MINUTES OF THE MEETING OF FORT BEND COUNTY FRESH WATER SUPPLY DISTRICT NO. 1. August 20, 2015

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1 MINUTES OF THE MEETING OF FORT BEND COUNTY FRESH WATER SUPPLY DISTRICT NO. 1 August 20, 2015 STATE OF TEXAS COUNTY OF FORT BEND The Board of Supervisors (the Board ) of Fort Bend County Fresh Water Supply District No. 1 of Fort Bend County, Texas (the District ), met in special session, open to the public, on August 20, 2015, commencing at 5:00 p.m. at the Mustang Community Center, 4521 FM 521 North, Fresno, Fort Bend County, Texas, inside the boundaries of the District, and the roll was called of the duly constituted officers and members of the Board, to wit: Paul Hamilton Greg Fleck Calvin Casher Rodrigo Carreon Rosa Linda Medina President Vice President Secretary Assistant Secretary Assistant Secretary All members of the Board were present, except Supervisor Fleck (who entered the meeting in progress at 5:30 pm), thus constituting a quorum. Also present at the meeting were: David Dybala with Jacobs Engineering Group, Inc. ( Jacobs ), the District s Engineer; Breah Campbell with Environmental Development Partners ( EDP ), Operator for the District; Phyllis Herbst, the District s Bookkeeper; David Smalling with RW Baird & Co., Incorporated ( Baird ), the District s Financial Advisor; Cynthia Rodriguez, the District s Tax Assessor/Collector; Michael Gutierrez with Fort Bend County Precinct One; members of the public, the names of which are on the attached attendance sheet; and Michael R. Willis of Sanford Kuhl Hagan Kugle Parker Kahn LLP ( SK Law ), the District s Attorney. The meeting was called to order and the following business was transacted. 1. SALE OF SERIES 2015 UNLIMITED TAX BONDS (the Bonds ) The Board recognized Mr. Willis, who presented to the Board the following documents in connection with the sale of the Bonds: a. Texas Water Development Board ( TWDB ) Resolution Approving Project and Purchase of Bonds. b. Order Authorizing Issuance of the Bonds; c. General Certificate; d. Signature Identification and No-Litigation Certificate; e. Tax Exemption Certificate; f. Form 8038-G; g. Bond Registrar, Paying Agency and Transfer Agency Agreement; h. Escrow Agreement i. Bond Review Board Form; and /Minutes

2 j. Other documents and certificates necessary to obtain approval of the Bonds by the Attorney General of Texas. Mr. Willis explained that the Order Authorizing Issuance of the Bonds is the contract between the District and the bondholders and provides, among other things: (1) the legal authority for the District to issue the Bonds, (2) the interest rates on the Bonds, (3) the District s obligation to levy ad valorem taxes to pay the principal and interest due on the Bonds, (4) the designation of the Paying Agent/Registrar for the Bonds and (5) the covenant by the Board to maintain the tax-exempt status of the Bonds. Mr. Willis then presented the General Certificate and explained that this Certificate provides information concerning the District, including the directors and terms of office, information on previous bond sales, current tax rate, and the District s current assessed valuation. Mr. Willis presented the Signature Identification and No-Litigation Certificate, explaining that said Certificate represents that there is no litigation pending against the District affecting the Bonds and identifies the signatures of the President and Secretary of the Board. Mr. Willis then presented the Tax Exemption Certificate. He explained that this Certificate will be drafted and dated the day of closing on the sale of the Bonds. Mr. Willis further stated that the Certificate states, in addition to other facts, that the District has met certain conditions pursuant to the Internal Revenue Code of 1986 which allows the Bonds to be qualified as tax-exempt obligations. Mr. Willis introduced a Bond Registrar Paying Agency Agreement with Amegy Bank National Association, Houston, Texas as Paying Agent/Registrar for the Bonds. Mr. Willis explained that all tax exempt municipal bonds are required to be fully registered with registry books maintained by a registrar on behalf of the District. The books reflect the names, addresses and principal amounts of bonds registered in the name of the owner. Mr. Willis further explained that the Agreement sets forth the duties, responsibilities and fees involved for maintaining this information and transferring to owners. Mr. Willis introduced (i) the letter to the Attorney General for the State of Texas which authorizes the execution of the General Certificate and the Signature Identification and No-Litigation Certificate as of the date of the Approving Opinion for the Bonds, (ii) the letter to the Comptroller of Public Accounts which authorizes the Comptroller of Public Accounts to deliver the bonds to Sanford Kuhl Hagan Kugle Parker Kahn LLP once they are approved by the Attorney General and registered and (iii) the letter to Sanford Kuhl Hagan Kugle Parker Kahn LLP which authorizes the dating of the General Certificate, the Signature Identification and No-Litigation Certificate and the Certificate as to Tax Exemption and provides that the District will immediately notify Sanford Kuhl Hagan Kugle Parker Kahn LLP if any of the facts contained in those documents change prior to the date of closing and delivery of the bonds. The Board next considered authorizing the President to execute IRS Form 8038-G. Mr. Willis explained that this form provides information about the Bonds to the IRS for record keeping purposes. The Escrow Agreement was presented. Such Agreement provides for the placement of the Bond proceeds (less the Costs of Is suance) in an escrow account with BOKF, NA, with said funds to be released upon TWDB approval for the construction of the project. Consideration was then given to authorizing additional action in connection with obtaining approval of the Attorney General of Texas of the Bonds. Mr. Willis informed the Board that once the Attorney General s office has received and reviewed the Transcript of Proceedings for the Bonds, it is /Minutes

