MINUTES FORT BEND COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

February 27, 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 27th day of February, 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:

Robert Yack Bernice Barclay Lisa Dudley Betty J. Stewart Pam Kelley

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.; Joseph Ellis of McCall Gibson Swedlund Barfoot PLLC ("McCall"); Officer Calvin Johnson; Jerry Schroeder and Kim Cosco of Champions Hydro-Lawn, Inc. ("Champions"); Chad Abram of IDS Engineering Group ("IDS"); Christina Garcia of Myrtle Cruz, Inc. ("Myrtle Cruz"); Rebecca Marcucci of Municipal District Services LLC ("MDS"); David Patterson of Assessments of the Southwest, Inc.(" ASW"); Barbara Wilson, Leslie Sanchez, and Felicia Guity, residents of the District; and Teshia Judkins and Merry Heyne of Allen Boone Humphries Robinson LLP (" ABHR").

PUBLIC COMMENTS

Ms. Judkins opened the meeting for public comments. Ms. Sanchez addressed the Board regarding standing water and exposed rebar in front of her driveway. Ms. Wilson addressed the Board regarding an issue with her water usage not registering due to a problem with her water meter last month. Ms. Wilson also requested a tax refund from the District due to Fort Bend County Central Appraisal District's adjustment of her property value. Ms. Guity addressed the Board about accidentally including her tax payment along with her water bill payment in the District's drop box. Ms. Guity also had a question regarding the District's water which Ms. Marcucci answered. There being no additional public comments, Ms. Judkins closed the meeting to public comments. All questions of Ms. Sanchez, Ms. Wilson, and Ms. Guity were later addressed under the relevant agenda items, as noted within these minutes.

CONSENT AGENDA

The minutes from the January 23, 2018, regular Board meeting, and consultant reports were previously distributed. After discussion, Director Kelley moved to remove

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agenda item 2(b) from the consent agenda, 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 January 23, 2018, regular Board meeting; (2) the engineer's report; (3) the operator's report; and (4) approve reimbursement of eligible Association of Water Board Directors ("A WBD") winter conference expenses and authorize attendance at the A WBD summer conference. Director Dudley 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

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

Mr. Patterson responded to Ms. Wilson's question concerning a tax refund, confirmed the District recently processed a refund check for Ms. Wilson, and provided Ms. Wilson with that refund check.

The Board discussed delinquent tax accounts. After review and discussion, Director Kelley moved to approve the tax assessor/ collector's report. Director Dudley seconded the motion, which passed unanimously.

AUDIT FOR FISCAL YEAR ENDING OCTOBER 31, 2017

Mr. Ellis presented and reviewed the District's audit for the fiscal year ending October 31, 2017, and the related management and representation letters. He further discussed, among other topics, adjustments to certain figures stated in the District's 2016 fiscal year audit and the efforts taken to timely complete the District's 2017 fiscal year audit. After review and discussion, Director Dudley moved to approve the audit, subject to final review, and direct that the audit be filed appropriately and retained in the District's official records. Director Barclay seconded the motion, which passed by unanimous vote.

SECURITY PATROL MATTERS

Officer Johnson discussed security patrol matters included in the previously distributed Security Patrol Report, a copy of which is attached.

Officer Johnson reported on recent law enforcement efforts to address suspected illegal activity occurring at a house in the District. He also reported on a man who had been reported missing and was later found deceased in a Fort Bend County drainage ditch within the District.

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Director Dudley reported on incidents involving inappropriate pictures and words being drawn in wet concrete in the District as well as the additional efforts and costs required to remove the vandalism. Discussion ensued. Officer Johnson recommended that any District or Fort Bend County contractors who plan to pour cement in the District should be provided with his contact information and encouraged to contact him so that security patrol and the contractor can coordinate monitoring the area while the cement is still wet.

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

Mr. Schroeder reviewed a Detention and Drainage Facilities Report, a copy of which is attached. Mr. Schroeder further reviewed Fort Bend County interceptors within the District that require repair and noted Fort Bend County is aware of the needed repairs to these interceptors.

Mr. Schroeder updated the Board on the heavy brush located at the corner of Belknap Road and Townewest Boulevard that is not being maintained. He reported that he will be contacting the owner of the lot regarding its maintenance.

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 arid discussion, Director Dudley moved to approve the bookkeeper's report, including payment of the bills. Director Kelley seconded the motion, which passed unanimously.

ADOPT RESOLUTION CONCERNING EXEMPTIONS FROM TAXATION

The Board considered adopting a Resolution Concerning Exemptions from Taxation. Ms. Williams reviewed a comparison of exemptions in the amount of $20,000 versus $30,000 for persons 65 years of age or older or disabled and any impact this increase in exemptions could have on the District's debt service and maintenance tax revenues. After review and discussion, Director Barclay moved to adopt a Resolution Concerning Exemptions from Taxation, granting a $30,000 exemption for persons 65 years of age or older or disabled and rejecting general homestead and travel trailer exemptions, and direct that the Resolution be filed appropriately and retained in the District's official records. Director Stewart seconded the motion, which carried by unanimous vote.

