MINUTES

NORTH FORT BEND WATER AUTHORITY

March 27, 2019 '

The Board of Directors (the "Board") of the North Fort Bend Water Authority (the "Authority") met in regular session, open to the public, on the 27th day of March, 2019, at the Willow Fork Country Club, 21055 Westheimer Parkway, Katy, Texas, inside the boundaries of the Authority, and the roll was called of the members of the Board:

Peter Houghton Robert Patton Melony Gay David Spell Robert Darden Bruce Fay Pat Hebert

President Vice President Secretary Assistant Secretary Assistant Vice President Assistant Secretary Assistant Secretary

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

Also present for all or part of the meeting were Lindsay Kovar, Fred Bauhof, Matt Froehlich, Ian Pietz, and Whitney Milberger of BGE, Inc. ("BGE"); Pam E. Lightbody of AV ANTA Services; Dale Clayton of Inframark, LLC ("Inframark"); David Oliver, Christina Miller, Heather Trachtenberg, and Justine M. Cherne of Allen Boone Humphries Robinson LLP (" ABHR"); and persons listed on the attached attendance sheets.

APPROVE MINUTES

The Board considered approving the minutes of the meeting held February 27, 2019. After review and discussion, Director Gay moved to approve the minutes as presented. Director Hebert seconded the motion, which carried unanimously.

COMMENTS FROM THE PUBLIC

Director Houghton opened the meeting to receive public comments. There being no public comments, Director Houghton closed the meeting to public comments.

PUBLIC COMMUNICATION, WATER CONSERVATION, AND REUSE MATTERS, AND LARRY'S TOOLBOX WATER CONSERVATION PROGRAM

Ms. Kovar presented a Memorandum Regarding Water Conservation and Reuse matters, a copy of which is attached. Ms. Kovar reported on educational programs, training opportunities, and community outreach. She discussed BGE' s attendance at community events and municipal utility districts' and homeowner associations'

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meetings within the Authority's boundaries and conferences to provide information regarding the Authority, the Authority's water conservation and outreach programs, and other available water conservation resources.

Ms. Kovar stated that the Authority's Communication, Conservation, and Reuse Committee ("CCR Committee") recommended that the Board authorize purchasing slip resistant mats for the ramp entrance to the Authority's water conservation mobile teaching lab in the amount of $600.00.

Ms. Kovar reported that 56 irrigation system evaluations were completed through the Authority's W.I.S.E. Guys Irrigation System Evaluation Program ("WISE Guys Program") during February, 2019. She stated that the three winners of the Giveaway Incentive Program for February were randomly selected at the March meeting of the Authority's CCR Committee and each winner will receive a gift card from Enchanted Gardens in the amount of $100.00.

Ms. Kovar stated that Irrigation System Evaluations Cost Sharing Agreements with Fort Bend County Municipal Utility District Nos. 30 and 122 are ready for execution.

Ms. Kovar reviewed a chart indicating the status of effluent reuse or alternate water credit projects/ contracts.

Ms. Kovar stated that the Authority's CCR Committee recommended that the Board authorize awarding points to Fort Bend County Municipal Utility District Nos. 122 and 123 ("FB 122 and FB 123") for their successfully completed 2018 Larry's Toolbox water conservation program initiatives. She explained that the operating company has implemented procedures to prevent late data submissions for the program in the future.

Ms. Kovar stated that the Authority's CCR Committee recommended that the Board approve fourth quarter water rate rebate payments to 43 participants in the Authority's 2017 Larry's Toolbox water conservation program in the amount of $170,499.80.

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Following review and discussion, Director Gay moved to:

(1) authorize purchasing slip resistant mats for the ramp entrance to the Authority's water conservation mobile teaching lab in the amount of $600.00;

(2) authorize execution of Irrigation System Evaluations Cost Sharing Agreements with FB 122 and FB 123;

(3) authorize awarding points to FB 122 and FB 123 for their successfully completed 2018 Larry's Toolbox water conservation program initiatives; and

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(4) approve fourth quarter water rate rebate payments to 43 participants in the Authority's 2017 Larry's Toolbox water conservation program in the amount of $170,499.80.

Director Hebert seconded the motion, which was approved by unanimous vote.

Ms. Milberger gave a presentation of a summary of results for the 43 participants in the Authority's 2018 Larry's Toolbox water conservation program. She reported that Cinco Municipal Utility District No. 8 ("Cinco 8") achieved the most points as a participant in the program with 22 points earned. The Board thanked the program participants for their efforts in making the program successful and presented plaques to each member of the Board of Directors of Cinco 8 in recognition of their outstanding efforts. Photographs were taken of the Directors of Cinco 8 in attendance, the Authority's Board, and consultants who participated in the program.

