MINUTES FORT BEND COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

August 27, 2019

The Board of Directors (the "Board") of Fort Bend County Municipal Utility District No. 2 (the "District") met in regular session, open to the public, on the 27th day of August, 2019, at Townewest Club House, 10322 Old Towne Lane, Sugar Land, Texas, inside the boundaries of the District, and the roll was called of the members of the Board:

Pam Kelley Robert Yack Lisa Dudley Betty J. Stewart Terri Doyle

President Vice President Secretary Assistant Vice President Assistant Secretary

and all of the above were present, thus constituting a quorum.

Also present for all or a portion of the meeting were Julie Williams of Rathmann & Associates, L.P.; Greg East of Perdue, Brandon, Fielder, Collins & Mott, LLP ("Perdue"); Officers Scott Gill and Justin D. Mason; Chad Abram of IDS Engineering Group ("IDS"); Kim Cosco of Champions Hydro-Lawn, Inc. ("Champions"); Erin Garcia of Myrtle Cruz, Inc. ("Myrtle Cruz"); Rebecca Marcucci of Municipal District Services LLC ("MDS"); Rhonda Patterson of Assessments of the Southwest, Inc. (" ASW"); Alice Turner, Angela Massaro, Clyde Massaro, and Kali Tahuna, residents of the District; Amarjit Verma, a member of the public; and Whitney Higgins and Merry Heyne of Allen Boone Humphries Robinson LLP (" ABHR").

PUBLIC COMMENTS

Director Kelley opened the meeting for public comments. Mr. Verma addressed the Board. He discussed hike and bike trails in the surrounding area. He informed the Board that he has requested the Fort Bend County Commissioners office ("FBC Commissioner") put sidewalks on Belknap Road and Old Towne and is planning on meeting with the FBC Commissioner. He asked if anyone would be interested in attending the meeting. He also discussed adding street lights on Belknap Road and requested the District assist with the coordination of this with the FBC Commissioner.

Ms. Turner discussed cars speeding down West Bellfort. She requested that the District security patrol monitor this area more closely.

Mr. Massaro discussed a potential recession and discussed his suggestions for funds investments.

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There being no further public comments, Director Kelley closed the meeting to public comments.

CONSENT AGENDA

The minutes from the July 23, 2019, regular Board meeting, July 18, 2019, special Board meeting, and consultant reports were previously distributed. After discussion, Director Dudley moved to remove agenda item 2(b) from the consent agenda, and to approve all remaining items on the consent agenda, and to direct that, where appropriate, items are filed and retained in the District's official records, including the following: (1) the minutes from the July 23, 2019, regular Board meeting, and July 18, 2019, special Board meeting; (2) the engineer's report; and (3) the operator's report. Director Doyle seconded the motion, which passed unanimously. Copies of all reports approved as part of the consent agenda are attached.

ITEMS REMOVED FROM CONSENT AGENDA

TAX ASSESSMENT AND COLLECTION MATTERS

Director Kelley reviewed and discussed various accounts included on the delinquent tax report. Mr. East discussed the delinquent taxes on the property at 14119 Panhandle Drive.

Ms. Patterson presented and reviewed the tax assessor/ collector's report, a copy of which is attached.

Mr. East reviewed the delinquent tax report, a copy of which is attached to the tax assessor/ collector's report. He requested authorization for water termination of the eligible delinquent accounts that have not been paid or otherwise responded to delinquent tax and water termination letters.

After review and discussion, Director Kelley moved to (1) approve the tax assessor/ collector's report; and (2) authorize water termination for the eligible delinquent accounts that have not been paid or otherwise responded to delinquent tax and water termination letters. Director Doyle seconded the motion, which passed unanimously.

RENEW AL OF DISTRICT'S INSURANCE POLICIES

This agenda item was deferred until the next Board meeting.

