PARKWAY UTILITY DISTRICT MINUTES OF BOARD MEETING
SEPTEMBER 18, 2018
The Board of Directors (the “Board” or “Directors”) of Parkway Utility District (the “District”) met in regular session, at 6:30 p.m., at 12843 Tidwell Road, Houston, Texas, on Tuesday, September 18, 2018, 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”); Delia Yanez of Assessments of the Southwest (“Tax Assessor-Collector”); Bradley Jenkins of Jones|Carter (“Engineer” or “Jones|Carter”); Charlie Chapline of Municipal District Services (“Operator” or “MDS”); Bill Blitch of Blitch Associates, Inc. (“Financial Advisor”); Gary Syzek of Systems Project Management; Greg East of Perdue Brandon Fielder Collins & Mott, L.L.P. (“Delinquent Tax Attorney”); Elliot M. Barner, attorney, and Diane F. Brewer, paralegal, of Radcliffe Bobbitt Adams Polley PLLC (“Attorney” or “RBAP”); and all persons on the attached attendance roster.
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.
Public Comment
The President first opened the meeting to public comment.
Michelle Green introduced herself to the Board and reported that Direct Waste Solutions, Inc. (“Direct Waste”) was not consistently collecting trash from her property on the District’s scheduled collection days of Wednesday and Saturday. Discussion then ensued regarding the different types of waste that Direct Waste collects on behalf of the District.
In response to a question from Mr. Barner, Ms. Green described the uncollected waste as construction waste. Director Balderas and Mr. Barner then explained to Ms. Green that Direct Waste does not collect contractor/construction waste as part of its contract with the District and that it is the responsibility of the contractor or the property owner to have construction waste removed from a property.
Director McNeil next informed Ms. Green that Harris County Commissioner Precinct 2 Commissioner Rodney Ellis’ office (“Precinct 2”) had collected construction waste in the District on several occasions following Hurricane Harvey (“Harvey”) and that going forward, any requests from Precinct 2 residents for collection of construction debris related to Harvey will be handled on a case-by-case basis. Director McNeil recommended that Ms. Green contact Precinct 2 directly about the collection of such construction waste.
Ms. Green next requested explanation of a notice she recently received regarding the District’s water supply. Mr. Chapline explained that the notice is related to the level of disinfectant by-products (“DBP”) found in the District’s water distribution system (the “System”) during the District’s testing in the 2nd quarter of 2018. Mr. Chapline further explained that the District sent such notice to customers pursuant to Texas Commission on Environmental Quality (“TCEQ”) requirements related to DBP levels, which may sometimes exceed the maximum level allowed during warmer weather in systems that operate using surface water. Mr. Chapline added that the District was testing and flushing the System more frequently to ensure DBPs did not exceed maximum levels.
As no further public comments were offered, the President instructed the Board to proceed with the agenda.
MINUTES
The President then directed the Board to consider the approval of the minutes of the workshop meeting held on July 12, 2018, and the regular meetings held on July 17, 2018, August 9, 2018 and August 21, 2018. Upon a motion by Director Everhart, seconded by Director Rettig, after full discussion and with all Directors present voting aye, the Board approved the minutes of the workshop meeting held on July 12, 2018, and the regular meetings held on July 17, 2018, August 9, 2018 and August 21, 2018, as presented.
Ms. Green exited the meeting at this time.
FINANCIAL ADVISOR’S REPORT
Mr. Blitch then presented the 2018 tax rate recommendation and a summary of the District’s tax rate history, copies of which are attached hereto.
Mr. Blitch explained that he is recommending that the Board levy a total 2018 tax rate between $0.73 and $0.765 per $100 of assessed valuation. Mr. Blitch explained that the proposed tax rate would be comprised of between $0.53 and $0.577 for debt service purposes and between $0.20 and $0.188 for operations and maintenance purposes. Mr. Blitch noted that $0.91 per $100 of assessed valuation is the maximum total tax rate that can be set without subjecting the District to a potential rollback election.
Mr. Blitch next explained that the District’s 2018 taxable value is approximately $336,074,338, of which approximately $38,197,907 is still uncertified by the Harris County Appraisal District. Mr. Blitch noted that the 2017 certified value was $335,505,911.
Mr. Blitch went on to explain the basis for his recommendation, noting that although the District’s average homestead value increased by 2.97% from the 2017 average value, the overall property value increase from 2017 was just 0.17%. Mr. Blitch further noted that the 2018 average home value is $116,660, compared to the average home values of $113,330 in 2017. Mr. Blitch also stated that: 1) a $0.73 total tax rate would mean the average homeowner would pay approximately $20.00 more in District taxes as they paid in 2017; 2) a $0.765 total tax rate would mean the average homeowner would pay approximately $52.00 more in District taxes than in 2017; and 3) a $0.91 total tax rate would mean the average homeowner would pay approximately $204.00 more in District taxes than in 2017.
