PARKWAY UTILITY DISTRICT MINUTES OF BOARD MEETING
SEPTEMBER 19, 2017
The Board of Directors (the “Board” or “Directors”) of Parkway Utility District (the “District”) met in regular session, at 6:30 p.m., at the Monahan Elementary School located at 8901 Deep Valley Drive, Houston, Texas, on Tuesday, September 19, 2017, pursuant to notice of said meeting posted in accordance with Chapter 551 of the Texas Government Code; whereupon the roll was called of the members of the Board, to-wit:
Brenda McNeil – President
Alphonso P. Rettig, Jr. – Vice President
Jennifer Balderas – Secretary
Ron Everhart – Assistant Secretary
Gloria M. Woods – Director
All members of the Board were present. Also attending were: Diane Bailey of McLennan & Associates, L.P. (“Bookkeeper”); Donna Bryant of Assessments of the Southwest (“Tax Assessor-Collector”); John Sherrington of Sherrington-Humble LLC (“Engineer” or “S-H”); Charlie Chapline and Rebecca Marcucci of Municipal District Services (“Operator” or “MDS”); Deputy Terry Ganey of the Harris County Constable’s Office, Precinct No. 3 (the “Constable”); Bill Blitch of Blitch Associates, Inc. (“Financial Advisor”); Greg East of Perdue Brandon Fielder Collins & Mott, L.L.P. (“Delinquent Tax Attorney”); Natalie Barnaby, Administrative Service Manager of Eco Waste and Recycling (“Eco”); and Elliot M. Barner, attorney, and Diane F. Brewer, paralegal, of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”).
The President, after finding that the notice of the meeting was posted as required by law and determining that a quorum of the Board of Directors was present, called the meeting to order and declared it open for such business as may come before it.
The President then opened the meeting to public comment. As no public comments were offered, the President instructed the Board to proceed with the agenda.
Eco Waste & Recycling REPORT
Ms. Barnaby presented the Eco Monthly Report, a copy of which is attached hereto, and reported that she had driven through the District before the meeting to check the status of storm debris in the District. Ms. Barnaby next reported that she has spoken with various homeowners association (“HOA”) representatives regarding garbage throughout the District. Ms. Barnaby discussed Eco’s concerns with aggressive District residents and an issue that occurred with recycling being included with regular trash. Director McNeil stated that Harris County Precinct One (“Precinct 1”) has been in the area, but collecting storm debris has been and will continue to be a slow process. Ms. Barnaby reported that some residents have requested additional bins and Eco will focus on distributing bins next week. Director Balderas asked why recycling is not being collected and Ms. Barnaby responded that recycling services will begin on Thursday, September 21, 2017. Director McNeil stated that Eco was helpful in collecting storm debris at homes in Sunrise Pines that back up to commercial property. Ms. Barnaby stated that if the storm debris could be easily handled, Eco picked it up. Ms. Barnaby added that Eco is also going to try roll-off containers next week.
Patrol Service Report
Deputy Ganey presented and reviewed with the Board the Patrol Service Report for August 2017, a copy of which is attached hereto.
Ms. Marcucci entered the meeting at this time.
Deputy Ganey discussed how well law enforcement and residents worked together during Hurricane Harvey (the “Hurricane”).
Deputy Ganey exited the meeting at this time.
2017 Tax Rate Study
Mr. Blitch presented the 2017 Tax Rate Study, a copy of which is attached hereto. Mr. Blitch reviewed with the Board his analysis of the District’s debt service requirements. Based on the District’s existing debt service requirements and anticipated future expansion and rehabilitation projects, Mr. Blitch recommended the Board consider a tax rate of $0.73 per $100 of assessed value for the year 2017, comprised of $0.55 for debt service purposes and $0.18 for operations and maintenance purposes. Mr. Blitch noted that the recommended 2017 tax rate is a $0.06 reduction from the 2016 tax rate.
Discussion ensued regarding the tax rate and the Board requested that the rate be set at $0.73 for publication with a final determination to occur at the October 17, 2017 Board meeting. Mr. Blitch stated that the rate of $0.73 will be published as provided by law.
Director McNeil recalled that after Tropical Storm Allison, the District approached the Harris County Appraisal District (“HCAD”) about a reevaluation of property values. Mr. Blitch responded that the District could ask HCAD to reevaluate effective September 1, 2017, but that in his opinion it would not result in a benefit to property owners since any such adjustment would only be for the last three (3) months of the 2017 tax year. Mr. Barner stated that the Board could adopt a resolution requesting that HCAD reevaluate property within the District if it so chooses. Mr. Blitch and Ms. Bryant pointed out that since tax statements will be sent out to property owners immediately after the tax rate is set at the District’s next meeting, any subsequent reevaluation by HCAD would require the District to send out a supplemental tax statement identifying any adjustments for the remainder of the 2017 tax year, which would increase cost to the District. Mr. Blitch further pointed out that property owners are entitled to protest the value of their property to HCAD directly.
