2013-06-24 TAX INCREMENT REINVESTMENT ZONE NO. 2 BOARD MEETING MINUTESMINUTES OF A REGULAR MEETING OF THE TAX INCREMENT REINVESTMENT
ZONE NUMBER TWO (TIRZ NO. 2), ALSO KNOWN AS SHADOW CREEK RANCH, CITY
OF PEARLAND TEXAS, HELD ON MONDAY, JUNE 24, 2013, AT 4:30 P.M., IN THE
FIRST FLOOR CONFERENCE ROOM AT PEARLAND CITY HALL, 3519 LIBERTY
DRIVE, PEARLAND, TEXAS.
Chairman Kenneth R.
Phillips called the meeting to order at 4:05 p.m. with the following
present:
Chair
Kenneth R. Phillips
Vice Chair
Gary Cook
Secretary
Mike Pyburn
Boardmember
Donna Coleman
Boardmember
Herbert Fain
Boardmember
Ron Castillo
Boardmember
Larry Loessin
Boardmember
Gary Davis
Absent: Boardmember Jo Knight
Others in attendance: Bill Eisen City Manager City of Pearland; Claire Bogard Director of
Finance City of Pearland; Rick Overgaard Assistant Director of Finance City of Pearland;
Maria E. Rodriguez Deputy City Secretary City of Pearland; Lynne Humpries, Allen Boone
Humphries Robinson LLP; James Ross LJA Engineering; Mark McGrath Null—Lairson;
Drew Pelter Shadow Creek Ranch Development Company Ltd.
NEW BUSINESS
BOARD ACTION- REGARDING THE APPROVAL OF THE SPECIAL MEETING MINUTES
OF THE JUNE 11, 2012, TAX INCREMENT REINVESTMENT ZONE NUMBER 2 (TIRZ
NO. 2) BOARD OF DIRECTORS MEETING. TIRZ NO. 2. Board of Directors.
Boardmember Coleman made the motion, seconded by Boardmember Phillips to approve
the minutes of the June 11, 2012, Tax Increment Investment Zone Number 2 Board of
Directors Meeting.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Coleman, Fain, Castillo, Davis, and
Loessin.
Voting "No" None.
Motion Passed 8 to 0, with Boardmember Knight absent.
Page 1 of 8 — 6/24/2013 — TIRZ No. 2
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-01 —A RESOLUTION OF THE TAX
INCREMENT REINVESTMENT ZONE NO. 2 (TIRZ), APPROVING THE 2012 ANNUAL
Boardmember Castillo made the motion, seconded by Boardmember Coleman to approve
Resolution No. RTIRZ-2013-01.
Claire Bogard Director of Finance provided the Boardmembers with an overview of the
Pearland Tax Increment Reinvestment Zone 2012 Annual Report. She stated after the
Board reviews and approves the calendar year 2012 Annual Report, as required by state
law, it will be presented to City Council, sent to Brazoria County and to Alvin Independent
School District as they are participants in the TIRZ No.2.
Discussion ensued between Boardmembers, Lynn Humphries, Allen Boone Humphries
Robinson LLP, and Claire Bogard Finance Director regarding future reimbursement.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Coleman, Fain, Castillo, Davis, and
Loessin.
Voting "No" None.
Motion Passed 8 to 0, with Boardmember Knight absent.
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-02 — A RESOLUTION OF THE TAX
INCREMENT REINVESTMENT ZONE NO. 2 (TIRZ), ACCEPTING THE 2012 ANNUAL
FINANCIAL REPORT FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2012.
Ms. Claire Bogard, Finance Director.
Boardmember Phillips made the motion, seconded by Boardmember Castillo, to approve
Resolution No. RTIRZ-2013-02.
Claire Bogard Finance Director stated as required by law the City has the accounts audited
every year by a CPA. This year, 2012, it was done by Whitley Penn LLP, formerly known
as Null Lairson. She stated Whitley Penn LLP, has given a clean and unqualified audit.
