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Trophy Club Municipal Utility District No. 1 August 16, 2016 Regular Meeting Minutes
REGULAR MEETING MINUTES
TROPHY ClUB MUNICIPAl UTILITY DISTRICT NO. 1
BOARD OF DIRECTORS
AUGUST 16, 2016 at 6:00P.M.
100 Municipal Drive, Trophy Club, Texas 76262
The Trophy Club Municipal Utility District No. 1 Board of Directors, of Denton and Tarrant Counties, met
in Regular Session on August 16, 2016 at 6:00 P.M., in the Boardroom of the Administration Building,
100 Municipal Drive, Trophy Club, Texas 76262. The meeting was held within the boundaries of the
District, and was open to the public.
STATE OF TEXAS §
COUNTIES OF DENTON AND TARRANT §
DISTRICT BOARD MEMBERS PRESENT
Kevin R. Carr
Greg Wilson
Jim Hase
Jim Thomas
Bill Rose
STAFF PRESENT:
President
Vice President
Secretary/Treasurer
Director
Director
Jennifer McKnight General Manager
laurie Slaght District Secretary
Renae Gonzales
Terri Sisk
Mike McMahon
Karl Schlielig
Pam Liston
Rick Lasky
GUESTS PRESENT:
Paul Liston
Finance Manager
Administration Manager
Water Superintendent
Wastewater Superintendent
General legal Counsel
Interim Fire Chief
Attorney
T any Corbett
Kevin Glovier, PE
Attorney, District Bond Counsel
CP&Y
Andrew Friedman Samco Capital Markets
Justin Razor NewGen Strategies
PUBLIC HEARING -REGULAR MEETING
CAll TO ORDER AND ANNOUNCE A QUORUM
President Carr announced the date of August 16, 2016, called the meeting to order and announced a
quorum present at 6:00p.m.
1. PUBLIC HEARING -Announce and open Public Hearing regarding proposed water and sewer rates.
General Manager McKnight gave a presentation regarding the proposed rate increases for October
1, 2016. McKnight explained how the District sets its water and sewer rates, the methodology and
what is included in those rates. McKnight gave an overview of the scenario's that were considered
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by the Board and explained the rationale behind their selection of scenarios chosen. McKnight
reviewed the proposed rates and compared them with the rates of surrounding towns and cities.
(The presentation is attached hereto)
President Carr stated that the District had received emails from the following residents:
Charles Mitchell
Joe & Patti Tellez
Melissa Cornish
Rob Zimmerman
Aaron Cornish
Ted Powell
Terry (gave only first name)
The following residents spoke during the Public Hearing:
Pat Gillis 71 Panorama Circle
John Lynch 525 Indian Creek
Dennis Sheridan
Evan Callahan
Ted Powell
Eric Green
Luanne Wing
Dr. Wanda Franklin
1 Hillcrest Court
420 Parkview
12 Reading Court
553 Indian Creek Drive
1115 Wilshire Drive
4 Turnberry Court
President Carr Closed the Public Hearing regarding proposed water and sewer rates at 7:09p.m.
CITIZEN COMMENTS
Renae Gonzales
REPORTS & UPDATES
20 Sonora Drive
2. Fire Department Report for July 2016
a.Operations Report
b.Volunteer Recruitment Report
Chief Lasky gave his monthly update to the Board and stated that he is working on bolstering mutual
aid agreements with Flower Mound and Southlake .
CONSENT AGENDA
3. Consider and take appropriate action to approve the Consent Agenda.
a. July 2016 Check Register
b. July 13, 2016 Special Meeting Minutes
c. July 19, 2016 Regular Meeting Minutes
d. lnterlocal Agreement with Denton County for tax collections in FY 2017
Motion made by Director Rose and seconded by Director Wilson to approve the consent agenda as
presented.
Motion carried unanimously
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REGULAR SESSION
4. Consider and take appropriate action to adopt District Rate Order No. 2016-0816A amending water
and sewer rates and setting effective date of October 1, 2016.
