2015-06-22 TAX INCREMENT REINVESTMENT ZONE NO. 2 BOARD MEETING MINUTESMINUTES OF A REGULAR MEETING OF THE TAX INCREMENT REINVESTMENT
ZONE NUMBER TWO (TIRZ # 2), ALSO KNOWN AS SHADOW CREEK RANCH, CITY
OF PEARLAND TEXAS, HELD ON MONDAY, JUNE 22, 2015, 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
Boardmember Herb Fain
Boardmember Ali Hasanali
Boardmember Jo Knight
Boardmember Larry Loessin
Absent: Boardmembers Coleman, Davis, and Pybum
Others in attendance: Clay Pearson City Manager City of Peadand; Claire Bogard
Director of Finance City of Peadand; Rick Overgaard Assistant Director of Finance City
of Peadand; Maria E. Rodriguez Deputy City Secretary City of Peadand; Taylor Gunn
Perry Homes, Lynne Humphries Allen Boone Humphries Robinson LLP; James Ross LJA
Engineering; Drew Palter Shadow Creek Ranch Development Company Ltd.
CALL TO ORDER AND ROLL CALL
PURPOSE OF THE MEETING:
Board Action - Regarding The Approval of The Regular Meeting Minutes of the June
23, 2014, 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 Regular Meeting Minutes of June 23, 2014.
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, and Phillips.
Voting "No" None.
Motion Passed 5 to 0, with Boardmembers Coleman, Davis, and Pybum absent.
Boardmember Loessin abstained due to being absent from the meeting of June 23, 2014.
Board Action - Resolution No. RTIRZ- 2015-02 - A Resolution of The Tax Increment
Reinvestment Zone No. 2 (TIRZ #2), accepting the 2014 Annual Financial Report for the
Fiscal Year ending September 30, 2014. Mr. Rick Overgaard, Assistant Finance Director.
Page 1 of 7 - 6/22/2015
Boardmember Knight made the motion, seconded by Boardmember Phillips, to approve
Resolution No. RTIRZ-2015-02.
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 TIRZ No. 2, which is
considered a blended unit of the primary government, is included in the audit for the fiscal
year ending September 30, 2014. Mr. Rick Overgaard, Assistant Finance Director.
Discussion ensued between Boardmember Loessin and Claire Bogard City of Pearland
Finance Director regarding if the bond issues could be refinanced at a lower interest rate.
Lynne Humphries with Allen, Boone, Humphries, Robinson LLP stated Contract Revenue
Bonds are paid by contracts with participating entities who pay over their tax revenue.
They are not secured by property of the City or the District.
Boardmember Phillips stated refinancing the bonds even with costs of today's rate the
District will see a substantial interest savings over a period of time.
Lynne Humphries with Allen, Boone, Humphries, Robinson LLP stated a Savings Report
was done at the time of the Bond issue that had to be produced for the Attorney General
as part of the transcript that was approved. It is filed with the City's records.
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, Loessin and Phillips.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Davis, and Pybum absent.
Board Action - Resolution No. RTIRZ-2015.03 - A Resolution of the Tax Increment
Reinvestment Zone No. 2 (TIRZ #2), 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 Loessin made the motion, seconded by Boardmember Phillips, to approve
Resolution No. RTIRZ-2015-03.
Rick Overgaard City of Pearland Assistant Finance Director stated the Public Funds
Investment Act (PFIA) requires the governing body to review its investment policy,
investment strategies, and approve broker/dealers not less than annually. At this time the
Investment Policy contains no changes this year. He further stated it is required to send
an RFP every two years.
Page 2 of 7 - 6/22/2015
Lynne Humphries with Allen, Boone, Humphries, Robinson LLP stated in Section 1 of
Resolution No. RTIRZ 2015-03 should be read in its entirety, that the TIRZ has complied
with the requirements of the Public Funds Investment Act and the Investment Policy.
There are no changes to the Investment Policy. Otherwise it states the modified
Investment Policy is attached.
Resolution No. RTIRZ 2015.03
Section 1. That the TIRZ has complied with the requirements of the Public Funds
Investment Act and the Investment Policy. There are no changes to the Investment
Policy, Invest Strategy and approved Brokers are attached hereto as Exhibit "A", Exhibit
"B" and Exhibit "C" and are hereby adopted effective immediately.
