Minutes September 21, 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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2011</U></A></div> <div> <A HREF="id398.htm" TARGET="_top" TITLE="Minutes December 19, 2011"><U>Minutes December 19, 2011</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"> <bR> <div> <B>CORNERSTONES </B><FONT SIZE="2" COLOR="#FFFFFF" FACE="Arial" ><B>MUNICIPAL UTILITY DISTRI</B></FONT><FONT SIZE="3" COLOR="#FFFFFF" FACE="Arial" ><B>CT</B></FONT></div> <DIV ALIGN="LEFT"></DIV> <div> <B>Cornerstones Municipal Utility District</B></div> <div> Minutes of Meeting of Board of Directors</div> <div> September 21, 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 September 21, 2009, 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> <bR> <div> And being absent: </div> <bR> <div> E.C. Norris, Assistant Secretary</div> <div> Darryl Box, Investment Officer</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, L.L.P.</div> <bR> <div>  </div> <div> The meeting was called to order at 7:08 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>           After discussion, upon motion duly made, seconded and unanimously carried, the Meeting Minutes of the August 17, 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.  HIRE AUDITOR;</U></B></div> <bR> <div>            Greg Sissel presented BKD's audit proposal to the Board.  The fee for the audit will be $14,600.  </div> <bR> <div> After discussion and upon motion duly made, seconded and unanimously carried, the Board approved the hiring of BKD as the District's auditor.</div> <bR> <div> <B><U>4.  ADOPT BUDGET;</U></B></div> <bR> <div>          Terry Holland of Myrtle Cruz, Inc., the District's bookkeepers, presented a draft budget for the District's FYE 2010.  Mr. Holland reviewed the draft budget and responded to questions.  The Board plans to move $150,000 from Special Projects to Cinco STP Repairs and move $225,000 into a short term six month CD at 1.96%.  After discussion was concluded, upon motion duly made, seconded and unanimously carried, the board adopted the budget as presented.</div> <bR> <div> <B><U>5.  AUTHORIZE PUBLICATION OF PROPOSED TAX RATE;</U></B></div> <bR> <div> The board reviewed a memorandum received from Jan Bartholomew of RBC Dain Rauscher, Inc., the District's financial advisor, regarding the District's financial requirements to be met with the tax levy for 2009.  Based on their analysis of certified and uncertified values from the Harris and Fort Bend County Appraisal Districts, they recommend levying $0.19 per $100 of assessed valuation for debt service and $0.18 per $100 of assessed valuation for maintenance and operations.  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 $0.37 per $100 taxable value as recommended by RBC.  The board will consider adoption of the tax rate at the next regular meeting. </div> <bR> <div> <B><U>6.  ADOPT RESOLUTION REVIEWING DROUGHT CONTINGENCY PLAN;</U></B></div> <bR> <div>           Mark W. Brooks of Young & Brooks, the attorneys for the District, noted that TCEQ rules require that the board review and update the District's Drought Contingency Plan as appropriate at least every five (5) years.  The Board decided no changes are needed at this time.  After discussion was concluded, upon motion duly made, seconded, and unanimously carried, the board adopted the attached Resolution Reviewing Water Conservation, Drought and Emergency Contingency Plan.</div> <bR> <div> <B><U>7.  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 $1,539.88; Adjustments $15,999.11.  Original 2008 Tax Levy: $1,090,108.87, Adjustments $83,134.70.  Total Taxes Receivable: $1,214,260.21.  Prior Years Taxes Collected $29,235.71; 2008 Taxes Collected $1,163,793.84.  Taxes Receivable at 8/31/2009: $21,230.66.  2008 Receivables: Debt Service $4,973.54; Maintenance $4,476.19.  Month of 8/2009: Beginning Cash Balance $25,922.86; Total Receipts $1,067.73, Total Disbursements $4,775.75, Cash Balance at 8/31/2009 $22,214.84.  Total Disbursements for the month of September 2009: $4,567.03, Remaining Cash Balance $17,647.81.  The District is 99.999% collected for 1999, 100.00% collected for 2000, 99.978% collected for 2001 taxes, 99.998% for 2002 taxes, 99.979% for 2003 taxes, 99.950% for 2004, 99.809% for 2005, 99.732% for 2006, 99.636% for 2007 and 99.195% for 2008.  