A discussion then ensued regarding the 2018 tax rate recommendation.
Upon a motion by Director Rettig, seconded by Director Balderas, after full discussion and with all Directors present voting aye, the Board voted to: 1) propose a total 2018 tax rate of $0.73 per $100 assessed valuation; and 2) authorize Ms. Yanez to publish notice of the proposed tax rate and the public hearing date on such tax rate at least seven (7) days prior to the public hearing date set for the October 16, 2018 Board meeting.
Mr. Blitch exited the meeting at this time.
Tax Assessor-Collector’s Report
Ms. Yanez presented to and reviewed with the Board the Tax Assessor-Collector’s Report, a copy of which is attached hereto. Ms. Yanez reported that 97.48% of the 2017 taxes have been collected as of August 31, 2018.
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 letters regarding service termination for non-payment of 2017 delinquent taxes had been sent out. Mr. East also reported that the Estate of Pearlie D. Baldwin requested a payment arrangement upon receipt of such letter.
Mr. Barner next informed the Board and Mr. East that the requisite public hearing on termination of water service had not been placed on the agenda for the Board meeting because Perdue Brandon had not notified RBAP that termination letters had been mailed out. Mr. Barner informed Mr. East that water termination letters will need to be resent notifying holders of delinquent tax accounts that the requisite public hearing will be held on October 16, 2018.
Upon a motion by Director Balderas, seconded by Director Rettig, after full discussion and with all Directors present voting aye, the Board approved the Tax Assessor-Collector’s Report, as presented; and authorized payment of checks numbered 1989 through 2004 from the Tax Account, with check number 1997 being voided.
Upon a motion by Director Rettig, seconded by Director Woods, after full discussion and with all Directors present voting aye, the Board: 1) approved the Delinquent Tax Report; 2) authorized a public hearing on termination of water service to 2017 delinquent tax accounts for Tuesday, October 16, 2018, at 6:30 p.m.; and 3) accepted the payment plan discussed during the Delinquent Tax Attorney’s Report.
ENGINEER’S Report
Mr. Jenkins first reported that construction by Reddico Construction (“Reddico”) on the waterline on the east side of Beltway 8 (the “Water Line Loop”) is nearing completion. Mr. Jenkins presented Reddico’s Pay Estimate No. 3 in the amount of $419,047.11, a copy of which is attached to the Engineer’s Report, and recommended payment of same.
Regarding the Water Plant Improvements Project, Mr. Jenkins reported that this project is currently on hold until October 2018 to avoid taking the Water Plant offline during months of high usage.
Mr. Jenkins next presented Jones|Carter’s findings after its review of cleaning and televising videos in preparation for the 24-inch (24″) Sanitary Sewer Rehabilitation Project. Mr. Jenkins recommended the rehabilitation of a sanitary sewer manhole and presented photographs of the condition of such manhole and estimated costs of rehabilitation such manhole.
Concerning, the Lift Station No. 4 Emergency Sanitary Sewer Manhole Replacement Project, Mr. Jenkins reported that Jones|Carter submitted a letter to the TCEQ requesting approval to proceed with such project on an emergency basis, a copy of which is attached to the Engineer’s Report. Mr. Jenkins also reported that Jones|Carter sent contracts to Reddico in the amount of $99,354.40. Mr. Jenkins went on to report that Jones|Carter and RBAP have reviewed the contracts, bonds and insurance for the project. Mr. Jenkins added that Reddico has expedited the fabrication of the manhole and plans to begin work the week of September 24, 2018.
Mr. Jenkins next reported that Jones|Carter expects to complete a draft Flushing Plan for the flushing of the District’s System at the November Board meeting. Mr. Jenkins added that the Flushing Plan will be finalized upon completion of the Water Plant Improvements Project.
Regarding Sunrise Plastic (“Sunrise”), Mr. Jenkins reported that Jones|Carter understands that Sunrise is evaluating a location for the private force main needed to serve Sunrise. Mr. Jenkins also reported that Jones|Carter informed Sunrise that the District will require funds for the waterline extension required to serve Sunrise before beginning design of such extension. Mr. Jenkins noted that he understands a deposit has not been received from Sunrise as of the date of the meeting.
