MINUTES FORT BEND COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

August 28, 2018

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 28th day of August, 2018, 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 except Director Yack, thus constituting a quorum.

Also present for all or a portion of the meeting were Julie Williams of Rathmann & Associates, L.P. ("Rathmann"); Kim Cosco of Champions Hydro-Lawn, Inc. ("Champions"); Chad Abram of IDS Engineering Group ("IDS"); Erin Garcia of Myrtle Cruz, Inc. ("Myrtle Cruz"); Rebecca Marcucci of Municipal District Services LLC ("MDS"); Cathy Brittain-Drew of Assessments of the Southwest, Inc. (" ASW"); Liliana Gamba, Jason McKinney, and Jerry Benskin, residents of the District; and Whitney Higgins and Merry Heyne of Allen Boone Humphries Robinson LLP (" ABHR").

ADDITIONAL OPERATING MATTERS

This agenda item was deferred until the next Board meeting.

PUBLIC COMMENTS

Ms. Higgins opened the meeting for public comments. Ms. Gamba addressed the Board. She thanked the District security patrol for doing such a great job patrolling in the District and for being so visible. She also thanked MDS for a great job on doing an emergency repair of sewer pipes in the District last weekend. There being no additional public comments, Ms. Higgins closed the meeting to public comments.

CONSENT AGENDA

The minutes from the July 24, 2018, regular Board meeting, and July 18, 2018, special Board meeting, and consultant reports were previously distributed. After discussion, Director Dudley moved to approve all items on the consent agenda, and to direct that, where appropriate, items are filed and retained in the District's official

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records, including the following: (1) the minutes from the July 24, 2018, regular Board meeting, and July 18, 2018, special Board meeting; (2) the tax assessor/ collector's report; (3) the engineer's report; and (4) 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.

RENEWAL OF DISTRICT'S INSURANCE POLICIES

The Board reviewed the renewal proposal for the District's insurance policies as submitted by Arthur J. Gallagher & Co. ("Gallagher") noting that the current coverage expires on September 27, 2018. The Board discussed several items included in the renewal proposal and requested that Director Stewart follow up with Gallagher to confirm such items, as discussed. After review and discussion, Director Dudley moved to accept the renewal proposal. Director Kelley seconded the motion, which passed unanimously.

UPDATE ON POTENTIAL PARK BOND MATTER

This agenda item was deferred until a later Board meeting.

CONSIDER PROPOSALS FROM LANDSCAPE ARCHITECTS FOR DISTRICT PARK PLAN AND TAKE APPROPRIATE ACTION, IF NECESSARY

The Board considered the proposals previously provided by Four & One Landscape Architecture ("Four & One") and KGA/DeForest Design. Following review and discussion, Director Kelley moved to approve the proposal from Four & One. Director Doyle seconded the motion, which passed by a vote of three to one, with Director Stewart voting against.

UPDATE ON SIDEWALK REPAIR POLICY AND TAKE APPROPRIATE ACTION, IF NECESSARY

Following discussion, Director Doyle moved to approve the Amended and Restated Sidewalk Repair and Replacement and Landscape Removal Policy. Director Dudley seconded the motion, which passed by a vote of three to one, with Director Stewart voting against.

DISCUSS 2018 TAX RATE, SET PUBLIC HEARING DATE, AND AUTHORIZE NOTICE OF PUBLIC HEARING REGARDING ADOPTION OFT AX RA TE

Ms. Williams presented and reviewed the 2018 tax rate, a copy of which is attached. Ms. Williams recommended a debt service tax rate of $0.29 per $100 of assessed value. After review and discussion, Director Dudley moved to (1) approve a proposed 2018 tax rate of $0.56 per $100 of assessed valuation, comprised of $0.27 for operations and maintenance and $0.29 for debt service; and (2) authorize the tax

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assessor/ collector to publish notice of the September 25, 2018, Board meeting at 8:30 a.m. as the public hearing on the matter, after which the Board will vote on the District's tax levy. Director Doyle seconded the motion, which passed by unanimous vote.

SECURITY PATROL MATTERS

The Board discussed security patrol matters in the District. Mr. Abram updated the Board on placing a flashing speeding sign on West Bellfort to try to reduce the number of cars speeding. He reported that Commissioner Andy Meyer's office has committed all of their flashing speeding signs to other locations. He added that Commissioner Meyer's office informed him that they hope to purchase more signs soon and will notify Mr. Abram when they have one. Discussion ensued.