FINANCIAL AND BOOKKEEPING MATTERS AND HEARING REGARDING ANY DELINQUENT FEES AND RULE VIOLATIONS

Ms. Lightbody presented the bookkeeper's report, including checks for payment, fund and wire transfers, monthly receipts, a summary of investments, schedules of debt service payments, water conservation credits, past due accounts, number of inspections completed for the Authority's WISE Guys Program, and a statement of revenues and expenditures for the Enterprise Fund. A copy of the bookkeeper's report is attached. Following review and discussion, Director Gay moved to approve the bookkeeper's report as presented. Director Hebert seconded the motion, which was approved by unanimous vote.

OPERATION OF AUTHORITY FACILITIES

Mr. Clayton presented the operator's report and reported on the operations of the Authority's facilities, including inspections, maintenance, repairs, joint facility expenses, and water accountability. A copy of the operator's report is attached.

Mr. Clayton reported that the Authority's Capital Planning and Design Committee ("CPD Committee") recommended that the Board approve a cost estimate from Cummins Southern Plains, LLC ("Cummins") for repair of the primer pump for generator no. 2 at the Bellaire Pump Station in the amount of $7,731.58. Mr. Froehlich stated that he will discuss an additional recommendation for preventative maintenance for the three Bellaire Pump Station generators during the engineer's report.

Mr. Clayton reported that the Authority's CPD Committee recommended that the Board approve a cost estimate from Southern Flowmeter, Inc. for meter testing services in the amount of $9,575.00.

Following review and discussion, Director Gay moved to approve the operator's

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report as presented, including approval of (1) the cost estimate from Cummins for repair of the primer pump for generator no. 2 at the Bellaire Pump Station in the amount of $7,731.58; and (2) the cost estimate from Southern Flowmeter, Inc. for meter testing in the amount of $9,575.00. Director Hebert seconded the motion, which was approved by unanimous vote. Copies of the cost estimates are attached to the operator's report.

APPROVE ANNUAL REPORT AND WATER CONSERVATION IMPLEMENTATION REPORT; ADOPT ORDER ADOPTING AMENDED AND RESTATED WATER CONSERVATION PLAN

The Board concurred to table this item.

ORDER ADOPTING AMENDED AND REST A TED DROUGHT CONTINGENCY PLAN

The Board concurred to table this item.

ADOPT UPDATED CRISIS MANAGEMENT MEDIA RELATIONS PLAN

The Board reviewed an updated Crisis Management Media Relations Plan. Following review and discussion, Director Gay moved to adopt the updated Crisis Management Media Relations Plan. Director Hebert seconded the motion, which was approved by unanimous vote.

REGULATORY MATTERS: SUBSIDENCE DISTRICT REGULATIONS AND PERMITTING, AND AUTHORITY'S GROUNDWATER REDUCTION PLAN ("GRP")

Mr. Froehlich presented the engineer's report, a copy of which is attached. Mr. Froehlich reported on matters related to the Authority's GRP, including monthly groundwater and surface water use by municipal utility districts receiving surface water from the Authority.

Mr. Froehlich reported that BGE provided an acknowledgment letter for annexation notices received from Fort Bend County Municipal Utility District No. 143.

Mr. Froehlich reported on coordination with ABHR on the preparation of GRP Participation Agreements with (1) Fort Bend County Municipal Utility District No. 24 ("FB 24"), to include only the approximately 520 acres of land proposed for annexation by FB 24, and (2) Charleston Municipal Utility District.

ENGINEERING MATTERS: ROUTING ANALYSES, DESIGN, AND CONSTRUCTION

Mr. Froehlich reviewed a chart indicating the status of property acquisition matters, including for the Authority's joint reclaimed water system project with Fort Bend County Municipal Utility District Nos. 146 and 194("FB146 and FB 194").

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Mr. Froehlich reported on the status of construction of the Authority's Phase 1 portion of the joint reclaimed water system project with FB 146 and FB 194. He stated C4 Partners, LLC is addressing punch list items for the project. He recommended approval of Pay Estimate No. 17 in the amount of $21,668.07 submitted by C4 Partners, LLC for the project.

ENGINEERING MATTERS: FACILITIES, PROJECTS, AND STUDIES

Mr. Froehlich reported on the schedule for the construction of the Authority's surface water line connection facilities for Fort Bend County Municipal Utility District No. 190. He stated that completion is anticipated in April, 2019.

Mr. Froehlich stated the design specifications for the Authority's project to construct a surface water line connection for Fort Bend County Municipal Utility District No. 30' s Water Plant No. 3 are pending the outcome of coordination efforts with representatives of the City of Houston's ("COH") Public Works Department on a proposed variance to COH' s design review criteria.

