Minutes September 17, 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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on September 17, 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.; Brenda McLaughlin of Bob Leared Interests, Mark Brooks of Young & Brooks, Doug Konopka of Cinco, LTD, Stephen Eustis with RBC and Greg Sissel with BKD.</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 August 20, 2007 meeting were approved.</div> <bR> <div>  </div> <div> <B><U>QUESTIONS/COMMENTS FROM THE PUBLIC</U></B></div> <bR> <div>      None</div> <bR> <div> <B><U>HIRE AUDITOR</U></B></div> <bR> <div>      Greg Sissel of BKD, L.L.P. presented their proposal to audit the District's books and records for its fiscal year ending September 30, 2007 at an estimated fee of $12,700.00.  He also gave the Board a letter outlining the new Auditing Standard No. 112 published in May 2006.  After discussion, upon motion duly made, seconded and unanimously carried, the Board approved the hiring of BKD as the District auditor.</div> <bR> <div> <B><U>CONSIDER AND POSSIBLY APROVE PROPOSAL FOR ARBITRAGE REBATE REPORT IN CONNECTION WITH DISTRICT'S SERIES 2003 REFUNDING BOND ISSUE</U></B></div> <bR> <div>      Mark Brooks presented and, upon motion duly made, seconded and unanimously carried, the Board approved, a proposal by Arbitrage Compliance Specialists for the first five-year arbitrage rebate calculations in connection with the District's Series 2003 refunding bond issue.  </div> <bR> <div> <B><U>ADOPT BUDGET</U></B></div> <bR> <div>      Tony Garza updated the Board on changes requested last month to the 2008 budget.  After discussion, upon motion duly made, seconded and unanimously carried, the Board approved adopting the budget for 2008.</div> <bR> <div> <B><U>AUTHORIZE PUBLICATION OF PROPOSED TAX RATE</U></B></div> <bR> <div> Stephen Eustis gave report on the Levy of the 2007 Tax Rate.  Based on their analysis, RBC Capital Markets is recommending $0.25 for Debt Service and $0.18 for Maintenance.  After discussion, upon motion duly made, seconded and unanimously carried, the Board authorized the tax assessor to publish the District's proposed tax rate at $0.43 tax rate as recommended by RBC.  The board will consider adoption of the tax rate at the next regular meeting.</div> <bR> <div> <B><U>CONSIDER AND POSSIBLY ADOPT RESOLUTION TO CONTINUE TAXATION OF GOODS IN TRANSIT</U></B></div> <bR> <div>      Mark W. Brooks, of Young and Brooks, the attorneys for the District, reviewed recent legislation requiring that the District take affirmative action if the board desires to retain the District's authority to tax goods in transit.  Board president Garza called for a public hearing on the issue, and invited questions and comments from the public.  No members of the public presented any questions or comments.  The board discussed the pros and cons of preserving the District's ability to tax goods in transit.  After the board members and persons attending the meeting were given a final opportunity to present their comments and questions, the public hearing was closed.  Upon motion duly made, seconded and unanimously carried, the board adopt the attached Resolution to Continue Taxation of Goods in Transit.</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, presented the Tax Assessor/Collector report to the Board.  Taxes Receivable 8/31/2006: $26,036.43, reserve for uncollectables $999.76; adjustments $92.91.  Original 2006 Tax Levy: $889,423.03, adjustments $429,545.71.  Total Taxes Receivable: $1,344,098.32.  Prior years taxes collected $20,283.64, 2006 taxes collected $1,307,597.37.  Taxes Receivable at 8/31/2007: $16,217.31.  2006 Receivables: Debt Service $8,354.48; Maintenance $3,016.89.  Month of 8/2007: beginning cash balance $28,030.92 total receipts $5,208.48, total disbursements $4,578.78, cash balance at 8/31/2007 $28,660.62.  Total Disbursements for the month of September 2007 $6,197.48, remaining cash balance $22,463.14.  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, 99.945% for 2004, 99.784% for 2005 and 99.138% 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 payment 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 August 2007 Operations Report.  Total connections were 1494.  Meter installations and inspections for July 14 - Aug 13:  New taps Installed - 0; Sewer inspections completed - 0; Builder inspections completed - 0; Customer Service inspections completed - 0; Net Rental Meter Change - 0.  