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HomeMy WebLinkAbout2018-0917 September 17, 2018 Public Hearing Regular Meeting MinutesSeptember 17, 2018 Public Hearing Regular Meeting Minutes PUBLIC HEARING REGUlAR MEETING MINUTES TROPHY ClUB MUNICIPAl UTILITY DISTRICT NO.1 BOARD OF DIRECTORS September 17, 2018 at 6:30P.M. 100 Municipal Drive, Trophy Club, Texas 76262 Trophy Club Municipal Utility District No . 1 Board of Directors, of Denton and Tarrant Counties, met in a Public Hearing and Regular Meeting on September 17, 2018 at 6:30 P.M., in the Boardroom of the Adm i nistration 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 § BOARD MEMBERS PRESENT: Gregory Wilson President William C. Rose Vice President Kelly Castonguay Director BOARD MEMBERS ABSENT: Steve Flynn Mark Chapman STAFF PRESENT: John Carman laurie Slaght Mike McMahon Steven Krolczyk Tony Co r bett GUESTS PRESENT: Secretary/Treasurer Director General Manager District Secretary Water Superintendent Finance Manager Legal Counsel Chris Ekrut NewGen Strategies Andrew Friedman Samco Capital Marketing CAll TO ORDER AND ANNOUNCE A QUORUM President Wilson announced the date of September 17, 2018, called the meeting to order and announced a quorum present at 6 :34p.m. CITIZEN COMMENTS luanne Wing 1115 Wilshire Drive PUBLIC HEARING 1. Trophy Club Municipal Utility District No. 1 will conduct a Public Hearing regarding adoption ofthe final Distri ct Tax Rates for Tax Year 2018 . Director Wilson opened the Public Hearing at 6:35 p.m. 1 of7 There were no speakers for the Public Hearing Director Wilson closed the Public Hearing at 6:36 p.m. CONSENT AGENDA 2. Consider and take appropriate action to approve the Consent Agenda. a. August 2018 Check Register b. August 20, 2018 Regular Meeting Minutes September 17 , 2018 Pub lic Hearing Regular Meeting Minutes Motion made by Director Rose and seconded by Director Castonguay to approve the consent agenda as presented. Motion carried unanimously REGULAR SESSION 3. Receive report from District Rate Consultant regarding proposed water and sewer rate recommendations . Chris Ekrut, Director at NewGen Strategies and Rate Consultant to the District presented proposed water and sewer rates for FY2019 and answered questions related thereto. Discussion Only, No Action Taken 4. Receive report from District Financial Advisor regarding outstanding District debt, issuance of proposed revenue bonds, debt service funding obligations, future capital improvement project financing, and general District financial recommendations . Andrew Friedman, Managing Director at SAMCO Capital Markets and Financial Advisor to the District provided an update to the board regarding the upcoming bond issuance and answered questions related thereto. Mr. Friedman stated that he has reviewed the proposed FY19 Budget and feels the District meets the revenue requirements for the upcoming bond issuance. Discussion Only, No Action Taken 5 . Consider and take appropriate action to approve Resolution No . 2018 -0917A amending the Fiscal Year 2018 Budget . Steven Krolcyzk, Finance Manager reviewed the amendments to the Fiscal Year 2018 Budget and answered questions related thereto. Motion made by Director Rose and seconded by Director Castonguay to approve Resolution No. 2018- 0917A amending the Fiscal Year 2018 Budget . 