2004-07-13 TAX INCREMENT REINVESTMENT ZONE NO. 2 BOARD MEETING MINUTESMINUTES OF THE BOARD OF DIRECTORS MEETING
TAX INCREMENT REINVESTMENT ZONE NUMBER TWO
CITY OF PEARLAND, TEXAS
July 13, 2004
A regular meeting of the Board of Directors ("Board") of the Tax Increment Reinvestment Zone
Number Two ("Zone"), City of Pearland, Texas, was held in the First Floor Conference Room of
City Hall, located at 3519 Liberty Drive, Pearland, Texas, on Tuesday, July 13, 2004, at 12:00
p.m. The meeting was open to the public.
Board Members in Attendance:
Gary Cook
James McFeron
Jo Knight
Mike Pyburn
Larry Loessin
Donna Coleman
Gary Davis
Developers in Attendance:
Drew Pelter — Shadow Creek Ranch Dev. Co.
City of Pentland Representatives in Attendance:
Alan Mueller
Andrea Gardner
1. Introduction.
Board Members Not in Attendance:
Nigel Harrison
Ron Castillo
Consultants in Attendance:
David Tinney — LJA Engineering
James Ross — LJA Engineering
Chris Johnson — Huitt-Zollars, Inc.
Mark McGrath — Null-Lairson
Lynne Humphries — Allen Boone Humphries, LLP
Sue Darcy — Knudson & Associates
Charles Knight — Knudson & Associates
Board Vice Chair, Gary Cook, welcomed those in attendance and introduced the Board
Members.
2. Call the meeting to order, take attendance and verify that a quorum is present.
Mr. Cook called the meeting to order at 12:02 p.m. and took attendance. The following Board
Members were present:
1.
Gary Cook
2.
Jo Knight
3.
Gary Davis
4.
Mike Pyburn
5.
Larry Loessin
6.
Donna Coleman
7.
James McFeron
Board Members Nigel Harrison and Ron Castillo were not in attendance.
3. Discuss and approve minutes of the April 26, 2004 Board meeting.
Board Member Loessin moved that the Board approve the minutes of the April 26, 2004 meeting.
Board Member Pyburn seconded the motion. Following discussion, the Board unanimously
approved the motion.
4. Project report from the Developer and PowerPoint Presentation; take appropriate
action.
Drew Pelter of Shadow Creek Ranch Development Company L.P. and David Tinney of LJA
Engineering reported on the current development. Mr. Pelter reported that approximately $18.2
million worth infrastructure improvements have been completed, with an additional $32 million
worth of infrastructure under construction. To date, more than 2,000 lots have been completed
and approximately 1,017 homes have been sold. Following Mr. Pelter's report, David Tinney of
LJA Engineering and Surveying reported on engineering and constriction activities to date. The
Board took no action on the report.
5. Quarterly financial report from City.
Andrea Gardner, Finance Director for the City of Pearland, presented the report to the Board.
She reviewed the Zone's Income Statement for the nine months ended June 30, 2004, as well as
the Zone's Balance Sheet as of June 30, 2004. The Board tools no action on the report.
6. Report on current TIRZ lobbying activities in Governor's special legislative session.
Lynne Humphries with Allen Boone & Humphries, Attorney's for the Zone, reported on school
finance reform and its impact on the Zone. She reported that there would not be another Special
Session of the State Legislature this year. She stated that the issue of school finance reform
would be revisited in the next Regular Session of the State Legislature in January of 2005. The
Board took no action on the report.
7. Report on status of Tri -Party Agreement by and between the City of Pearland,
Texas, Tax Increment Reinvestment Zone Number Two, City of Pearland, Texas
and Local Government Corporation.
Alan Mueller reported that the original plan was for the City to issue TIRZ revenue bonds on
behalf of the Zone. However, on June 28, 2004, the City created a local government corporation
entitled the Pearland Development Authority (the "Authority"). The Authority has, among its
other duties and responsibilities, the responsibility of issuing TIRZ revenue bonds on behalf of
the City. To this end, a Tri -Party Agreement by and between the City, the Zone and the
Authority must be executed, which will establish the legal relationship, terms and conditions for
such bond issues. The Board took no action on the report.
