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2004-10-05 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 October 5, 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 Council Chambers of City Hall, which is located at 3519 Liberty Drive, Pearland, Texas, on Tuesday, October 5, 2004, at 5:00 p.m. The meeting was open to the public. Board Members in Attendance: Nigel Harrison Gary Cook Ron Castillo Jo Knight Mike Pyburn Donna Coleman Gary Davis Developers in Attendance: Drew Pelter — Shadow Creek Ranch Dev. Co. Citv of Pearland Representatives in Attendance: Mayor Tom Reid Bill Eisen Alan Mueller Andrea Gardner Darrin Coker Development Authority of Pearland Directors in Attendance: Bill Sloan Ed Baker Henry Stanaland 1. Introduction. Board Members Not in Attendance: Larry Loessin Consultants in Attendance: Lynne Humphries — Allen Boone Humphries, LLP Trey Lary — Allen Boone Humphries, LLP David Tinney — LJA Engineering James Ross — LJA Engineering Chris Johnson — Huitt-Zollars, Inc. Mark McGrath — Null-Lairson Tommy Lee — Assessments of the Southwest Bob DeForest— KGA/DeForest Design Sue Darcy — Knudson & Associates Charles Knight — Knudson & Associates Ryan O'Hare — Dain Rauscher Rick Witte — Andrews & Kurth Board Chair Nigel Harrison 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. Harrison called the meeting to order at 5:02 p.m, and took attendance. The following Directors were present: 1. Nigel Harrison 2. Gary Cook 3. Jo Knight 4. Gary Davis 5. Mike Pyburn 6. Ron Castillo a 7. Donna Coleman Board Member Larry Loessin was not in attendance. The Development Authority of Pearland also convened its meeting at 5:05 p.m. in the Pearland City Council Chambers. In order to accommodate the Development Authority of Pearland, the Zone Board agreed to consider agenda items 8 and 9 at this point. 8. Discuss and approve the Tri -Party Agreement by and between the City of Pearland, Texas, Tax Increment Reinvestment Zone Number Two, City of Pearland, Texas and the Pearland Development Authority. Trey Lary of Allen Boone Humphries reviewed with the Board the Tri -Party Agreement by and between the City of Pearland, TIRZ No. 2 and the Development Authority of Pearland, which sets forth the terms, conditions, duties and responsibilities of the parties. Mr. Lary summarized the primary responsibility of the TIRZ as essentially being the implementation of the Project Plan and Reinvestment Zone Financing Plan. Mr. Lary then summarized the primary responsibility of the Development Authority of Pearland as essentially being the issuing of debt to fund implementation of the Plan. Board Member Castillo then moved that the Board approve the Tri - Party Agreement by and between the City of Pearland, Texas, TIRZ No. 2 and the Development Authority of Pearland. Board Member Cook seconded the motion. Following discussion, the Board unanimously approved the motion. Following approval of the motion, the Development Authority of Pearland Board of Directors adjourned its meeting at 5:25 pm so that it could reconvene to consider the Tri -Party Agreement by and between the City of Pearland, TIRZ No. 2 and the Development Authority of Pearland. 9. Discuss and appoint a Director to serve on joint City of Pearland, Texas/Tax Increment Reinvestment Zone Number Two, City of Pearland, Texas/Development Authority of Pearland Bookkeeper Selection Committee. Sue Darcy of Knudson & Associates explained that with the creation of the Pearland Development Authority, it is now necessary that a bookkeeper be hired to manage the accounts for both the Authority and the Zone. The first step in this process is the formation of a booUd eeper selection committee. Ms Darcy further explained that this committee will consist of the City's Finance Director and a representative from both the Authority and the Zone. Board Member Pyburn then moved that the Board nominate 7o Knight as the Zone's representative on the Committee. Ms. Knight accepted the nomination. Board Member Davis seconded the motion. Following discussion, the Board unanimously approved the motion. 2 3. Discuss and take necessary action regarding approval of Resolution of Appreciation for James McFeron. Sue Darcy asked that the Board, in recognition of James McFeron's untimely death and his service to the City of Pearland's TIRZ Number Two Board of Director's, adopt a Resolution of Appreciation for Director James McFeron who passed away August 6, 2004. Board Member Pyburn moved that the Board adopt the Resolution of Appreciation for Director James McFeron. Board Member Castillo seconded the motion. Following discussion, the Board unanimously approved the motion. 4. Discuss and approve the minutes of the July 13, 2004 Board meeting. Board Member Davis moved that the Board approve the minutes of the July 13, 2004 meeting. Board Member Coleman seconded the motion. Following discussion, the Board unanimously approved the motion. 5. Discuss and approve the Auditor's Report on TIRZ Invoices Presented for Payment and approval of outstanding administrative invoices to date. Mark McGrath of Null-Lairson reviewed with the Board the Auditor's Report on outstanding TIRZ invoices for services rendered on behalf of the Zone from July 2004 through September 2004. Board Member Castillo moved that the Board approve the Auditor's Report on outstanding TIRZ invoices for services rendered on behalf of the Zone from July 2004 through September 2004 and authorize payment thereof. Board Member Knight seconded the motion. Following discussion, the Board unanimously approved the motion. 