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HomeMy WebLinkAboutJuly 12, 2007 Regular Session BackupTown of Trophy Club Municipal Utility District No.1 Meeting Agenda 100 Municipal Drive Trophy Club, Texas 76262 Thursday, July 12, 2007 5:00 P.M. A.1 Call to Order and Announce a Quorum. A.2 Public Comments or Presentations. B.1 Review and discuss FY07-08 Preliminary Budget for MUD 1. (Sakura Moten-Dedrick) B.2 Discuss and take appropriate action concerning proposed contract(s) with Town of Trophy Club for the providing of water and sewer services to the proposed new development by Centurion American. B.3 Discuss and take appropriate action concerning disposition of amounts to be received as a result of the contract(s) with the Town of Trophy Club for the furnishing of water and wastewater services to the new development known as "The Highlands," including discussion and appropriate action for resolving disputes with Trophy Club MUD No. 2 over the disposition of such funds by nonbinding mediation or binding arbitration. C.1 Receive District Manager's Report a. Items to be placed on future agendas D.1 Review and Approve Minutes a. April 19, 2007 - Special Session minutes b. June 12, 2007 - Regular Session minutes D.2 Review and Approve Disbursements and Variance Report a. May 2007 D.3 Review Monthly Tax Collection Report a. May 2007 D.4 Set Next Meeting Date Next regularly scheduled meeting date: Tuesday, , 2007, 6:00 p.m. F.1 Adjourn. MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 7-12-2007 Subject: Agenda Item No.A.1 Call to Order and Announce a Quorum. (mm) MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 7-12-2007 Subject: Agenda Item No.A.2 Public Comments or Presentations. (mm) MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 7-12-2007 Subject: Agenda Item No. B.1 Review and discuss FY07-08 Preliminary Budget for MUD 1. (Sakura Moten- Dedrick) EXPLANATION: For discussion. (smd) Attachments: 1. FY07-08 MUD 1 Preliminary Budget MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 7-12-2007 Subject: Agenda Item No.C.1 Receive District Manager's Report a. Items to be placed on future agendas (mm) MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 7-12-2007 Subject: Agenda Item No. D.1 Review and Approve Minutes a. April 19, 2007 - Special Session minutes b. June 12, 2007 - Regular Session minutes (mm) Attachments: 1. Minutes MINUTES OF SPECIAL SESSION TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 April 19, 2007 The Board of Directors of the Trophy Club Municipal Utility District No. 1 of Tarrant and Denton Counties met in Special Session on Thursday, April 19, 2007, at 2:00 p.m., in the Boardroom of the Trophy Club Administration Building, 100 Municipal Drive, Trophy Club, Texas 76262. DIRECTORS PRESENT: Dean Henry President Gary Cantrell Vice President Connie White Secretary/Treasurer Jim Hase Asst. Secretary/Treasurer Neil Twomey Director STAFF AND GUESTS PRESENT: Lisa Ramsey Acting Recording Secretary Bob West Attorney Jim Budarf MUD 2 Director Roger Unger Consultant SPECIAL SESSION A.1 Call meeting to order. President Henry announced a quorum and called the meeting to order at 2:04 p.m. President Henry requested to move up B.2 as Roger Unger and Jim Budarf were present. B.1 Discuss and take appropriate action concerning proposed contract with Town of Trophy Club for the providing of water and sewer services to the proposed new development by Centurion American. The latest version of proposed contract was distributed to the Board, and the Board discussed the various modifications. With regard to security deposits, interest and money flow, Town Manager Emmons stated that the Town would not be responsible for any overages that the security deposits would not cover. Attorney West addressed questions regarding the contract being between M1 and M2 versus the Master District. The Master District is really not a “district,” it’s an administrative agency created by the two “districts.” The Master District has no statutory basis, it only has contractual basis, and therefore is not the appropriate entity to contract with the Town. Attorney West believes “all” entities should contract with Town,; the Master District, MUD 1 and MUD 2. Director Cantrell asked Counsel’s advice with regard to the “original” agreement being made at a Master District meeting and with the Master District. Attorney West advised that when the contract is ready to sign, the contract agreement should be on all three MUD agendas; Master District, MUD 1 and MUD 2. Director Cantrell asked if the $3.8 million is the amount to be paid so that the Town does not pay double the money. So once the water is delivered or the contract is signed the $3.8 million is due and payable. Town Manager Emmons clarified that the $540,000 will be paid upon the closing of the PID not when the contract is signed, as the Town has no way of paying that amount until the PID closes. And at that time they will then formalize the payment schedule of the $540,000. Town Manager Emmons reiterated that he/Town is not particular as to whom they contract with for water / wastewater services; MUD 1, MUD 2, or the Master District. Town Manager Emmons