John Lynch
Luanne Wing
Kyle Williams
525 Indian Creek
1115 Wilshire Drive
2206 Montgomerie Avenue
Director Wilson gave his explanation as to how we got here. The Board used reserves to pay the rate
increases instead of passing on the cost to the customer. The PID is built out and the reserves are
depleted. Wilson stated that residents should expect rates to go up for the next few years.
Ted Powell
Evan Callahan
Ali Nur
Mark Sudberry
Danny Mayer
Ted Powell
Nick Sanders
10 Reading Court
420 Parkview Drive
2225 Veranda Avenue
3 Fresh Meadow Court
2201 Prestwick Avenue
10 Reading Court
7 Hayes Ct.
Motion made by Director Rose and seconded by Director Wilson to have Section 3.02G . (Meter Data
Logging Fee) be eliminated from the Rate order.
Attorney Liston stated that the motion is out of order. Meter Data logging fees will be added to an
upcoming agenda.
Motion made by Director Carr and seconded by Director Thomas to adopt District Rate Order No.
2016-0816A amending water rates.
For: Carr, Hase, Thomas
Opposed: Rose, Wilson
Motion passed 3-2
The Board Recessed at 8:52 p.m.
Due to technical difficulties the meeting has resumed into Regular Session at 9:11 p.m. using a voice
recorder. Videotaping resumed at 9:29 p.m.
General Manager McKnight asked for an opinion from Justin Razor with NewGen Strategies as to
how setting base rates the same for 5/8" and 1" meters could be justified. Justin stated that it could
not be justified because a 1" meter flows at 60 gallons per minute and a 5/8" meter flows at 20
gallons per minute that is why the cost is higher and added that the Board could make a policy
decision to charge the same base rate for 5/8" and 1" meters, however, that would be a Board
policy decision only and would not be justifiable to the Public Utility Commission.
Motion by Director Rose seconded by Director Wilson to amend the rate order base rate for a 1"
meter be set at $24.55 and not $32.23 and that displaced revenue to be regained by adjusting the
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volumetric rates.
For: Rose
Opposed: Hase, Carr, Wilson, Thomas
Motion failed 1-4
August 16, 2016 Regular Meeting Minutes
Motion made by Director Rose and seconded by Director Wilson that commercial and residential will
cover their own cost of service based on derived volumetric flows at the wastewater treatment plant
with an adjustment for I & I of 10%. Commercial water that is billed, sewer charges shall be used as
commercial flow at the wastewater treatment plant for the purpose of calculating percentage of
service and allocating cost plus the I & I for commercial and residential customers.
For: Rose, Wilson Thomas and Hase
Oppose: Carr
Motion passed 4-1
Motion made by Director Rose and seconded by Director to have the General Manager present the
following sewer rate scenarios for consideration of the Board:
1) Commercial and residential volumetric rates with residential cap adjusted so that total
residential revenue capped at actual amount processed at wastewater treatment plant
adjusted for 10% I & I
2) Commercial total rate revenue equal and residential total rate revenue equal actual amounts
processed at the wastewater treatment plant adjusted for 10% I & I using winter averaging on
residential with no caps.
3} Same as 2 except winter averaging with an inclining block structure, blocks 0-4,000 gallons,
4,001-8,000 gallons, 8,001-12,000 gallons and +12,000 gallons.
Base rate for scenario's 1, 2 and 3 shall be the same and have a customer analysis similar to
the one presented at the rate workshop included.
Motion carried unanimously
5. Consider and take appropriate action regarding $4,635,000 Trophy Club Municipal Utility District No.
1 Water and Sewer System Revenue Bonds, Proposed Series 2016 (the "TWDB Bonds"):
a. Approval of Financing Agreement with Texas Water Development Board (TWDB) setting forth
terms and conditions of financial assistance under the State Water Implementation Revenue
Fund.
b. Authorize other actions necessary, appropriate or convenient regarding the issuance of the
TWDB Bonds.
Motion made by Director Carr and seconded by Director Thomas to approve the following:
c. Approval of Financing Agreement with Texas Water Development Board (TWDB} setting
forth terms and conditions of financial assistance under the State Water Implementation
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Revenue Fund.
d. Authorize other actions necessary, appropriate or convenient regarding the issuance of the
TWDB Bonds.