2 of7 Motion carried unanimously September 17 , 2018 Public Hearing Regular Meeting Minutes 6. Consider and take appropriate action regarding adoption of Resolution No. 2018-09178 approving Budget for Fiscal Year 2019 . Motion made by Director Rose and seconded by Director Castonguay to adopt Resolution No. 2018-0917B approving Budget for Fiscal Year 2019 using option 3 for the water and sewer rate increase. For: Rose, Castonguay Opposed: Wilson Motion Failed 2-1 Motion made by Director W i lson to approve the fiscal year budget as presented with option 2 for the water and sewer rates . Motion d i ed for lack of a second . Motion made by Director Rose and seconded by Director Castonguay to adopt Resolution No. 2018-0917B approving Budget for Fiscal Year 2019 using option 3 for the water and sewer rate increase. For : Rose, Castonguay Opposed: Wilson Motion Failed 2-1 Motion by director Wilson to approve the FY budget using Option 2 for the water and sewer increase . Motion di es for the lack of a second. Motion by Wilson seconded by Director Rose to adopt Resolution No. 2018-0917B approving Budget for Fiscal Year 2019 using option 2 for the water and sewer rate increase. Motion carried unanimously 7. Consider and take appropriate action to adopt Rate Order No . 2018-0917 A amending water and sewer rates and setting an effective date of October 1, 2018 . Motion made by Director Wilson and seconded by Director Rose to adopt Rate Order No . 2018-0917A amending water and sewer rates and setting an effective date of October 1, 2018. Amendment to the Motion Motion by Director Rose and seconded by Director Castonguay to amend Section 1.10 of Rate Order 2018- 3 of 7 September 17, 2018 Public Hearing Regular Meeting Minutes 0917A to read as follows: 1.10 FORT WORTH IMPACT FEE. Each customer requesting an initial connection to the Districts water system shall also payto the District the applicable City of Fort Worth Impact Fee. Motion to amend Section 1.10 of the Rate Order carried unanimously Motion to adopt Rate Order 2018-0917A as amended carried unanimously 8 . Consider and take appropriate action regarding Order No . 2018-09178, fixing and levying Trophy Club Mun i cipal Utility District No.1 Debt Service Tax Rate and Operat i ons and Maintenance Tax Rate for 2018 Tax Year . Motion made by Director Rose and seconded by Director Castonguay to approve Order No. 2018-09176, fixing and levying Trophy Club Municipal Utility District No. 1 Debt Service Tax Rate and Operations and Maintenance Tax Rate for 2018 Tax Year. Motion carried unanimously 9. Consider and take appropriate action regarding approval of amendment to District Information Form , including Notice to Purchaser Form. Motion m'ade by Director Wilson and seconded by Director Castonguay to approve the amendment to District Information form including Notice to Purchaser Form with a rate of .11618 per $100 valuation . Motion carried unanimously 10. Consider and take appropriate action regarding adoption of Resolution 2018-0917C approving FY 2018 Tax Roll for Trophy Club Mun i cipal Utility Distri ct No . 1. Motion made by Director Wilson and seconded by Director Rose to adopt Resolution 2018-0917C approving FY 2018 Tax Roll for Trophy Club Municipal Utility District No. 1. Motion carried unanimously 11. Consider and take appropri ate action regarding annual review of District Investment Policy and Investment Strategies including : a. Appoint District Investment Offi cer(s). b. Order No. 2018-0917C Adopting Amended and Restated Investment Policy. Motion made by Director Rose and seconded by Director Wilson to approve Order No. 2018-0917C Adopting Amended and Restated Investment Policy. Amendment to the Motion Motion made by Director Rose second by Director Castonguay to amend the Section 7.02 Investment 4 of7 September 17, 2018 Public Hearing Regular Meeting Minutes Training and delete board appointed treasurer 7.02 and treasurer in sentenance 2. For: none Opposed: Rose, Wilson and Castonguay Motion to amend Section 7.02 of the Investment Policy Failed 0-3 Motion approve Order No. 2018-0917C carried unanimously 12. Consider and take appropriate action regarding adoption of Order No . 