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, Loessin and Phillips.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Davis, and Pybum absent
Board Action — Resolution No. RTIRZ - 2015-04 — A Resolution of The Tax Increment
Reinvestment Zone No. 2 (TIRZ #2), the Financial Report for the period ending May 31,
2015. Ms. Claire Bogard, Finance Director.
Boardmember Hasanali made the motion, seconded by Boardmember Phillips, to
approve Resolution No. RTIRZ- 2015-04.
Claire Bogard City of Peariand Finance Director provided the Board with the following
overview of the financial statements (Balance Sheet, Statement of Revenues and
Expenditures) for the Tax Increment Reinvestment Zone for the eight month period
ending May 31, 2015. She stated cash and investments total $14,265,467. This includes
the Alvin Independent School District suspense fund of $9,082,394. Of that amount,
$5,642,174 will be released in August 2015. Contributions through May total $17,379,850
of which $11,697,253 is from the City of Pearland and $913,610 from Fort Bend County.
In May, the TIRZ received $4.8 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. Alvin Independent School District has not received the State payment
yet. Last years payment of $1.3 million was received in September. Fiscal year to date
expenses total $7,468,611 of which $7,467,185 are administration fees to the City. Fund
equity as of May 31, 2015 is $14,265,467 which includes $9,082,394 in the suspense
fund. The current available operating balance is $5,183,074. Estimate to be transferred
to the Development Authority, including an estimate on Brazoria County tax increment to
be received in August, totals $12.4 million of which $5.8 million will be retained by Regions
Bank for annual debt service, leaving approximately $6.6 million for cash reimbursement
to the developer. She further stated $5.6 million will be released from the Alvin
Independent School District suspense fund of $9,082,394.
Page 3 of 7 — 6/22/2015
Discussion ensued between Boardmembers and Claire Bogard City of Pearland Finance
Director regarding a payment to the City of Pearland and a payment to the Development
Authority.
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, Loessin and Phillips.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Davis, and Pybum absent.
Board Action — Resolution No. RTIRZ- 2015-05 — A Resolution of The Tax Increment
Reinvestment Zone No. 2 (TIRZ #2), accepting the investment report for the quarters
ending June 2014, September 2014, December 2014 and March 2015. Mr. Rick
Overgaard, Assistant Finance Director.
Boardmember Phillips made the motion, seconded by Boardmember Cook, to approve
Resolution No. RTIRZ- 2015-05.
Rick Overgaard City of Pearland Assistant Finance Director stated a decrease in portfolio
from June 2014 to Sept 2014 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. Increase in portfolio represent tax
increment payments from the taxing participants to be transferred to the Development
Authority in August 2015. Yield on portfolio has decreased, while 1 year T -Bill benchmark
has risen. A 3 month CD at a .15% was purchased in April to try and increase yield.
Unfortunately, short maturity CD's do not bring much yield to the portfolio and the CD's
have to mature prior to debt service due dates.
Discussion ensued between Boardmembers and Claire Bogard City of Pearland Finance
Director regarding the loss on interest earnings that have been made up by lower interest
rates on the debt.
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, Loessin and Phillips.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Davis, and Pyburn absent.
Board Action — Resolution No. RTIRZ - 2015-06 — A Resolution of The Tax Increment
Reinvestment Zone No. 2 (TIRZ #2), Ratifying Invoices that were paid from May 2014
through June 2015 and approving invoices for payment. Mr. Rick Overgaard, Assistant
Finance Director.
Boardmember Loessin made the motion, seconded by Boardmember Fain, to approve
Resolution No. RTIRZ-2015-06.
Page 4 of 7 — 6/22/2015
Rick Overgaard City of Pearland Assistant Finance Director stated since the last meeting
in June 2014, the invoices review committee has reviewed and approved for payment
invoices totaling $14,421.15. These invoices span more than one fiscal year. The board
also has six invoices pending payment for approval totaling $13,214.76. Upon payment,
total operating expenses for FY2015 to date will total $27,635.91.
Discussion ensued between Boardmembers and Rick Overgaard City of Pearland
Assistant Finance Director regarding the general expenditures that were paid out this time
last year.
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, Loessin and Phillips.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Davis, and Pybum absent.
