2019-09-23 DEVELOPMENT AUTHORITY OF PEARLAND REGULAR MEETING MINUTESMINUTES OF A REGULAR MEETING OF THE DEVELOPMENT AUTHORITY OF PEARLAND,
CITY OF PEARLAND TEXAS, HELD ON MONDAY, SEPTEMBER 23, 2019, 4:00 P.M.,
COMMUNITY DEVELOPMENT HOUSTON CONFERENCE ROOM PEARLAND CITY HALL
ANNEX 3523 LIBERTY DRIVE
Chairman Reid called the meeting to order at 4:00 p.m. with the following present:
Chairman Tom Reid
Boardmember Tony Carbone
Boardmember Donna Rizzo
Boardmember Tom Pool
Absent Secretary Ed Baker.
Others in attendance: Cynthia Pearson, City Finance Director, Jon Branson Deputy City Manager,
Trent Epperson Assistant City Manager, Lynne Humphries Allen Boone Humphries and Robinson
LLP, Allan Mueller, Maria E. Rodriguez Interim City Secretary, Michael Muscarello Administrative
Assistant, John McCarter Assistant Finance Director, John Robuck BOK, Inc. Rick Witte, Andrews
Kurth LLP,
NEW BUSINESS
Board Action - Approval of the Development Authority of Pearland Board of Directors Regular
Meeting Minutes for October 22, 2018 held at 4:00 p.m.
Boardmember Carbone made the motion, seconded by Boardmember Pool to approve the
Meeting Minutes for October 22, 2018, Regular Meeting held at 4:00 P.M.
Voting "Aye" Boardmembers Reid, Carbone, Rizzo, and Pool.
Voting "No" None.
Motion Passed 4 to 0 with Boardmember Baker absent.
Board Action - Resolution RDAP-2019-01 - A Resolution of the Development Authority of
Pearland (DAP), accepting the 2018 Annual Financial Report for the Fiscal Year ending
September 30, 2018.
Boardmember Pool made the motion, seconded by Boardmember Carbone to approve Resolution
RDAP-2019-01.
Director of Finance Cynthia Pearson stated the City is required to submit to an independent audit
yearly. She further stated the auditor's opinion was a clean audit, also known as an unqualified
opinion. Director of Finance Cynthia Pearson also stated total assets are $8.4 million, with $6.6
million of that in cash and cash investments. She further stated liabilities are at $799.00 and there
is a restricted fund balance of $8.49 million. Director of Finance Cynthia Pearson provided fund
expenditures and revenue streams, in addition to the amount of Revenue Bonds issued.
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Boardmember Carbone stated the balance sheet does not reflect the amount of debt that has
been issued.
Director of Finance Cynthia Pearson stated it is accounted for but not listed on the balance sheet.
She further stated that a synapsis of the debt is recorded in the 2018 Annual Financial Report
and not itemized on the balance sheet.
Voting "Aye" Boardmembers Reid, Carbone, Rizzo, and Pool.
Voting "No" None.
Motion Passed 4 to 0 with Boardmember Baker absent.
Board Action - Resolution RDAP-2019-02 - A Resolution of the Development Authority of
Pearland (DAP), accepting the Financial Report for the period ending August 31, 2019.
Boardmember Rizzo made the motion, seconded by Boardmember Carbone to approve
Resolution RDAP-2019-02.
Director of Finance Cynthia Pearson presented the Financial Report and provided the highlights
of funds allocated in each area. She further provided revenue, interest earnings and debt service.
Voting "Aye" Boardmembers Reid, Carbone, Rizzo, and Pool.
Voting "No" None.
Motion passed 4 to 0 with Boardmember Baker absent.
Board Action - Resolution RDAP-2019-03 - A Resolution of the Development Authority of
Pearland (DAP), accepting the quarterly Investment Reports for the periods ending September
2018, December 2018, March 2019, and June 2019.
Boardmember Reid made the motion, seconded by Boardmember Carbone to approve
Resolution RDAP-2019-03.
Director of Finance Cynthia Pearson stated every year the last four quarters of Investment
Reports are presented to the Board. She further stated the starting balance was $971,000 and
ended with $964,000 balance. Director of Finance Cynthia Pearson stated the interest earned on
that was approximately $14,000 and is included in the report.