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GARBAGE AND RECYCLING MATTERS, INCLUDING RECEIVE PRESENTATION, CONSIDER PROPOSAL FROM, AND, IF APPPROPRIATE AUTHORIZE AGREEMENT WITH SIMPLE RECYCLING

There was no discussion on this agenda item. The agenda item on Simple Recycling was tabled until the next Board meeting.

SECURITY PATROL MATTERS

Officer Gill reported on security patrol matters in the District. A copy of the Security Patrol Report is attached.

Officer Gill reported that the laptop stand in the patrol vehicle is broken and needs to be replaced at a cost of $704. He added that the laptop stand allows the officers to move the laptop from the patrol vehicle to the office.

Officer Gill reported that Officer Calvin Johnson is recommending, in his capacity as the independent contractor responsible for security staffing decisions, that the District hire a new security officer, Justin D. Mason, and he requested the District's approval of the related Security Services Contract for Officer Mason. He informed the Board that Officer Mason has submitted all required documentation.

Officer Gill informed the Board that Officer Johnson has been coordinating with the Texas Center for the Missing which is a nonprofit group dedicated to bringing hope and healing to the missing and their families through crisis intervention, prevention, and community education. He added that Officer Johnson would like to do a presentation, at either the Townewest Club House of the Children's Assessment Center located in Rice Village, on Interactive Internet Safety Training that is designed to help school aged kids with internet safety. Following discussion, the Board concurred to provide Officer Johnson with three possible dates for this event.

Director Stewart reported on vandalism at the old fire station in the District as well as fights and reports of incidents involving illegal drugs at the District parks. She requested that security patrol monitor these areas closely. It was noted that the parks are supposed to be closed at dusk.

Officer Gill updated the Board on placing flashing speeding signs on West Bellfort and Florence Road to try to reduce the number of cars speeding. He presented and reviewed a proposal for four signs, including dollies for each of the signs, at a cost of $15,482. It was noted that the cost would be approximately $12,500 without the dollies.

Following discussion, Director Kelley moved to (1) approve the Security Patrol Report; (2) approve the laptop stand for the patrol vehicle at a cost not to exceed $710; (3) authorize execution of the Security Services Contract with Officer Mason, as

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recommended by Officer Johnson, with Officer Johnson to fill District patrol hours at his discretion; and (4) approve the four radar signs, without the dollies, at a cost not to exceed $12,500. Director Doyle seconded the motion, which passed by a vote of four to one with Director Yack voting against.

TOUCHSTONE DISTRICT SERVICES CONSULTING AGREEMENT

Following discussion, the Board concurred to take no action on the Consulting Agreement. It was noted that the Board is not authorizing Touchstone to do any work for the District at this time and does not require Touchstone to attend any Board meetings.

DISCUSS 2019 TAX RATE, SET PUBLIC HEARING DATE, AND AUTHORIZE NOTICE OF PUBLIC HEARING REGARDING ADOPTION OF TAX RATE

Ms. Williams presented an analysis of the recommended District tax rate, a copy of which is attached. Discussion ensued and the Board determined to publish notice of the 2019 tax rate at $0.63 per $100 of assessed valuation, with $0.36 allocated to debt service and $0.27 allocated to maintenance and operations. Following review and discussion, Director Dudley moved to (1) set a public hearing date to adopt the tax rate on September 24, 2019, at 8:30 a.m. at Townewest Club House; and (2) authorize the tax Assessor/ collector to publish notice of the tax hearing and the proposed rate as required by law. Director Kelley seconded the motion, which passed unanimously.

DETENTION AND DRAINAGE FACILITTES AND LANDSCAPING REPORT FROM CHAMPIONS HYDRO-LAWN, INC., PROJECTS, AND RELATED AGREEMENTS

Mr. Cosco reviewed a Detention and Drainage Facilities Report, a copy of which is attached.

Mr. Cosco updated the Board on adding herbicide to the channel bottom and vector from West Bellfort to Belknap Road. He reported that the herbicide treatment has been completed.