added that based on recommendations from our attorney, the Town can only enter into an Interlocal Agreement, which is for one-year, renewed annually. Discussion only, no action taken. B.2 Discuss and take appropriate action concerning disposition of amounts to be received by the Master District as a result of the contract between the Master District and the Town of Trophy Club for the furnishing water and wastewater services to the new development known as "The Highlands." Director Twomey reported as the money is received from the PID, it would be put in a sinking fund at 5% interest. Look at tax equalization between the two MUDs. Since MUD 2’s debt service is higher, even using a middle road projection, MUD 1 may get a very small percentage, stretching out the sinking fund 16 years, so the money would stay with Master MUD. With the projections proposed, MUD 1 would not receive any of the money as they are due to be debt free in 2011. Roger Unger provided some payment assumptions from the sale of the PID. Starting in 07-08, with annual payments for 16 years, the payments would turn to zero in 2023. Prior to 2008, the PID would permit 40 homes to be built. MUDs would put money in a bank account and take out over a 16-year period and would put that money towards their debt service. Roger Unger went back last three years to determine valuations. MUD 1 averaged an annual increase of 5.3%. MUD 2 averaged an annual increase of 5.41%; which is very close between the two MUDs. Roger Unger made assumption that Fire would increase 3%. Discussion only, no action taken. D.1 Set Next Meeting Date Next regularly scheduled meeting date: Thursday, May 3, 2007, 5:30 p.m. President Henry corrected the next regularly scheduled meeting will be Thursday, May 10th at 5:30. MUNICIPAL UTILITY DISTRICT 1 TO CONVENE INTO CLOSED SESSION Board convened into Closed Session at 3:35 p.m. CLOSED SESSION E.1 Closed meeting of the Board of Directors in accordance with Section 551.071 Tex. Gov. Code: TO CONDUCT A PRIVATE CONSULTATION WITH THE DISTRICT'S ATTORNEY on matters in which the duty of the attorney to the District under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Texas Government Code, on the following matters: A. Proposed contract with Town of Trophy Club for the providing of water and sewer services to the proposed new development by Centurion American; and B. Disposition of amounts to be received by the Master District as a result of the contract between the Master District and the Town of Trophy Club for the furnishing of water and wastewater services to the new development known as "The Highlands." MUNICIPAL UTILITY DISTRICT 1 TO RECONVENE INTO REGULAR SESSION Board reconvened into Regular Session at 3:39 p.m. *REGULAR SESSION F.1 Discuss and take appropriate action concerning discussions held in Closed Session: a. Proposed contract with Town of Trophy Club for the providing of water and sewer services to the proposed new development by Centurion American. No action taken. b. Disposition of amounts to be received by the Master District as a result of the contract between the Master District and the Town of Trophy Club for the furnishing of water and wastewater services to the new development known as "The Highlands." No action taken. F.2 Adjourn. Motion made by President Henry, seconded by Vice President Cantrell to adjourn. Meeting adjourned at 4:40 p.m. __________________________________ Dean Henry, President (SEAL) ____________________________________ Jim Hase, Secretary/Treasurer ___________________________________ Lisa Ramsey, Acting Recording Secretary MINUTES OF REGULAR SESSION TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 June 12, 2007 The Board of Directors of the Trophy Club Municipal Utility District No. 1 of Tarrant and Denton Counties met in Regular Session on Tuesday, June 12, 2007, at 6:00 p.m., in the Boardroom of the Trophy Club Administration Building, 100 Municipal Drive, Trophy Club, Texas 76262. DIRECTORS PRESENT: Dean Henry President Gary Cantrell Vice President Connie White Secretary/Treasurer Jim Hase Asst. Secretary/Treasurer Neil Twomey Director STAFF AND GUESTS PRESENT: Walter Fitzpatrick District Manager Sakura Dedrick Finance Director Mary Moore Recording Secretary Bob West Attorney REGULAR SESSION A.1 Call Meeting to Order. President Henry announced a quorum and called the meeting to order at 6:03 p.m. A.2 Public Comments or Presentations. No public comments. Board agreed to address agenda item B.5 first, followed by D.2. B.1 Discuss and take appropriate action concerning proposed contract with Town of Trophy Club for the providing of water and sewer services to the proposed new development by Centurion American. Attorney Bob West provided the Board with an update regarding the contract he received from Town Attorney Patricia Adams. The single contract has been broken out into two contracts. The substance of the new contract is it breaks out two obligations, water and wastewater services, and expands and clarifies it a little bit. Also, sets out agreements with regard to water and wastewater supply with usage of the word “capacity” as though the capacity were being bought or paid for. Secondly