Brenda presented to the Board a copy of the latest delinquent list and reported the second set of delinquent statement are being sent out.  </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> <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 District's operations and facilities, and presented the August 2009 Operations Report.  Total Connections were 1502.  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 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 37,818,000 at Water Plant #1, Total Supplied - 37,818,000, Daily Average - 1,219,935.  Subsidence Information: Estimated Number of Months Available - 5.60, Permit Months Remaining - 1, Percent of Permitted Production - 66.28.  Water Accountability is at 93.0 for 07/09/09-08/08/09 and 95.2 for the Four Month Average.  Total Operations Charges $27,208.66.  Actual work related costs - $19,388.00 for repairs.  Total Current Billing $109,000.69.  Total Aged Receivables $34,166.58.  Total Accounts Receivables $143,167.27.  Total Deposits for August 2009 $122,830.09.  Disconnects/Reconnects Income: $331.24.  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.</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 requests for water or sewer capacity received.  Marvin distributed to the Board information from the North Fort Bend Water Authority regarding 2013 Surface Water Conservation/Chloramine Disinfection Notification.  </div> <bR> <div> Upon motion duly made, seconded and unanimously carried, the Board approved the Engineers report.<B><U> </U></B></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 September 21, 2009 - $1,326,696.20.  Total Debt Service Requirements for 2009: $1,294,820.00.  General Operating: Previous Cash Balance August 17, 2009 - $37,514.80, Total Deposits $122,945.13.  Beginning Cash Balance September 21, 2009 - $140,067.66.  General Operating Funds available September 21, 2009 - $2,562,184.15.  Terry included copies of the Debt Service Calculations for Yield Restriction Report, Cornerstones Energy Report, the Cinco Regional WWTP Improvements Report, Cornerstones MUD Budget for Fiscal Year Ending September 30, 2009, The proposed Budget for Fiscal Year Ending September 30, 2010, the Investment Report, the Deposit/Collateral Report by District and the Tex Pool Performance sheet.  Terry also reported that Junction Landscape is sending bills with sales tax.  Tony Garza will talk to them to get it corrected.</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>8.  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>9.  CINCO REGIONAL OPERATING COMMITTEE REPORT;</U></B>     </div> <bR> <div>  </div> <div>      Tony Garza reported nothing new going on at the plant. </div> <bR> <div> <B><U>10. AUTHORIZE ANY NECESSARY ACTIONS WITH RESPECT TO GREENBELT TRACTS; AND</U></B></div> <bR> <div>           John Irwin went out with representative to look at the trash receptacles and benches in the Greenbelt.  Three of the trash receptacles need replacing at a cost of approximately $500 each and five benches need replacing at a cost of approximately $600 each.  He has estimates being sent on a couple of different styles.  The current trash receptacles and benches were installed by KGA DeForest Design.  The Board will contact them to see if there is any warranty on them.</div> <bR> <div> <B><U>11.  PENDING BUSINESS;</U></B></div> <bR> <div> Mark Brooks reported the Web Site is down.  Terry Holland sent an email today to the Web Hosting Company.</div> <bR> <div>      </div> <div> Tony Garza received and email on H20 Texas - The Water Event being held November 16th and 17th in Fort Worth.  No one from the Board plans to attend.</div> <bR> <div>      </div> <div>      After concluding and there being no further business to come before the Board, the meeting was adjourned at 8:11 p.m.</div> <bR> <bR> <bR> <div>                                                                                                                       _______________________________</div> <div>                                                                                                                      Secretary</div> <bR> <div> Attachments:     Resolution Reviewing Water Conservation, Drought and Emergency Contingency Plan</div> <div>     Bookkeeper's Report</div> <bR> <bR> </td> </tr></table></body>