Mr. Cosco updated the Board on Champions trimming the trees in the District, as previously approved by the District. He reported that Champions trimmed 20 trees instead of the 19 trees that were approved because a District resident requested an additional tree be trimmed due to the tree blocking a light. He requested the District reimburse Champions for the additional tree at a cost of $250.

Mr. Cosco reported that vehicles from the auto repair shop are parking again on District property. Discussion ensued.

The Board discussed the dead knockout roses at Water Plant No. 2 and possibly replanting in the spring time.

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Discussion ensued regarding the trash on West Bellfort.

Following review and discussion, Director Yack moved to (1) authorize the addition of herbicide in the District to the annual budget, with a 10% discount, as discussed; and (2) authorize payment to Champions in the amount of $250 for trimming one additional tree. Director Doyle seconded the motion, which passed unanimously.

FINANCIAL AND BOOKKEEPING MATTERS

Ms. Garcia presented and reviewed the bookkeeper's report, a copy of which is attached, including the District's bills, budget comparison, and investment report. Following review and discussion, Director Dudley moved to approve the bookkeeper's report, including payment of the bills. Director Kelley seconded the motion, which passed unanimously.

ADOPT BUDGET FOR FISCAL YEAR ENDING OCTOBER 31. 2020

Following review and discussion, the Board deferred action on this agenda item.

SECURITY PATROL MATIERS (CONTINUED)

Following discussion, Director Dudley moved to amend the earlier motion approving four radar signs, without the dollies, at a revised cost not to exceed $12,822, instead of the earlier motion that was at a cost not to exceed $12,500. Director Kelley seconded the motion, which passed by a vote of four to one, with Director Yack voting against.

ACTION ITEMS FOR ENGINEERING AND OPERATIONS

Mr. Abram presented and reviewed the engineer's report, a copy of which is attached, providing an updated status of engineering projects in the District, including items specifically addressed as follows in these minutes.

Mr. Abram updated the Board on the 2016 Sanitary Sewer and Storm Sewer Manhole Rehabilitation project. He informed the Board that a second round of inspections for the storm sewer manholes will be conducted because the first round of inspections found deficiencies.

Mr. Abram updated the Board on the Townewest Channel Access Improvements project. He reported that seven defects in portions of the work were found in May 2019. He informed the Board that Tackle Construction ("Tackle") has agreed to repair the defects in these locations by removing and replacing the sidewalks and resetting the dowels between the driveway panels and the sidewalks to specification. He added that Tackle has also agreed to provide an additional one-year warranty for all of the work in this project once the repairs are completed.

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Mr. Abram updated the Board on bond application no. 10. He reported that the bond application should be completed and ready for consultant review by the end of this week.

Following review and discussion, and based on the engineer's recommendation, Director Doyle moved to authorize Tackle to repair the defects found for the Townewest Channel Access Improvements project, as discussed. Director Stewart seconded the motion, which passed by unanimous vote.

Ms. Marcucci discussed adding a bill message that is required by the North Fort Bend Water Authority ("NFBWA") regarding water conservation in order to receive Larry's Toolbox points.

Ms. Marcucci informed the Board that there were 11 addresses on Old Towne and Village Point that provided water, with the customers' permission, to irrigate the newly laid sod. She requested the Board authorize MDS to bill these customers an average usage bill. Following discussion, the Board tabled action on this request pending further review of the District's Rate Order.

Ms. Marcucci requested authorization for MDS to send a letter to the homeowner at 10522 Belknap due to a damaged storm inlet, as discussed.

Following discussion, Director Dudley moved to approve the bill message, as presented. Director Kelley seconded the motion, which passed unanimously.

Ms. Marcucci presented and reviewed a proposed Amendment to the Agreement between the District and MDS (the "Amended Agreement"). Following discussion, the Board concurred to approve the Amended Agreement, effective September 1, 2019, and direct that the Amended Agreement be filed appropriately and retained in the District's official records.

