2014-06-23 TAX INCREMENT REINVESTMENT ZONE NO. 2 BOARD MEETING MINUTESMINUTES OF A REGULAR MEETING OF THE TAX INCREMENT REINVESTMENT
ZONE NUMBER TWO (TIRZ It 2), ALSO KNOWN AS SHADOW CREEK RANCH, CITY
OF PEARLAND TEXAS, HELD ON MONDAY, JUNE 23, 2014, AT 4:00 P.M., IN THE
COUNCIL CHAMBERS, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS.
Chairman Kenneth R. Phillips called the meeting to order at 4:00 p.m. with the following
present:
Chair
Kenneth R. Phillips
Vice Chair
Gary Cook
Secretary
Mike Pyburn
Boardmember
Gary Davis
Boardmember
Herb Fain
Boardmember
Ali Hasanali
Absent: Boardmember Larry Loessin; Boardmember Donna Coleman and
Boardmember Jo Knight.
Others in attendance: Clay Pearson City Manager City of Peadand; Claire Bogard
Director of Finance City of Pearland; Rick Overgaard Assistant Director of Finance City
of Pearland; City of Pearland Damn Coker, City Attorney; Matt Buchanan President of
Pearland Economic Development; City of Pearland Maria E. Rodriguez Deputy City
Secretary; Tim Austin Allen Boone Humphries Robinson LLP; James Ross LJA
Engineering; Drew Pelter Shadow Creek Ranch Development Company Ltd.
CALL TO ORDER AND ROLL CALL
PURPOSE OF THE MEETING:
Board Action — Regarding The Approval of The Special Meeting Minutes of the June 24,
2013, Tax Increment Reinvestment Zone Number 2 (TIRZ No. 2) Board of Directors
Meeting.
Boardmember Phillips made the motion, seconded by Boardmember Cook, to approve
the Special Meeting Minutes.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Fain, Hasanali, and Davis.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent.
Board Action — Resolution No. RTIRZ- 2014-02 — A Resolution of The Tax Increment
Reinvestment Zone No. 2 (TIRZ), Approving the 2013 Annual Report. Ms. Claire Bogard,
Finance Director.
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Boardmember Phillips made the motion, seconded by Boardmember Pyburn, to approve
Resolution No. RTIRZ-2014-02.
Claire Bogard City of Pearland Director of Finance stated this item is for the Board's
consideration and approval of the Pearland Tax Increment Reinvestment Zone 2013
Annual Report. Ms. Bogard provided an overview of the 2013 Annual Financial Report.
She stated the report will also be presented to the City Council, filed, and presented to
the other participating entities.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Fain, Hasanali, and Davis.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent.
Board Action — Resolution No. RTIRZ- 2014-03 — A Resolution of The Tax Increment
Reinvestment Zone No. 2 (TIRZ), Accepting The Financial Report For The Period Ending
May 31, 2014. Ms. Claire Bogard, Finance Director.
Boardmember Pyburn made the motion, seconded by Boardmember Cook, to approve
Resolution No. RTIRZ- 2014-03.
Claire Bogard City of Pearland Director of Finance provided the Board with the following
overview of the financial statements Balance Sheet, Statement of Revenues and
Expenditures for the Tax Increment Reinvestment Zone No.2 for the eight month period
ending May 31, 2014. She stated the cash and Investments total $12,769,923 this
includes the Alvin Independent School District Suspense Fund of $8,315,971, of that
amount, $4,123,011 will be released in August 2014. Contributions through May total
14,892,100, of which $10,113,975 is from the City of Pearland and $722,113 from Fort
Bend County. In May, the Tax Increment Reinvestment Zone No. 2 received $4.1 million
from Alvin Independent School District, which must be held in the Suspense Fund for a
year, and Brazoria County's contribution will be received in August. The Alvin
Independent School District has not received the State payment yet. Last year's payment
of $1.3 million was received in September. Fiscal year to date expenses total $6,461,237,
of which 100 percent is administration fees to the City. Fund equity as of May 31, 2014
is $12,769,438, which includes $8,315,971 in the suspense fund. The current available
operating balance is $4,453,467. The Brazoria County tax increment is to be received in
August, totals $10.6 million, of which $5.1 million will be retained by Regions Bank for
annual debt service, leaving approximately $4.5 million, net of the $1 million in debt
service, for cash reimbursement to the developer.
Voting "Aye" Boardmembers Phillips, Cook, Pybum, Fain, Hasanali, and Davis.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent
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Board Action — Resolution No. RTIRZ- 2014-04 — A Resolution of The Tax Increment
Reinvestment Zone No. 2 (TIRZ), accepting the 2013 Annual Financial Report for the
Fiscal Year ending September 30, 2013. Mr. Rick Overgaard, Assistant Finance Director.
Boardmember Pyburn made the motion, seconded by Boardmember Cook, to approve
Resolution No. RTIRZ- 2014-04.