6. Discuss and approve the Auditor's Report on Developer Reimbursement No. 1 and make recommendation to the City for reimbursement. Mark McGrath reviewed with the Board the Auditor's Report on Developer Reimbursement No. 1, noting the actual creation and project costs detailed in the Report, including interest earned thereon, totaled $18,443,843. Mr. McGrath then noted the Report's conclusion that the construction of the TIRZ improvements were completed in compliance with the Master Developer Reimbursement Agreement and the TIRZ Implementation and Reimbursement Process, and are in order for reimbursement upon the availability of funds. Mr. McGrath also directed the Board's attention to the Engineer's certification letters and the Administrator's certification letter. Board Member Pyburn moved that the Board approve the Auditor's Report on Developer Reimbursement No. l and recommend to the City that it reimburse the developer for the project costs contained therein. Board Member Davis seconded the motion. Following discussion, the Board approved the motion with six Board Members voting for the motion and Board Member Cook abstaining. 3 7. Financial report from the City. Andrea Gardner, the City's Finance Director, reviewed with the Board the Income Statement for the Eleven Months Ended August 31, 2004, noting total revenue for the period of $760,727. Ms. Gardner also noted that total expenditures for the same period totaled $293,866, which resulted in net income for the period of $466,862. Ms. Gardner then reviewed with the Board the Zone's Balance Sheet as of August 31, 2004. Board Member Pyburn asked the future Income Statements show income and expenditures for prior years, as well, to which Ms. Gardner agreed. The Board took no action on the report. 10. Discuss and approve contract with Assessments of the Southwest, Inc, to provide services related to verification of tax increment. Tommy Lee of Assessments of the Southwest introduced himself to the Board and reviewed his contract to provide services related to verification of tax increment in anticipation of the upcoming bond issue. Board Member Castillo moved that the Board approve the contract with Assessments of the Southwest, Inc. to provide services related to verification of tax increment. Board Member Cook seconded the motion. Following discussion, the Board unanimously approved the motion. 11. Discuss and approve Joint Construction and Reimbursement Agreement with Brazoria County MUD No. 26 for construction of the Reflection Bay Drive Sanitary Sewer Trunk Line and Lateral "A". 12. Discuss and approve Joint Construction and Reimbursement Agreement with Brazoria-Fort Bend County MUD No. 1 for construction of the Lakes "A", "C" and "D" and detention pond "B" to serve Shadow Creek Ranch Village 4. The Board elected to consider agenda items 11 and 12 together. Lynne Humphries of Allen Boone Humphries reviewed the Joint Construction and Reimbursement Agreements with the Board. Board Member Davis moved that the Board approve the Joint Construction and Reimbursement Agreements with Brazoria County MUD No. 26 for construction of the Reflection Bay Drive Sanitary Sewer Trunk Line and Lateral "A" and with Brazoria-Fort Bend County MUD No. 1 for construction of the Lakes "A", "C" and "D" and detention pond "B" to serve Shadow Creek Ranch Village 4. Board Member Castillo seconded the motion. Following discussion, the Board approved the motion with six Board Members voting for the motion and Board Member Cook abstaining. 13. Presentation and discussion of the Financing Plan's updated project costs. David Tinney of LJA Engineering and Surveying and Lynne Humphries reviewed with the Board the revised project plan budget, as well as the status of completed letter financing agreements as of October 5, 2004. Mr. Tinney then directed the Board's attention to the LJA letter, which confirms that there are sufficient funds remaining in the budget to complete the construction of 4 the remaining TIRZ infrastructure projects, to which Chris Johnson with Huitt-Zollars concurred. The Board took no action on the report. 14. New Business. No new business was brought before the Board. 15. Any other matters which may properly come before the Board. No other matters were brought before the Board. 16. Adjournment. Following discussion, the meeting was recessed by unanimous consent at 6:04 p.m. With the full quorum of directors remaining, the Board reconvened at 6:10 p.m. to consider minor revisions just made by the Development Authority of Pearland to the Tri -Party Agreement by and between the City of Pearland, Texas, Tax Increment Reinvestment Zone Number Two, City of Pearland, Texas and the Pearland Development Authority. Lynne Humphries reviewed the changes with the Board. Board Member Pyburn moved that the Board approve the revised Tri -Party Agreement by and between the City of Pearland, Texas, Tax Increment Reinvestment Zone Number Two, City of Pearland, Texas and the Pearland Development Authority. Board Member Castillo seconded the motion. Following discussion, the Board approved the motion with six Board Members voting for the motion and Board Member Cook abstaining. Following discussion, the meeting was adjourned by unanimous consent at 6:17 p.m. Approved: Tax Increment Reinvestment Zone Number Two City of Pearland, Texas