Mr. Jenkins next reported that the District received a $6,500 deposit from Global New Millennium (“Global”) to update the feasibility study to serve the tract and Jones|Carter will update the feasibility study for presentation at the November Board meeting.
Mr. Jenkins then reported that Jones|Carter is working on the water distribution model and will perform field testing for the Elevated Storage Tank Variance Alternate Capacity Request once the new booster pumps are operational.
Regarding the Sheldon Independent School District (“SISD”) Waterline Project, Mr. Jenkins reported that Jones|Carter understands the City of Houston (the “City”) has not approved capacity for SISD. Mr. Barner went on to explain to the Board that he recently met with the City regarding the District’s request for an increase in the amount of surface water purchased from the City and that subsequent to such meeting, the City officially rescinded its commitment to SISD for water capacity. Mr. Barner added that he will continue to monitor the matter and SISD currently does not have water service.
Mr. Jenkins reported that Jones|Carter continues preparation of Bond Application Report No. 16 (“BAR 16”) and plans to complete the draft in October. Mr. Jenkins reviewed the Preliminary Summary of Costs with the Board. Mr. Barner informed the Board that the City has informed him that water impact fees related to the increased surface water will not be required for at least 12 months.
Mr. Jenkins next reported that Jones|Carter received the TCEQ administratively complete letter for the Change in Project Scope and Escrow Release Application (the “Application”) on August 31, 2018, and the TCEQ should complete its review by December 29, 2018. Mr. Jenkins reminded the Board that approval of the Application will reallocate certain funds escrowed under prior bond issuances to pay for the costs of the Regional Wastewater Treatment Plant (“RWWTP”) Project and release of funds from escrow for the Beltway 8 Waterline and Surface Water Transmission Facility land acquisition costs.
Mr. Jenkins then reported that Jones|Carter is preparing a Capital Improvement Plan and will submit a draft at the October Board meeting.
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 Engineer’s Report, as presented; 2) approved Reddico Pay Estimate No. 3 in the amount of $419,047.11; and 3) authorized execution of Reddico construction contracts for the Lift Station No. 4 Sanitary Sewer Manhole Replacement.
Bookkeeper’s Report
The Bookkeeper’s Report and Investment Report were presented to and reviewed with the Board by Mrs. Bailey, copies of which are attached hereto. Mrs. Bailey reported that the District has approximately 6.77 months’ operating reserve.
Mrs. Bailey inquired regarding the $95 balance owed on the 23.5 acre tract-East Beltway 8 and Tidwell Road account. Discussion ensued. It was the consensus of the Board to write-off the $95 balance owed on the account.
Next, Mrs. Bailey reported that the Forest Park Apartments-Fire Line account has a balance owed of $441.75. Information will be provided to the Bookkeeper so a letter can be written to Forest Park Apartments requesting a $1,000 deposit for additional review costs.
Mr. Barner then explained that the Texas Public Funds Investment Act requires the Board to review the District’s Investment Policy on an annual basis and presented the Order Reviewing Investment Policy and Investment Strategies for the Board’s consideration and adoption.
The Board next considered amending the List of Qualified Brokers for the District’s Investment Policy. Mr. Barner presented an Order Amending List of Qualified Brokers, a copy of which is attached hereto.
Upon a motion by Director Rettig, seconded by Director Balderas, 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 9418 through 9489 from the General Fund; 2) authorized payment of checks numbered 1751 through 1753 from the Capital Projects Fund; 3) approved the Order Reviewing Investment Policy and Investment Strategies; and 4) approved the Order Amending List of Qualified Brokers.
Operator’s Report
The Operator’s Report was presented by Mr. Chapline, a copy of which is attached hereto.
First, Mr. Chapline presented the Fire Hydrant Survey, a copy of which is attached hereto, and reviewed same with the Board. Mr. Chapline noted that the map does not include the new fire hydrants located along Beltway 8 Service Road. Mr. Chapline recommended repairing 30 hydrants and installing road reflectors at a total cost of $13,000.
In response to a question from Mr. Syzek, Mr. Chapline explained that Harris County is responsible for replacing the stormwater inlet grates, but has not recently replaced any such grates within the District to his knowledge. Mr. Chapline added that such inlet grates cost approximately $200 each.
Mr. Chapline reported that there are 2,425 connections in the District. Mr. Chapline next reported that the District accounted for 84.1% of water billed to customers.
Repairs and preventative maintenance performed at the water plant, water distribution system, sanitary and storm sewer collection systems, and lift station were next discussed.
Mr. Chapline then reported concerning the Write-Off List dated August 24, 2018, identifying two (2) accounts totaling $120.40 for the Board’s approval.