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8. Discuss and take necessary action regarding Huitt-Zollars, Inc.'s construction audit
work authorizations for the following projects:
a. Primary Entry Monument Land Cost, project no. 04-07-001;
b. Police/Fire Station Land Cost Adjustment, project no. 04-07-002;
C. Regional Nature Park, project no. 04-07-003;
d. Village 3, Phase 4 Improvements, project no. 04-07-004;
e. Village 4, Phase 1 and Reflection Bay North Improvements, project no. 04-
07-005;
I. Traffic Signal at Shadow Creek Parkway and Kingsley Drive, project no. 04-
07-006;
g. Parks and Trails Grading and Infrastructure, project no. 04-07-007.
The Board agreed to consider items 8.a through 8.g together. Chris Johnson with Huitt-Zollars,
construction auditor for the Zone, reviewed the work authorizations with the Board. Board
Member McFeron moved that the Board approved the Huitt-Zollars work authorizations listed in
agenda items 8.a through 8.g. Board Member Pyburn seconded the motion. Following
discussion, the Board unanimously approved the motion.
9. Engineering Report on the following projects by LJA Engineering & Surveying,
Inc..
a. Primary Entry Monument Land Cost, project no. 04-07-001;
b. Police/Fire Station Land Cost Adjustment, project no. 04-07-002;
C. Regional Nature Park, project no. 04-07-003;
d. Village 3, Phase 4 Improvements, project no. 04-07-004;
e. Village 4, Phase 1 and Reflection Bay North Improvements, project no. 04-
07-005;
I. Traffic Signal at Shadow Creek Parkway and Kingsley Drive, project no. 04-
07-006;
g. Parks and Trails Grading and Infrastructure, project no. 04-07-007.
10. Construction Audit Report on the following projects by Huitt-Zollars, Inc. and
discuss future procedures for construction audits:
a. Primary Entry Monument Land Cost, project no. 04-07-001;
b. Police/Fire Station Land Cost Adjustment, project no. 04-07-002;
C. Regional Nature Park, project no. 04-07-003;
d. Village 3, Phase 4 Improvements, project no. 04-07-004;
e. Village 4, Phase 1 and Reflection Bay North Improvements, project no. 04-
07-005;
I. Traffic Signal at Shadow Creek Parkway and Kingsley Drive, project no. 04-
07-006;
g. Parks and Trails Grading and Infrastructure, project no. 04-07-007.
The Board agreed to consider items 9.a through 9.g and 10.a through 10.g together. David
Tinney with LJA Engineering, engineers for the Zone, reviewed the projects with the Board.
Board Member Pybum inquired as to how cost overruns for land or improvements are handled
and what effect such overruns might have on the estimate of project costs in the Project Plan.
Sue Darcy with Knudson & Associates, Administrator for the Authority, responded that project
costs outlined in the Project Plan are only estimates, and the Zone has the authority to reallocate
costs among line items within the same category as it sees fit. However, the estimate of the total
project cost found in the Plan cannot be exceeded.
Chris Johnson then reviewed the construction audit reports for the projects listed in agenda items
10.a through 10.g. Following the reports, Board Member McFeron moved that the Board
approve the reports as listed in agenda items 9.a through 9.g and 10.a through 10.g. Board
Member Davis seconded the motion. Following discussion, the Board unanimously approved the
motion.
11. Discuss and take necessary action regarding approval of Letter Financing
Agreement(s) for the following projects:
a. Primary Entry Monument Land Cost, project no. 04-07-001;
b. Police/Fire Station Land Cost Adjustment, project no. 04-07-002;
C. Regional Nature Park, project no. 04-07.003;
d. Village 3, Phase 4 Improvements, project no. 04-07.004;
e. Village 4, Phase 1 and Reflection Bay North Improvements, project no. 04-
07-005;
f. Traffic Signal at Shadow Creek Parkway and Kingsley Drive, project no. 04-
07-006;
g. Parks and Trails Grading and Infrastructure, project no. 04-07-007.
Lynne Humphries reviewed the letter financing agreements with the Board. Board Member
Pyburn moved to approve the letter financing agreements as listed in agenda items 1 La through
I l.g. Board Member Coleman seconded the motion. Following discussion, Board Members
McFeron, Coleman, Pyburn, Loessin, Davis and Knight approved the letter financing agreements
as listed in agenda items l La through 11.g. Board Member Cook abstained.