2018-09170 Approving Cash Reserve Policy . Motion made by Director Rose and seconded by Director Castonguay delegate Director Rose and Director Flynn work with the General Manager and Finance Manager to work on a reserve policy to bring back to the Board for approval. Motion carried unanimously 13 . Consider and take appropri ate action regarding the August 2018 combined f i nancials and variance report. a. Combined financials b . Variance report Motion . made by Director Rose and seconded by Director Castonguay to approve the August 2018 Combined Financials and Variance Report . Motion carried unanimously REPORTS & UPDATES 14. General Manager Monthly Reports and Updates a. Regulatory Update b . Capital Improvement Projects • Interconnect Water Transmission Line Phase 1 • Interconnect Water Transmission Line Phase 2 • Wastewater Treatment Plant Upgrade Project • Joint Projects w ith Town c. Fire Department Summary d . Water System Operations e. Wastewater System Operat ions f . Finance Update • Uti lity Billing Report • Permits Collected • Cash Report 5 of 7 September 17, 2018 Public Hearing Regular Meeting Minutes General Manager John Carman presented his monthly update to the Board and answered questions related thereto. The Board convened into Executive Session at 9:18P.M. EXECUTIVE SESSION 15. Pursuant to Section 551.071 of the Texas Open Meetings Act, the Board may consult with its attorney in Executive Session on a matter in which the duty of the attorney to the Governmental Body under the Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Open Meeti ngs Act or to seek advice of counsel on legal matters involving pending or contemplated litigation or settlement offers: a. Contractor breach, performance and payment issues related to District's contract with Webber- Cadagua Partners for construction of the Wastewater Treatment Plant Improvements; and b. Trophy Club Municipal Utility District No . 1 v. Acadia Services, LLC, In the District Court of Tarrant County, 141'1 Judicial District (Cause No . 141-299351-18). c. Claims for damages caused by District facilities and/or operations to property located at 1040 Trophy Club Drive, Trophy Club Texas. 16. Pursuant to Section 551.072 of the Texas Open Meetings Act, the Board may deliberate the pu r chase, exchange, lease, or value of real property if deliberation in an open meeting would have a detrimental effect on the position of the governmental body in negotiations with a third person : a. · District real property located at 100 Municipal Drive and 1501 Junction Way . The Board convened into Regular Session at 9 :52 p.m. REGULAR SESSION Director Wilson stated that no final decisions, actions or votes were taken in Executive Session. 17 . Consider and take appropriate action on matters deliberated in Executive Session: No action was taken 18 . Items for future agendas: Director Rose would like to discuss rebranding. 19 . Review and set future Meeting dates: Regular Board Meeting-Monday, October 15 , 2018 at 6:30p .m. ADJOURN Motion made by Director Rose and seconded by Director Castonguay to adjourn the meeting. Motion carried unanimously 6 of7 Director Wilson adjourned the Meeting at 9:52 p.m. ~ . (1 ~j ; A~! o c~ u~l..d! Laurie Slaght, District Secr ~ry 7 of 7 September 17, 2018 Public Hearing Regular Meeting Minutes _... 