Motion carried unanimously
The Board recessed at 10:37 p.m.
The reconvened into Regular Session at 10:49 p.m.
6. Consider and take appropriate action regarding adoption of Resolution No. 2016-0816A approving
Preliminary Engineering Report for Waterworks System Improvement Projects.
Motion made by Director Carr and seconded by Director Hase to adopt Resolution No. 2016-0816A
approving Preliminary Engineering Report for Waterworks System Improvement Projects.
For: Hase, Carr and Thomas
Opposed: Wilson, Rose
Motion passed 3-2
7. Consider and take appropriate action regarding November 8, 2016 Bond Election.
a. Consider and Take Action Regarding Adoption of Order No. 2016-0816B Calling a Bond
Election for Trophy Club Municipal Utility District No. 1 and Making Provisions for Conducting
Such Election and Other Provisions Incidental and Related Thereto.
Considerar y tamar acci6n en relaci6n a Ia adopci6n de una Orden e/ Numero 2016-0816B Para
Convocar una Elecci6n de Bonos Para el Distrito Municipal de Servicios Publicos Trophy Club
No. 1 y estableciendo las disposiciones para Ia conducci6n de tal elecci6n y otras disposiciones
incidentales y relativas a Ia misma.
b. Consider and Take Action regarding joint election and election service agreements for
conducting November 8, 2016 Bond Election.
Considerar y tamar acci6n en relaci6n a los convenios de elecci6n conjunta y servlc/os
electorates para Ia realizaci6n de Ia Elecci6n de Bonos de/8 de noviembre de 2016.
c. Authorize the General Manager, Officers and District consultants to take such other action as
may be necessary or appropriate to proceed with the November 8, 2016 Bond Election.
Autorizar at Gerente General, directivos y consultores del Distrito para tamar tales otras
medidas segun sean necesarias o apropiadas para proceder con Ia Elecci6n de Bonos del 8 de
noviembre de 2016.
Director Rose strongly disagrees with the Preliminary engineering reports and feels that the Board
must obtain more accurate data. Rose does not feel that an additional tank or that the district
needs new lines. Director Hase would like to know if we can cancel the election if we call it tonight.
Attorney Corbett stated that the Board cannot call the election and then remove it off the ballot.
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Motion made by Director Wilson and seconded by Director Rose to delay the Bond until the May 2017
election.
For: Rose, Thomas, Hase and Wilson
Opposed: Carr
Motion passed 4-1
8. Consider and take appropriate action to conduct Director Meetings with the public regarding water
and sewer rates and/or District bond election. (Wilson)
Motion made by Director Wilson and seconded by Director Thomas to hold public meetings as needed
and authorizing Director Wilson to take the lead on these meetings.
Motion carried unanimously
9. Consider and take appropriate action to approve Second Amended lnterlocal Cooperation
Agreement for Fire Protection Services with the Town of Trophy Club to amend section 3.01
(Funding).
Motion made by Director Carr and seconded by Director Thomas to approve Second Amended
lnterlocal Cooperation Agreement for Fire Protection Services with the Town of Trophy Club to amend
section 3.01 (Funding).
Motion carried unanimously
10. Consider and take appropriate action to approve contract no. 20160816 for Personnel Services with
Emergency Services Consulting International (ESCI) to serve as District Fire Service Administrator for
up to a ninety-day period and to assist in drafting and implementing an agreement for fire/EMS
services with the Town of Trophy Club. (Carr)
Discussion only, no action taken
11. Consider and take appropriate action regarding fire protections services including options for
management and operations ofthe District Fire Department. (Wilson)
Motion made by Director Wilson and seconded by Director Carr to direct staff to work with the Town
to draft an agreement within 45 days to transfer operations and management to the Town.
Motion is amended to include specific deadlines for ESCI, SOP's come up with the components that
create a solid ILA by Sept 15 and turn over to Legal and bring back to the Board by the end of
September.
Motion is amended by the first and the second to extend the deadline to November 15, 2016.