Board Action - Resolution No. RTIRZ - 2015-07 - A Resolution of the Tax Increment
Reinvestment Zone No. 2 (TIRZ #2), approving the 2014 Annual Report. Ms. Claire
Bogard, Finance Director.
Boardmember Cook made the motion, seconded by Boardmember Hasanali, to approve
Resolution No. RTIRZ- 2015-07.
Claire Bogard City of Pearland Finance Director stated in accordance with the Tax
Increment Financing Act (Chapter 311, Tax Code), Reinvestment Zone Number Two, City
of Pearland, Texas (the Zone) was established by Ordinance 891 of the City Council of
the City of Pearland (the City), Texas on December 21, 1998 and is further known as
"Shadow Creek Ranch." The Zone ends December 2028. After two plan amendments
adding 465 acres to the Zone, the Zone is now composed of 3,932+ acres, of which
3,125+ acres are within Brazoria County and 807+ acres are within Fort Bend County.
The objective of the Zone is to facilitate quality mixed-use development with a self-
sustaining tax base for the City and the other participating taxing entities. Improvements
in the Zone significantly enhance the value of all taxable real property in the Zone and
are a general benefit. Participating entities in the Zone include the City of Pearland,
Brazoria County, Fort Bend County and Alvin Independent School District. These entities
participate in the Zone at various levels as described in their respective interlocal
agreements, with property tax increment from each being deposited into the Zone.
Discussion ensued between Boardmembers and Lynne Humphries with Allen, Boone,
Humphries, Robinson, LLP regarding the consideration of Fort Bend County's request
purposing extending participation of the expansion of Farm Rd 521 through the TIRZ, and
the City needing a formal written request or proposal from Fort Bend County.
Page 5 of 7 - 6/22/2015
Discussion ensued between Boardmembers and Claire Bogard City of Pearland Finance
Director regarding the tax increment and base market value.
Boardmember Cook made a motion, seconded by Boardmember Phillips to remove LFA
12-06-001 (Village 7, Phase 1) from Table F, Letter Finance Agreements Approved for
Reimbursement subject to it being approved on the next Agenda Item.
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, Loessin and Phillips.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Davis, and Pyburn absent.
Lynne Humphries with Allen, Boone, Humphries, Robinson LLP stated she would
recommend redoing the chart for next year to be less confusing. She stated she would
get with Claire Bogard Director of Finance regarding a different format.
Chair Phillips called for the vote on the original motion as amended.
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, Loessin and Phillips.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Davis, and Pyburn absent.
Board Action — Resolution No. RTIRZ- 2015-08 —A Resolution of the Board of Directors
of the Tax Increment Reinvestment Zone No. 2 (TIRZ #2), approving reimbursement of
completed Letter of Financing Agreement 12-06-001 with 518 SCR Ltd. Mr. Rick
Overgaard, Assistant Finance Director.
Boardmember Cook made the motion, seconded by Boardmember Hasanali, to approve
Resolution No. RTIRZ-2015-08.
McGrath & Co., PLLC Auditor, provided an overview of the Reinvestment Report
regarding the LFA 12-06-001 (Village 7, Phase 1). The supporting documentation has
been received and reviewed to support the amount of actual costs. The actual cost is
$3,767,158, the interest being calculated at the agreed amount of 6.5 percent $544,659,
for a total reimbursement of $4,311,817. Said amount of interest will change once the
actual date of reimbursement is known.
Lynne Humphries with Allen, Boone, Humphries, Robinson, LLP stated one of the things
an auditor does when doing an audit is to confirm any amounts that might have been paid
by the Municipal Utility Districts so there is never double dipping. That is one of the
reasons the amount of the actual reimbursement is so much less than the Approved LFA.
Page 6 of 7 — 6/22/2015
Voting "Aye" Boardmembers Knight, Hasanali, Fain, Cook, Loessin and Phillips.
Voting "No" None.
Motion Passed 6 to 0, with Boardmembers Coleman, Davis, and Pyburn absent.
Claire Bogard City of Peadand Director of Finance announced her retirement and stated
she has enjoyed working with everyone.
ADJOURNMENT
Meeting was adjourned at 5:00 p.m.
Minutes approved as submitted and/or corrected this the 6'1 day of August, A.D., 2016.
GAR1 C OK
VICE AIR
ATTEST:
MIKE PY URN
SECRETARY
Page 7 of 7 — 6/22/2015