on the other contract, the operations, that is clear. There is now language in the contract regarding Town being responsible for the construction of a new elevated tank. Attorney Bob West advised he needs to meet with Pam Liston and Patricia Adams to go over the contract, especially regarding the use of the word “capacity,” and we still need to address policy changes. There are some clerical errors that still need to be cleaned up, before it can be brought before the Board and Council. Attorney Bob West hopes to have a clean draft, perhaps by Thursday, for further discussion. President Henry stated that he was on the committee with Director Carr. The minutes of the last Master District meeting stated that both he and Kevin Carr agreed to two contracts. In a meeting later in Walter’s office, he agreed that the contract for water supply, wastewater/sewer and maintenance is one contract and the other contract is for payment. The parties in the contract are the two MUDs not the Master District. President Henry stated that the Master District is going to have to ratify the contract before he will sign it. Director Cantrell stated that we may need to reiterate that the Master District is the entity that should be on the contract. Director Hase stated that with regard to Attorney West’s report on the contract, which he’ll call a business plan that was turned over to the Town Attorney, he does not expect to see any major changes to the business plan; he does not want to see any changes to the substance of the business plan/contract. Director Cantrell believes the Town can sign a multi-year contract and would like to see in writing where it states the reasons the Town cannot sign a multi-year contract. Attorney Bob West believes the Town can sign a multi-year contract. Director Hase states that the law allows two governmental entities to sign contracts. His understanding is the Town has been advised by counsel to sign a one-year contract with a non- governmental entity for a service contract. Attorney Bob West stated the contract should be signed by MUD 1, MUD 2 and the Master District. District Manager Fitzpatrick stated that there is no question that the contract for water and sewer sales can be anytime. The service/operation is the part in question. Discussion only; no action taken. B.2 Discuss and take appropriate action concerning disposition of amounts to be received as a result of the contract with the Town of Trophy Club for the furnishing of water and wastewater services to the new development known as "The Highlands." Attorney Bob West spoke briefly regarding his response to MUD 2’s position letter, advising that he has a rough draft with him tonight, and recommends going into Closed Session to discuss this draft letter. Discussion only; no action taken. B.3 Discuss and take appropriate action to authorize the president of MUD 1 to execute the necessary documents to finance the purchase of the new fire truck, to be titled in the name of the Master District. District Manager Fitzpatrick advised that he has checked with MUD 2 President Budarf, who has approved the purchase of the Fire Truck by MUD 1. Attorney West spoke with Pete Tart regarding this issue, who was of the strong opinion that the contract of obligation should be with MUD 1 with an ILA with MUD 2 for payment for very practical reasons as none of the paperwork for MUD 2 has been filed to prove up their election. All the voting rights are in the name of MUD 1, which means the process would be performed much quicker. Director Cantrell moved to authorize the president of MUD 1 to execute the necessary documents to finance the purchase of the new fire truck, titled in the name of the Master District and to also execute an Interlocal Agreement with MUD 2 for their participation and payment, which is fifty percent (50%). Director White seconded the motion. Floor was opened up for discussion. Discussion followed regarding how MUD 2 may want to pay their half of the fire truck and if there is a need to adjust their tax rate or pay their half by some other means, as the fire tax rates for MUD 1 and MUD 2 are different. Motion carried unanimously. B.4 Discuss and take appropriate action regarding the granting by Trophy Club Municipal Utility District No. 1 (TCMUD 1) to Beck Properties, Trophy Club, LP, a Texas Limited Partnership, of a 15-foot-wide easement situated in the Mary Medlin Survey, Abstract No. 832 in the Town of Trophy Club, Denton, Texas, and being part of a tract of land acquired by TCMUD 1 by deed recorded in Volume 3419, Page 827, Deed Records, Denton County, Texas, and being part of that tract of land acquired by TCMUD 1 by deed recorded in Volume 791, Page 459, Deed Records, Denton County, Texas. District Manager Fitzpatrick advised that this 15-foot easement is out at Wastewater Treatment Plant, and MUD 1 was paid a sum of $3,400 for the easement. Director White moved to approve the easement to Beck Properties, Trophy Club, LP, as directed. Director Cantrell amended the motion that payment for the easement would be made to TCMUD 1 and then the money would be transferred/deposited into the Master District account. Director White seconded the