DETENTION AND DRAINAGE FACILITIES 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 reported on certain tree canopies in the District near the Belknap detention pond that need to be raised or trimmed. The Board discussed having Champions check on the irrigation to make sure the trees and surrounding area are being watered sufficiently. The Board further discussed Champions' contract that includes a monthly irrigation check.

Mr. Cosco updated the Board on the property located at the corner of Belknap Road and Townewest Boulevard that needs to be mowed. He reported that Champions contacted the landowner again and still did not receive a response. Director Kelley stated that she will contact environmental control about this property.

Mr. Cosco updated the Board on the Fort Bend County ditch slope repair on Spanish Grant Drive within the District that requires repair. He reported that Fort Bend County partially repaired the ditch which has saved the District approximately $2,300. He recommended that the District complete this ditch slope repair project and that the costs should now be approximately $16,000.

Mr. Cosco informed the Board that tree limbs were thrown over a fence onto District property behind the Water Plant on Old Village Lane. Ms. Marcucci informed the Board that MDS will remove the tree limbs.

Mr. Cosco reported on a collapsed pipe east of the elementary sch9ol on the outfall from the County bar ditch. Following discussion, the Board concurred to have Mr. Abram contact Fort Bend County's Road and Bridge Department ("Road and Bridge") about this collapsed pipe.

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Following review and discussion, Director Doyle moved to authorize Champions to complete the ditch slope repair on Spanish Grant Drive, as discussed, at a cost not to exceed $16,810. Director Dudley 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 Stewart seconded the motion, which passed unanimously.

ACTION ITEMS FOR ENGINEERING AND OPERATIONS

Mr. Abram updated the Board on the 2016 Sanitary Sewer and Storm Sewer Manhole Rehabilitation project. He reviewed and recommended approval of Change Order No. 3 to the contract with Lopez Utilities Contractor, LLC ("Lopez") in the amount of $14,694 to increase the contract amount for costs associated with application of Sewpercoat in lieu of 100% epoxy and repair and replacement of fiberglass sanitary sewer manholes. The Board determined that Change Order No. 3 is beneficial to the District. He also recommended the Board approve Pay Estimate Nos. 10 and 11 in the amounts of $161,385.61 and $148,522.41, respectively.

Mr. Abram updated the Board on the 2017 Storm Sewer Inspection project. He reviewed and recommended approval of Change Order No. 2 to the contract with CSI Consolidated LLC ("CSI") in the amount of $71,162 to increase the contract amount for reflecting the costs of the original contract that was awarded based on the base bid plus the alternate bid but was erroneously prepared for execution for only the base bid. The Board determined that Change Order No. 2 is beneficial to the District. He also recommended the Board approve Pay Estimate No. 4 in the amount of $87,816.

Mr. Abram updated the Board on the intersection improvements at Village Point and Old Towne Lane. He reported that Road and Bridge has indicated they will not be repairing this intersection until after their 2019 budget is set in October 2018. He added that there are three large trees at the intersection and after reviewing the storm sewer inspection video, root intrusion was found. Mr. Abram recommended removal of the trees due to the root intrusion in accordance with the District's policy.

Following review and discussion, and based on the engineer's recommendation, Director Doyle moved to (1) approve Change Order No. 3 in the amount of $14,694 as an increase to the contract with Lopez, based upon the Board's finding that the Change Order is beneficial to the District and the engineer's recommendation; (2) approve Pay Estimate Nos. 10 and 11 for the 2016 Sanitary Sewer and Storm Sewer Manhole Rehabilitation project in the amounts of $161,385.61 and $148,522.41, respectively,

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payable to Lopez, as recommended; (3) approve Change Order No. 2 in the amount of $71,162 as an increase to the contract with CSI, based upon the Board's finding that the Change Order is beneficial to the District and the engineer's recommendation; and (4) approve Pay Estimate No. 4 for the 2017 Storm Sewer Inspection project in the amount of $87,816, payable to CSI, as recommended. Director Dudley seconded the motion, which passed unanimously.

Discussion ensued regarding a sanitary sewer manhole that is missing a lid at the corner of West Bellfort and Belknap. Ms. Marcucci informed the Board that MDS is addressing this matter and will replace the lid.

The Board discussed the mobile vet that will be in the District on September 19, 2018, from 4:00 p.m. to 7:00 p.m. The Board also requested that MDS order stickers to place on the signs to advertise the mobile vet.

Ms. Marcucci discussed adding a bill message regarding an MS4 message. The Board requested that MDS change the bill message to advertise National Night Out and the mobile vet and save the MS4 bill message for a later month.