The entire document may be found on the City's website. The TIRZ No. 2, is considered a
component unit of the primary government which has been included in the audit for the
fiscal year ended September 30, 2012. Ms. Bogard provided Boardmembers with an
overview of the Tax Increment Reinvestment Zone No. 2 (TIRZ), ending September 2012.
Boardmember Phillips stated the most important thing is that the Auditors have opined that
the City's books have been kept to present financial affairs in a fair, accurate, and all
material respects financial position as of September 30, 2012.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Coleman, Fain, Castillo, Davis, and
Loessin.
Page 2 of 8 — 6/24/2013 — TIRZ No. 2
Voting "No" None.
Motion Passed 8 to 0, with Boardmember Knight absent.
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-03 — A RESOLUTION OF THE
BOARD OF DIRECTORS OF THE PEARLAND TAX INCREMENT REINVESTMENT
ZONE #2 (TIRZ #2) BOARD OF DIRECTORS, APPROVAL OF A JOINT
CONSTRUCTION AND REIMBURSEMENT AGREEMENT AMONG THE ZONE,
BRAZORIA-FORT BEND MUD NO. 1 AND 518SCR, LTD. ASSOCIATED WITH LFA 13-
06-002. Ms. Lynne Humphries, Allen Boone Humphries LLP.
Boardmember Cook made the motion, seconded by Boardmember Fain to approve
Resolution No. RTIRZ-2013-03.
Lynne Humphries, Allen Boone Humphries LLP, stated this first item is with Perry Homes
entity, 518 SCR, Ltd. This is for Southlake Phase 2 project. The City has a Joint
Construction and Reimbursement Agreement which is the first part, it establishes the
budget. She stated that some of the items on the agenda go together. The Letter
Financing Agreement is with Perry Homes for Southlake Phase 2. The letter of agreement
authorizes other projects that stem from it at a later time. The amount of the budget is
$900,102,286. The first phase of the item is a joint project that is construction of Lakes 3,
4, and 5. The procedure in place for efficiency purposes often the MUD and the TIRZ do a
joint contract agreement and a system in place to do joint agreements, so that the auditor
knows to subtract, or not, whichever reimbursement might come first. The joint agreement
sets forth the engineers contract to say what amount is for what. This is for a bid award
contract for Lindsey Construction.
Boardmember Phillips stated he is not familiar with Lindsey Construction and asked if
anyone has had an adverse experience with the company.
James Ross LJA Engineering stated they have done numerous projects with Lindsey
Construction and have no reasons not to recommend them.
Discussion ensued between Boardmember Phillips, James Ross, LJA Engineering and
Lynn Humphries, Allen Boone and Humphries LLP, regarding the numerous projects
involved and Letter of Finance Agreement.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Coleman, Fain, Castillo, Davis, and
Loessin.
Voting "No" None.
Motion Passed 8 to 0, with Boardmember Knight absent.
Page 3 of 8 — 6/24/2013 — TIRZ No. 2
BOARD ACTION— RESOLUTION NO. RTIRZ-2013-04 —A RESOLUTION OF THE TAX
INCREMENT REINVESTMENT ZONE NO. 2 (TIRZ), ACCEPTING THE FINANCIAL
REPORT FOR THE PERIOD ENDING MAY 31, 2013. Ms. Claire Bogard, Finance
Director.
Boardmember Castillo made the motion, seconded by Boardmember Coleman to approve
Resolution No. RTIRZ-2013-04.
Claire Bogard Finance Director provided Boardmembers with a detailed report of the
financial statement Balance and Statement of Revenues and Expenditures for the Tax
Increment Reinvestment Zone No. 2, for the period ending May 31, 2013.
Discussion ensued between Boardmembers, Lynn Humphries, Allen Boone and
Humphries and Claire Bogard Finance Director regarding the amount of interest the TIRZ
No.2, will have to pay due to the opt out period provision and the suspense account.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Coleman, Fain, Castillo, Davis, and
Loessin.
Voting "No" None.
Motion Passed 8 to 0, with Boardmember Knight absent.
