CORNERSTONES MUNICIPAL UTILITY DISTRICT
Cornerstones Municipal Utility District
Minutes of Meeting of Board of Directors
September 22, 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 September 22, 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 SouthWest Water Company; Brenda McLaughlin of Bob Leared Interests; Marvin Zahradnik of Landev Engineers, Inc.; Mark Brooks of Young & Brooks; Stephen Eustis of RBC Capital Markets; Gregory Sissel of BKD, LLP and Doug Knopka of Cinco, LTD.
The meeting was called to order at 7:06 p.m. and declared open for such business as might come before it.
1. APPROVE MINUTES OF PRIOR MEETINGS;
After discussion, upon motion duly made, seconded and unanimously carried, the Minutes of the August 18, 2008 meeting were approved.
2. QUESTIONS/COMMENTS FROM THE PUBLIC;
None
3. HIRE AUDITOR;
Greg Sissel presented rates to the Board the for the next budget period. Their base fee will be the same as last year at $12,800.00 and an additional $2,000.00 for risk assessment.
After discussion and upon motion duly made, seconded and unanimously carried, the Board approved the rates and hired BKD, LLP as the District Auditor.
4. ADOPT BUDGET;
Terry Holland of Myrtle Cruz, Inc. presented the proposed budget to the Board.
After discussion and upon motion duly made, seconded and unanimously carried, the Board adopted the budget for Fiscal Year 10/1/2008 thru 9/30/2009.
5. AUTHORIZE PUBLICATION OF PROPOSED TAX RATE;
Stephen Eustis of RBC Capital Markets presented their recommendations on the 2008 Tax Rate. Based of their analysis of certified and uncertified values from the Harris and Fort Bend County Appraisal Districts, they recommend levying a $0.20 per $100 of assessed valuation for debt service and $0.18 per $100 of assessed valuation 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 in the Katy Times at $0.38 per $100 taxable value as recommended by RBC. The board will consider adoption of the tax rate at the next regular meeting.
6. CONSIDER CONSULTANTS' REPORTS, AS NEEDED;
a. 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 $2.643.67. Original 2007 Tax Levy: $1,158,056.50, Adjustments $73,967.90. Total Taxes Receivable: $1,250,885.38. Prior Years Taxes Collected $8,811.76; 2007 Taxes Collected $1,216,515.97. Taxes Receivable at 8/31/2008: $25,557.65. 2007 Receivables: Debt Service $9,016.53; Maintenance $6,491.90. Month of 8/2008: Beginning Cash Balance $22,732.13; Total Receipts $9,519.99, Total Disbursements $3,455.27, Cash Balance at 8/31/2008 $28,796.85. Total Disbursements for the month of September 2008: $6,875.80, Remaining Cash Balance $21,921.05. The District is 99.999% collected for 1999, 100.00% collected for 2000, 99.978% collected for 2001 taxes, 99.940% for 2002 taxes, 99.979% for 2003 taxes, 99.948% for 2004, 99.807% for 2005, 99.578% for 2006 and 98.741% for 2007. After review of the delinquent list furnished by Purdue, the Board approved Purdue going forward with collection of delinquent accounts.
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.
b. FINANCIAL ADVISOR,
(See minute enry above regarding publication of proposed tax rate.)
c. OPERATOR'S REPORT,
Dusty Lane of SouthWest Water Company, the District's Operator, reported on the Districts operations and facilities, and presented the August 2008 Operations Report. Total Connections were 1501. Meter Installations and Inspections for Jul 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 August 2008. TCEQ Chemical Analysis: Metals 12/4/06; Radio-Chemicals 08/11/05; Volatile Organic Chemicals 8/11/05; Minerals 5/18/06; Trihalomethane Gasses (THMs) 8/30/2007 and Halocacetic Acids (HAAs) 8/30/2007. Water Production: Pumped 29,455,000 at Water Plant #1, Total Supplied - 29,455,000, Daily Average - 950,161. Subsidence Information: Estimated Number of Months Available - 0.82, Permit Months Remaining - 1, Percent of Permitted Production - 95.86. Water Accountability is at 92.0 for 07/11/08-8/09/08 and 94.8 for the Four Month Average. Total Operations Charges $16,955.34. Actual work related costs - $6,000.00 for repairs. Total Current Billing $78,893.38. Total Aged Receivables $20,383.87. Total Accounts Receivables $99,277.25. Facility Checklist Completed: Water Plant #1 08/26/08. Inspections Completed: Fire Hydrants 06/13/08. Total Deposits for August 2008 $80,543.55. Disconnects/Reconnects Income was $250.00. Dusty reported on repairs made and presented the Board with a copy of the Cornerstones M.U.D. Delinquent List and the Discharge Monitoring Reports. Everyone has been duly notified of situation and it is being addressed.
Dusty reported that during Hurricane Ike everything at the plant went fine. Generators did what they were supposed to do. Diesel was a little hard to get for a few days. Received report from owner Mrs. Lotz at 22322 Kent Falls that the sprinkler in the greenbelt is hitting her fence and would like it adjusted. They will have the heads checked and adjusted if needed.
Tony Garza questioned Dusty regarding the Hot Shot charges on the detail billing. Dusty will check on it and report back to the Board.
Upon motion duly made, seconded and unanimously carried, the Board approved the Operator's report.
d. ENGINEER'S REPORT,
Marvin Zahradnik of Landev Engineers, Inc., the District's Engineer, presented the engineers report. No new requests for water or sewer. HEB/Katy Car Wash is moving forward. Mark Brooks sent a commitment letter for the Royal Montreal Plaza (1.275 acre tract for Montessori School) as authorized at the previous meeting.
Discussed options for the two locations on Shady Valley and Holly Lake Court to re-circulate the water lines. They need to check for flushing valves. Other alternative for Holly Lake Court is to loop the line and change to a four inch line. Shady Valley needs a blow off valve checked. Problem tabled until Dusty has them checked.
Upon motion duly made, seconded and unanimously carried, the Board approved the Engineers report.
e. BOOKKEEPER'S REPORT,
Terry Holland of Myrtle Cruz, Inc., the District's Bookkeeper, presented the monthly report. Debt Service Funds available September 15, 2008 - $2,086,130.92. Total Debt Service Requirements for 2008: $1,413,182.50. General Operating: Previous Cash Balance August 18, 2008 - $20,517.12, Total Deposits $81,379.36. Beginning Cash Balance September 15, 2008 - $101,280.64. General Operating Funds available September 15, 2008 - $2,390,414.51. 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, Proposed Budget for Fiscal Year 10/1/2008, the Investment Report, the Deposit/Collateral Report by District 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.
7. 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 postpone terminating utility service to the unpaid accounts until next month due to Hurricane Ike.
8. CINCO REGIONAL OPERATING COMMITTEE REPORT;
Dusty Lane reported the plant was on generator four or five days after Hurricane Ike. Tony Garza requested Dusty look for alternate or back up supplier for diesel fuel since it was hard to find after the storm. Mark Brooks will send out copies of the current contingency plans to the Board.
9. AUTHORIZE ANY NECESSARY ACTIONS WITH RESPECT TO GREENBELT TRACTS;
It was reported there is a dead pine tree in the esplanade on Highland Knolls. Harris County will be contacted. John Irwin will send Mark Brooks the exact location so he can prepare and send a letter to the county.
10. PENDING BUSINESS;
Doug Knopka updated the Board on projects in the District.
After concluding and there being no further business to come before the Board, the meeting was adjourned at 8:20 p.m.
_______________________________
Secretary
Attachments: Bookkeeper's Report