INTEG CORPORATION January 14,2015 The Honorable Ramon Garcia Chairman, Board of Directors Hidal go County Drainage District No. 1 c/o Of?ce of the County Judge P.O. Box 1356 Edinburg, Texas 78540 Re Yonr correspondence dated January 5, 2015 Dear Chairman Garcia, I am in receipt of your letter dated January 5, 2015, on County of Hidalgo letterhead. I am confused since it appears that you have embarked on a personal investigation based on your last letter to me and your comments to the media wherein you stated to the Monitor (March 24, 2014) that you want to go after an insurance policy because you think Integ was overpaid. Even though I could ?nd no authorization by agenda approval in the minutes of any meetings with Hidalgo County Drainage District No. 1 for your personal investigation, I will respond to your letter with the understanding that you will provide me within 10 days of this letter with the agenda item authorizing your personal investigation. Please be advised that you cannot conduct a ?personal? investigation under color of your position as Chairman of the Board of the - you must have authorization from the Board of Directors of Based on your prior comments, I question your motivation and your inipartiality. Regarding your letter, the contract you refer to in your letter is between Hidalgo County Drainage District No. and Integ, Inc, (?Integ?). The contract was signed with my company Integ, Inc., and not with me personally as you imply in your letter. The contract was signed (after approval) on February 6, 2007, by Juan De Dios Salinas, 111, as Chairman of the Board of Directors of and myself on behalf of Integ. The contract is virtually identical to the one you signed as Chairman of the Board of Directors of with Integ on October 5, 2006. Atlas Hall prepared both contracts on behalf of Integ did not have an attorney who represented it when the contracts were signed. The only difference between the two contracts was the addition of language in the 2007 contract wherein hired Integ to manage the construction of the Hidalgo County Master Drainage System Phase 11 and agreed to pay Integ one and a half percent of the actual construction costs, excluding any land acquisitions, of the Hidalgo County Master Drainage System Phase II. The 2007 contract was approved by the Board of Directors on February 6, 2007. Page 2 I disagree with your statement and personal belief that i have not been nanSparent regarding the drainage bond issues. Your past personal accusations that lnteg did not have a valid contract regarding the work done by Integ on the Hidalgo County Master Drainage System Phase II is simply wrong. See Contract at Exhibit A attached to this letter. A contract is a contract. As you know, I on behalf of Integ, Inc., negotiated the contract with and the parties agreed on compensation equal to 1.5% of the entire project cost. The fee was based on similar fees and contracts for the type and scope of work Integ was agreeing to do, and my knowledge of Hidalgo County drainage and my 28 years of eXperience (at the time) with Hidalgo County drainage. As principal of Integ, my experience and knowledge was acknowledged by on the ?rst page of the contract as follows: WHEREAS, District recognizes the bene?ts of contracting with a party who will employ the former manager of District, which manager has the training, experience, and qualifications necessary to manage and supervise the ?mctions of the District; WHEREAS, District has determined that the proper, orderly and e?icient delivery of quality services to District constituents can be accomplished by contracting with Integ on a contract basis as God?'ey Garza, through Integ, desires to provide services to other individuals or entities. Atlas Hall prepared the contract on behalf. The contract was then approved by the Board of Directors. Then Chairman of the Board of Judge, J.D. Salinas, and lnteg signed the contract. Integ did not have a lawyer. The was represented by Atlas Hall and worked with Atlas Hall to insert the language they wanted in the contract. The contract was nothing but transparent and was approved by the entire board Again, the process was nothing but transparent to all parties. In your letter you claim that I personally have a con?ict of interest because my wife now owns Valley Data Collection Specialists, Inc., (?Valley Data?). Remember that the contract with is not with me personally. It is with Integ, Inc. Nevertheless, any alleged con?ict of interest would be governed by Integ?s contract with where it is speci?cally de?ned. ?Con?ict of Interest? is de?ned in the contract in section 9 as follows: 9. Con?ict of Interest Prior to entering into any contract or business relationship or receiving payment ??om any individual or entity who is financially interested in a contract or project with the District or who is a director or employee of any such individual or entity, lnteg shall disclose the proposed contract business relationship or payment to the Board of Directors of District. Page 3 For your information, Integ, Inc., has never hired or contracted with Valley Data Collection Specialists, Inc. Therefore, no con?ict of interest has occurred. By way of history, Valley Data, was incorporated in 2004 as an employee leasing company by my sons, Godfrey Garza, and Jonathan Garza, well before the Hidalgo County Master Drainage System Phase II project (?Phase II Drainage Project?) was initiated. My wife, Annie Q. Garza, informed me that she did not become an owner of Valley Data until 2012 by that time the Phase II Drainage Project had already been substantially completed. It is telling that you conveniently left out Valley Data?s corporate history in your January 5, 2015, letter since this information is public and readily available to anyone from the Texas Secretary of State?s web site. According to my sons, Valley Data over its lifetime has provided services with several entities across South Texas and not just in Hidalgo County. Integ did not hire any contractors on the Phase Ii Drainage Project. This was not Integ?s job. All contractors on the Phase II Drainage Project were solicited by by a Request for Quali?cations Therea?er, the Board of Directors, based on the responses to the RFQ, made the decision on who was going to be hired on the Phase Drainage Project. Integ had no control over contractors hiring Valley Data after they were contracted by the Neither Integ, nor 1, have ever owned or had an interest in Valley Data or had a say as to whether Valley Data was hired by a particular contractor. My grown sons (age 38 and 30, respectively) who owned Valley Data at the time the Phase II Drainage Project was ongoing, Godfrey Garza, and Jonathan Garza, were in charge of their own company. Integ or myself had no control over them. I am perplexed at page two of your letter since it purports to make reference to an ?Article 14" entitled ?Contracts with Engineers? that does not exist in either Integ?s 2006 or 2007 contract with Before you accuse myself or Integ with a violation of something you should make sure that it applies. Since you seem to be making a personal accusation that Integ violated this ?Article 14" please let me know where you found this article. Without it being in the 2006 or 2007 contracts, I cannot address it. You claim in your letter that I own ?fty percent of Valley Data but I do not. If you have any corporate documents that show otherwise, please let me know. You also claim that my wife owns ?fty percent of Integ, Inc., but she does not. If you have any corporate documents that show otherwise, please let me know. Your blanket and personal accusation that by default Texas Family law makes me one half owner of Valley Data when my wife became an owner in 2012 is wrong according to my research. I am disappointed that you have chosen to make baseless allegations against Integ and myself and I question your motives. Your motivation and attempt to accuse and defame Integ and myself to manufacture a case to try and collect monies from an insurance policy are unfounded and, based on my review of the minutes of the meetings of 1 not authorized by the Board of Directors. Again, you are bound by Texas law to seek Board Page 4 Approval before you embark on a personal and unjusti?ed investigation under color of your position as Chairman of . Sincerely, INTEG, INC. By; Godfrey Gam?n President xo: The Honorable A.C. Cuellar, Jr., Director The Honorable Eduardo Cantu, Director The Honorable Joe M. Flores, Director The Honorable Joseph Palacios, Director Mr. Steve Crain, Legal Connsel Ms. Lora Briones, Financial Of?cer