Ms. Marcucci requested authorization to paint Water Plant 1 piping for the booster pump area, well pump, and header at a cost of $5,088.75.

Ms. Marcucci requested authorization to repair and repaint the gate at the lift station at a cost of $1,380.

Ms. Marcucci presented and reviewed a proposal for phase 24 storm sewer inlet and manhole repairs in the amount of $41,030. Mr. Abram confirmed that the capital improvements made as part of these projects are payable from bond funds .

Ms. Marcucci reported that MDS received a customer request for reimbursement from the property owner at 10611 Spanish Grant Drive in response to MDS notifying the District residents who may have previously repaired driveways or sidewalks in the public easement or right-of-way along Spanish Grant Drive due to the District's storm sewer line. She reported that after calculating the amount for the portion covered in accordance with the Board policy, the District will be reimbursing the property owner at 10611 Spanish Grant Drive in the amount of $1,344.

Ms. Marcucci updated the Board on the previous customer request for reimbursement of repair of the driveway from the property owner at 10607 Spanish Grant Drive. She reported that after calculating the amount for the portion covered in accordance with the Board policy, the District will be reimbursing the property owner at 10607 Spanish Grant Drive in the amount of $1,344.

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Ms. Marcucci updated the Board on Florence Automotive located at 13413 Florence. She reported that MDS disconnected Florence Automotive' s water due to an illegal discharge. Discussion ensued.

Ms. Marcucci presented and reviewed a proposal for removing certain trees within the District's easement that are causing issues to District facilities or will potentially harm new sidewalks and driveways in the future in accordance with the District's policy in the amount of $106,310.40. She added that these costs include removing the trees, removing certain portions of the sidewalks and driveways as indicated, disposing of the concrete, and installing the new sidewalks and driveways.

Following review and discussion, Director Dudley moved to (1) approve the revised bill message, as discussed; (2) authorize MDS to paint the Water Plant 1 piping for the booster pump area, well pump, and header at a cost of $5,088.75; (3) authorize MDS to repair and repaint the gate at the lift station at a cost of $1,380; (4) authorize MDS to perform the phase 24 storm sewer inlet and manhole repairs in the amount of $41,030; (5) authorize reimbursement to the property owner at 10611 Spanish Grant Drive for their previous driveway repair, as discussed, in the amount of $1,344; (6) authorize reimbursement to the property owner at 10607 Spanish Grant Drive for their previous driveway repair, as discussed, in the amount of $1,344; and (7) authorize MDS to remove certain trees, remove certain portions of the sidewalks and driveways as indicated, dispose of the concrete, and install the new sidewalks and driveways at a cost of $106,310.40, as discussed. Director Kelley seconded the motion, which passed unanimously.

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 Stewart 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.

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

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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 Stewart seconded the motion, which passed unanimously.

Director Doyle left the meeting.

DISTRICT WEBSITE MA TIERS

The Board discussed additions to the District website.

CORRESPONDENCE RECEIVED BY THE DISTRICT, DIRECTORS OR CONSULT AN S, AND REPORTS ON DISTRICT BUSINESS AND OPERATIONS

Director Dudley informed the Board that Director Stewart will be contacting Whitney Milberger-Laird of the North Fort Bend Water Authority about attending the upcoming events in the District.

Ms. Higgins discussed with the Board the letter that the District received from WCA Waste Corporation of Texas ("WCA") regarding adding a Recycling Processing Fee, effective October 1, 2018, for recycling services in the District. The Board also discussed some problems in the District with the garbage and recycling services and requested that a representative from WCA attend the next meeting.

Director Kelley informed the Board that she and Director Dudley completed the Fort Bend County community education initiative called "Commissioners College" and will be receiving acknowledgment for completing this community education on September 4, 2018.

ANNUAL REVIEW OF CONSULTANT CONTRACTS

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

NORTH FORT BEND WATER AUTHORITY MA TIERS

There was no additional discussion on this matter.

ATTORNEY'S REPORT

There was no discussion on this agenda item.

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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

Tax assessor/ collector's report ................................................................................................. 2 Engineer's Report ........................................................................................................................ 2 Operator's Report ............................. ... ... .................... ................... .. .................... ... .. ... ........ ... ..... 2 Tax Rate Recommendation ........................................................................................................ 2 Detention and Drainage Facilities Report ............................................................................... 3 Bookkeeper's Report .......................... .......................... .. ... ....... ............. ....................... ............... 4

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