MINUTES OF MEETING OF THEBOARD OF DIRECTORS

October 25,2016

THE STATE OF TEXASCOLTNTY OF HARRISHARRIS COLINTY MI.INICIPAL UTILITY DISTRICT NO. 364

The Board of Directors (the "Board") of Harris County Municipal Utility District("MUD") No. 364 (the "District") met in regular session, open to the public, at Coles Crossing

Community Center, 13050 Barker Cypress Road, Cypress, Texas, a designated meeting place

outside the boundaries of the District, on Tuesday, October 25,2016, at 4:00 p.m.; whereupon,

the roll was called of the members of the Board, to-wit:

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Vince DeAngelisDale R. TrevinoWilliam Alan BeardRoss A. CrawfordErin Corken

PresidentVice PresidentS ecretary/Investment OfficerAssistant SecretaryDirector

All members of the Board were present, except Director Trevino, thus constituting a

quorum. Also attending the meeting were: Mr. Terry Holland of Myrtle Cruz,Inc. ("MCI"),bookkeeper for the District; Ms. Lina Loaiza and Ms. Odett McMullen of Bob Leared Interests,

Inc. ("Bob Leared"), tax assessor/collector for the District; Mr. Gary Hastings of MunicipalOperations & Consulting, Inc. ("MOC"), operators for the District; Mr. John Peyton of Van De

Wiele & Vogler, Inc. ("Van De Wiele"), engineers for the District; Mr. Sabir Fakhruddin ofVillage Green Cypress ("Village Green"), owner of a 1.8353-acre tract of land located at 14520

Huffmeister Road, proposed to be developed as an Alzheimer's assisted living center;

Mr. Mike Qaddumi of The Interfield Group, engineers for Village Green;

Mr. Peyton's wife, Ms. George-Anne Cornelison; and Ms. Robin S. Bobbitt and Mr. Joshua

Ellery, attorneys, and Ms. Carla Christensen, paralegal, of Radcliffe Bobbitt Adams PolleyPLLC ("RBAP"), attorneys for the District.

WHEREUPON, the meeting was called to order and evidence was presented that publicnotice of the meeting had been given in compliance with the law. The posted notices of the

meeting are attached hereto.

APPROVAL OF THE MINUTES

The Board first considered approval of the minutes of the regular meeting ofSeptember 27, 2016, previously distributed to the Board. Upon motion by Director Beard,

seconded by Director Crawford , after full discussion and the question being put to the Board, the

Board voted unanimously to approve the minutes of the September 27, 2016 meeting, as

presented.

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PUBLIC HEARING ON 2016 TAX RATE

Director DeAngelis then declared the public hearing to discuss the District's proposed taxrate for 2016 open, notice of which was published as required by law. Ms. Bobbitt reminded theBoard that, at the regular meeting of September 27,2016, the Board had agreed on a proposed

total tax rate for 2016 of $0 .455 per $ 100 assessed valuation, comprised of a debt service tax rateof $0.275 per $100 of assessed valuation and an operation/maintenance tax rate of $0.180 per$100 of assessed valuation. No one present in the meeting offered any public comment on theproposed tax rate. The public hearing was then adjoumed.

ADOPTION OF ORDER SETTING RATE AND LEVYING TAX FOR 2016

Ms. Loaiza then explained that the notice of the proposed 2016 tax rate had beenpublished and then distributed for the Board's review an Affidavit of Publication of WaterDistrict Notice of Public Hearing on Tax Rate, a copy of which is attached hereto.

Ms. Bobbitt next presented for the Board's approval and adoption an Order Setting Rateand Levying Tax for 2016 (the "Order") regarding the levy of a tax rate of 50.275 per $100 ofassessed valuation for debt service purposes and $0.180 per $100 of assessed valuation foroperations and maintenance pu{poses, for a total 2016 tax rate of $0.455 per $100 of assessed

valuation, a copy of which is attached hereto. Ms. Bobbitt explained that due to GASB 34accounting requirements, it is necessary to reflect in the minutes, at the time the Order isadopted, the applicable accounting period for the taxes being levied. Ms. Bobbitt explained thatthe debt service tax to be levied at today's meeting will be for the calendar year endingDecember3I,2017, and that the operations and maintenance tax to be levied will be for theDistrict's f,rscal year ending August 3T,2017.

Upon motion by Director Crawford, seconded by Director Beard, after full discussion and

the question being put to the Board, the Board voted unanimously to adopt the Order, therebylevying a debt service tax rale of $0.275 per $100 of assessed valuation for the calendar yearending December 31,2017 and an operations/maintenance tax rate of $0.180 per $100 ofassessed valuation for the District's fiscal year ending August 31,2017, for a total 2016 tax rateof $0.455 per $100 of assessed valuation.