Upon motion by Director Rettig, seconded by Director Everhart, after full discussion and with all Directors present voting aye, the Board authorized publication of the proposed tax rate, which evidences a tax rate of $0.73 per $100 of assessed value for the year 2017, comprised of $0.55 for debt service purposes and $0.18 for operations and maintenance purposes, and approved a public hearing at the regular meeting of Tuesday, October 17, 2017, at 6:30 p.m.
The President next directed the Board to consider the approval of the minutes of the regular meeting held on August 15, 2017. Upon motion by Director Rettig, seconded by Director Woods, after full discussion and with all Directors present voting aye, the Board approved the minutes of the regular meeting held on August 15, 2017, as presented.
Systems Project Management Report
Mr. Syzek first discussed the Hurricane’s impact on the District, as well as the partnership of the communities within the District with Precinct 1. Mr. Syzek updated the Board regarding heavy trash removal by Precinct 1.
Mr. Syzek next discussed flood damage to the District Administration Building (the “District Building”) and reported approximately eight inches (8″) of water entered the District Building. It was reported that MDS filed an insurance claim on behalf of the District. Ms. Marcucci reported that she attended a meeting earlier in the day and the Federal Emergency Management Agency (“FEMA”) has grant money available for future improvements that are not covered by insurance. Ms. Marcucci went on to report that MDS will file a claim with FEMA. Mr. Syzek reported that everything has been removed from the District Building so repair can begin. Mr. Syzek also reported that the District’s walking trail looks okay.
Mr. Syzek discussed storm event emergency communications and reported that the District’s drinking water was safe during the Hurricane. Ms. Marcucci reported that a seminar will be presented at the Association of Water Board Directors Mid-Winter Conference at 3:00 p.m. on January 26, 2018.
Mr. Syzek reported that the District’s joint facilities with Greenwood Utility District (“Greenwood”) flooded during the Hurricane.
Mr. Syzek next updated the Board regarding the outfall pipe construction at the Regional Wastewater Treatment Plant (“RWWTP”).
Mr. Syzek reported that Apache Corporation will donate 100 trees to the District with a tentative delivery date of March 2018.
Director McNeil discussed questions of Sunrise Pines residents concerning entrance and exit at the Beltway 8 service road. Mr. Sherrington reported that Harris County (the “County”) is back to the drawing board regarding the proposed high school’s entrance to Beltway 8. Mr. Barner reported that Mr. Sherrington previously contacted Pulte Homes regarding stub-outs in the subdivision for future roads. Mr. Barner noted that he is encouraged that the County is speaking with Sheldon Independent School District about the new artery. Director Everhart asked who was responsible for the drawings of Phase 5 and plans for an outlet. Mr. Sherrington explained the submittal process of plats to the County by developers. Director Everhart inquired regarding the District’s recourse. Extensive discussion ensued.
Tax Assessor-Collector’s Report
The Tax Assessor-Collector’s Report was presented by Ms. Bryant, a copy of which is attached hereto. Ms. Bryant first reported that 97.07% of the 2016 taxes have been collected as of August 31, 2017.
Ms. Bryant next reported that the Delinquent Tax Roll is attached to the Tax Assessor-Collector’s Report.
Mr. East then presented the Delinquent Tax Report, a copy of which is attached to the Tax Assessor-Collector’s Report. Mr. East reported that before the Hurricane, notices were sent to property owners with delinquent 2016 tax accounts that the hearing on termination of service for such delinquent accounts would be held at tonight’s meeting; Mr. East asked the Board if it wished to postpone such hearing for 30 days in order to give such property owners additional time to pay such delinquent accounts.
Upon motion by Director Everhart, seconded by Director Balderas, after full discussion and with all Directors present voting aye, the Board: 1) approved the Tax Assessor-Collector’s Report, as presented; 2) authorized payment of checks numbered 1888 through 1889 from the Tax Account; and 3) postponed the public hearing authorizing termination of delinquent tax accounts until the October 17, 2017 Board meeting.
Ms. Bryant and Ms. Barnaby exited the meeting at this time.