Mr. Chapline next reported that the Delinquent Letter Accounts Listing Due September 18, 2018, is attached to the Operator’s Report.
Upon a motion by Director Everhart, seconded by Director Rettig, after full discussion and with all Directors present voting aye, the Board: 1) approved the Operator’s Report, as presented; 2) authorized write-offs and terminations; and 3) approved repairs to 30 fire hydrants and installation of road reflectors.
Director Everhart exited the meeting at this time.
Parkway/Greenwood Joint Facilities report
Mr. Jenkins reviewed the Joint Facilities Report, a copy of which is attached hereto. Mr. Jenkins first explained that A&S Engineers, Inc. (“A&S”) and Jones|Carter reviewed the final capacity needs of both the District and Greenwood Utility District and that the District’s capacity ownership in Phase One of the RWWTP Expansion Project (the “RWWTP Project”) will be 60%. Mr. Jenkins stated that the Joint Facilities Agreement needs to be finalized before BAR 16 is submitted.
Mr. Jenkins next updated the Board regarding the Outfall Repair Project and reported that Harris County Flood Control District (“HCFCD”) inspected the project on August 16, 2018. Mr. Jenkins presented the HCFCD Post Construction Inspection Satisfactorily Complete Letter, a copy of which is attached to the Joint Facilities Report. Mr. Jenkins reported that the project closeout documents and the final pay application will be presented at the next Board meeting. Mr. Jenkins added that the Operator will begin mowing and maintaining the cleared outfall route.
Mr. Jenkins then reported that installation of the RWWTP fine screen (the “Screen”) is complete and the Screen is currently operating as designed. Mr. Jenkins reported that a minor transducer issue was found, was modified and is being monitored by the manufacturer of the Screen. Mr. Jenkins also reported that the project closeout documents and the final pay application for the Screen will be presented at the next Board meeting.
Director Everhart re-entered the meeting at this time.
Mr. Jenkins discussed the status of the RWWTP Project’s design and reported that the preliminary engineering for such project continues. Mr. Jenkins presented to and reviewed with the Board A&S’ amended proposal and preliminary opinion of construction costs and proposed project schedule for the RWWTP Project (the “Amended Proposal”), a copy of which is attached to the Joint Facilities Report. Mr. Jenkins explained that the Amended Proposal reflects an increase on costs of Phase One of the RWWTP, such increase being necessitated by the District’s increase capacity needs for anticipated future development. Mr. Jenkins recommended the Board approve the Amended Proposal. Mr. Jenkins then distributed the proposed site layout for the RWWTP, a copy of which is attached to the Joint Facilities Report.
Mr. Jenkins reported that work on the management of identified poorly draining areas near the RWWTP is ongoing and additional survey work has been required to complete the work.
Mr. Jenkins updated the Board regarding the Tidwell Road Improvement Project and presented Preliminary Opinion of Probable Cost for the Harris County Infrastructure Improvements for waterline upgrades, storm sewer extensions and driveway additions, a copy of which is attached to the Joint Facilities Report.
Upon a motion by Director Everhart, seconded by Director Balderas, after full discussion and with all Directors present voting aye, the Board approved the Joint Facilities Report, including the Amended Proposal with A&S for the RWWTP Project.
ASSOCIATION OF WATER BOARD DIRECTORS (“AWBD”)
Mr. Barner next requested the Board consider authorizing Directors’ attendance at the AWBD 2018 Fall Seminar at the Omni Houston Hotel at Westside on Tuesday, October 30, 2018, at 7:00 p.m., and the AWBD Mid-Winter Conference at the JW Marriott in Austin, Texas, on Friday, January 25, 2019, through Saturday, January 26, 2019.
NOVEMBER 6, 2018 PARK BOND ELECTION (THE “ELECTION”)
The Board next discussed the Election and information it would like to present to voters within the District regarding such election. Mr. Barner next discussed early and regular voting information with the Board. Extensive discussion ensued on the structure of open house events to be held in order to provide information on the Election.
Upon a motion by Director Rettig, seconded by Director Balderas, after full discussion and with all Directors present voting aye, the Board agreed to schedule the following meetings for the Election: 1) Open House Workshop on October 3, 2018, at 6:30 p.m.; 2) Open House on October 10, 2018, at 6:30 p.m.; and 3) Open House on October 17, 2018, at 6:30 p.m.
THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned.
PASSED AND APPROVED this the 16th day of October, 2018.
Secretary, Board of Directors
September 18, 2018 Minutes Signature