Minutes August 20, 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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2009"><U>Minutes October 19, 2009</U></A></div> <div> <A HREF="id346.htm" TARGET="_top" TITLE="Minutes November 16, 2009"><U>Minutes November 16, 2009</U></A></div> <div> <A HREF="id347.htm" TARGET="_top" TITLE="Minutes December 21, 2009"><U>Minutes December 21, 2009</U></A></div> <div> <A HREF="id349.htm" TARGET="_top" TITLE="Minutes January 18, 2010"><U>Minutes January 18, 2010</U></A></div> <div> <A HREF="id350.htm" TARGET="_top" TITLE="Minutes February 15, 2010"><U>Minutes February 15, 2010</U></A></div> <DIV ALIGN="LEFT"></DIV> <div> <B><IMG SRC="21f46600.gif" border=0 width="70" height="96" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></B></div> </td> <td valign="top" height=355 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <B>CORNERSTONES MUNICIPAL UTILITY DISTRICT</B></div> <DIV ALIGN="LEFT"></DIV> <div> <B>Cornerstones Municipal Utility District</B></div> <div> Minutes of Meeting of Board of Directors</div> <div> August 20, 2007</div> <bR> <div>      The Board of Directors of Cornerstones Municipal Utility District (the “District”) met at 805 Hidden Canyon, Katy, Harris County, Texas at 7:00 p.m. on August 20, 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.; Dusty Lane of Eco-Resources, Inc.; Marvin Zahradnik of Landev Engineers, Inc; Mark Brooks of Young & Brooks, and Doug Knopka of Cinco, LTD.</div> <bR> <div>  </div> <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 July 16, 2007 meeting were approved with Gary abstaining. Tony Garza confirmed that the Cinco plant improvement project costs are expected to total $1,626,000.00 as reflected in the Minutes.</div> <bR> <div>  </div> <div> <B><U>QUESTIONS/COMMENTS FROM THE PUBLIC</U></B></div> <bR> <div>      None</div> <bR> <div> <B><U>TAX ASSESSOR/COLLECTOR'S REPORT</U></B></div> <bR> <div>      Brenda McLaughlin of Bob Leared Interests, the District's Tax Assessor/Collector, had sent the Tax Assessor/Collector report to the Board but was unable to attend the meeting.  Taxes Receivable 8/31/2006: $26,036.43, reserve for uncollectables $999.76; adjustments $92.91.  Original 2006 Tax Levy: $889,423.03, adjustments $429,870.75.  Total Taxes Receivable: $1,344,423.36.  Prior years taxes collected $19,708.97, 2006 taxes collected $1,304,974.85.  Taxes Receivable at 7/31/2007: $19,739.54.  2006 Receivables: Debt Service $10,520.03; Maintenance $3,798.90.  Month of 7/2007: beginning cash balance $31,249.07 total receipts $9,715.51, total disbursements $12,933.66, cash balance at 7/31/2007 $28,030.92.  Total Disbursements for the month of August 2007 $4,578.78, remaining cash balance $23,452.14.  The District is 99.999% collected for 1999, 100.00% collected for 2000, 99.978% collected for 2001 taxes, 99.940% for 2002 taxes, 99.976% for 2003 taxes, 99.940% for 2004, 99.743% for 2005 and 98.915% for 2006. </div> <bR> <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>      </div> <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 July 2007 Operations Report.  Total connections were 1494.  Meter installations and inspections for June 14 - July 13:  New taps Installed - 0; Abandoned connections - 0; Sewer inspections completed - 4; Builder inspections completed - 0; Customer Service inspections completed - 0; Net Rental Meter Change - 0.  The required 7 samples were taken during 7/2007.  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 18,560,000 at Water Plant #1, Total supplied - 18,560,000, Daily Average - 598,710.  Subsidence Information: Estimated number of months available - 10.70, Permit months remaining - 5, Percent of permitted production - 39.55.  Water Accountability is at 96.0 for 6/6/07 - 7/5/07 and 94.3 for the four month average.  Total Operations Charges $20,712.55.  Actual work related costs - $12,369.00 for repairs.  Total Current Billing $61,545.22.  Total Aged Receivables $8,080.65.  Total Accounts Receivables $69,625.87.  Facility Checklist Completed: Water Plant #1 7/5/07.  Inspections Completed: Fire Hydrants on 12/30/2006.  