Minutes February 19, 2007

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=125 BGCOLOR="#996699" TEXT="#080000" bgproperties="fixed" background="1da467d1erlcll.gif"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="Arial" ><B>Cornerstones Municipal Utility District</B></FONT><B>     </B><B>|     </B><A HREF="index.htm" TARGET="_top" TITLE="Cornerstones Municipal Utility District"><U><B>home</B></U></A></div> <div> back to<B>  </B><A HREF="id27.htm" TARGET="_top" TITLE="Archived Minutes"><U><B>Archived Minutes</B></U></A></div> <div> </div> </td> </tr><tr> <td valign="top" width=190 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <A HREF="id190.htm" TARGET="_top" TITLE="Minutes January 19, 2004"><U>Minutes January 19, 2004</U></A></div> <div> <A HREF="id196.htm" TARGET="_top" TITLE="Minutes February 16, 2004"><U>Minutes February 16, 2004</U></A></div> <div> <A HREF="id197.htm" TARGET="_top" TITLE="Minutes March 15, 2004"><U>Minutes 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February 19, 2007, in accordance with the duly posted notice of said meeting, with a quorum of directors present as follows:</div> <bR> <div> Tony Garza, President</div> <div> Gary Hughes, Vice President  </div> <div> John Irwin, Secretary</div> <div> E.C. Norris, Assistant Secretary</div> <div> Darryl Box, Investment Officer</div> <bR> <div> and being absent: </div> <bR> <div> None</div> <bR> <div> Also present were Kathie Naumow, Recording Secretary; Terry Holland of Myrtle Cruz, Inc.; Brenda McLaughlin of Bob Leared Interests; Dusty Lane of Eco-Resources, Inc.; Marvin Zahradnik of Landev Engineers, Inc.; Mark Brooks of Young & Brooks, Doug Knopka of Cinco LTD, Jan Bartholomew of RBC Dain Rauscher, and Greg Sissel of BKD, LLP.</div> <bR> <div> The meeting was called to order at 7:00 p.m. and declared open for such business as might come before it.</div> <bR> <div> <B><U>APPROVE MINUTES OF PRIOR MEETINGS</U></B></div> <bR> <div>      After discussion, upon motion duly made, seconded and unanimously carried, the Minutes of the January 15, 2007 meeting were approved pending corrections. </div> <bR> <div>  </div> <div> <B><U>QUESTIONS/COMMENTS FROM THE PUBLIC</U></B></div> <bR> <div>      None.</div> <bR> <div> <B><U>APPROVE AUDIT</U></B></div> <bR> <div>      Greg Sissel of BKD, LLP presented the audit report to the Board and answered their questions.  After discussion, upon motion duly made, seconded and unanimously carried, the Board approved the audit of September 30, 2006.</div> <bR> <div> <B><U>REVIEW INVESTMENT POLICIES</U></B></div> <bR> <div>      Mark Brooks asked the Board of Directors if they wanted to make any changes in the investment policy.  After discussion, upon motion duly made, seconded and unanimously carried, the Board decided against making any changes to the District's investment policies and will sign the required documentation.</div> <bR> <div> <B><U>ESTABLISH TAX EXEMPTIONS AND ADOPT TAX COLLECTION PENALTY</U></B></div> <bR> <div>      Brenda McLaughlin of Bob Leared Interests, Inc., the District's tax assessor, advised the Board that it would be appropriate for the District to consider any revisions it wishes to make to the District's tax exemptions for purposes of the 2007 tax year.  After discussion, upon motion duly made, seconded and unanimously carried, the Board adopted the attached Resolution Concerning Exemptions from Taxation, continuing the homestead exemption at the maximum 20% and the additional exemption for persons who are disabled or 65 or over in the amount of $30,000.</div> <bR> <div> Ms. McLaughlin also advised the Board that it would now be appropriate to continue the authorized implementation of the tax collection penalty, pursuant to Sections 33.07, 33.08, and 33.11 of the Texas Property Tax Code.  After discussion, upon motion duly made, seconded and unanimously carried, the Board adopted the attached Resolution Authorizing Additional Penalties on Delinquent Taxes.  The District's tax assessor/collector was authorized and instructed to issue the necessary notices for implementation of the penalties at the appropriate times.