Motion approve the amendment to the motion is unanimous.
Director Rose asked Chief Lasky if he could take care of the Standard Operating Procedures without
ESCI. Lasky replied that he could. General Manager McKnight stated that she feels that ESCI and
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Chief Lasky should work together because they are experts and can come up with measurable goals
so as we move forward the Board can be assured that the District assets are being taken care of
because these are the measures we are going to look for on an annual basis. McKnight added that
having two experts put these items into an ILA is the best option because the ILA's that are in place
are not working and she does not think the Board should continue to use the ILA's that have not
worked in the past whether it be the Town that writes them or the District. McKnight added that
the motion was to direct staff and she feels confident that Chief Lasky is the right staff for the Town
and that ESCI is the right staff for the District. McKnight stated that if the Board is choosing not to
use ESCI, they need to be specific on what staff they are directing to represent the District.
Director Rose makes a motion to remove ESCI from this motion, seconded by Director Wilson
For: Rose, Hase, Wilson and Thomas.
Opposed: Carr
Amendment to remove ESCI from the amendment to the main motion passed 4-1
THE MAIN MOTION IS AMENDED BY THE FIRST AND SECOND TO STATE: Motion to amend the main
motion by the first, Director Wilson and the second, Director Carr to finalize the agreement to transfer
the maintenance and operations of the fire station to the Town with the District approving the budget
and setting the tax rate. If the District so desires to bring in a third party to assist with the transition,
that decision can be made during the negotiation process.
Motion carried unanimously
(Motion is amended by the first and the second to extend the deadline to November 15, 2016.
Motion to approve the amendment as amended is unanimous.)
12. Consider and take appropriate action regarding sewer billing for Town of Trophy Club Splash Pad
located on Parkview Drive.
General Manager McKnight stated that the Splash Pad is not being charged sewer.
Motion made by Director Carr and seconded by Director Wilson to waive any back fees for sewer and
have the staff follow up 60 days.
Motion carried unanimously
13. Consider and take appropriate action regarding elevated tank capacity necessary to serve RR
Webster Family LLC for the development known as Trophy Club Village Centre MOB, Phase 2,
Trophy Club Animal Hospital and to approve Non-Standard Water and Wastewater Agreement for
service commitment.
General Manager McKnight stated that she is not comfortable with an agreement that allocates tank
capacity. McKnight stated that she would advise the Board to seek capacity from the Town of
Trophy Club.
Staff is directed to contact the Town and find out if we have an allocation agreement.
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Motion made by Director Carr and seconded by Hase to approve the approve Non-Standard Water
and Wastewater Agreement for service commitment for the development known as Trophy Club
Village Centre MOB, Phase 2, Trophy Club Animal Hospital contingent upon receiving the written
allocation agreement.
Motion carried unanimously
14. Consider and take appropriate action to amend District Agenda Policy to allow Citizen Comments at
all meetings of the Board. (Rose)
Motion made by Director Rose and seconded by Director Hase to table agenda item No. 14.
Motion carried unanimously
15. Consider and take appropriate action clarifying and formalizing the authority of individual Directors
of the Board as related to:
a. Interactions with and direction to the General Manager, staff, and consultants. (Wilson/Thomas)
b.Authorization of expenditures of District funds. (Thomas)
c. Procedures for conducting meetings ofthe Board. (Carr)
Motion made by Director Wilson and seconded by Director Rose to levy the same power on all
Directors. All request go through the General Manager and all information is shared equally. That the
President should work with staff to create the agenda and that the secretary treasurer should work
with finance.
Motion as amended carried unanimously
Director Carr asked for agenda item 15.c and wanted to state the meeting does not operate under
Roberts Rules of Order.
Motion made by Director Carr and seconded by Director Thomas that we limit meeting time until 11
p.m. and that the Board is not operating under Roberts rules of Order.
For: Hase, Wilson, Carr, Thomas
Opposed: Rose
Motion passed 4-1
16. Consider and take appropriate action to increase retainage fees for professional services by
NewGen Strategies related to the Public Utility Commission rate challenge.