ACTION ITEMS FOR ENGINEERING AND OPERATIONS

Ms. Marcucci responded to Ms. Guity's request for a credit of the $10 fee for the termination letter and late fees as a result of her mistaken inclusion of her tax payment with her water bill payment. Discussion ensued.

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Ms. Marcucci responded to Ms. Wilson's request to be charged a Surface Water Fee based on the North Fort Bend Water Authority ("NFBWA") fee that was in effect prior to the increase on January 1, 2018, for her water usage that did not register due to a problem with her water meter. Discussion ensued.

Ms. Marcucci responded to Ms. Sanchez's question regarding standing water and exposed rebar in front of her driveway. She reported that John McDonald will look into this matter tomorrow.

Ms. Marcucci reported on an unauthorized discharge from a sewer manhole caused by grease blockage that occurred in the District on January 31, 2018. She also reviewed the results of a February 8, 2018 Nitrate Analysis Report.

Ms. Marcucci discussed adding a bill message regarding the annual waterline flushing.

Ms. Marcucci reported on a problem with the lift pump. She added that the District is currently using a rental lift pump, and she will be providing proposals at next month's meeting for repair of the lift pump.

Following discussion, Director Dudley moved to (1) authorize MDS to credit the $10 fee for the termination letter and late fees to Ms. Guity' s account, as discussed; (2) authorize MDS to charge, as discussed, the Surface Water Fee that was in effect prior to the NFBW A's 2018 increase for Ms. Wilson's water usage that did not register due to a problem with her water meter; and (3) approve the bill message as discussed. Director Kelley seconded the motion, which passed unanimously.

Mr. Abram updated the Board on the MS4 Phase II Storm Water Management Plan. He requested approval of the Year 4 Report that will be submitted to the Texas Commission on Environmental Quality ("TCEQ") by March 13, 2018.

Mr. Abram updated the Board on the 2016 Sanitary Sewer and Storm Sewer Manhole Rehabilitation project (the "2016 Sanitary Sewer project"). He discussed conditions found in the field that may result in a proposed change order. He also reported that Lopez Utilities Contractor, LLC ("Lopez") provided information to the District containing information about SewperCoat which Lopez is proposing to use instead of 100% epoxy. Discussion ensued regarding the advantages of SewperCoat lining, and Mr. Abrams noted he currently has no objections to using SewperCoat. He added that Pay Estimate No. 6 was approved at the last Board meeting and was inadvertently included again for consideration in this engineer's report.

The Board next discussed an easement adjacent to the construction site where Lopez is working and that Lopez is using for storage. Following discussion, the Board concurred to have Lopez restore the property upon completion of the project.

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Following review and discussion, Director Kelley moved to approve the Year 4 Report for the MS4 Phase II Storm Water Management Plan and authorize Mr. Abram to submit the Year 4 Report to the TCEQ. Director Yack 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 Barclay moved to approve the extensions, adjustments, and write-off accounts as recommended by MDS. Director Yack 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 discussion, Director Barclay 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 Yack seconded the motion, which passed unanimously.

DISTRICT WEBSITE MATTERS

The Board discussed additions to the District website including the 2018 District newsletter. The Board also discussed posting the Notice of Election, including the Spanish language translation of same, on the District website and concurred to do so.

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

The Board discussed revisions to the 2018 District newsletter.

Ms. Judkins reminded the Board of an invitation from Fort Bend County Commissioner Meyers to boards of directors of municipal utility districts, among others, to attend a community education initiative called "Commissioners College" to be held on March 3, 2018.

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TOWNE HALL RENTAL POLICIES AND USAGE AGREEMENT WITH TOWNEWEST HOMEOWNERS ASSOCIATION

The Board discussed the proposed clubhouse rental agreement. Following review and discussion, Director Stewart moved to (1) grant Director Yack the authority to approve on behalf , of the District the final form of the clubhouse rental agreement, including any proposed changes, and (2) approve the clubhouse rental agreement, subject to final review by Director Yack. Director Barclay seconded the motion, which passed unanimously.

NORTH FORT BEND WATER AUTHORITY MATTERS

There was no discussion on this agenda item.

ATTORNEY'S REPORT

Ms. Judkins noted the Court in the Carter litigation has scheduled a hearing for March 13, 2018 on the motions filed in that litigation.

2018 DIRECTORS ELECTION

Ms. Judkins reported that five candidate applications were received for three positions. She added that the 2018 directors election will be held on May 5, 2018.

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.

Secretary, Board of Direct (SEAL)

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LIST OF ATI ACHMENTS TO MINUTES

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

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