3 likely they will request additional information and/or documents and requested the Board s authority to prepare and have executed any requested documents or amendments to the existing documents. Upon motion duly made by Supervisor Medina, seconded by Supervisor Casher, the board voted unanimously to approve the above-described documents, and to authorize any officer to execute on behalf the Board nay other document or certification necessary to effect closing on the Bonds. 2. BOOKKEEPER S REPORT The Board then considered the Bookkeeper s Report presented by Ms. Herbst, a copy of which is attached hereto, and the invoices and checks presented for payment as follows: A. Approval of Bills. The Board reviewed the bills presented for payment. B. Review Investment Report. No Quarterly Investment Report was given. C. Review Collateral Pledge Report. No Collateral Pledge Report was given. Upon motion duly made by Supervisor Medina, seconded by Supervisor Casher, the Board voted unanimously to (1) accept the Bookkeeper s Report as presented; and (2) authorize the payment of the checks and invoices listed therein 3. TAX REPORT The Board next considered the Tax Report, presented by Ms. Rodriguez. Upon motion duly made by Supervisor Medina, seconded by Supervisor Casher, the Board voted unanimously to approve the Tax Report, as presented. 4. ATTORNEY S REPORT The Board recognized Mr. Willis, who presented the Attorney s report as follows: A. Approval of Minutes. Proposed minutes of the regular and town hall meetings held on June 25, 2015 and the regular meeting held on July 16, 2015 were presented for approval. Upon motion duly made by Supervisor Carreon, seconded by Supervisor Casher, the Board voted unanimously to approve the minutes as presented. B. Report on Certificates of Convenience and Necessity ( CCNs ). No action was taken in connection with the CCNs /Minutes

4 C. Regional Plant Committee Report. Supervisor Hamilton next presented the Regional Plant Committee Report, a copy of which is attached hereto. Upon motion duly made by Supervisor Fleck, seconded by Supervisor Casher, the Board voted unanimously to approve the Regional Plant Committee Report. D. Strategic Partnership Agreement. No action was taken in connection with a Strategic Partnership Agreement. E. Regional Facilities Contract No action was taken in connection with the Regional Facilities Contract. F. Five Year Financing Plan No action was taken in connection with the Five Year Financing Plan. G. Procedures for Plumbing Contracts No action was taken in connection with the plumbing contract procedures. H. Resolution Regarding Annual Review of Investment Policy At this time the Board conducted the Annual Review of the District s Investment Policy. Upon motion duly made by Supervisor Fleck, seconded by Supervisor Medina, the Board voted unanimously to approve the Resolution Regarding Annual Review of the Investment Policy. I. Discuss 2015 Tax Levy and Call Public Hearing The Board next recognized Mr. Smalling, and considered a Tax Rate Analysis, prepared by the District s Financial Advisor, Baird, a copy of which is attached hereto. Mr. Smalling noted that Baird recommends a debt service tax rate of $0.50 and an operation and maintenance tax of $0.50 for a total tax rate of $1.00 per $100 assessed valuation. Mr. Willis reminded the Board that setting the tax rate is a two-step process. The first step is to establish a proposed tax rate, to a call a public hearing on the proposed tax rate and to authorize SK Law to publish notice of the proposed tax rate and public hearing in a newspaper of general circulation in the County. The second step is to conduct the public hearing and officially set the tax rate. Upon motion duly made by Supervisor Fleck, seconded by Supervisor Medina, the Board voted unanimously to (1) establish its intent to set and levy (i) a debt service tax rate for 2015 of $0.50, and (ii) an operation and maintenance tax of $0.50 for a total tax rate of $1.00 per $100 assessed valuation, (2) to call a public hearing on the proposed tax rate for Thursday, September 17, 2015 at 6:00 p.m. at the regular meeting place of the Board and (3) to authorize SK Law to publish notice of the proposed tax rate and public hearing. [THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.] /Minutes

5 There being no further business to come before the Board, upon a motion duly made and seconded, the Board voted unanimously to adjourn. PASSED, ADOPTED, and APPROVED this September 17, /Minutes