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-05 — A RESOLUTION OF THE TAX
INCREMENT REINVESTMENT ZONE NO. 2 (TIRZ), ADOPTING AN AMENDED
INVESTMENT POLICY, INVESTMENT STRATEGY AND APPROVED BROKERS IN
ACCORDANCE WITH CHAPTER 2256 OF THE GOVERNMENT CODE ("PUBLIC FUNDS
INVESTMENT ACT'). Mr. Rick Overgaard, Assistant Finance Director.
Rick Overgaard, Assistant Finance Director stated there are some minor changes made to
the policy section 1.04 Delegation of Responsibility. The senior accountant was promoted
to supervisor, so there is a title change to the policy. Also in section 4.01 Selection of
Investment Broker/Dealers, the City now has an online bidding system. There is some
added definition to Federal Farm Credit Bank and to Federal Home Loan Mortgage
Corporation or Freddie Mac. There were no changes to the Investment Strategies and no
changes made to the Broker Dealers.
Boardmember Pyburn made the motion, seconded by Boardmember Phillips to approve
Resolution No. RTIRZ-2013-05.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Coleman, Fain, Castillo, Davis, and
Loessin.
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Voting "No" None.
Motion Passed 8 to 0, with Boardmember Knight absent.
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-06 — A RESOLUTION OF THE TAX
INCREMENT REINVESTMENT ZONE NO. 2 (TIRZ), ACCEPTING THE INVESTMENT
REPORT FOR THE QUARTERS ENDING JUNE 2012, SEPTEMBER 2012, DECEMBER
2012 and MARCH 2013. Mr. Rick Overgaard, Assistant Finance Director.
Rick Overgaard Assistant Finance Director provided the Board with an overview of the
Executive Summary of the Investment Reports for the Quarters ending June 30, 2012,
September 2012, December 31, 2012 and March 31, 2013.
Boardmember Davis made the motion, seconded by Boardmember Castillo to approve
Resolution No. RTIRZ-2013-06
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Coleman, Fain, Castillo, Davis, and
Loessin.
Voting "No" None.
Motion Passed 8 to 0, with Boardmember Knight absent.
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-07 — A RESOLUTION OF THE
BOARD OF DIRECTORS OF THE PEARLAND TAX INCREMENT REINVESTMENT
ZONE #2 (TIRZ #2) BOARD OF DIRECTORS, ACCEPTING THE ENGINEERS REPORT
AND APPROVING A LETTER FINANCING AGREEMENT WITH SHADOW CREEK
RANCH DEVELOPMENT COMPANY ON SCR SCH 3SITE, LFA 2013-06-001.
Mr. James Ross, LJA Engineering.
James Ross, LJA Engineering stated this item is for the Board's approval of the Finance
Letter of Agreement No. 1306-001 establishing the budget for this project. This project is
the land cost associated with the School Site No. 3. Mr. Ross stated that the Engineer's
recommendation letter, budget report, location and benefitted areas have been provided to
the Board as exhibits in their packets. The Board is being asked for the approval of
establishing the Letter of Finance Agreement and the proposed budget of $1.5 million for
the land cost and School Site.
Boardmember Fain made the motion, seconded by Boardmember Pyburn to approve
Resolution No. RTIRZ-2013-07
Voting "Aye" Boardmembers Phillips, Pyburn, Coleman, Fain, Castillo, Davis, and Loessin.
Page 5 of 8 — 6/24/2013 — TIRZ No. 2
Voting "No" None.
Voting "Abstain" Boardmember Cook.
Motion Passed 7 to 0, with 1 abstention and Boardmember Knight absent.
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-08 — A RESOLUTION OF THE
BOARD OF DIRECTORS OF THE PEARLAND TAX INCREMENT REINVESTMENT
ZONE #2 (TIRZ #2) BOARD OF DIRECTORS, APPROVING REIMBURSEMENT OF
COMPLETED LETTER OF FINANCING AGREEMENTS. Mr. Mark McGrath, McGrath &
Co., PLLC.
Mark McGrath, McGrath & Co., PPLLC, stated that the draft report related to the future
reimbursement of the Letter of Agreement No. 1306-001 has been discussed on the
previous agenda item number 8 and also included in the agenda packet for the Board's
review. Mr. McGrath provided the Board with a recapitulation of amounts due to Shadow
Creek Ranch Development. He stated as of June 24, 2013, the Letter of Finance
Agreement amount is $2,382,379, the actual cost $1,514,705, which has been verified,
through today the interest is $90,364 and the total due back as of today is $1,605,069.