Mr. Sherrington reviewed the Engineer’s Report, a copy of which is attached hereto. Concerning the Beltway 8 Waterline Extension Project, Mr. Sherrington reported that the latest topographic survey data was received from Texas Engineering and Mapping (“TEAM”) and S-H is in the process of updating the design drawings for submittal to the governing authorities for review and approval. Mr. Sherrington reported that S-H received, reviewed and approved TEAM’s Invoice No. 8332 in the amount of $3,950 which was forwarded to the District’s Bookkeeper for payment.
Next, Mr. Sherrington reported that Gary Hornberger emailed S-H concerning the status of construction of such project because he had a developer interested in purchasing property near such project. Mr. Sherrington stated that he informed Mr. Hornberger that S-H is in the process of revising the design drawings for approval by the City and the County. Mr. Sherrington further stated that he reminded Mr. Hornberger that such project only consisted of construction of a water line and that sanitary sewer collection facilities necessary to serve such property would need to be constructed by the developer.
Concerning the ten-inch (10″) Force Main and twelve-inch (12″) Waterline Project along Deep Valley, Mr. Sherrington reported that CES Utilities, Inc. (“CES”) will install new pumps and piping at the Stonefield Terrace Lift Station on Van Hut on September 20, 2017. CES is also expected to install the new driveway for the Parkway Forest Lift Station and correct the sags in the Van Hut ten-inch (10″) gravity sanitary sewer line. Mr. Sherrington next reported that S-H received claims from subcontractors, Ferguson Enterprises, Inc. and Cherry, and forwarded such claims to CES. Mr. Sherrington went on to report that S-H received, reviewed and approved Project Surveillance, Inc.’s Invoice No. 10690 in the amount of $2,470 which was forwarded to the District’s Bookkeeper for payment. Mr. Sherrington also reported that S-H received Pay Estimate No. 7 in the net amount of $74,290 and recommended payment of same to CES.
Mr. Sherrington reported that S-H will schedule a meeting with Pastor Jim Miller of the Parkway Baptist Church to review the property acquisition and reconstruction of Lift Station No. 2 at Tidwell and Deep Valley.
Concerning the Water Plant Improvements Project, Mr. Sherrington reported that S-H conducted a pre-construction conference with Tidal Construction, Inc. (“Tidal”), inspectors and the District’s Operator. Mr. Sherrington next reported that S-H issued the Notice to Proceed to Tidal for September 18, 2017, and Tidal should complete its work on or before June 14, 2018.
Mr. Sherrington then reported that S-H received an email from Greg Robertson of Sunrise Plastic Enterprises, Inc. (“Sunrise Plastic”) requesting a letter documenting that the District will provide wastewater collection services in lieu of its existing septic facilities. Mr. Barner reported that annexation documents were received from Sunrise Plastic.
Mr. Sherrington reported that on behalf of the District and in response to the civil design engineer, S-H prepared and transmitted review comments regarding the Forest Park Apartments.
Upon motion by Director Balderas, seconded by Director Rettig, after full discussion and with all Directors present voting aye, the Board approved the Engineer’s Report, as presented, and approved CES Pay Estimate No. 7 in the amount of $74,290.
Bookkeeper’s Report and Investment Report
The Bookkeeper’s Report and Investment Report were presented to and reviewed with the Board by Ms. Bailey, copies of which are attached hereto. Ms. Bailey reported that the District has approximately 7.63 months’ operating reserve.
The Board next considered amending the List of Authorized Brokers for the District’s investment policy. Mr. Barner presented an Order Amending List of Authorized Brokers, a copy of which is attached hereto.
Director Balderas then asked about paying for recycling services when such services are not being provided by Eco. Director McNeil reminded the Board that Eco collected storm debris after the Hurricane. Mr. Barner stated that the District must pay Eco in accordance with the terms of the District’s agreement with Eco. Director Balderas also discussed paying Donna Rice for cleaning the District Building. Director Rettig indicated that the District Building has not been cleaned and stated that Ms. Rice asked to let her know when her cleaning services are needed.
Upon motion by Director Rettig, seconded by Director Woods, after full discussion and with all Directors present voting aye, the Board approved the Bookkeeper’s Report, as presented, and acted on the following: 1) authorized payment of checks numbered 8599 through 8666 from the General Fund; 2) authorized payment of checks numbered 1679 through 1683 from the Capital Projects Fund; and 3) approved the Order Amending List of Authorized Brokers.
The Operator’s Report was presented by Mr. Chapline, a copy of which is attached hereto. Mr. Chapline first discussed delinquent accounts and penalties. It was the consensus of the Board to charge no late fees or terminate water and sewer service in September 2017 and revisit the matter in 30 days.