Motion made by Director Hase and seconded by Director Wilson to increase retainage fees for
professional services by NewGen Strategies related to the Public Utility Commission rate challenge up
to a total of $200,000.
For: Hase, Thomas, Wilson and Carr
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Obstain: Rose
Motion passed 4-1
17. Discussion regarding status of appeal of retail water and sewer rates pending with the Public Utility
Commission of Texas.
Discussion only, no action taken
18. Consider and take appropriate action regarding Resolution 2016-08168, adopting the budget for
Trophy Club Municipal Utility District No. 1 for the fiscal year beginning October 1, 2016 and ending
September 30, 2017.
Motion made by Director Rose and seconded by Director Thomas to approve Resolution 2016-08168,
adopting the budget for Trophy Club Municipal Utility District No. 1 for the fiscal year beginning
October 1, 2016 and ending September 30, 2017
Motion carried unanimously
Motion is amended by Director Rose and seconded by Director Wilson to remove the following line
items be zeroed out from the adopted budget: 135-50005-026, 135-50030-026, 135-50035-026, and
135-50040-026.
Motion to amend the main motion and remove Director Fees carried unanimously
Director Thomas would like to look into the W.I.S.E. Guys Irrigation Evaluation program and will
bring information to a future meeting regarding this.
19. Consider and take appropriate action regarding District Governmental Accounting Standards Board
(GASB} accounts:
a. Reallocation offunds in GASB-IT to GASB-Sewer.
b. Reallocation of other GASB account funds.
Motion made by Director Carr and seconded by Director Wilson reallocate the funds from GASB IT to
GASB sewer.
Motion carried unanimously
20. Consider and take appropriate action regarding the July 2016 combined financials and variance
report.
a.Combined financials
b.Variance report
Motion made by Director Hase and seconded by Director Carr to approve the July 2016 combined
financials and variance report.
Motion carried unanimously
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REPORTS & UPDATES
21. Report on AWBD new director training class. (Rose)
Director Rose gave an overview of his class at AWBD
22. Update from General Manager Search Committee (Carr)
Director Carr updated the Board on the status of the search committee and stated that the
committee will be interviewing for the interim General Manager position on Monday, August 22,
2016.
23. General Manager Monthly Report for June 2016
a. Water System Operation
b.Meter Head Change Out Program
c. Wastewater System Operation
d.District Personnel Changes Update
e.Finance Update
•Utility Billing Reports
•Permits Collected
f. Project Status Updates
•LAS System Project
•Restroom Renovation Project
•Wastewater Treatment Plant Upgrade Project
•Wastewater Treatment Plant Permit Renewal
General Manager McKnight gave the Board her monthly update. McKnight announced that Terri Sisk is
also leaving to take a new job. The Board made comments to Jennifer and gave her well wishes.
THE BOARD CLOSED SESSION
24. The Board will convene into closed session pursuant to Section 551.074 of the Texas Government
Code regarding Personnel Matters to deliberate a complaint submitted by Danny Mayer against
Director Jim Thomas dated June 15, 2016 and receive legal counsel's findings regarding face of
complaint regarding same.
RECONVENE INTO REGULAR SESSION at 1:54 a.m.
25. Consider and take appropriate action regarding Closed Session items.
Director Rose stated that he would like to have a hearing in an open meeting and allow the persons
involved to present their information.
Director Hase felt that this is a private matter and does not support this motion. Danny Mayer spoke
and stated that he did not want to file this complaint. He was just seeking an apology from Director
Thomas
Motion made by Director Rose and seconded by Director Wilson to move the complaint forward for
further review and investigation of the complaint.
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For: Carr, Rose, Wilson
Abstain: Thomas
Opposed: Hase
Motion passed 3-1-1
26. Items for future agendas:
August 16, 2016 Regular Meeting Minutes
27. Announce meeting dates: Regular Meeting on September 20, 2016 at 6:00p.m.
Motion made by Director Wilson and seconded by Director Rose to adjourn the Regular Meeting.
Motion carried unanimously
Meeting adjourned at 2:02 a.m.
~c_
evin R. Carr, President
~
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