The Boards is being asked for the approval of this report and this Letter of Financing
Agreements for future reimbursements
Discussion ensued between Mark McGrath, McGrath & Co., PPLLC, Lynn Humphries,
Allen Boone and Humphries LLP, and the Board regarding clarification of the last
paragraph of the Draft report.
The Board requested a copy of the final Auditor's Report of Completion reflecting
correction to the last paragraph regarding the master developer, sub -developer interest,
creation cost, and actual cost for the land.
Boardmember Phillips made the motion, seconded by Boardmember Pyburn to approve
Resolution No. RTIRZ-2013-08.
Voting "Aye" Boardmembers Phillips, Pyburn, Coleman, Fain, Castillo, Davis, and Loessin.
Voting "No" None.
Voting "Abstain" Boardmember Cook.
Motion Passed 7 to 0, with 1 abstention and Boardmember Knight absent.
Page 6 of 8 — 6/24/2013 — TIRZ No. 2
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-09 — A RESOLUTION OF THE
BOARD OF DIRECTORS OF THE PEARLAND TAX INCREMENT REINVESTMENT
ZONE #2 (TIRZ #2) BOARD OF DIRECTORS, ACCEPTING THE ENGINEER'S REPORT
AND APPROVING A LETTER FOR FINANCING AGREEMENT WITH 518SCR LTD. FOR
SOUTHLAKE PHASE 2, LFA 13-006-002. Mr. James Ross, LJA Engineering.
Boardmember Davis made the motion, seconded by Boardmember Cook to approve
Resolution No. RTIRZ-2013-09.
Mr. James Ross, LJA Engineering stated this item to accept the Engineer's Report for
Southlake Phase 2, Project No. 113-06-002. The budget for the proposed improvements
totals $9,102,286 which includes construction cost, design cost and contingency for
Southlake Phase 2. He stated this is part of the first planned amendment. It is a separate
budget than from the original TIRZ based on (2006 Dollars.) This item is to establish the
budget from here on Perry Homes will begin the design for construction. The
reimbursement will be presented at a later date.
Boardmember Carbone asked if there is a MUD in the area.
James Ross stated that there is a MUD in the area, but the budget does not reflect the
MUD's participation.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Coleman, Fain, Castillo, Davis, and
Loessin.
Voting "No" None.
Motion Passed 8 to 0, with Boardmember Knight absent.
BOARD ACTION — RESOLUTION NO. RTIRZ-2013-10 —A RESOLUTION OF THE TAX
INCREMENT REINVESTMENT ZONE NO. 2 (TIRZ), RATIFYING INVOICES THAT WERE
PAID FROM AUGUST 2012 THROUGH MAY 2013 AND APPROVING INVOICES FOR
PAYMENT. Ms. Claire Bogard, Finance Director.
Claire Bogard, Finance Director stated since the last meeting in June 2012, the invoice
review committee has reviewed and approved for payment invoices totaling $12,855.60 as
shown in Exhibit "A" . The Board also has three invoices pending payment and approval
totaling $5,911.66 as shown in Exhibit B". The Board is being requested to approve this
resolution ratifying invoices already paid and approving invoices to be paid. Upon payment
total operating expenses for FY2013 to date will total $7,882.55.
Boardmember Phillips made the motion, seconded by Boardmember Castillo to approve
Resolution No. RTIRZ-2013-10.
Page 7 of 8 — 6/24/2013 — TIRZ No. 2
Motion Passed 8 to 0, with Boardmember Knight absent.
ADJOURNMENT
Meeting was adjourned at 5:50 p.m.
Minutes approved as submitted and/or corrected this the 23rd day of June, A.D., 2014.
1/4 // I
KENNETFW. PHILLIPS
TIRZ NO. 2 Chair
ATTEST:
mv) y
MIKE PYBURN
TIRZ NO. 2 SECRETARY
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