BRAZOS MUTUAL DOMESTIC WATER CONSUMERS ASSOCIATION, INC.

August 18, 2013 Meeting Minutes

Meeting was brought to order at 8:05 a.m. at the Brazos Volunteer Fire Station

Directors Present: Clay Kilmer

Mike Valdez

Deej Banister

Rubel Martinez

Mike Doyle

Paul Walenciak

Minutes of July 20, 2013:

Clay Kilmer made a motion to accept the minutes as submitted. Mike Doyle seconded the motion. The motion unanimously carried.

Treasurer’s Report:

Rubel Martinez presented the month-end financial report:

Bank accounts:

Bills are current. Four (4) checks were written this month (from August 1 until August 18, 2013).

Community Bank checking as of July 31, 2013: $ 45,637.06

Fidelity cash as of July 31, 2013: $ 15,079.44

JASBX as of July 31, 2013: $ 105,690.31

Total Checking/Savings $ 166,406.81

Rubel asked the Board to approve moving $30,000.00 from the Community Bank into Fidelity checking to set up a possible move into a mutual fund with Fidelity, Thompson (THOPX). Currently, the management fee is .78%. Clay Kilmer made a motion to transfer the funds. Paul Walenciak seconded. The motion unanimously carried. Rubel will move $30,000.00 into the THOPX fund if it seems the market is stable.

Financial Reports/Invoices/Procedures:

After discussing the pros and cons of using a collection agency for procuring delinquent water fees, the Board opted to not use this type of service. The collection agency procedure is to be removed from the Rules and Regulations. Irv Lindemuth will review the R/Rs for Board action.

The preparation of an additional month-end report containing monthly costs with

month-to-month comparisons was tabled since it was found to be repetitive with current monthly reporting from the bookkeeper. Rubel will notify Gretchen to send month-end reports to all Board members.

In an effort to increase information transparency, Rubel will send a copy of the monthly Fidelity statement on a monthly basis to the Board members.

Gretchen Denman, bookkeeper, expressed concern that she is receiving directives and repetitive questions from too many Board members—at times these directives conflicted with Board decisions. She has requested that she receive Board directives regarding bookkeeping issues from the Treasurer and/or Secretary. The Board agreed—our water operator works under a similar situation. The Board also agreed that the Directors can contact Gretchen with questions concerning bookkeeping issues. Rubel Martinez is to notify Gretchen of the Board’s decision to her request.

Memberships/Transfers/Cancellations:

Two (2) new memberships were received:

Curtis and Sabrina Goodfellow, TR14, Unit 1, BLE

John and Kim Holtry, Lot 30, Block 2, Unit 1, BLE

Delinquent Water Fees:

The Board discussed delinquent water fees, and determined that following the existing R/Rs was the most efficient and consistent method of dealing with late payments. It appears that the action of following our R/Rs resulted in fees being brought current—late fees for 2012 and 2013 have been received with these acceptions: Robinson, Moya, Padilla Andrews and Thurston.

Deej Banister obtained the following information from Gretchen Denman, bookkeeper, regarding mailing of invoices and lock out schedules:

1. Initial invoices are mailed on April 15.

2. Non-payment invoices are mailed out according to the time-line printed on the bottom of the invoice:

a. 1-30 days past due, late fee.

b. 31-61 days past due, lock out.

c. Over 90 days past due.

3. Locks out invoices are sent with a handwritten statement indicating a date for lock out if the account is not paid in full.

4. Fees not collected for any given year are carried over to the next year.

Forming a committee to work collections was discussed; however, since most of the late fees for this year have been received by using the Rules and Regulations procedures, it was the consensus of most of the Board that establishing a collections committee at this time is not necessary. It was decided that Board members and the bookkeeper should continue to follow the collection directives in our Rules and Regulations. Rubel Martinez will notify the bookkeeper of the Board’s decision.

Survey for Upper Tank Lot:

The upper water tank property needs to be surveyed for tax purposes and exact lot location. Paul Walenciak indicated that Metes and Bounds estimated a cost of $2,200 to $2,400 for this service. Clay Kilmer made a motion that Paul Walenciak contact Metes and Bounds and schedule a survey. Mike Doyle seconded. The motion unanimously carried. When the survey is complete, the County will be contacted to verify that the Association’s name, parcel and plat information has been correctly entered into the County’s tax records.

Water Rights Adjudication:

Clay Kilmer attended a meeting on Wednesday, July 24, 2013, with Jeff Albright and Kent Malmquist to discuss time lines. The outcome of the meeting was that we were advised that the Association has not submitted a “Request for Extension of Time to Apply Water to Beneficial Use” since 2002. The extension of time is used to maintain our water right claim until we can grow into our originally permitted water right. We will be allowed to retroactively file three (3) of these extensions, but we will have to complete this task to get into compliance with the requirement before the adjudication court can complete its work in regard to our water right.

During the discussion, we were advised that we will likely not be given an additional 40 years to put our entire claim to beneficial use, since our claim has been on file since 1969. The most water we have ever metered in a year was about 18 acre feet and our original claim was for 97 acre feet. We will ask for more time, but will likely be given a shorter time frame than 40 years. After we file the timeline extension requests and are back in compliance, we will need to submit a revised stipulation to the adjudication court.

Clay Kilmer submitted a detailed cost estimate from Mr. Albright, Lewis and Roca, for $3525.00 to prepare and submit the extension paperwork and to complete and file the revised stipulation pursuant to completing the settlement agreement with the adjudication court, as well as preparation of the Water Plan that will need to be submitted to map out how we will grow into whatever our eventual maximum water use and right will be.

Discussion by the Board of the total funding thus far and the proposed additional costs followed. Clay Kilmer made a motion to pay Lewis and Roca approximately $4000.00 for these services. Mike Valdez seconded. The motion unanimously carried.

Other:

The Board discussed the need to increase the monthly salary for our bookkeeper, Gretchen Denman. Rubel Martinez made a motion to establish the base salary at $200.00 a month for 5 hours with an increase of $40.00 an hour for overtime based on 15 minutes intervals. Mike Doyle seconded the motion. The motion unanimously carried. Rubel Martinez will notify Gretchen Denman.

Paul Walenciak is making PDF files of the Association’s original copy of the registered “Agreement” with the Brazos Lodge Estates and the Brazos Water Cooperation regarding the upper water tank property, as well as the registered deed for the same property for Board perusal.

Insurance:

Mike Doyle reviewed the Association’s property insurance. It was determined that the 18,000 gallon water tank on DR 1759 across from Well 3 should be added to our coverage since it is currently being used by the VFD. Also, we may need to increase the Association’s property liability coverage. Mike Doyle will continue to review necessary coverages and obtain additional costs for Board approval.

The Board asked that Mike Doyle also review the personal liability policy that is currently in place for Board members to see if it should be increased.

The next meeting is scheduled for Sunday, September 22, 2013 at the BVFS at 8:00 a.m.

The meeting officially adjourned at 10:21 a.m.

Respectfully submitted,

Deej Banister

Secretary