amended motion. Floor was opened for discussion. Motion carried unanimously. B.5 Review and discuss preliminary budget for MUD 1. Finance Director Sakura Dedrick advised the Board of a change to the handout in the packet. The change has to do with payment of the Buxton Study. The change will be to pay half ($15,000) of the Buxton Study out of this year’s MUD 1 budget and pay the other half ($15,000) in the next fiscal year’s 07/08 budget. This will drop MUD 1’s tax rate for MUD 1 for next fiscal year. Finance Director Sakura Dedrick advised that she will bring a full, complete budget before the Board in July. B.6 Discussion regarding the impact of Solana on the Master District with reference to fire protection, and water and wastewater revenue. Director Twomey looked at the 2006 fire tax values. If something was to happen to Solana, which has a value of $149 million, it would cause both MUDs’ to have to increase their fire tax rate by roughly two cents. Next, Director Twomey looked at the amount of water and wastewater that we were charging Solana. Robert Scott provided all the numbers. Master MUD has total revenues of water and wastewater sales of $3.8 million dollars, with about 805 million gallons consumed, then subtracted out Solana, came down to roughly $672 million used by non-Solana areas. The impact of Solana has on water system, first, looked at total cost for Fort Worth water, assuming still using well water, and figured out their cost per gallon, then took Solana water sales, and determined that Master MUD would have a reduced expense of $221,000. The Solana Fire Tax revenue equals $135,000. The revenue from Solana reduced by Fort Worth water expenditures, purchases came out to net of $377,000 and add $145,000 equals a $513,000 benefit to the MUDs and our water system. Also, need to look at expansion in Solana, which will increase taxes and water usage, positive impact on both MUDs. The present value of $513,000 over 20 years is worth $6.3 million, and the income will go up in taxes and water sales, and that number will increase. Everyone’s water would be higher without Solana as well as have taxes go up two cents. C.1 Receive District Manager's Report a. Items to be placed on future agendas District Manager Fitzpatrick had nothing to report. D.1 Review and Approve Minutes a. May 7, 2007 - Regular Session minutes Director Hase moved to approve the minutes for May 7, 2007. Director Cantrell seconded the motion. Motion carried unanimously. D.2 Review and Approve Disbursements and Variance Report a. April 2007 Director White moved to approve the disbursements and variance report for April 2007. Director Twomey seconded the motion. Motion carried unanimously. D.3 Review Monthly Tax Collection Report a. April 2007 Board reviewed the April Tax Collection Report with no action taken. D.4 Set Next Meeting Date a. Tuesday, July 10, 2007, 6:00 p.m. Board agreed to meet on Thursday, July 12th at 5:00 p.m. BOARD TO CONVENE INTO CLOSED SESSION The Board convened into Closed Session at 7:07 a.m. CLOSED SESSION E.1 ADJOURN INTO CLOSED MEETING FOR THE FOLLOWING PURPOSE: PURSUANT TO SECTION 551.071 OF THE TEXAS GOVERNMENT CODE TO CONDUCT A PRIVATE CONSULTATION WITH THE DISTRICT'S ATTORNEY SEEKING THE ATTORNEY'S ADVICE REGARDING AGENDA ITEM B.2, RELATING TO THE DISPOSITION OF AMOUNTS TO BE RECEIVED AS A RESULT OF THE CONTRACT WITH THE TOWN OF TROPHY CLUB FOR THE FURNISHING OF WATER AND WASTEWATER SERVICES TO THE NEW DEVELOPMENT KNOWN AS "THE HIGHLANDS." BOARD TO RECONVENE INTO REGULAR SESSION Board reconvened into Open/Regular Session at 7:40 p.m. E.2 Discuss and take appropriate action regarding discussions held in Closed Session regarding disposition of amounts to be received as a result of the contract with the Town of Trophy Club for the furnishing water and wastewater services to the new development known as "The Highlands." Director Cantrell moved to direct our attorney to submit the letter to the President of MUD 2 with information presented in Executive Session, to communicate our position with regard to MUD 2’s position letters. Director Hase seconded the motion. Floor was opened for discussion. Director Cantrell amended his motion to state that President Henry will distribute the letter to Jim Budarf and to Walter Fitzpatrick, and Walter will then forward the letter to the Master District. Director Hase seconded the amended motion. Motion carried unanimously. F.1 Adjourn. Meeting adjourned at 7:43 p.m. _________________________________ Dean Henry, President (SEAL) ____________________________________ Jim Hase, Secretary/Treasurer ____________________________ Mary Moore, Recording Secretary MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 7-12-2007 Subject: Agenda Item No. D.2 Review and Approve Disbursements and Variance Report a. May 2007 (smd) Attachments: 1. May 2007 Variance Report MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 7-12-2007 Subject: Agenda Item No. D.3 Review Monthly Tax Collection Report a. May 2007 (mm) Attachments: 1. May Tax Collection Report MUNICIPAL UTILITY DISTRICT #1 From: The Office of the Municipal Utility District#1 Date: 7-12-2007 Subject: Agenda Item No.F.1 Adjourn. (mm)