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2008-08-25 DEVELOPMENT AUTHORITY OF PEARLAND SPECIAL MEETING MINUTESMINUTES OF A SPECIAL MEETING OF THE DEVELOPMENT AUTHORITY OF PEARLAND, CITY OF PEARLAND TEXAS , TO BE HELD ON MONDAY, AUGUST 25, 2008, 3:00 P.M., IN THE SECOND FLOOR CONFERENCE ROOM, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS. Mayor Reid called the meeting to order at 3:02 p.m. with the following present: Chairman Secretary Boardmember Boardmember Absent: Boardmember Tom Pool Tom Reid Henry Stanaland Bill Sloan Ed Baker Others in attendance: Bill Eisen, City of Pearland City Manager, Claire Bogard, City of Pearland Director of Finance; Trey Lary, Allen Boone Humphries Robinson, LLP; Sonia Blair, City of Pearland. NEW BUSINESS BOARD ACTION — APPROVAL OF THE DEVELOPMENT AUTHORITY OF PEARLAND BOARD OF DIRECTORS MEETING MINUTES FOR SEPTEMBER 24, 2007. DAP Board of Directors. Boardmember Baker made the motion, seconded by Boardmember Stanaland, to approve the Minutes of the September 24, 2007, Special Meeting. Voting "Aye" Boardmembers Reid, Stanaland, Sloan, and Baker. Voting "No" None. Motion Passed 4 to 0, Boardmember Pool absent. BOARD ACTION — RESOLUTION NO. RDAP-2008-05— A RESOLUTION OF THE BOARD OF DIRECTORS FOR THE DEVELOPMENT AUTHORITY OF PEARLAND (DAP), ACCEPTING THE DAP INVESTMENT REPORT FOR THE QUARTER ENDING JUNE 2008. Ms. Claire Bogard, Director of Finance. City of Pearland Director of Finance Claire Bogard reviewed the June 30, 2008, Quarterly Investment Report. She stated the beginning market value and book value as of March 31, 2008 is $901,866.99 and as of June 30, 2008, the market value and book value is $896,082. The average yield for the period was 1.32% versus a one -day agency note of 2.20% and a T-bill of 2.07%. Options were investigated on whether the money could be invested in a different place other than where it currently is, but due to a Trust Indenture in the Bond Covenant, it has to remain with Wells Fargo Bank. Page 1 of 5 — 8/25/2008 - DAP Discussion ensued between Boardmembers, City of Pearland Director of Finance Claire Bogard, and Trey Lary, Allen Boone Humphries Robinson, LLP, regarding the Investment Report. Boardmember Baker made the motion, seconded by Boardmember Sloan, to approve Resolution No. RDAP2008-05. Voting "Aye" Boardmembers Reid, Stanaland, Sloan, and Baker. Voting "No" None. Motion Passed 4 to 0, Boardmember Pool absent. BOARD ACTION — RESOLUTION NO. RDAP-2008-02— A RESOLUTION OF THE BOARD OF DIRECTORS FOR THE DEVELOPMENT AUTHORITY OF PEARLAND (DAP) RATIFYING CHECKS 1033 THROUGH 1050 APPROVED AND SIGNED BY THE DEVELOPMENT AUTHORITY COMMITTEE AND APPROVING CHECK 1051 FOR PAYMENT. Ms. Claire Bogard, Director of Finance. City of Pearland Director of Finance Claire Bogard stated, due to infrequent meeting dates, the Development Authority Board had previously appointed an Invoice Review Committee to review invoices and issue checks for payment. The Invoice Review Committee has currently issued checks for $74,400.57, of which $41,351.00 are issuance costs associated with Bond Series 2007. Approving this Resolution will ratify the checks already issued and approve check number 1051 for $2000.00 to the City of Pearland. Boardmember Reid stated the invoice review system seems to be working and prevents vendors from having to wait for payment. Boardmember Sloan asked if there was a maximum amount the Invoice Review Committee can approve for one payment. City of Pearland Director of Finance Claire Bogard stated she believes the maximum amount the Invoice Review Committee can approve is $25,000 per invoice. Boardmember Stanaland stated the paying agent fee of $3500 from Wells Fargo seemed high and asked if this was a standard amount. City of Pearland Director of Finance Claire Bogard stated the amount reflected two series but did appear high compared to fees she has seen from other vendors. Page 2 of 5 — 8/25/2008 - DAP Trey Lary, Allen Boone Humphries and Robinson, stated the fee is higher because there is a Trust Indenture and the bank is acting as Trustee in addition to the roll of paying agent. Boardmember Baker made the motion, seconded by Boardmember Sloan, to approve Resolution No. RDAP2008-02. Voting "Aye" Boardmembers Reid, Stanaland, Sloan, and Baker. Voting "No" None. Motion Passed 4 to 0, Boardmember Pool absent. BOARD ACTION — RESOLUTION NO. RDAP-2008-03 — A RESOLUTION OF THE BOARD OF DIRECTORS FOR THE DEVELOPMENT AUTHORITY OF PEARLAND (DAP) ACCEPTING THE FINANCIAL REPORT FOR THE PERIOD ENDING JULY 31, 2008. Ms. Claire Bogard, Director of Finance. City of Pearland Director of Finance Claire Bogard provided the Board with a review of the Financial Report for the period ending July 31, 2008. She stated cash and Investments are $897,049, with 100% in interest bearing money market accounts. Of this amount $812,184 is debt service reserve and not available. The income statement to date has $19,210,366 in revenues of which $15,950,000 is from bond proceeds, $3,200,000 in compensation from TIRZ No. 2, and $2,000,000 cash compensation. The Development Authority of Pearland has purchased Triple "A" debt service reserve surety policies from CDC IXIS Financial Guarantee for the Series 2004, 2006 and 2007 issuances in lieu of holding cash reserves which limit developer reimbursements. As a result of the national subprime situation, the company has been downgraded from the Triple "A" rating which is required. Board financial advisors are recommending setting aside the necessary debt service cash reserves for all outstanding Authority issues to mitigate the negative impact of selling the series 2008 Development Authority of Pearland issuance. Discussion ensued between Boardmembers, City of Pearland Director of Finance Claire Bogard, and Trey Lary, Allen Boone Humphries Robinson, LLP, regarding the Financial Report. Boardmember Sloan made the motion, seconded by Boardmember Stanaland, to approve Resolution No. RDAP2008-03. Voting "Aye" Boardmembers Reid, Stanaland, Sloan, and Baker. Voting "No" None. Page 3 of 5 — 8/25/2008 - DAP Motion Passed 4 to 0, Boardmember Pool absent. BOARD ACTION — RESOLUTION NO. RDAP-2008-04 — A RESOLUTION OF THE BOARD OF DIRECTORS FOR THE DEVELOPMENT AUTHORITY OF PEARLAND (DAP), REGARDING ANNUAL REVIEW OF INVESTMENT POLICY, STRATEGY, AND LIST OF APPROVED BROKER/DEALERS. Ms. Claire Bogard, Director of Finance. City of Pearland Director of Finance Claire Bogard stated, according to the Public Funds Investment Act, the Board is required to annually review and adopt an Investment Strategy and a list of approved Broker/Dealers. It is recommended that the Board adopt the current Investment Policy of the City of Pearland that addresses all the items required by the Public Funds Investment Act and is reviewed by the City's Investment Committee. The City of Pearland Investment Policy was adopted by the TIRZ No. 2 Board in May 2008. Boardmember Reid stated the Investment Policy includes the word "City" throughout the document and he feel this does not clarify the separation of the Development Authority of Pearland and the City of Pearland. He feels the wording in the document should be changed to reflect the Development Authority of Pearland. Trey Lary, Allen Boone Humphries Robinson, LLP, stated the separation of the two entities is in the Resolution. City of Pearland Director of Finance Claire Bogard stated the Resolution states "the Board of Directors has determined to adopt the Exhibit "A" City of Pearland's Investment Policy, Strategy, and Exhibit "B" list of Broker/Dealers as its own; Now, Therefore." This wording is intended to reflect the separation. Boardmember Reid stated it would be clearer if the wording in the Investment Policy reflected the Development Authority of Pearland. Boardmember Sloan made the motion, seconded by Boardmember Baker, to approve Resolution No RDAP2008-04 with the understanding that the word "City" will be replaced with the word "Authority" in the Investment Policy Document. Voting "Aye" Boardmembers Reid, Stanaland, Sloan, and Baker. Voting "No" None. Motion Passed 4 to 0, Boardmember Pool absent. Page 4 of 5 — 8/25/2008 - DAP BOARD ACTION — RESOLUTION NO. RDAP-2008-01 — A RESOLUTION OF THE BOARD OF DIRECTORS FOR THE DEVELOPMENT AUTHORITY OF PEARLAND (DAP), ACCEPTING THE DISCLOSURE STATEMENTS OF THE AUTHORITY'S INVESTMENT OFFICERS AND BOOKKEEPERS. Ms. Claire Bogard, Director of Finance. City of Pearland Director of Finance Claire Bogard stated the Public Funds Investment Act requires that an investment officer of an entity who has a personal business relationship with a business organization offering to engage in an investment transaction with the entity shall file a statement disclosing that personal business interest. She stated she does not have a personal business relationship with any of the broker/dealers associated with the Authority. The Assistant Director of Finance Rick Overgaard does personal business with RBC Dain Rausher, but with a different advisor in an office located in another city. Boardmember Sloan made the motion, seconded by Boardmember Baker, to approve Resolution No. RDAP2008-01. Voting "Aye" Boardmembers Reid, Stanaland, Sloan, and Baker. Voting "No" None. Motion Passed 4 to 0, Boardmember Pool absent. � l�l�l�7►`1►iL=T►� Meeting was adjourned at 3:51 p.m. Minutes approved as submitted and/or corrected this the 3rd day of November, A.D., 2008. i eevelopment Authority of Pearland Chairman ATTEST: Development Authority of Pearland Secretary Page 5 of 5 — 8/25/2008 - DAP