HEARING ON TERMINATION OF WATER AND SEWER SERVICE TO DELINQUENT CUSTOMERS AND CUSTOMER APPEALS

Ms. Marcucci reviewed customer correspondence and discussed updates to the extensions and adjustments approved by MDS since the last Board meeting and reviewed accounts recommended for write-off as listed in the operator's report.

Following review and discussion, Director Dudley moved to approve the extensions, adjustments, and write-off accounts as recommended by MDS. Director Kelley seconded the motion, which passed unanimously. Copies of the lists for extensions, adjustments, and write-offs are filed and retained in the District's official records.

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The Board next conducted a hearing on the termination of utility service to delinquent accounts. Ms. Marcucci reported that the residents on the delinquent list were mailed written notice prior to this meeting in accordance with the District's Rate Order, notifying them of the opportunity to appear before the Board to explain, contest, or correct the nonpayment of their utility service bill, and to show reason why utility service should not be terminated for reason of nonpayment. After review and discussion, Director Dudley moved to authorize that service to the customers on the termination list with accounts remaining unpaid and who were not present at the meeting and had not presented any written statement on the matter be terminated in accordance with the District's Rate Order, except for accounts in amounts below $30.00. Director Kelley seconded the motion, which passed unanimously.

AMEND RATE ORDER

Discussion ensued regarding suggested revisions to the District Rate Order. Following discussion, the Board concurred to defer this item until the next Board meeting.

UPDATE ON BOND APPLICATION NO. 10

This agenda item was discussed previously in the Board meeting.

ADOPT RESOLUTIONS EXPRESSING INTENT TO REIMBURSE

There was no action taken on this agenda item.

DISTRICT WEBSITE MATTERS

There was no discussion on this agenda item.

CORRESPONDENCE RECEIVED BY THE DISTRICT, DIRECTORS OR CONSULTANTS, AND REPORTS ON DISTRICT BUSINESS AND OPERATIONS

Director Dudley reported that the mobile vet will be in the District on September 11, 2019, at 4:00 p.m.

ANNUAL REVIEW OF CONSULTANT CONTRACTS

The Board noted that at this time there are no proposed increases to the consultants' contracts.

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NORTH FORT BEND WATER AUTHORITY MATTERS, INCLUDING LARRY'S TOOLBOX PROGRAM AND APPROVE LEGAL CONFLICTS WAIVER

Ms. Higgins presented and reviewed a Consulting Service Agreement between the NFBWA, the District, and Masuen Consulting, LLC, for the District's participation in the NFBW A's Homeowner Association/ Golf Course Irrigation System Evaluation and Water Budget initiative. She also presented a conflicts waiver disclosing ABHR's representation of the District and the NFBW A regarding the Consulting Service Agreement. Following discussion, Director Doyle moved to (1) approve the Consulting Service Agreement; and (2) agree to waive the conflict and acknowledge the conflicts waiver. Director Stewart seconded the motion, which carried unanimously.

RIGHT OF WAY BEAUTIFICATION AND GREENSCAPE ENHANCEMENTS IN THE DISTRICT

There was no discussion on this agenda item.

ATTORNEY'S REPORT

There was no discussion on this agenda item.

CONVENE IN EXECUTIVE SESSION

The Board did not convene in executive session pursuant to Section 551.071, Texas Government Code.

There being no further business to come before the Board, the meeting was adjourned by agreement.

(SEAL)

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LIST OF ATTACHMENTS TO MINUTES

Engineer's Report ............................................................ .. ........ ... ...... ... ...................................... 2 Operator's Report. .................................... .. ........ ......... .......... ... .. .......... .... ............. ........ ..... ....... .. 2 Tax assessor/ collector's report .............................................. .... ... ......... ..... .. ..... ............... ........ 2 Security Patrol Report ............... ... ............................................................................. ... ... ........... 3 Tax rate analysis ........................................ .. ........... .................. ............. .. ..... ... .... ........................ 4 Detention and Drainage Facilities Report ............................................................................... 4 Bookkeeper's Report. ............................... ... .... .................... .... ............. ....................................... 5

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