</div> <bR> <div> <B><U>TAX ASSESSOR/COLLECTOR'S REPORT</U></B></div> <bR> <div>      Brenda McLaughlin presented the Tax Assessor/Collector report.  Taxes Receivable 8/31/2006: $26,036.43, reserve for uncollectables $635.83; adjustments $238.56.  Original 2006 Tax Levy: $889,423.03, adjustments $426,595.39.  Total Taxes Receivable: $1,341,180.46.  Prior years taxes collected $12,148.27, 2006 taxes collected $1,217,932.18.  Taxes Receivable at 1/31/2007: $111,100.01.  2006 Receivables: Debt Service $72,063.36; Maintenance $26,022.88.  Month of 1/2007: beginning cash balance $694,633.28 total receipts $485,335.64, total disbursements $688,163.06, cash balance at 1/31/2007 $491,805.86.  Total Disbursements for the month of February 2007 $468,199.64, remaining cash balance $23,606.22.  The District is 99.978% collected for 2001 taxes, 99.930% for 2002 taxes, 99.957% for 2003 taxes, 99.863% for 2004, 99.278% for 2005 and 92.547% for 2006.  Reported 2.2 on real amount left to certify.  Delinquent notices will be sent out on April 1, 2007.</div> <div>      </div> <div> After discussion and upon motion duly made, seconded and unanimously carried, the Board approved the Tax Assessor/Collector's Report; and payments of the tax bills presented.</div> <bR> <div> <B><U>FINANCIAL ADVISOR</U></B></div> <bR> <div>      N/A </div> <bR> <div> <B><U>OPERATOR'S REPORT</U></B></div> <bR> <div> Dusty Lane of Eco-Resources, Inc., the District's Operator, reported as to the Districts operations and facilities, and presented the January 2007 Operations Report.  Total connections were 1494.  Meter installations and inspections for Dec. 14 - Jan. 13:  New taps Installed - 0; Abandoned connections - 0; Sewer inspections completed - 0; Builder inspections completed - 0; Customer Service inspections completed - 0; Net Rental Meter Change - 0.  Wastewater Treatment; Permitted Average Daily Flow - 3,000,000GPD.  The required 7 samples were taken during 1/2007.  TCEQ Chemical Analysis: Metals 12/4/06; Radio-Chemicals 08/11/05; Volatile Organic Chemicals 8/11/05; and Minerals 5/18/06.  Water Production: Pumped 14,369,000 at Water Plant #1, Total supplied - 14,369,000, Daily Average - 463,516.  Subsidence Information: Estimated number of months available - 21.6, Permit months remaining - 11, Percent of permitted production - 4.43.  Water Accountability is at 94% Year to Date.  Total Operations Charges $13,167.36.  Actual work related costs - $5,621.00 for repairs.  Total Current Billing $56,263.96.  Total Aged Receivables $13,463.05.  Total Accounts Receivables $69,727.01.  Facility Checklist completed: Water Plant #1 on 1/04/2007.  Inspections Completed: Fire Hydrants on 12/30/2006.  Total deposits for January $65,262.29.  Disconnects/Reconnects income was $325.00. Provided Discharge Monitoring Report, number exceeded all zero.  Reported on repairs made and also presented the Board with a copy of the Cornerstones M.U.D. delinquent list.   Everyone has been duly notified of situation and it is being addressed. </div> <bR> <div> Upon motion duly made, seconded and unanimously carried, the Board approved the Operator's report. </div> <bR> <div> <B><U>ENGINEER'S REPORT</U></B></div> <bR> <div> Marvin reported no requests for service.  He has reviewed plans submitted by Blake Roberts and provided his comments.  He continues work on Royal Montreal property.</div> <bR> <div> Upon motion duly made, seconded and unanimously carried, the Board approved the Engineers report.  </div> <bR> <div> <B><U>BOOKKEEPER'S REPORT</U></B></div> <bR> <div> Terry Holland of Myrtle Cruz, Inc., the District's Bookkeeper, presented the monthly report.  Debt service funds available February 19, 2007 - $2,278,046.07.  Total Debt Service Requirements for 2007: $1,354,107.50.  General Operating: Previous cash balance January 15, 2007 - $9,545.20, total deposits $145,342.74.  Beginning cash balance February 19, 2007 - $154,347.27.  General Operating Funds available February 19, 2007 - $1,835,261.08.  Included a copy of the Budget for fiscal year ending September 30, 2007, the Investment Report and Tex Pool Performance sheet.