Total deposits for July $61,900.20.  Disconnects/Reconnects income was $225.00. Pull Fees: totals $0.00.  Reported on repairs made and 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.  No customer requests.  Distributed letter on Districts Storm Preparedness to the Board.</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 Zahradnik of Landev Engineers, Inc., the District's Engineer, presented the Board with a tabulation of bids received on water and sanitary sewer facilities to serve Royal Montreal.  Storm Sewer not needed.  $144,571.00 under preliminary estimate.  Updated Board regarding Golden Plaza shopping center as there may be an issue with the 8-inch water line along Mason Road.  After discussion and motion duly made the board approved bid and awarded contract to Triple B based on their low bid as recommended by Mr. Zahradnik.  </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 August 20, 2007 - $2,611,619.74.  Total Debt Service Requirements for 2007: $1,354,107.50.  General Operating: Previous cash balance July 16, 2007 - $6,858.16, total deposits $64,651.69.  Beginning cash balance August 20, 2007 - $70,705.79.  General Operating Funds available August 20, 2007 - $1,885,555.72.  Included a new report on Cornerstones Energy Report with quantity used and what the district pays for energy.  Included a copy of the Budget for fiscal year ending September 30, 2007, the Investment Report, the Tex Pool Performance sheet and a copy of the first revised draft for fiscal year 10/01/08.  The Board has decided to go with BKD as auditor and they will give proposal next month.  Also presented was the Deposit Collateral report.</div> <bR> <div> After discussion, upon motion duly made, seconded and unanimously carried, the Board approved the Bookkeepers report, payment of said bills, and ordered checks issued on the appropriate District accounts in payment thereof.  </div> <bR> <div> <B><U>CONSIDER AND POSSIBLY APPROVE RESOLUTION REGARDING THE CONSUMPTION OF ELECTRICITY BY THE DISTRICT</U></B></div> <bR> <div>      Mark Brooks presented resolution regarding the consumption of electricity to the Board.  After discussion, upon motion duly made, seconded and unanimously carried, the Board approved and signed the resolution.</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> <bR> <div> <B><U>CINCO REGIONAL OPERATING COMMITTEE REPORT</U></B>     </div> <bR> <div>  </div> <div> Tony Garza reported on the status of the improvement project at the Cinco plant.  Weirs and compact basin need pulling.  Should be enough money in the account to cover the remaining costs.</div> <bR> <div>      </div> <div> <B><U>AUTHORIZE ANY NECESSARY ACTIONS WITH RESPECT TO GREENBELT TRACTS</U></B></div> <bR> <div>      John O'Donnell with Water Logic never got back with John Irwin.  Tony will research other companies.  Sprinkler in the greenbelt are coming on at 7:30 a.m.  John Irwin will call Junction and have the sprinkler system checked.  The system should start the watering cycle at 4:00 a.m.</div> <bR> <div>  </div> <div> <B><U>PENDING BUSINESS</U></B></div> <bR> <div>      Jan Bartholomew of RBC Capital Markets, the District's financial adviser, sent a recalculation of the target value for the preconstruction agreement in connection with the Royal Montreal project, since the storm sewer is not needed.  Doug Knopka is asking the Board to amend the agreement with new figures.  After discussion, upon motion duly made, seconded and unanimously carried, the Board approved the revision of the pre-construction agreement with Doug Knopka of Cinco, LTD.</div> <bR> <div> After concluding and there being no further business to come before the Board, the meeting was adjourned at 7:43 p.m.</div> <bR> <div>                                                                                                                            _______________________________</div> <div>                                                                                                                            Secretary</div> <bR> <div> Attachments:     Bookkeeper's Report</div> <bR> <bR> </td> </tr></table></body>