Meeting Minutes 2018-10-16

PARKWAY UTILITY DISTRICT MINUTES OF BOARD MEETING

OCTOBER 16, 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, October 16, 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”); Gary Syzek of Systems Project Management; 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.

Public Comment

The President first opened the meeting to public comment.  As no 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 special meetings held on September 4, 2018 and September 7, 2018, and the regular meetings held on September 18, 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 special meetings held on September 4, 2018 and September 7, 2018, and the regular meetings held on September 18, 2018, as presented.

2018 TAX RATE

Mr. Barner directed the Board to consider various tax-related orders.

The President called the public hearing on the 2018 ad valorem tax rate to order, notice of which was published as required by law.  A copy of the Affidavit of Publication is attached hereto.  The President noted that there were no parties present to offer public comment.  The President then declared that, pursuant to the recommendation of the District’s Financial Advisor, the Board proposed to levy a total tax rate of $0.73 per $100 assessed value for the year 2018, comprised of $0.53 per $100 assessed valuation for debt service purposes and $0.20 per $100 assessed valuation for operations and maintenance purposes.  The public hearing was adjourned.

Director Woods entered the meeting at this time.

ADOPTION OF ORDER SETTING RATE AND LEVYING TAX FOR 2018

Mr. Barner then presented for the Board’s approval and adoption an Order Setting Rate and Levying Tax for 2018 reflecting the levy of a tax rate of $0.53 per $100 of assessed valuation for debt service purposes and $0.20 per $100 of assessed valuation for operations and maintenance purposes, resulting in a total 2018 tax rate of $0.73 per $100 of assessed valuation.  Mr. Barner explained that the debt service tax to be levied at today’s meeting will be for the calendar year ending December 31, 2019, and that the operations and maintenance tax to be levied will be for the District’s fiscal year ending (the “FYE”) December 31, 2019.

Upon a motion by Director Rettig, seconded by Director Balderas, after full discussion and with all Directors present voting aye, the Board approved the Order Setting Rate and Levying Tax for 2018, authorizing a total ad valorem tax rate of $0.73 per $100 assessed value for the year 2018, comprised of $0.53 per $100 assessed valuation for debt service purposes and $0.20 per $100 assessed valuation for operations and maintenance purposes.

AMENDED DISTRICT INFORMATION FORM (“ADIF”)

Mr. Barner then explained that pursuant to Section 49.455 of the Texas Water Code, as amended, the District is required to amend its District Information Form any time information in such form is revised or updated and, therefore, since the District’s 2018 tax rate has been adopted, an amendment to the District Information Form is necessary.  A copy of the ADIF 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 Amended and Restated District Information Form and authorized the Attorney to file the form with the HCRPR and the TCEQ as required by law.

APPOINT TAX ASSESSOR-COLLECTOR

Mr. Barner next reviewed with the Board the Order Appointing Tommy Lee , as the District’s Tax Assessor/Collector.

Upon a motion by Director Rettig, seconded by Director Balderas, after full discussion and with all Directors present voting aye, the Board approved the Order Appointing Tax Assessor/Collector, as presented, appointing Tommy Lee as Tax Assessor/Collector for the District.

ADOPT RESOLUTION CONCERNING TAX COLLECTION

Mr. Barner then reviewed with the Board the Resolution Concerning Tax Collection Procedures and reminded the Board that it adopts such procedures related to rejection of certain tax payment options.

Upon a motion by Director Rettig, seconded by Director Balderas, after full discussion and with all Directors present voting aye, the Board approved the Resolution Concerning Tax Collection Procedures.

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 97.92% of the 2017 taxes have been collected as of September 30, 2018.

Ms. Yanez next reported that the Delinquent Tax Roll is attached to the Tax Assessor-Collector’s Report.

Ms. Yanez then presented the Delinquent Tax Report, a copy of which is attached to the Tax Assessor-Collector’s Report, and reported that termination letters were mailed.  No persons were present for a public hearing regarding delinquent taxes.

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 Tax Assessor-Collector’s Report, as presented; 2) authorized payment of checks numbered 2005 through 2011 from the Tax Account, with check number 1952 being voided; and 3) authorized termination of service due to non-payment of delinquent taxes.

ENGINEER’S Report

Mr. Jenkins first reported that Reddico Construction (“Reddico”) completed installation of the waterline on the east side of Beltway 8 (the “Water Line Loop”) and has hydrostatic tested such line. Mr. Jenkins also reported that Reddico will repair the damaged landscaping at the entrance of the Sunrise Pines subdivision as a punch-list item.  Mr. Jenkins presented Reddico’s Pay Estimate No. 4 in the amount of $29,490.30, a copy of which is attached to the Engineer’s Report, and recommended payment of same.

Regarding the Water Plant (“WTP”) Improvements Project, Mr. Jenkins reported that he is working with the contractor, Tidal Construction, Inc., the structural engineer and MDS to determine when to take the WTP offline.  Mr. Jenkins went on to report that the timing of taking the WTP offline is subject to Greenwood’s WTP being placed back into service after the completion of its ground storage tank (“GST”) project, which is anticipated to be completed by the end of November.