AMENDMENT TO DISTRICT INFORMATION FORM

Ms. Bobbitt then explained that pursuant to Section 49.455 of the Texas V/ater Code, as

amended, the District is required to amend its District Information Form any time information insuch form is revised or updated and, because the District has adopted its 2016 tax rate, anamendment to the District Information Form is necessary. Upon motion by Director Crawford,seconded by Director Beard, after full discussion and the question being put to the Board, theBoard voted unanimously to authorize the execution of the Amendment to District InformationForm (the "Amendment"), and to authorize RBAP to file such Amendment in the Harris CountyReal Property Records and with the Texas Commission on Environmental Quality, as requiredby law.

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LLECTOR'S REP

Ms. McMullen then reviewed with the Board the Tax Assessor/Collector's Report for the

month of August, a copy of which is attached hereto. Ms. McMullen reported that as ofSeptember 30,2016, the District had collected99.74%o of its 2015 tax levy. Upon motion byDirector Crawford, seconded by Director Beard, after full discussion and the question being putto the Board, the Board voted unanimously to approve the Tax Assessor/Collector's Report,

including the payment of the checks listed therein.

In response to a question, Ms. Loaiza stated that the 2016 tax bills will be sent out onMonday.

BOOKKEEPER'S REPORT

Mr. Holland next reviewed the Bookkeeper's Report with the Board, including the

revenues and expenses of the District, the budget comparison, the investment report and the

checks being presented for payment, copies of which are attached hereto.

In response to a question from Director DeAngelis, Mr. Holland stated that BBVACompass Bank had assessed the District a monthly service fee of $18 for the month ofSeptember since the District earned interest in excess of $ 18 for the month.

A discussion then ensued regarding the outstanding balances of Global Senior Care

("Global") and AEON Corporation/Village Green in the amounts of $1,981.50 and $747.64,respectively, in connection with the preparation of the feasibility studies for the respectiveproperties. It was the consensus of the Board that MCI invoice Global for the negative depositbalance amount on their account and invoice AEON Corporation/Village Green for the negative

deposit balance amount on their account, plus an additional $5,000 deposit to cover futureexpenses.

Upon motion by Director Crawford, seconded by Director Beard after full discussion andthe question being put to the Board, the Board voted unanimously to approve the Bookkeeper'sReport and to authorize payment of the checks reflected therein.

OPERATOR'S REPORT

Mr. Hastings then reviewed with the Board the Operator's Report for the period endingSeptember 15, 2016, along with a list of delinquent accounts, copies of which are attachedhereto. Mr. Hastings reported that there are currently 1,832 connections in the District and thatthe water accountability for the month was l25.4o/o. In response to a question, Mr. Hastingsstated that he will contact the operator for Harris County Municipal Utility District No. 365("HC 365") and request that they investigate and provide an explanation for the substantiallyhigher than normal water accountability percentage for the month of September 2016.

A discussion then ensued regarding an emergency manhole repair that had recently beenperformed by HC 365. Mr. Hastings stated that the District had not yet received an invoice forsuch repair.

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Upon motion by Director Crawford, seconded by Director Beard, after full discussion and

the question being put to the Board, the Board voted unanimously to: 1) approve the Operator's

Report; and 2) authorize termination of service to the delinquent accounts in accordance with theprovisions of the District's Rate Order.

AIJTHORIZE OPERATOR TO SUBMIT ]AT, GROIINDWATER REPORT TO THEAL WATER AUTHOzuTY

Ms. Bobbitt next explained that the Board needs to authorize MOC to submit the AnnualGroundwater Report and usage estimate to the NHCRWA. Upon motion by Director Crawford,seconded by Director Beard, after full discussion and the question being put to the Board, the

Board voted unanimously to authorize MOC to submit the Annual Groundwater Report and

estimate of the amount of water the District will use in the 2017 permit year to the NHCRWA.

Mr. Fakhruddin entered the meeting at this time

LUTION AUTHORIZING S

F BOARD DIRECTO''AWBD

Ms. Bobbitt next presented the Resolution for the Board's review and adoption and

explained that the District has participated in the AWBD Water Smart Partners Program for thepast several years and that the Board had previously determined that it would submit a WaterSmart application for 20t7. Upon motion by Director Crawford, seconded by Director Beard,

after full discussion and the question being put to the Board, the Board voted unanimously toadopt the Resolution and authorize Mr. Hastings to prepare and submit the District's 2017 WaterSmart application to the AWBD.

ENGINEER'S REPORT

Mr. Peyton then reviewed the Engineer's Report with the Board, a copy of which isattached hereto.