Mr. Froehlich reported on the status of the reclaimed water system project for Grand Lakes Municipal Utility District Nos. 1, 2, and 4, consisting of (i) the wastewater plant improvements; and (ii) the reclaimed water distribution system. He stated that agency submittals for the distribution system are pending acquisition of the necessary property rights. Mr. Froehlich stated that the executed contracts with }TR Constructors Inc. for construction of the wastewater improvements portion of the Authority's reclaimed water system project for Grand Lakes Municipal Utility District Nos. 1, 2, and 4 will be routed to the Texas Water Development Board (the "TWDB") for approval prior to issuing the Notice to Proceed.

Mr. Froehlich reported on the status of Costello, Inc.'s design of the Authority's Phase 2 portion of the joint reclaimed water system project with FB 146 and FB 194 consisting of the Authority's reclaimed water distribution system.

REGIONAL PLANNING MATTERS: JOINT PROJECTS AND WATER SUPPLY

Mr. Froehlich reported on matters related to the Authority's joint facilities with the West Harris County Regional Water Authority ("WHCRWA").

Mr. Froehlich reported on the status of BGE's evaluation of long-term lease/purchase options for backup generator power at the Bellaire Pump Station in coordination with Inframark. He recommended authorizing execution of a Letter of Authorization to permit Enchanted Rock, LLC to obtain the Authority's historical electricity usage from CenterPoint Energy for use in preparing a proposal for long-term lease/ purchase options for backup generator power at the Bellaire Pump Station.

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Mr. Froehlich recommended executing a Service Agreement for preventative maintenance for the Authority's three generators located at the Bellaire Pump Station per cost estimates received from Cummins in the approximate total amount of $33,000.00.

Mr. Froehlich stated that the Authority's CPD Committee recommended that the Board modify its prior authorization to terminate the Authority's contract with Storm Water Solutions, LP ("SWS") for mowing maintenance of the Authority's right-of-way to include termination of the entirety of the agreement, including services for storm water management plans for the Authority's Bellaire Pump Station site. Mr. Froehlich recommended that BGE resume providing storm water management plan services for the Authority's Bellaire Pump Station site pursuant to the Authority's Professional Engineering Services Agreement with BGE in an annual amount not to exceed $1,500.00.

Mr. Froehlich updated the Board on the status of the Authority's joint Surface Water Supply Project ("SWSP") with the WHCRWA. He reported that the WHCRWA issued a cash call to the Authority, due April 23, 2019, for second quarter 2019 expenses for the SWSP in the amount of $8,057,368.00. He stated that the Authority's financial advisor recommended paying $410,000.00 of the cash call from proceeds of the Authority's note program. He reported that the Authority's CPD Committee recommended that the Authority authorize payment of the cash call issued by the WHCRWA for second quarter 2019 expenses for the SWSP, subject to the TWDB's approval of the release of the necessary portion of the escrowed funds.

Mr. Froehlich reported on the status of design and easement acquisition for Segments A, B, and C, and the design of the Kinder Morgan Segment, the sub-segments for Segment 3, the Re-Pump Station, and the Central Pump Station for the SWSP. Mr. Froehlich discussed the schedule for WHCRW A's contractor pre-qualification process for open-cut pipeline contractors.

Mr. Froehlich reported on the status of the Coastal Water Authority's Luce Bayou Interbasin Transfer Project, including the construction schedules for the Capers Ridge pump station, canal projects, and the dual 96-inch raw water lines. He stated that an updated schedule and revised invoice have been received for the Authority's share of the annual debt service payment for the project in the amount of $203,694.43, which is in addition to the $176,711.39 previously paid by the Authority. He stated that the Authority's CPD Committee recommended that the Authority authorize payment of the invoice, due May 15, 2019.

Mr. Bauhof reported on the status of design of COH's Northeast Water Purification Plant ("NEWPP") Expansion Project per its Design-Build Agreement with the Houston Waterworks Team ("HWT"). He stated that HWT has submitted the 90% design for Phases 1 and 2 for review by the NEWPP participants' Project Management

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Team. He discussed the status the NEWPP participants' Project Management Team's negotiations with HWT regarding the terms and conditions of the Guaranteed Maximum Price contract amendment. Mr. Bauhof reported that COH anticipates issuing Cash Call 8A in the amount of $150,000.00 for contract legal services soon. He recommended that the Authority approve $32,109.00 for payment of its portion of Cash Call 8A. He reported on the status of site clearing, earthwork, construction of drainage facilities and roadway, excavation for raw water pipeline and the tunnel shaft, and construction of the west filter/transfer pump station.

