CORNERSTONES MUNICIPAL UTILITY DISTRICT

Cornerstones Municipal Utility District

Minutes of Meeting of Board of Directors

April 21, 2008

          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 April 21, 2008, in accordance with the duly posted notice of said meeting, with a quorum of directors present as follows:

Tony Garza, President

Gary Hughes, Vice President  

John Irwin, Secretary

E.C. Norris, Assistant Secretary

Darryl Box, Investment Officer

and being absent:

None

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; Marvin Zahradnik of Landev Engineers, Inc.; Mark Brooks of Young & Brooks, Doug Konopka of Cinco, LTD. and Bob Patton with North Fort Bend Water Authority.

The meeting was called to order at 7:00 p.m. and declared open for such business as might come before it.

APPROVE MINUTES OF PRIOR MEETING

          After discussion, upon motion duly made, seconded and unanimously carried, the Minutes of the March 17, 2008 meeting were approved as presented.

QUESTIONS/COMMENTS FROM THE PUBLIC

          Bob Patton, our representative with North Fort Bend Water Authority, introduced himself to the Board.  He gave an overview of what has been going on with the District over the last two years and what direction they are looking at going for surface water.  NFBWA should know the results of the election this Wednesday, April 23, 2008.  The NFBWA meets at the Cinco Golf Club every fourth Wednesday at 6:00 p.m.

TAX ASSESSOR/COLLECTOR'S REPORT

          Brenda McLaughlin of Bob Leared Interests, the District's Tax Assessor/Collector, presented the Tax Assessor/Collector report to the Board.  Taxes Receivable 8/31/2007: $17,217.07, Reserve for Uncollectibles $999.76; Adjustments $2.582.38.  Original 2007 Tax Levy: $1,158,056.50, Adjustments $72,620.39.  Total Taxes Receivable: $1,249,476.58.  Prior Years Taxes Collected $8,036.99; 2007 Taxes Collected $1,171,463.85.  Taxes Receivable at 03/31/2008: $69,975.74. 2007 Receivables: Debt Service $34,426.18; Maintenance $24,786.86.  Month of 3/2008: Beginning Cash Balance $64,470.65; Total Receipts $11,795.73, Total Disbursements $42,999.84, Cash Balance at 03/31/2008 $33,266.54.  Total Disbursements for the month of April 2008: $6,568.68, Remaining Cash Balance $26,697.86.  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, 99.802% for 2005, 99.534% for 2006 and 95.189% for 2007.  

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.

FINANCIAL ADVISOR;

     N/A

OPERATOR'S REPORT;

          Dusty Lane of SouthWest Water Company, the District's Operator, reported on the Districts operations and facilities, and presented the March 2008 Operations Report.  Total Connections were 1500.  Meter Installations and Inspections for Feb 14 - Mar 13:  New Taps Installed - 0; Sewer Inspections Completed - 0; Builder Inspections completed - 0; Customer Service Inspections completed - 0; Net Rental Meter Change - -2.  The required 7 samples were taken during March-2008.  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 18,596,000 at Water Plant #1, Total Supplied - 18,596,000, Daily Average - 599,871.  Subsidence Information: Estimated Number of Months Available - 8.23, Permit Months Remaining - 6, Percent of Permitted Production - 62.98.  Water Accountability is at 93.1 for 02/08/08 - 03/10/08 and 94.9 for the Four Month Average.  Total Operations Charges $15,746.57.  Actual work related costs - $7,700.00 for repairs.  Total Current Billing $57,798.66.  Total Aged Receivables $14,535.55.  Total Accounts Receivables $72,334.21.  Facility Checklist Completed: Water Plant #1 03/31/08.  Inspections Completed: Fire Hydrants 02/07/08.  Total Deposits for March 2008 $65,868.22.  Disconnects/Reconnects Income was $50.00. Pull Fees: totals $0.00.  Dusty 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 this month.  Distributed copies of the Annual Concerned Consumer Report to the Board and informed them the cost will be $1.65 per connection to mail out.

Upon motion duly made, seconded and unanimously carried, the Board approved the Operator's report and the mail out of the Concerned Consumer Report.

Also, after discussion and upon motion duly made, seconded and unanimously carried, the Board approved signing the consent letter for Eco's contract assignment to their parent company, Southwest Water Company.

ENGINEER'S REPORT;

Marvin Zahradnik of Landev Engineers, Inc., the District's Engineer, presented the engineers report.  No requests made.  The Royal Montreal project is waiting on inspection from Harris County which is slow with inspections.

Upon motion duly made, seconded and unanimously carried, the Board approved the Engineers report.  

BOOKKEEPER'S REPORT;

Terry Holland of Myrtle Cruz, Inc., the District's Bookkeeper, presented the monthly report.  Debt Service Funds available April 21, 2008 - $2,034,675.76; Demand Deposit Investments: Texpool - 1,913,588.65, Texas State Bank - $26,087.11; Total Debt Service Requirements for 2008: $1,413,182.50; General Operating: Previous Cash Balance March 17, 2008 - $762.84; Total Deposits $65,606.08; Beginning Cash Balance April 21, 2008 - $65,974.46; General Operating Funds available April 21, 2008 - $2,360,021.13.  Terry included copies of the Debt Service Calculations for Yield Restriction Report, Cornerstones Energy Report, the Cinco Regional WWTP Improvements Report, Budget for Fiscal Year Ending September 30, 2008, the Investment Report and the Tex Pool Performance sheet.

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 except for #5927 in the amount of $474.00 to Rush Maintenance Company which is not ours.

CONDUCT HEARING ON TERMINATION OF WATER AND SEWER SERVICE;

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.

CINCO REGIONAL OPERATING COMMITTEE REPORT

Tony Garza reported nothing new from the committee.  There will be a special meeting next week.  They are considering an electricity use and pricing program with Legacy Group.  Tony also reported another $5,000.00 may be needed for improvements at the plant.

AUTHORIZE ANY NECESSARY ACTIONS WITH RESPECT TO GREENBELT TRACT

Received email about the condition of the plants and problem with anthills in the greenbelt.  The plants are not growing in equal size.  The Board Members will look at the landscaping problem areas and decide what to do at next month's meeting.

PENDING BUSINESS

Doug Konopka reported sales have slowed down.  There is a new commercial prospect at the back of Royal Montreal, possibly a Day Care Center.

     Pattie's has live bands on the weekends and the noise can be heard in the neighborhood.  If it becomes a continuous problem late into the evenings Doug Konopka can talk to the owners.

     After concluding and there being no further business to come before the Board, the meeting was adjourned at 7:43 p.m.

                                                                                                                               _______________________________

                                                                                                                               Secretary

Attachments:     Bookkeeper's Report