $6,000 to $10,000 per pump. Mr. Hays then recommended that one (1) pump with the longest running time be pulled ãt.uih plant site. A discussion then ensued regarding whether to authorize the rebuilding of the booster pumps. The Board concurred that the oldest booster pump at Water Plant No. 1 should be inspected and refurbished. Mr. Abshire next handed out an instruction sheet and the passwords to the Board to access the District's Geographic Information System' Upon motion by Director Simpson, seconded by Director Stoebner, after full discussion and the question being put to the Board, the Board voted unanimously to approve the Engineer's Report, to approve the use of a battery power system for the emergency interconnect with Bridgestone, to approve awarding the construction contract for the SWQMP to Environmental Allies in the amount of 53,180 per year, to authorize Jones & Carter to update the District EPP, to approve the annual Water Plant Inspections Results repoft, and to authorize the inspection and refurbishing of the oldest booster pump at Water Plant No. l. Director Chamberlain then announced that he has asked Mr. Shackelford to consider, when appropriate, reducing the number of meetings he attends due to the increase in Mr. Shackelford's hourly rate. 00 I 56925 7
DISCUSS PROPOSED TO DIS RATE ORDER RELATED TO WATER TES AND WATER S CHARGES Mr. Abshire then reviewed a Water Rate Comparison chaft, a copy of which is attached hereto, a d explained that Plan A represents what the Board was considering at the special meeting of January 22,2014. Director Chamberlain then reviewed Plan B that is also reflected on the comparison chart. Director Simpson stated that he was not in favor of the Plan A rate structure and stated that he prefers the Plan B structure. Director Day noted that her goal and desire is to keep the rates for the usage tier 0-15,000 gallons low, which both Plan A and Plan B do. Director Winkler then asked Mr. Shackelford if the District is losing money with the cunent rate structure. Mr. Shackelford responded that in his opinion, the District's sewer rate should be at least $30 for 0-15,000 gallons of water usage and it is currently at $15 for such amount of usage. Mr. Shackelford added that it appears that the District may not be charging enough to.ouèr the District's cost to produce water. Further discussion ensued. Director Stoebner stated that he is opposed to having l0 tiers in the water usage rate structure. Director Chamberlain noted that based on all of the Board members' comments, it does not appear that there is rnuch support for revising the District's water and sewer rates at this time. Director Winkler stated that he would like to look at the NHCRWA credit calculation information from Ms' Jarmon. Director Charnberlain agreed, but noted that the District should not increase the rates during periods of high water usage. Director Day stated that she does not want a maintenance tax in.r.ur. to be required as a result of not implementing water and sewer rate increases. Director Winkler noted that he would prefer to give customers information regarding any change in rates far advance of implementing any such changes. Mr. Shackelford stated that he and Ms. Bobbitt will review the rates with Ms. Jarmon, including the District's rate of surface water usage, and stated that Jones & Carter will also review the CIP regarding other maintenance/operations items that may be required in the near future. The Board then discussed the possibility of implementing a water surcharge designed to target the top users in the District. Director Simpson then noted that it appears that the Board is not willing and/or ready to implement high usage surcharges at this time. DISCUSS OPMENT AND IMP ATION OF A COMMLTNICATIONS PLAN FOR INFORMING/E DI ]CATTNG DISTRICT CI ISTOMERS ABOUT DISTRICT'S HT CONTIN ''DCP' Director Chamberlain then asked about the development and irnplementation of a communications plan for inforrning/educating the District's customers about the District's updated DCP. Director Winkler noted that he would like to defer the matter to the March meeting. DISCUSS WAI, OF CLASSIC M GING LLC (''CLASSIC'') MESSAGING SERVICES AG ITHE ''AGREEMENT'') Ms. Bobbitt next explained that the initial term of the Agreernent was April 20,2013 to April 20, 2014, and that the District must give 60-day notice to Classic if they do not intend to 00 r 56925 8
renew tlie Agreement. Upon motion by Director Winkler, seconded by Director Day, after full discussion and the question being put to the Board, the Board voted unanimously to continue the Agreement with Classic for another term of l2 months. ATTORNEY'S REPORT Ms. Bobbitt reported that she only had the items on the Supplemental Election Agenda to present to the Board. SUPPLEMENTAL ELECTION AGENDA Ms. Bobbitt next reviewed the Supplemental Agenda regarding the upcoming May 10, 201 4 Directors Election. ADOPT ORDER CALLIN DIRECTORS ELECTION Ms. Bobbitt presented an Order Calling Directors Election and noted that the early voting polling place and the Election Day polling place will be at the Klein Volunteer Fire Departrnent -station 1, at 5518 Winding Ridge Drive. Ms. Bobbitt stated that early voting hours will be from 8:00 a.m. to noon and 4:00 p.m. to 8:00 p.m. Ms. Bobbitt stated that Director Stoebner has found four (4) people to serve as election judges and clerks for the election, as follows: Mr. Don Adams as Presiding Judge; Ms. Toni Camp as Alternate Presiding Judge; Ms. YolandaLopez as Early Voting Clerk; and Ms. Kathy Adams as Election Clerk. Upon motion by Director Winkler, seconded by Director Day, after full discussion and the question being put to the Board, the Board voted unanimously to adopt the Order Calling Directors Election, a copy of which is attached hereto. DETERMINE CANV ASS G DATE Ms. Bobbitt next asked the Board to select a date for canvassing the election returns of the May 10,2014 Directors Election. Upon motion by Director Winkler, seconded by Director Day, after full discussion and the question being put to the Board, the Board voted unanimously to canvass the election returns on Friday, May 16, 2014, at 9:00 a.m. DISCUSS. APPROVE AND AU ORIZE EXECUTION OF RENTAL EO AND SALE OF CES AGREEMENT WITH,ECTION SYSTEMS AND SO FTWARE ITHE,'ES&S AGREEMENT'') Ms. Bobbitt next presented the ES&S Agreement for the Board's approval. Ms. Bobbitt stated that the ES&S Agreement provides for one Early Voting ivoltronic voting machine and related equipment and one ivoltronic voting machine and related equipment for Election Day and the cost is $3,986. Upon motion by Director Stoebner, seconded by Director Simpson, after full discussion and the question being put to the Board, the Board voted unanimously to approve and authorize execution of the ES&S Agreement, a copy of which is attached hereto. There being no further business to come before the Board, the meeting was adjourned. 00 I 56925 9
PASSED, APPROVED AND ADOPTED this 6fl'day of March,2074.,.1 u T tt ì, Board of f c't a at ai Ê * 00 r 56925 10