The required 7 samples were taken during 8/2007.  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 23,016,000 at Water Plant #1, Total supplied - 23,016,000, Daily Average - 742,452.  Subsidence Information: Estimated number of months available - 9.15, Permit months remaining - 4, Percent of permitted production - 46.64.  Water Accountability is at 92.7 for 7/6/07 - 8/2/07 and 93.9 for the four month average.  Total Operations Charges $15,402.28.  Actual work related costs - $7,755.00 for repairs.  Total Current Billing $56,751.04.  Total Aged Receivables $12,093.10.  Total Accounts Receivables $68,844.14.  Facility Checklist Completed: Water Plant #1 08/09/07.  Inspections Completed: Fire Hydrants on 06/28/07.  Total deposits for August 2007 $60,716.40.  Disconnects/Reconnects income was $325.00. 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.  Received two customer requests.  Request 1 - Customer developed large leak outside their house while out of town and would like to go back as average usage.  Currently owes $868.00.  After discussion the Board approved a credit for the sewer portion of the overage and will allow customer to pay out the remaining balance over three months.  Request 2 - Customer requesting reimbursement in the amount of $79.50 for sprinkler repairs, which she says were caused by Eco Resources in June.  After discussion the Board approved a $79.50 credit on her water bill.</div> <bR> <div> Upon motion duly made, seconded and unanimously carried, the Board approved the Operator's report and the Consumers Report.</div> <bR> <div> <B><U>ENGINEER'S REPORT</U></B></div> <bR> <div> Marvin Zahradnik of Landev Engineers, Inc., the District's Engineer, reported on activity in the District.  Royal Montreal still working on paperwork and easement recordings before calling contractors out.  Mark Brooks forwarded letter from Cypress Station Carwash at Mason Road.  They are requesting another 1,000 gallons per day in capacity for irrigation.  After discussion, upon motion duly made, seconded and unanimously carried, the Board authorized reissuing the utility commitment for the project reflecting the increased capacity requested.</div> <bR> <div> Doug Konopka updated the Board on activity.  Another retail center coming up.  Stanka Group has a 1.5 acre track for Medical Office Building.</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 September 17, 2007 - $2,654,556.19.  Total Debt Service Requirements for 2007: $1,354,107.50.  General Operating: Previous cash balance August 20, 2007 - $4,754.44, total deposits $68,290.86.  Beginning cash balance September 17, 2007 - $72,512.22.  General Operating Funds available September 17, 2007 - $1,885,630.45.  Included copies of Cornerstones Energy Report, the Budget for fiscal year ending September 30, 2007, the Investment Report, the Tex Pool Performance sheet and the Deposit/Collateral Report by District.</div> <bR> <div> Terry also informed the Board they were reviewing all of their contracts.  July 2001 was the last increase to the District.  They are asking for an increase from $800.00 to $895.00 per month.  They would like to put the increase on the agenda to consider next month.</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.  Also approved putting the bookkeeper fee increase on the agenda for October 2007.</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.  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> <div>  </div> <div> Tony Garza informed the Board that all work is completed at the STP plant.  Next month they should have the final payment amount.</div> <bR> <div>      </div> <div> <B><U>AUTHORIZE ANY NECESSARY ACTIONS WITH RESPECT TO GREENBELT TRACTS</U></B></div> <bR> <div>      Chip reported lock broken on gate into Chesterfield in the greenbelt.  </div> <bR> <div> <B><U>PENDING BUSINESS</U></B></div> <bR> <div>      None</div> <bR> <div> After concluding and there being no further business to come before the Board, the meeting was adjourned at 7:54 p.m.</div> <bR> <bR> <div>                                                                                                                                _______________________________</div> <div>                                                                                                                                Secretary</div> <bR> <div> Attachments:     Bookkeeper's Report</div> <bR> <bR> </td> </tr></table></body>