Minutes February 16, 2009

<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 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> February 16, 2009</div> <bR> <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 February 16, 2009, in accordance with the duly posted notice of said meeting, with a quorum of Directors present as follows:</div> <bR> <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>      </div> <div> Tony Garza, President</div> <bR> <div> 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, Noah Worley of DHK Development, Inc. and Greg Sissel of BKD, LLP.</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>1.  APPROVE MINUTES OF PRIOR MEETINGS;</U></B></div> <bR> <div>           Correction requested regarding attendance.  After discussion, upon motion duly made, seconded and unanimously carried, the Meeting Minutes of the January 19, 2009 meeting were approved.</div> <bR> <div>  </div> <div> <B><U>2.  QUESTIONS/COMMENTS FROM THE PUBLIC;</U></B></div> <bR> <div>           N/A</div> <bR> <div> <B><U>3.  RATIFY NEW ELECTRICITY CONTRACT;</U></B></div> <bR> <div>           The Board discussed rates and reviewed the Sales Confirmation between Suez Energy Resources NA, Inc. and Cornerstones M.U.D.  After discussion, upon motion duly made, seconded and unanimously carried, the Board ratified the new electricity contract with Suez Energy Resources NA, Inc. for an additional 2 years from 01/01/2010 through 12/31/2011 at $0.07909.</div> <bR> <div> <B><U>4.  ESTABLISH TAX EXEMPTIONS AND ADOPT TAX COLLECTION PENALTY;</U></B></div> <bR> <div>          The Board discussed the current tax exemptions of 20% for Homestead and $30,000 additional for age 65 and over or disabled.  After discussion and upon motion duly made, seconded and unanimously carried, the Board approved leaving the current tax exemptions and penalty (20%) as is.</div> <bR> <div> <B><U>5.  CONSIDER CONSULTANTS' REPORTS, AS NEEDED;</U></B></div> <div> <B><U>a.  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 8/31/2008: $26,557.41, Reserve for Uncollectable's $999.76; Adjustments $9,887.79.  Original 2008 Tax Levy: $1,090,108.87, Adjustments $65,935.09.  Total Taxes Receivable: $1,191,489.40.  Prior Years Taxes Collected $11,170.88, 2008 Taxes Collected $1,090,066.43.  Taxes Receivable at 1/31/2009: $90,252.09.  2008 Receivables: Debt Service $34,725.02; Maintenance $31,252.51.  Month of 1/2009: Beginning Cash Balance $599,622.36; Total Receipts $451,471.07, Total Disbursements $561,102.72, Cash Balance at 1/31/2009 $489,990.71.  Total Disbursements for the month of February 2009: $446,753.13, Remaining Cash Balance $43,237.58.  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, 99.706% for 2006, 98.718% for 2007 and 94.293% for 2008.  Brenda will request an updated delinquent list from Purdue, Brandon for next month's meeting.</div> <bR> <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>b.  FINANCIAL ADVISOR,</U></B></div> <bR> <div> N/A</div> <bR> <div> <B><U>c.  OPERATOR'S REPORT,</U></B></div> <bR> <div>           Dusty Lane of SouthWest Water Company, the District's Operator, reported on the Districts operations and facilities, and presented the January 2009 Operations Report.  Total Connections were 1501.  Meter Installations and Inspections for Dec 14 - Jan 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 January 2009.  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 19,111,000 at Water Plant #1, Total Supplied - 19,111,000, Daily Average - 616,484.  Subsidence Information: Estimated Number of Months Available - 16.88, Permit Months Remaining - 8, Percent of Permitted Production - 19.16.  Water Accountability is at 93.3 for 12/09/08-01/10/09 and 93.9 for the Four Month Average.  Total Operations Charges $17,354.02.  Actual work related costs - $9,383.00 for repairs.  Total Current Billing $67,629.84.  Total Aged Receivables $27,250.78.  Total Accounts Receivables $94,880.62.  Facility Checklist Completed: Water Plant #1 01/30/09.  Inspections Completed: Fire Hydrants 06/13/08.  Total Deposits for January 2009 $67,058.12.  Disconnects/Reconnects Income: $302.92.  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.  There will probably be some violations reported at the Cinco plant next month due to mechanical problems with the traveling bridge. </div> <bR> <div> Upon motion duly made, seconded and unanimously carried, the Board approved the operator's report.</div> <bR> <div> <B><U>d.  ENGINEER'S REPORT,</U></B></div> <bR> <div> Marvin Zahradnik of Landev Engineers, Inc., the District's Engineer, presented the engineers report.  No new requests for water or sewer.  They did approve the grease trap for Lo-Cal.  He also issued new maps of the District to the Board.</div> <bR> <div> Upon motion duly made, seconded and unanimously carried, the Board approved the Engineers report.</div> <bR> <div> <B><U>e.  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 16, 2009 - $1,139,152.59.  Total Debt Service Requirements for 2009: $1,294,820.00.  General Operating: Previous Cash Balance January 19, 2009 - $49,931.59, Total Deposits $65,520.52.  Beginning Cash Balance February 16, 2009 - $108,771.55.  General Operating Funds available February 16, 2009 - $2,414,238.33.  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, 2009, the Investment Report, the Deposit/Collateral Report by District and the Tex Pool Performance sheet.  Terry also had the CD certificate signed by the Board.</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>6.  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>7.  CINCO REGIONAL OPERATING COMMITTEE REPORT;</U></B>     </div> <bR> <div>  </div> <div>           Dusty Lane of SouthWest Water Company reported trouble with the traveling bridge at the plant.  The plant will probably report a violation next month due to this problem.  They are currently looking at fixes.  Also reported the District will probably be charged $3,300.00 on connections that were under-reported by SouthWest Water.</div> <bR> <div>      </div> <div> <B><U>8. AUTHORIZE ANY NECESSARY ACTIONS WITH RESPECT TO GREENBELT TRACTS; AND</U></B></div> <bR> <div>           John Irwin received a bid in the amount of $200.00 from Tom's Handyman Service for sign repair in the greenbelt.  John Irwin has a check to cover the repair.</div> <bR> <div> <B><U>9.  PENDING BUSINESS;</U></B></div> <bR> <div>           Greg Sissel of BKD, LLP presented the audit for FYE 2008. </div> <bR> <div>           After discussion, upon motion duly made, seconded and unanimously carried, the Board approved the Audit Report for FYE 2008.  Mark Brooks will put the item on the agenda to ratify next month.</div> <bR> <div>           The Board completed the Annual Review of Investment Policies.  After discussion, upon motion duly made, seconded and unanimously carried, the Board adopted and signed the resolution.</div> <bR> <div>           After concluding and there being no further business to come before the Board, the meeting was adjourned at 7:45 p.m.</div> <bR> <bR> <div>                                                                                                                             _______________________________</div> <div>                                                                                                                             Secretary</div> <bR> <div> Attachments:     Bookkeeper's Report</div> <div>                            Resolution Reviewing Investment Policy and Investment Strategies</div> <bR> <bR> </td> </tr></table></body>