Mr. Chapline then reported that the District’s water plant functioned property throughout the Hurricane. Mr. Chapline next reported that the Hurricane did damage two (2) pump motors at the Surface Water Transmission Facility (“SWTF”). Mr. Chapline stated that the SWTF would be place back into operation after such pumps were replaced. Mr. Chapline further reported that the RWWTP flooded during the Hurricane and was inoperable for two (2) days. Mr. Chapline then stated that as a result of the Hurricane, he recommended raising the District’s generators to avoid damage to such generators in the event of future flooding. Ms. Marcucci stated that the District might be able to file an application with FEMA for funding to raise such generators.
In response to a question, Mr. Chapline next discussed costs associated with damaged blower motors at the RWWTP repairs and noted that such repairs are considered minor. Mr. Marcucci added that the District’s boiler and machinery insurance should cover repairs and indicated that claims are being processed.
Next, Mr. Chapline discussed the closure of the payment drop-box at the District Building during repair on such building. An extensive discussion ensued regarding payment options.
Upon motion by Director Balderas, seconded by Director Woods, after full discussion and with all Directors present voting aye, the Board: 1) approved the Operator’s Report, as presented; 2) authorized no late fees or termination of water and sewer service in September 2017; and 3) authorized notification to customers of currently available payment options by: a) placing notice at the District Building; b) including notice in customer bills; c) posting notice on the District’s website; d) sending notice by E-blasts to registered customers; e) sending notice to the HOAs within the District; and f) publishing notice on the Crime Watch Facebook page.
Parkway/Greenwood Joint Facilities
Mr. Sherrington presented the Joint Facilities Report, a copy of which is attached hereto. Mr. Sherrington first reported that S-H reviewed copies of invoices related expenses for the RWWTP and SWTF. Mr. Sherrington stated that the Attorney, Bookkeeper and Operator responded to questions related to such invoices and that Mr. Sherrington had no issues with such invoices.
Regarding the RWWTP, Mr. Sherrington reported that as previously reported by the Operator, the RWWTP was inoperable for a couple of days because of the Hurricane. Mr. Sherrington further explained that the blower motors required repaired and the lift station controls were cleaned. Mr. Sherrington also reported that CenterPoint Energy is restoring electrical power and that currently, the RWWTP is powered by its generator.
Mr. Sherrington next reported that Greenwood provided S-H with a copy of the new RWWTP permit recently issued by the TCEQ. Mr. Sherrington noted that the permit expires at midnight on August 1, 2022.
Mr. Sherrington then presented RAC Industries, LLC (“RAC”) Pay Estimate No. 1 in the amount of $117,149.37 for the outfall repair project and noted the District’s share is $58,574.69. Discussion ensued.
Mr. Sherrington next reported that after the District’s August 22, 2017 meeting, he informed Greenwood’s engineer by email that the Board was not in favor of consenting to Greenwood’s construction of a temporary force main within the residential boundaries of the District.
Concerning the County’s Tidwell Road Expansion Project, Mr. Sherrington reported that the County is seeking to purchase a 40′ by 335′ tract of land contiguous to the existing Tidwell Road right-of-way at the northwest corner of the RWWTP.
Mr. Sherrington reported that the booster pump motors and controls at the SWTF required repair and there is no emergency power backup. Mr. Barner reported that he had a conversation with the City before the Hurricane regarding the request for an increase in surface water under the terms of the Surface Water Supply Agreement and that the City was modeling the amount of such request.
Mr. Sherrington next reported that upon S-H’s request, the Operator provided the District’s water consumption by user type for the last twelve (12) months. Mr. Sherrington indicated that S-H will use this information to make a recommendation to pay back Greenwood and request an increase in groundwater pumpage from the Harris-Galveston Subsidence District with the next permit renewal application. Mr. Sherrington noted that he would like the District to pay back Greenwood in kind and
Mr. Barner asked the Directors and Consultants for three (3) available dates for a joint meeting with Greenwood during the first or second week of October. Mr. Barner noted that both Districts’ Bookkeepers, Operators and Engineers should attend the joint meeting. The Board and Consultants are available on October 13, October 19 and October 26.
Mr. Barner reported that the condemnation hearing for acquisition of the proposed new surface water facility site is scheduled for September 28, 2017.
Upon motion by Director Balderas, seconded by Director Woods, after full discussion and with all Directors present voting aye, the Board approved the Joint Facilities Report and approved RAC Pay Estimate No. 1 in the amount of $117,149.37 for the outfall repair project.