0 -(X) I-' :::0 OJ r-+ ro )> o_ l • c (/') r-+ 3 ro :::J r-+ Wastewater Cost Allocation li~~~~iliit.; Plant Flow Less: 5% 1/1 Less: Commercial Flow Result: Residential Flow Residential % Commercial % Notes: Proposed FV 2019 383.5 (19.2} (97.8} 266.5 73% 27% Wastewater Revenue Requirement Less: Fixed Charge Revenues Residential Commercial Subtotal Volumetric Revenue Requirement Residential {73%} Commercial {27%} -Volumes presented in Millions of Gallons; Dollars are presented in Millions -Numbers may be inexact due to rounding -Fixed Charge Revenues assume a $1 increase in the Fixed Minimum Charge $ 3.414 $ (1.091} (.026} $(1.117} $ 2.297 $1.680 $0.617 2 2 of 8 Proposed Wastewater Rates Commercial Fixed Minimum Charge Volumetric Charge Residential Fixed Minimum Charge Volumetric (per 1,000 gallons} 0-4,000 gallons 4,001-8,000 gallons 8,001-12,000 gallons > 12,001 gallons i I I $ 19 .60 $5.92 $ 19.60 $3 .18 4.51 6.43 9.15 Proposed $ 20.60 $6.30 $ 20.60 $3.24 4.60 6.56 9.32 3 of 8 3 Residential Wastewater Customer Impact Current 5,000 Gallons II $36 .83 Increase I (Decrease) from Current 10,000 Gallons $63.22 Increase I {Decrease) from Current 16,500 Gallons $117.26 Increase I {Decrease) from Current ' 20,000 Gallons $149.28 Increase I (Decrease) from Current 25,000 Gallons $195.03 Increase I (Decrease) from Current r •• '• •·. ·-•• ' •· 'l:l•'·~ ·!:i ." . .'J~: .,.i, Proposed _,_,~-..-;,, .. , .......... ~ J::i~r::.;~·:·~ $38.16 1.33 $65.08 1.86 $120.14 2.89 $152.76 3.48 $199.36 4.33 4 4 of 8 Commercial Wastewater Customer Impact -~ Proposed .. , 10,000 Gallons $78.80 $83.60 Increase I {Decrease) from Current 4.80 20,000 Gallons $138.00 $146.60 Increase I {Decrease) from Current 8 .60 76,000 Gallons {Class Average) $469.52 $499.40 Increase I {Decrease) from Current 29.88 5 5 of 8 0> 0 -(X) ;o Q) r+ ro )> 0... Water Rate Adjustment Options • Option 1 -No Change • Total Revenue Increase from sewer ""$125,000 • Option 2-Increase Water Meter 5/8" by $1.00 • Additional revenue for infrastructure repair and replacement • Total Revenue Increase of ""$213,000 {Water-$88K, Sewer-$125K) • Maintain current water meter equivalency factors 7 7 of 8 Water Fixed Charge Adjustment Meter Size 5/8" 1.00 $ 17.15 1" 1.88 $ 32.23 11/2" 3.32 $56.94 2" 5.05 $86.58 3" 9.08 I $ 155.76 4" 14.84 $ 254.59 6" 29.25 $ 501.64 Estimated Annual Revenue Increase I $11ncrease Maintain Eq yJ valency $ 18.15 $34.11 $60.26 $ 91.63 $ 164.84 $ 269.43 $530.89 $87,900 ;'~:;:;: ~j')'f)]~rl~:;y)~~ .-·-~ ,, ... ~ ;vanance ~· i' :'"-"·' '·····•~ ::, :~,:_:lii:.~'~:~.::-:::~D:.,~L·.~_t:2j $1.00 1.88 3.32 5.05 9.08 14.84 29 .25 8 8 of 8 Trophy Club MUD #1 Upcoming Revenue Bond Issuance Where We Stand: Application received by TCEQ and under expedited review Next Steps: Receive TCEQ approval and present timeline for debt issuance to Board for approval Time lin e for De bt Issuance : 1. TCEQ approval received and 'Request For Information' sent to District (Pricing-Day Minus 2 Months}, 2. Send out Preliminary Official Statement for review (P-Day Minus 6 Weeks), 3. Rating Call with Standard and Poors/Moody's (P-Day Minus 3 Weeks}, 4. Price and Sell (P-Day}, 5. Close (P-Day Plus 1 Month) Total: 3-Month Process If TCEQ approval is received by November 1, 2018, District could expect to close by March l 5 r, 2019 at the earliest. Str u cturing Co nsiderations: • (Likely) must have 2018 Audit in hand (investors and r;3ting agency will require) • Net Revenues must be 1.20X average annual debt service for additional bonds test • Utility Rates must generate net revenues more than 1 .10X scheduled annual . debt service payment Interest Rates and Charges: Interest Rate for MUD Revenue Bonds ("AA-") 4.25%-4.50% today. Planning for 5%. Costs of Issuance: Bond Counsel: $84,000 plus expenses Rating Agency Fee: $25,000 Special Tax Counsel: $25,000 Attorney General Fee: $7,200 Financial Advisor : $76,000 plus expenses TCEQ: $18,000