Following review and discussion, Director Gay moved to approve the engineer's report as presented, including:

(1) approve Pay Estimate No. 17 in the amount of $21,668.07 submitted by C4 Partners, LLC for the Authority's Phase 1 portion of the joint reclaimed water system project with FB 146 and FB 194;

(2) authorize execution of a Letter of Authorization for Enchanted Rock, LLC to obtain the Authority's historical electricity usage from CenterPoint Energy for use in preparing a proposal for long-term lease/purchase options for backup generator power at the Bellaire Pump Station;

(3) authorize execution of a Service Agreement for preventative maintenance for the Authority's three generators located at the Bellaire Pump Station per cost estimates received from Cummins in the approximate total amount of $33,000.00;

(4) approve payment of a portion of the cash call issued by the WHCRWA for second quarter 2019 expenses for the SWSP in the amount of $8,057,368.00, subject to BGE' s submission of a request and the TWDB' s approval for release of escrowed funds;

(5) approve payment of an invoice for the Authority's share of the annual debt service payment for Coastal Water Authority's Luce Bayou Interbasin Transfer Project in the amount of $203,694.43;

(6) approve modification of the Board's prior authorization to terminate the Authority's contract with SWS for mowing maintenance of the Authority's right-of-way to include termination of the entirety of the agreement, including services for storm water management plans for the Authority's Bellaire Pump Station site; and

(7) approve payment of the Authority's portion of Cash Call 8A to be issued by COH for contract legal services for the NEWPP Expansion Project in the amount of $32,109.00.

Director Hebert seconded the motion, which was approved by unanimous vote.

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AUTHORITY FINANCING PLAN MATTERS

The Board concurred to defer this item.

RENEWAL OF LETTER OF CREDIT WITH CENTRAL BANK

Ms. Miller reviewed a term letter for a proposed one-year renewal of the Authority's Letter of Credit issued by Central Bank in the amount of $1,000,000 in favor of CenterPoint Energy, due to expire on June 4, 2019. Following discussion, Director Gay moved to authorize execution of the term letter. Director Hebert seconded the motion, which was approved by unanimous vote.

CONTRACTS

Ms. Miller reported that ABHR is counsel for Fort Bend County Municipal Utility District No. 50 ("FB 50") and discussed with the Board the Authority's option to retain independent counsel or to have ABHR represent it in connection with the preparation of a proposed a Water Supply Letter Agreement with FB 50. Following discussion, Director Gay moved to authorize execution of a legal conflict waiver for ABHR' s preparation of the proposed Water Supply Letter Agreement with FB 50. Director Hebert seconded the motion, which was approved by unanimous vote.

REALTY INTEREST ACQUISITION

Mr. Oliver reviewed two Water Line Easements and an Easement and Consent for parcels as listed on the attached Realty Interests Chart. Following review and discussion, Director Gay moved to authorize execution of the Water Line Easements and Easement and Consent as presented. Director Hebert seconded the motion, which was approved by unanimous vote.

CONVENE EXECUTIVE SESSION

The Board convened in executive session at 6:49 p.m. to conduct a private consultation with its attorney regarding the Authority's legal rights and obligations under the Second Supplement to the Water Supply Contract with COH pursuant to Section 551.071, Texas Government Code. The Board determined that the attendance in this executive session of Ms. Kovar and Mr. Bauhof was necessary in order for the Board to obtain the necessary legal advice from its attorney, and the Board requested their presence in the executive session.

RECONVENE IN OPEN SESSION

At 7:21 p.m., the Board reconvened in open session. No action was taken by the Board.

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CONVENE EXECUTIVE SESSION

The Board convened in executive session at 7:22 p.m. to discuss the purchase, exchange, lease, or value of real property pursuant to Section 551.072, Texas Government Code. The Board determined that the attendance in this executive session of Ms. Kovar, Mr. Froehlich, and Ms. Milberger was necessary in order for the Board to obtain the necessary legal advice from its attorney, and the Board requested their presence in the executive session.

RECONVENE IN OPEN SESSION

At 7:48 p.m., the Board reconvened in open session. Director Gay moved to authorize the Authority's legal counsel to move forward with condemnation of Parcels 18.02 and 18.02TE. Director Darden seconded the motion, which was approved by unanimous vote.

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

ectors (SEAL)

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LIST OF ATTACHMENTS TO MINUTES

Minutes Page

Attendance Sheets ........................................................................................................................ 1 Memorandum Regarding Water Conservation and Reuse ................................................... 1 Bookkeeper's report ..................................................................................................................... 3 Operator's report .......................................................................................................................... 3 Engineer's report .......................................................................................................................... 4 Realty Interests Chart .................................................................................................................. 8

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