Mr. Qaddumi entered the meeting at this time

Mr. Peyton first reminded the Board that the Board of Directors of Harris CountyMunicipal Utility District No. 360 ("HC 360") had held their regular meeting on September 19,2016, at which time they considered Village Green Cypress's request for their property to obtainwater service from the Stillwater Village water line, but had denied such request. Mr. Peytonwent on to report that he had recently spoken with Mr. Fakhruddin and was told that VillageGreen is planning to construct an on-site water well to provide fire service to the proposedAlzheimer's assisted living center and will be returning to appeal HC 360's decision to deny therequest to provide water service to the Village Green property. Extensive discussion ensued.Mr. Peyton then informed Messrs. Fakhruddin and Qaddumi that the District would not approveuse of a private water well on the Village Green property. Mr. Peyton stated that the onlyoptions to serve the Village Green property are through the Stillwater Village water line or byextension of an existing water line to the Village Green property. Mr. Fakhruddin stated that heplans to attend the next HC 360 Board meeting and request that the Board of Directors of

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HC 360 reconsider the request for service. Mr. Peyton stated that Van De Wiele has reviewedVillage Green Cypress's updated off-site utility plans reflecting the original sanitary sewer

extension, as well as the water line extension that will be required. Mr. Peyton went on to reportthat he has provided comments on such plans to Village Green and its engineer. Mr. Peyton

further informed the Board that he would attend the next HC 360 meeting with representatives ofVillage Green, subject to the District's receipt of the additional deposit monies from VillageGreen.

Ms. McMullen and Ms. Loaiza exited the meeting at this time.

Mr. Peyton next reported that HC 365's engineer, Sander Engineering Corporation("Sander"), had recently issued the draft Preliminary Engineering Report ("PER") in connectionwith the proposed expansion of the Joint Wastewater Treatment Plant (the "Joint V/V/TP").Mr. Peyton stated that Van De V/iele will begin reviewing the draft Joint WWTP PER uponcompletion of their review and comment on the PER for the expansion of the Joint Water Plant(the "Joint Water Plant" and collectively with the Joint V/WTP, the "Joint Facilities").

Mr. Peyton went on to report that Sander had collected new data regarding water usage

and provided Van De Wiele with an updated usage and connection history on October 20th.

Mr. Peyton noted that the removal of the Stillwater Village subdivision from the usage data has

reduced the District's share of consumption from 53Yo to 50%o. Mr. Peyton stated that Van DeWiele is in the process of reviewing the new water usage data. Mr. Peyton added that Jones

Carter,Inc. had commenced preparation of the Elevated Storage Tank Waiver Application.

Ms. Bobbitt noted that she had been in contact with HC 365's attorney, as well as Sander

regarding the status of the PERs in connection with the expansion of the Joint Facilities.Ms. Bobbitt stated that representatives of Sander were not able to attend today's Board meetingdue to conflicting schedules. Ms. Bobbitt went on to state that HC 365 has requested anadditional deposit from the District in the amount of $30,000 to cover the invoice for thepreparation of the Joint Water Plant PER.

Mr. Peyton next noted that Van De Wiele had reviewed and provided information on one(1) pool construction application received during the prior month.

Upon motion by Director Crawford, seconded by Director Beard, after full discussion andthe question being put to the Board, the Board voted unanimously to approve the Engineer'sReport and authorize the deposit of additional District funds to HC 365 for Sander's preparationof the Joint Water Plant PER in the amount of $30,000.

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ATTTIJôÞT7tr AI'TtrNITIA'NIÕtr AT -I-IJtr A.I\íTTI \I/TNT'|-EP ñA\TEED ENTCE IN AUSTIN

TEXAS (JANUARY 27-28, 2OI7), SPRING BREAKFAST SEMINAR. ANNUALTEXA 22-25 201 AND FALL

Upon motion by Director Crawford, seconded by Director Beard, after full discussion and

the question being put to the Board, the Board voted unanimously to authoñze the Board'sattendance at the AWBD's: 1) Mid Winter Conference in Austin, Texas on January 27 -28,2017;2) the Spring Breakfast Seminar in Houston; 3) the Annual Conference in Corpus Christi,Texas on June 22-25,2017; and 4) the Fall Dinner Seminar in October 2017.

ATTORNEY'S REPORT

Ms. Bobbitt then reviewed with the Board correspondence from Ms. V/ei Carissa Zuorequesting that the Board consider providing curbside recycling services for District residents. Itwas the consensus of the Board to add a discussion of such request to the November meetingagenda.

Ms. Bobbitt said that she had nothing further to report at this time

Ms. Bobbitt then reminded the Board that the next regular meeting will be held onTuesday, November 29,2016 due to the Thanksgiving holidays.

There being no further business to come before the Board, the meeting was adjourned at

5:20 p.m.

PASSED, APPROVED AND ADOPTED this 19th day of December, 2016.

(Drsf*"il^ o- /llSecretary, Board of Directors

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