BUILDING SUPERINTENDENT’S REPORT
Director Rettig first reported that the undamaged contents of the District Building are in storage. Director Rettig next presented a proposal from Way-Tech, Inc. (“Way-Tech”) in the amount of $50,534 for the District Building Repair Project, a copy of
which is attached hereto. Director Rettig reported that subject to the Board’s approval
of the proposal, Way-Tech is ready to begin such project. Director Rettig discussed the scope of work to be performed and recommended the carpet flooring be replaced
with tile. Director Rettig then presented photos of tile he recommended. Mr. Sherrington recommended that all doors in the District Building be replaced. Director Rettig indicated that he would ask Way-Tech for an estimate for such doors. Mr. Chapline stated that he has communicated with the District’s insurer and no adjuster has been appointed to-date. Discussion ensued, including Way-Tech’s approach for any necessary mold remediation and documentation needed for the District’s insurer. Director Rettig reported that he has before and after photographs of the District Building that evidence the damage to the District Building as a result of the Hurricane. Director Rettig next reported that Way-Tech has a dumpster for the debris removed from the District Building. Mr. Sherrington requested that the dumpster not encroach on the Water Plant Improvement Project. Director Everhart stated that after sheetrock is removed from the District Building, Way-Tech must be certain to properly dry out and chemically treat the wood framing of the District Building. Director Rettig responded that Way-Tech will dry out the District Building with industrial fans after the sheetrock is removed. Ms. Bailey asked about progress payments to Way-Tech and if checks need to be executed at tonight’s meeting to be held by the Bookkeeper. Mr. Chapline stated that he will follow-up with the insurance company regarding the assignment of an adjuster.
Upon motion by Director Rettig, seconded by Director Everhart, after full discussion and with all Directors present voting aye, the Board: 1) approved the Way-Tech proposal in an amount not to exceed $55,000, subject to receipt of a Form 1295 Certificate of Interested Parties; and 2) authorized the Bookkeeper to write checks payable to Way-Tech to be held by the Bookkeeper for progress payments.
DISTRICT WEBSITE REPORT
Director Balderas reported that more residents have signed up for e-mail alerts.
Mr. Barner first discussed the Sunrise Plastic annexation and requested that the Board accept the Petition for Annexation of Land and approve the Petition for Consent to the City of Houston (the “City”), copies of which are attached hereto.
Next, Mr. Barner discussed amendments to the Amended and Restated Order Designating Investment Officer and Establishing Rules, Policies and Code of Ethics for the Investment of District Funds and Review of Investments (the “Investment Policy”) in order to comply with recently enacted changes to the Public Funds Investment Act, a copy of which is attached hereto.
Mr. Barner then discussed designating additional meeting places at the Sheldon Community Fire and Rescue Station 1 and Sheldon Community Fire and Rescue Station 3 as additional meeting places of the District. Director Balderas indicated that she would provide Mr. Barner with addresses for both fire stations.
Mr. Barner next requested the Board’s authorization of the Directors’ attendance at the Association of Water Board Directors-Texas (“AWBD”) 2017 Fall Seminar on Wednesday, October 25, 2017, and Mid-Winter Conference in Dallas, Texas, on Friday, January 26, 2018, through Saturday, January 27, 2018.
Discussion next ensued regarding the Directors’ attendance at community-related meetings, including Crime Watch meetings. Mr. Barner explained that director attendance at community-related meetings does not mean that such meetings are considered District meetings for the purposes of the Texas Open Meetings Act. Mr. Barner asked the Board to clarify if it considers the Crime Watch meetings as District meetings and if it desires to continue to post agendas and prepare minutes for such meetings. Mr. Barner noted that if the Board no longer wants agendas posted and minutes prepared, there can be no deliberation about District business by Directors in attendance. Director Balderas stated that it was her opinion that if the Board is conducting the Crime Watch meetings, then such meetings should not be considered as District business. Mr. Barner stated that if the Board considers such meetings to involve District business, then the District should continue the current process of posting agendas and preparing minutes. It was the consensus of the Board that the Crime Watch meetings involve District business are should be considered as District meetings. Mr. Barner stated that his office will continue to prepare agendas and minutes.
Upon a motion by Director Balderas, seconded by Director Rettig, after full discussion and with all Directors present voting aye, the Board: 1) approved the Attorney’s Report; 2) accepted the Petition for Annexation of Land and approved the Petition for Consent to the City; 3) approved the Investment Policy; 4) approved designating Sheldon Community Fire and Rescue Station 1 and Sheldon Community Fire and Rescue Station 3 as additional meeting places of the District; and 5) authorized the Directors’ attendance on behalf of the District.
THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned.
PASSED AND APPROVED this the 17th day of October, 2017.
Secretary, Board of Directors