Rick Overgaard City of Pearland Assistant Finance Director, stated pursuant to State law,
a municipality shall have its records and accounts audited annually and shall have an
annual financial statement prepared based on the audit. The Tax Increment Reinvestment
Zone No. 2, which is considered a blended unit of the primary government, is included in
the audit for the fiscal year ended September 30, 2013. Consideration and approval of
the resolution accepting the excerpt of the Fiscal Year 2013 Comprehensive Annual
Financial Report as prepared by the accounting firm of Grant Thorton, LLP.
Voting "Aye' Boardmembers Phillips, Cook, Pyburn, Fain, Davis, and Hasanali.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent.
Board Action — Resolution No. RTIRZ - 2014-05 — A Resolution of The Tax Increment
Reinvestment Zone No. 2 (TIRZ), Accepting The Investment Report For The Quarters
Ending June 2013, September 2013, December 2013 and March 2014.
Mr. Rick Overgaard, Assistant Finance Director.
Boardmember Phillips made the motion, seconded by Boardmember Cook, to approve
Resolution No. RTIRZ-2014-05.
Rick Overgaard City of Pearland Assistant Finance Director stated pursuant to the Public
Funds Investment Act, not less than quarterly, the Investment Officer shall prepare and
submit to the entity a report of investment transactions. He stated the decrease in
portfolio from June 2013 to Sept 2013 represents release of Alvin Independent School
District Suspense Funds in the amount of $4.1 million and transfer of those funds along
with additional funds to the Development Authority. The increase in portfolio represent
tax increment payments from the taxing participants to be transferred to the Development
Authority in August 2014. Mr. Overgaard continued to provide the Board with a detailed
overview of the Investment Report.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Fain, Davis, and Hasanali,
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent
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Board Action — Resolution No. RTIRZ - 2014-06 — 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.
Boardmember Davis made the motion, seconded by Boardmember Hasanali, to
approve Resolution No. RTIRZ- 2014-06.
Rick Overgaard City of Pearland Assistant Finance Director stated the investment policy
contains a few minor corrections and proposed changes. As of August each year all funds
are to be transferred to the Development Authority of Pearland, pursuant to the Tri -Party
Agreement. Therefore it is recommend to move the maximum maturity of an investment
from 3 years to 1 year, and the maximum weighted average maturity of the portfolio from
18 months to 9 months, or 547.5 days to 274 days. Investments must also mature prior
to August 31 of each year. Also, to allow the Tax Increment Reinvestment Zone No. #2
to purchase municipal bonds as an investment option, the following wording was added
under authorized investments in the policy, "Obligations of states, agencies, counties,
cities, and other political subdivisions of any state rated as to investment quality by a
nationally recognized investment rating firm not less than A or its equivalent." The Public
Funds Investment Act also requires a separate written investment strategy for each fund
or pooled group of funds. The strategy must address suitability, safety of principal,
liquidity, marketability, diversification, and yield. As such a separate written investment
strategy is also included for Tax Increment Reinvestment Zone No. 2 approval. There are
no proposed changes to the investment strategy.
Discussion ensued between Assistant Finance Director Rick Overgaard and the Board
regarding the adoption of the policy and exhibits.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Fain, Hasanali and Davis.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent.
Board Action — Resolution No. RTIRZ- 2014-07— A Resolution of the Tax Increment
Reinvestment Zone No. 2 (TIRZ), Ratifying Invoices that were paid from June 2013
through May 2014 and Approving Invoices for Payment. Mr. Rick Overgaard, Assistant
Finance Director.
Boardmember Phillips made the motion, seconded by Boardmember Cook, to approve
Resolution No. RTIRZ- 2014-07.
Rick Overgaard Assistant Finance Director stated this item is to ratify invoices that were
paid from June 2013, through May 2014 pursuant to the Exhibit provided in the Board's
packet. The Board also has four invoices pending payment for approval totaling
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$8,095.75, also provided as an Exhibit in the Board's packet. Upon payment, total
operating expenses for the 2014 Fiscal Year to date will total $27,211.83.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Fain, Hasanali and Davis.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent.
Board Action - Resolution No. RTIRZ - 2014-08 - A Resolution of the Board of
Directors of the Pearland Tax Increment Reinvestment Zone #2 Board of Directors,
approval of a Joint Construction and Reimbursement Agreement among the Zone,
Brazoria-Fort Bend Mud No. 1 and 518 SCR, Ltd. Associated with LFA 13-06-002.
Boardmember Phillips made the motion, seconded by Boardmember Pyburn, to approve
RTIRZ- 2014-08, with the Joint Construction and Reimbursement Agreement for Shadow
Oaks Detention/Amenity Lakes Phase 1 revised to refect that KB Home Lone Star, Inc.
is the developer of the project.