Mr. Jenkins next reported that construction costs for the 24-inch (24″) Sanitary Sewer Rehabilitation Project will be included in the proposed bond application report (“BAR”).

Next, Mr. Jenkins reported that he reviewed the videos of several sanitary sewer lines and recommended the Board authorize the Operator to proceed with the three (3) point repairs and four (4) lead repairs, photographs of which are attached to the Engineer’s Report.  Mr. Chapline stated that MDS can complete the repairs at a cost of $2,500 to $3,000 each.  In response to a question from Director McNeil, Mr. Jenkins explained that the District’s Operating Fund would be the available source of funding for such repairs, which need to be performed as soon as possible.  Mr. Jenkins went on to state that the District’s surplus bond funds from past bond issues (the “Surplus Funds”) would best be allocated to fund costs associated with a cleaning and televising project for sanitary sewer lines in older sections of the District (the “CTV Project”), such as Parkway Forest, costs being estimated at anywhere between $160,000 and $170,000, and that once it is determined the extent of all needed repairs, the costs for such repairs can be included in the next bond issue.  Mr. Jenkins stated that he would like to present a cost estimate and project scope for the CTV Project at the November 20, 2018 Board meeting.  In response to a question from Director McNeil, Mr. Jenkins responded that he does not expect the proposed CTV Project will expend all of the Surplus Funds.  Discussion then ensued regarding the scope of projects to include in the BAR currently under preparation as well as future BARs.  Mr. Jenkins reminded the Board that the District need to submit BAR No. 16 as soon as possible.  Messrs. Chapline and Jenkins again recommended authorizing preparation of a proposal for the CTV Project.

Concerning the Lift Station No. 4 Emergency Sanitary Sewer Manhole Replacement Project, Mr. Jenkins reported that the damaged manhole has been removed and the new manhole is on-site and will be installed once the site is dewatered and the soil compacted.  Mr. Jenkins presented photographs of the manhole, copies of which are attached to the Engineer’s Report, and reviewed same with the Board.

Mr. Jenkins next reported that Jones|Carter expects to complete a draft Flushing Plan for the flushing of the District’s water distribution system at the November 20, 2018 Board meeting.  Mr. Jenkins added that the Flushing Plan will be finalized upon completion of the WTP 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 next reported that Jones|Carter is working on the feasibility study for Global New Millennium (“Global”) for presentation at the November 20, 2018 Board meeting.

Mr. Jenkins then reported that he awaits a deposit from Americas International for costs associated with: 1) annexation costs; and 2) preparation of a feasibility study, which includes costs associated with payment for capacity in the Wastewater Treatment Plant (“WWTP”) Project.

Regarding the Forest Park Apartments (“Forest Park”) Fire Line, Mr. Jenkins reported that he awaits revised plans addressing Jones|Carter’s comments of the plan review.

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.

Mr. Jenkins reported that Jones|Carter continues preparation of BAR No. 16 and plans to complete the draft by the end of the week or first part of next week.  Mr. Jenkins reported that BAR 16 No. will be sent to the Financial Advisor and Attorney for review.  Mr. Jenkins again recommended using Surplus Funds for the CTV Project.

Mr. Jenkins then reported that Jones|Carter is preparing a Capital Improvement Plan and will present a draft at the November 20, 2018 Board meeting.

Upon a motion by Director Rettig, seconded by Director Balderas, 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. 4 in the amount of $29,490.30; 3) authorized the Operator to complete sanitary sewer repairs at seven (7) manholes; and 4) authorized the Engineer to prepare a proposal for the CTV Project.

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 8.48 months’ operating reserve.

Upon a motion by Director Balderas, seconded by Director Rettig, after full discussion and with all Directors present voting aye, the Board approved the Bookkeeper’s Report, as presented; authorized payment of checks numbered 9493 through 9555 from the General Fund; and authorized payment of checks numbered 1754 through 1757 from the Capital Projects Fund.

Operator’s Report

The Operator’s Report was presented by Mr. Chapline, a copy of which is attached hereto.

Mr. Chapline first reported that he received correspondence from the management company for Forest Park regarding sewer charges.  Mr. Chapline stated that Forest Park was affected by Hurricane Harvey and is asking for relief on the base regarding base billing of $13,000 per month, excluding the months since Hurricane Harvey.  Mr. Chapline went on to explain to the Board that the base bill is based on the number of Forest Park’s units. Discussion ensued regarding the effect of an alleged decreased occupancy at Forest Park and the challenges associated with and responsibility for monitoring changes in occupancy at multi-family commercial customers.  At the direction of the Board, Mr. Chapline stated that he would inform Forest Park that the District cannot provide it with any discounts or refunds.  Mr. Chapline noted that he will provide a draft letter to the Attorney for review.

Ms. Yanez exited the meeting at this time.

Mr. Chapline reported that there are 2,425 connections in the District.  Mr. Chapline next reported that the District accounted for 90.0% of water billed to customers.

Repairs and preventative maintenance performed on the WTP, water distribution and sanitary sewer collection systems.

Mr. Chapline then presented the Write-Off List dated September 24, 2018, identifying two (2) accounts totaling $99.04 for the Board’s approval.