</div> <bR> <div> After discussion, upon motion duly made, seconded and unanimously carried, the Board approved the Bookkeepers report and payment of said bills and ordered checks issued on the appropriate District accounts in payment thereof.  </div> <bR> <div> <B><U>CONDUCT HEARING ON TERMINATION OF WATER AND SEWER SERVICE </U></B></div> <bR> <div> The Board conducted a hearing on the termination of utility service.  The Operator presented a list of delinquent utility accounts that were delinquent by more than 60 days and reported that the customers have been given written notice 10 days prior to this meeting and the opportunity to appear before the Board of Directors to explain, contest or correct the utility service bill and to show reason why the utility service should not be terminated for nonpayment.  None of the customers on the list were present or have presented any statement on the matter.  </div> <bR> <div> After discussion, upon motion duly made, seconded and unanimously carried, the Board authorized the Operator to terminate utility service to the unpaid accounts in accordance with standard procedures.</div> <div>      </div> <bR> <div> <B><U>CONSIDER AND POSSIBLY APPROVE DEVELOPER REIMBURSEMENT FOR 12-ACRE COMMERCIAL TRACT AT ROYAL MONTREAL AND MASON ROAD</U></B></div> <bR> <bR> <div>      Tony Garza presented plan to Doug Knopka under which developer reimbursement for the 12-acre commercial tract within the District at Royal Montreal and Mason Road would be based on the taxable value for the tract.  District financial advisor Jan Bartholomew reported that a taxable value of $8.275 million would support reimbursement at 100%.  After discussion, upon motion duly made, seconded and unanimously carried, the Board approved the reimbursement agreement subject to discussions during this meeting.  </div> <bR> <div> <B><U>CONSIDER AND POSSIBLY APPROVE MEMORIAL MUD REQUEST FOR REVISIONS TO WATER SUPPLY AGREEMENT</U></B></div> <bR> <div>      Mark Brooks presented a proposed amendment to the District's water supply agreement with Memorial MUD to increase the number of connections served to 70.  The West Harris County Regional Water Authority has indicated they have no objection and do not presently impose an import fee.  After discussion, upon motion duly made, seconded and unanimously carried, the Board approved the amendment to the agreement allowing water service for up to 70 connections within Memorial MUD.  The Board will sign the four copies of the amendment presented.</div> <bR> <div> <B><U>CONSIDER AND POSSIBLY ADOPT ORDER ESTABLISHING OFFICES AND MEETING PLACES OUTSIDE THE DISTRICT</U></B></div> <bR> <div>      The Board approved removal of this item from the agenda.</div> <bR> <div> <B><U>CINCO REGIONAL OPERATING COMMITTEE REPORT</U></B>     </div> <bR> <div>  </div> <div>      Tony Garza updated the Board on progress.  Our estimated balance on this project is $50,000 to $75,000.</div> <bR> <div>      </div> <div> <B><U>AUTHORIZE ANY NECESSARY ACTIONS WITH RESPECT TO GREENBELT TRACTS</U></B></div> <bR> <div>      Chip Norris reported there is a lot of clover in the greenbelt.</div> <bR> <div>  </div> <div> <B><U>PENDING BUSINESS</U></B></div> <bR> <div>      Brick wall in the greenbelt is clean of graffiti.</div> <bR> <div> Doug Knopka has put some property under contract with Stanke for building of office space to be primarily for medical use.</div> <bR> <bR> <div> After concluding and there being no further business to come before the Board, the meeting was adjourned at 7:53 p.m.</div> <bR> <div>                                                                                                                            _______________________________</div> <div>                                                                                                                            Secretary</div> <bR> <div> Attachments:     Bookkeeper's Report</div> <div>     Resolution Reviewing Investment Policy and Investment Strategies</div> <div>                             Resolution Concerning Exemptions from Taxation</div> <div>                             Resolution Authorizing Additional Penalties on Delinquent Taxes</div> <bR> <bR> </td> </tr></table></body>