Tim Austin, Allen Boone Humphries Robinson LLP, stated Lynne Humphries was not able
to be at the meeting and that he would be presenting this item on her behalf. These
projects were approved for reimbursement in the Letter of Financing Agreement for
Southlake Phase 2, No. 13-06-002, which has been previously approved by the Board in
June 2013. The Board is being asked to discuss and take necessary action regarding
execution of (1) the Joint Construction and Reimbursement Agreements among the Zone,
Brazoria-Fort Bend MUD No. 1 and 518SCR, Ltd. for construction of Shelton Ridge Lane
Phase 2 Gulf Coast Water Authority Canal Bridge and (2) Joint Construction and
Reimbursement Agreements among the Zone, Brazoria-Fort Bend MUD No. 1 and KB
Home Lone Star, Inc. for construction of Shadow Oaks Detention/Amenity Lakes Phase
1.
Discussion ensued between Tim Austin, Allen Boone Humphries Robinson LLP, James
Ross, LJA Engineering and the Board regarding the parties to the Joint Construction and
Reimbursement Agreement for construction of Shadow Oaks Detention/Amenity Lakes
Phase 1. Mr. Ross noted the agreement as drafted indicates that 518SCR, Ltd. is the
developer of the project, rather than KB Home Lone Star, Inc. Mr. Austin stated that Allen
Boone Humphries Robinson will revise the agreement and requested the Board's approve
of the agreement as revised.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Fain, Hasanali and Davis.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent
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Board Action — Resolution No. RTIRZ - 2014-09 — A Resolution Of The Board Of
Directors Of The Pearland Tax Increment Reinvestment Zone #2 (TIRZ #2) Board Of
Directors, Accepting The Engineering Report and approving the Letter of Finance
Agreement On Southlake Phase 3, Project #14-06-001 Site.
Boardmember Pyburn made the motion, seconded by Boardmember Phillips, to approve
Resolution No. RTIRZ- 2014-09.
James Ross, LJA Engineering staled this item is to accept the Engineer's Report and the
Letter of Finance Agreement for Southlake Phase 3, Project No. 14-06-001. The budget
for the proposed improvements totals $2,812,460 (2006 dollars) which includes
construction cost, design cost, and contingency for Southlake Phase 3 as provided in the
Board's packet.
Discussion ensued between Boardmembers and Mr. James Ross Zone Engineer
regarding the proposed budget.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Fain, Davis, and Hasanali.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent.
Board Action — Resolution No. RTIRZ - 2014-10 — 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 the Letter of Finance
Agreement on Shadow Grove Phase 1, Project #14-06-002 Site.
Boardmember Pyburn made the motion, seconded by Boardmember Phillips to approve
Resolution No. RTIRZ- 2014-10.
James Ross, LJA Engineering this item is to accept the Engineer's Report and the Letter
of Finance Agreement Shadow Grove Phase 1, Project #14-06-002 Site. In accordance
with the November 14, 2011, Reimbursement Agreement among the City, the Zone, and
518SCR, Ltd. ("Sub -Developer"), the Sub -Developer has decided to proceed with the
project. The Letter Financing Agreement provides the Zone's approval to proceed with
the project, the budgeted cost of the improvements, and the reimbursement to the Sub -
Developer in accordance with the Reimbursement Agreement and the Project Plan, as
amended.
Discussion ensued between Boardmembers and Mr. James Ross Zone Engineer
regarding the necessary action regarding acceptance of Engineering Report and approval
of Letter Financing Agreement for Shadow Grove Phase 1.
Voting "Aye" Boardmembers Phillips, Cook, Pyburn, Fain, Davis, and Hasanali
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Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent
Board Action — Requesting Alvin Independent School District to reappoint or appoint
someone to the Tax Increment Reinvestment Zone #2 (TIRZ #2) Boardmember Position
No. 7 with a term expiring November 30, 2015, Ft. Bend County to reappoint or appoint
someone to the Tax Increment Reinvestment Zone #2 (TIRZ #2 (TIRZ No. 2)
Boardmember Position No. 8 with a term expiring November 30, 2014 and Brazoria
County to reappoint or appoint someone to the Tax Increment Reinvestment Zone #2
(TIRZ #2 (TIRZ No. 2) Position No. 9 with a term expiring November 30, 2015.
Boardmember Pyburn made the motion, seconded by Boardmember Phillips, to approve
current Boardmembers to continue to serve on until reappointment, or replaced.
Discussion ensued between Darrin Coker, City Attorney and the Board regarding action
needed for future reappoints and appointments.
Darrin Coker, City Attorney City of Peadand stated if one, or all Positions have been
appointed or reappointed the City needs the Order, Resolution, or minutes from the
appointing authority where these appointments have been made. That will allow the
records to be corrected.
Voting "Aye" Boardmembers Phillips, Cook, Pybum, Fain, Davis, and Hasanali.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Loessin and Knight absent.
ADJOURNMENT
Meeting was adjourned at 5:00 p.m.
Minutes approved as submitted and/or corrected this the 22ND day of June, A.D., 2015.
\
'KENNETPR. PHILLIPS
ATTEST: \ TIRZ CHAIRMAN
MIKE PYBURN
TIRZ SECRETARY
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