12. Discuss and take necessary action regarding approval of the following joint
construction and reimbursement agreements with Brazoria County MUD No. 26:
a. Lakes A-10, A-l0A and A10B serving Village 2, Phase 1;
b. Lake A-25 and Channel A-24 serving Village 2, Phase 2;
C. Lake A-11 and Channel A128-04-04 serving Village 2, Phase 2;
d. Lake A-13 and Channel C-13 serving Village 1, Phase IA;
e. Channel A128-01-00 and Channel A128-00-00 (2);
I. Diversion Channel and Village 2 Interim Channel;
g. Lakes A-19, A-20 and A-21 and Channel C-20 and Discovery Bay Channel
serving Village 1, Phase 111 (1).
13. Discuss and take necessary action regarding approval of the following joint
construction and reimbursement agreements with Brazoria County -Fort Bend
County MUD No. 1:
a. Lift Station No. 1;
b. Clearing and Grubbing for Villages 3 and 4 Lakes and Channels;
C. Lake A-3 serving Village 3;
d. Lake A-4 and Lake A -4A serving Village 3;
e. Lake A-7 serving Village 3;
f. Lake A-8 serving Village 3;
g. Channel A128.01-00 (3).
The Board agreed to hear agenda items 12.a through 12.g and 13.a through 13.g together. Lynne
Humphries reviewed the agreements for joint projects for the Board. Board Member Knight
moved that the Board approve the joint construction and reimbursement agreements with
Brazoria County MUD No. 26 and Brazoria County -Fort Bend County MUD No. 1 as listed in
agenda items 12.a through 12.g and 13.a through 13.g. Board Member McFeron seconded the
motion. Following discussion, Board Members McFeron, Coleman, Pybum, Loessin, Davis and
Knight approved the letter financing agreements as listed in agenda items 12.a through 12.g and
13.a through 13.g. Board Member Cook abstained.
14. Discuss and take necessary action regarding approval of contract with Assessments
of the Southwest, Inc. to provide appraisal services.
Sue Darcy reviewed the Assessments of the Southwest contract for appraisal services. Following
discussion, the Board requested the contract be revised to specify the scope of work and estimate
of costs.
15. Discuss and take necessary action regarding selection of Invoice Review Committee
members.
Charles Knight with Knudson & Associates explained that the Board needed to appoint another
Board Member to the Invoice Review Committee to replace former Director John Knox. Board
Member Davis moved to nominate Ron Castillo to replace Mr. Knox on the Invoice Review
Committee. Board Member Coleman seconded the motion. Following discussion, the Board
unanimously approved the motion and selected Mr. Castillo to take the place of Mr. Knox on the
Invoice Review Committee.
16. Discuss and take necessary action regarding Auditor's Report on TIRZ Invoices
Presented for Payment and approval of outstanding administrative invoices to date.
Mark McGrath of Null-Lairson, Zone Auditor, summarized the Report on Invoices Presented for
Services Rendered from April 2004 through June 2004. Board Member Coleman moved to
accept and approve the submitted invoices for payment by the City from the City's Tax
Increment Revenue Fund. Board Member Pybum seconded the motion. Following discussion,
the Board unanimously approved the motion.
17. Discuss and take necessary action regarding Auditor's Report on Developer
Reimbursement No. 1 and make recommendation to City for reimbursement.
Mark McGrath with Null-Lairson, Auditor for the Zone, explained that the Auditor's Report was
still being drafted, and, therefore, not ready for Board consideration. He did explain that the
report would cover letter financing agreements for Zone creation and organization costs, as well
as project numbers 99-11-001, 00-01-001, 00-10-002 and 01-04-001. The Board took no action.
18. Presentation and discussion of TIRZ Project Budget Report and make necessary
adjustments to Project Plan budget.
Sue Darcy explained that as the adjustments were still under consideration, this item would be
presented to the Board at a later date. The Board tools no action.
19. New Business.
No new business was brought before the Board.
20. Any other matters which may properly come before the Board.
No other matters were brought before the Board.
21. Adjournment.
Following discussion, the meeting was adjourned by unanimous consent at 1:46 p.m.
Approved:
Board Secretary'
Tax Increment Reinvestment Zone Number Two
City of Pearland, Texas
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