2018-09-24 TAX INCREMENT REINVESTMENT ZONE NO. 2 BOARD MEETING MINUTESMINUTES OF THE BOARD OF DIRECTORS MEETING
TAX INCREMENT REINVESTMENT ZONE NUMBER TWO / SHADOW CREEK RANCH
CITY OF PEARLAND TEXAS
SEPTEMBER 24, 2018 4:00 P.M.
CITY HALL ANNEX BUILDING, 3523 LIBERTY DRIVE, PEARLAND, TEXAS.
CALL TO ORDER AND ROLL CALL
Chair Fain called the meeting to order at 4:00 p.m. and declared a quorum with the following
Directors present:
Chair
Herb Fain
Vice Chair
Gary Cook
Director
Tommy King
Director
Ali Hasanali
Director
Larry Loessin
Chair Fain asked those present to introduce themselves and noted that Directors Phillips, Knight
and Tonini were absent.
Others in attendance: Tom Reid, Mayor City of Pearland; Cynthia Pearson, Director of Finance
City; Rhonda Daugherty, Assistant Director of Finance City; Carla Campbell, Management
Assistant Finance City; Maria Rodriguez, Deputy City Secretary; Trent Epperson, Assistant City
Manager; Lynne Humphries, Allen Boone Humphries Robinson LLP; Drew Pelter, Shadow Creek
Development; James Ross, LJA; Sue Darcy, Alan Mueller, and Jan Buehler, Marsh Darcy
Partners.
IL PURPOSE OF THE MEETING:
Consideration and Possible Action - Regarding the Regular Meeting Minutes of the
June 18, 2018, Tax Increment Reinvestment Zone Number 2 (TIRZ No. 2) Board of
Directors Meeting.
A motion by Director King to approve the Regular Meeting Minutes of June 18, 2018 as
presented was seconded by Director Cook, and passed unanimously.
Consideration and Possible Action
a. Financial Report for the period ending July 31, 2018.
Ms. Daugherty reviewed the Income Statement through August 31, 2018 noting current date
revenue approximately $29 million, current date expenditures at approximately $26.2 million,
with a net gain of $2.8 million. The current year net fund balance is $8.98 million.
A motion by Director Hasanali to approve the Financial Report as presented was seconded by
Director King, and passed unanimously.
3. Consideration and Possible Action - Investment Report for the Quarter Ending June
2018.
Ms. Pearson presented the Investment Report for the period ending June 30, 2018 noting the
portfolio market value and interest earned represented by cash and money market funds. She
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reviewed the distribution and holdings reports noting the total portfolio is $2.2 million. The
Pledged Collateral Reconciliation Report as of June 30, 2018 indicated a slight over
collateralization at 105%.
A motion by Director King to approve the Investment Report as presented was seconded by
Director Hasanali and passed unanimously.
4. Consideration and Possible Action — Ratification of invoices authorized for payment by
the Invoice Review Committee and approving invoices presented for payment.
Mr. Mueller presented the summary of six invoices that had been reviewed and approved by
the IRC totaling $21,953. Director Loessin requested clarification of the difference of rates
indicated for legal fees, to which Ms. Humphries responded.
A motion by Director Hasanali to ratify payment of the invoices as presented was seconded by
Director Cook, and passed unanimously.
5. Consideration and Possible Action — City Council approval of TIRZ Plan Amendment #4.
Mr. Mueller advised that the TIRZ Plan Amendment #4, previously reviewed by the Board and
recommended to the City Council for approval, was presented as Ordinance No. 1562 as
approved on the first reading on July 23, 2018. Director Cook asked whether the other
participants in the Zone had received a copy of the document, to which Mr. Mueller advised
that they were notified and given a copy, as well as the City Manager, Clay Pearson, had
conversations with several. Mr. Epperson expressed appreciation of the Board for its support
as well as from City Council; and noted that Mr. Pearson had conversations with the ISD, a
meeting with Fort Bend County, and attended a Shadow Creek Ranch Maintenance
Association board meeting to report on the plans and receive their input.
6. Consideration and Possible Action — Regarding recommending issuance of Tax
Increment Contract Revenue Bonds, Series 2018.
Mr. Mueller presented the recommendation of the issuance of Series 2018 Tax Increment
Contract Revenue Bonds noting that the Development Authority of Pearland actually issues
the bonds, not the TIRZ Board, but requests review and recommendations from the TIRZ
Board prior to taking action to issue the debt. Mr. Mueller reviewed the report prepared by the
Financial Advisor to the DAP and City, which recommends the issuance of approximately
$6,040,000 of bonds for Series 2018 that would result in net proceeds for reimbursement of
approximately $5,870,000. Director Loessin asked of the frequency of this type of issuance, to
which Ms. Humphries and Mr. Mueller responded. Ms. Humphries noted the actual amount of
bonds might change to include additional project reimbursement. Mayor Reid assured that the
DAP Board carefully reviews the information and works closely with the auditors and legal
counsel to ensure accuracy. Director Hasanali requested clarification of the distinction
between the City and the two counties participation rate that indicates a rate set for the City of
Pearland in Brazoria County but not set for Fort Bend County. Ms. Humphries and Mr. Mueller
responded and reviewed the participation levels in the Brazoria County and Fort Bend County
agreements.
A motion by Director Loessin to recommend that the Development Authority of Pearland to
proceed with the maximum principal amount of bonds that it can reasonably sell was
seconded by Director King, and passed unanimously.
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7. Consideration and Possible Action — Regarding authorizing developer reimbursements
from available surplus increment.
Mr. Mueller reminded of the two ways that developer advances are reimbursed, being selling
bonds and through accumulated cash from Alvin ISD's participation. Ms. Daugherty reviewed
the Balance Sheet noting cash in Wells Fargo of approximately $5.5 million. The $9.25 million
in Regions Bank is reserved for annual debt service payments in September and February.
With $1 million for future debt service reserve and operating costs, the available amount for
cash reimbursement is approximately $4.45 million and an anticipated $1.9 million from TEA
supplemental payments to Alvin ISD, resulting in total cash available of approximately $6.4
million. Director Cook asked for clarification of the debt service reserve and debt service
coverage, to which Mr. Mueller responded.
A motion by Director Loessin to authorize the maximum cash reimbursement to be made by
the City was seconded by Director Hasanali, and passed unanimously.
8. Consideration and Possible Action — Revised McGrath & Company engagement letter.
Mr. Mueller advised that the item is unnecessary as it will be addressed by the DAP Board.
9. Discussion Item — Possible dates for next Board meeting.
Mr. Mueller stated that the next meeting will likely occur later in June 2019 for presentation of
the 2018 Annual Report, unless there would be a prior need to do a Letter Finance
Agreement.
Mayor Reid complimented the Board of Directors and acknowledged all of the progress within
the Zone and area.
III. ADJOURN
There being no further business, Director Hasanali moved to adjourn at 4:35pm, which was
seconded by Director Loessin.
APPROVED:
H rb Fain
Chair, Board of Directors
Director, Board of Directors / q
Minutes approved as submitted and/or amended on
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