Mr. Chapline next presented the Delinquent Letter Accounts Listing Due October 16, 2018, is attached to the Operator’s Report.

In response to a question from Director McNeil, Mr. Chapline discussed a recently damaged fire hydrant and stated that the costs of repairing such hydrant have not been determined at this time.

In response to a question related to MDS’ testing of disinfectant by-products found in the District’s water distribution system, Mr. Chapline stated that most recent testing results have been positive.

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) authorized the Operator to prepare a denial letter to Forest Park regarding sewer charges.

Parkway/Greenwood Joint Facilities report

Mr. Jenkins presented the Joint Facilities Report, a copy of which is attached hereto.

Mr. Barner first reported that work continues on the Amended and Restated Regional Wastewater Treatment Plant (“RWWTP”) Agreement and that he anticipates distributing such agreement prior to the November 20, 2018 Board meeting.

Mr. Jenkins next reported that the Outfall Repair Project is complete and recommended payment of RAC Industries, LLC (“RAC”) Pay Application No. 5 and Final in the amount of $11,986.30, a copy of which is attached to the Joint Facilities Report.

Mr. Jenkins then reported that fine screen (the “Screen”) at the RWWTP is in operation, but that the Screen’s operation is disrupted by large debris collected from both the District and Greenwood’s collection systems.  Mr. Jenkins also reported that a representative of the Screen’s manufacturer has been onsite and plans to install a cutter blade on the Screen to alleviate such disruptions at no cost to the District and Greenwood.  Mr. Jenkins went on to report that Screen’s closeout documents and the Final Pay Application should be presented at the November 20, 2018 Board meeting.

Mr. Jenkins discussed the status of the RWWTP Project’s design and reported that the preliminary engineering for such project continues.  Mr. Jenkins also reported that advertisement of site clearing, grubbing and detention work is scheduled for the first quarter of 2019.  Mr. Jenkins next reported that the TPDES WWTP discharge permit minor amendment was submitted to the TCEQ.

Mr. Jenkins reported that work on the management of identified poorly draining areas near the RWWTP is nearing completion and the report should be presented at the November 20, 2018 Board meeting.

Mr. Jenkins next presented correspondence from the City of Houston (the “City”) that will allow the District and Greenwood to pay the City’s impact fees on the increased amount of surface water to be purchased from the City.

Mr. Jenkins updated the Board regarding the Tidwell Road Improvement Project and discussed the summary of funding for different portions of the project.  Mr. Barner reported that Harris County (the “County”) rejected the District’s and Greenwood’s counter-offer for the County’s purchase of an easement for the RWWTP site for the road widening project.

Mr. Jenkins then reported that the Tidwell Lakes Force Main Project is ongoing and that it is currently estimated that Greenwood can begin sending flow to the Tidwell Lakes WWTP in late November 2018.

Mr. Jenkins then presented a table of estimated wastewater usage for the RWWTP, a copy of which is attached to the Engineer’s Report.  Mr. Jenkins stated that such estimate in usage is based on data received from the Operator related to water consumed by both the District and Greenwood. Messrs. Jenkins and Barner further explained that Greenwood’s usage of wastewater treatment capacity in the RWWTP will decrease once the Tidwell Lakes Force Main is connected.  Discussion next ensued regarding wastewater capacity leased by Greenwood from the District and ongoing monitoring of additional connections to the Greenwood’s wastewater collection system.  Mr. Chapline stated that MDS will continue providing water consumption information to Mr. Jenkins and that he will include in his Operator’s Report information related to Greenwood’s taps and connections.  In response to a question from Director McNeil, Mr. Jenkins stated that he will continue to monitor estimated wastewater usage and discuss such usage with A&S Engineers.

Upon a motion by Director Rettig, seconded by Director Everhart, after full discussion and with all Directors present voting aye, the Board concurred with payment of RAC Pay Application No. 5 and Final in the amount of $11,986.30.

ANNUAL REVIEW OF CONSULTANT CONTRACTS

Discussion next ensued regarding the annual review of consultant contracts.  It was the consensus of the Board to continue individual meetings with each consultant and to begin such meetings in January 2019.

ATTORNEY’S REPORT

Mr. Barner discussed scheduling a joint meeting with Greenwood in November to discuss various joint facilities items, including budgets for such facilities and the Amended and Restated RWWTP Agreement.  The Board and consultants agreed to provide Mr. Barner with potential dates for further discussion with Greenwood.

NOVEMBER 6, 2018 PARK BOND ELECTION (THE “ELECTION”)

The Board and consultants discussed the Election, the District’s Master Park Plan (the “Plan”) and the District’s last Open House for the Election and the Plan, which is scheduled for Wednesday, October 17, 2018, at 6:30 p.m.

Mr. Barner reminded the Board that the Election will be canvassed at the November 20, 2018 Board meeting.

THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, the meeting was adjourned.

PASSED AND APPROVED this the 20th day of November, 2018.

                                                                       

Secretary, Board of Directors

October 16, 2018 Minutes Signature

October 16, 2018 Minutes Signature