Voting "Aye" Boardmembers Reid, Carbone, Rizzo, and Pool.
Voting "No" None.
Motion passed 4 to 0 with Boardmember Baker absent
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Board Action - Resolution No. RDAP-2019-04 - A Resolution of the Development Authority of
Pearland (DAP), ratifying checks 1179 through 1183 totaling $6,125.41.
Boardmember Pool made the motion, seconded by Boardmember Carbone to approve Resolution
RDAP-2019-4.
Director of Finance Cynthia Pearson stated since October 2018 five checks have been written
totaling $6,125.41, the bulk to the City of Pearland for professional services and one to Allen
Boone Humphries and Robinson for $125.00 and have been passed and approved by the Invoice
Review Committee.
Voting "Aye" Boardmembers Reid, Baker, Carbone, Rizzo, and Pool
Voting "No" None.
Motion passed 4 to 0 with Boardmember Baker absent.
Board Action - Resolution No. RDAP-2019-05 - A Resolution of the Development Authority of
Pearland (DAP), approving a contract with Arbitrage Compliance Specialists, Inc. for Arbitrage
compliance services.
Boardmember Carbone made the motion, seconded by Boardmember Pool to approve Resolution
RDAP-2019-05.
Director of Finance Cynthia Pearson stated IRS regulations state that an entity cannot earn more
interest on bond proceeds than it is paying. She further stated this is the contract with Arbitrage
Compliance Specialists, Inc who will do the calculations, so the City is in compliance to bring
current all rebate reports through September 30 with the total amount of the contract not to exceed
$1,550.00.
Voting "Aye" Boardmembers Reid, Carbone, Rizzo, and Pool
Voting "No" None.
Motion passed 4 to 0 with Boardmember Bake absent.
Board Action- Resolution No. RDAP-2019-06 - A Resolution of the Development Authority of
Pearland (DAP), Texas, authorizing a developer reimbursement to Shadow Creek Ranch
Development Company Liquidating Trust to reimburse for TIRZ Infrastructure Improvements in
the amount of $6,155,147; which includes the amount received from Texas Education Agency
(TEA) for tax year 2018 supplemental taxes.
Boardmember Rizzo made the motion, seconded by Boardmember Carbone to approve
Resolution RDAP-2019-06.
Director of Finance Cynthia Pearson stated this is for repayment to the developer for the TIRZ
and currently there is $6,155,147 available but will be used to pay off the original developer in
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Shadow Creek Ranch, which will decrease this amount. She further stated staff is asking for the
amount to be amended to $4,357,995 and a later Resolution will be made to pay off the remaining
balance.
Allan Mueller provided historical data on the Developers in Shadow Creek Ranch and Letter
Finance Agreements. He further stated how the available $6,155,147 was calculated and used
for reimbursement of the developers. Allan Mueller stated in the past the Master Developer has
been the one getting the reimbursement, but this will pay them off and begin reimbursing the next
in line developers. He further provided a breakdown of the outstanding Letter Finance
Agreements after the Master Developer is paid.
Lynne Humphries Allan Boone Humphries and Robinson stated Shadow Creek Retail developed
the retail area at FM 518 and SH 288. She further stated Shadow Creek Retail sold the rights to
Transwestern, who sold to multiple other successorslowners. Lynne Humphries stated that
Transwestern maintains they keep the rights to the receivables from the TIRZ, which puts them
next in line for reimbursement. She further stated the other successors/owners are stating they
have the rights and are next for reimbursement, causing an issue where the next in line has to
show proof they are entitled to reimbursement first.
Conversation ensued between Boardmember Carbone, Lynne Humphries and Allen Mueller
regarding interest on the Letter of Finance Agreements.
Deputy City Manager Jon Branson asked if the motion could be amended to read no more than
$6,155,147 in the language.
Boardmember Carbone made the motion, seconded by Boardmember Pool to amend the motion
to read not to exceed a $6,155,147 threshold.
Voting "Aye" Boardmembers Reid, Baker, Carbone, Rizzo, and Pool
Voting "No" None.
Motion to amend passed 4 to 0 with Boardmember Baker absent.
Voting "Aye" Boardmembers Reid, Baker, Carbone, Rizzo, and Pool
Voting "No" None.
Original motion passed 4 to 0 with Boardmember Baker absent.
Board Input and Discussion - Receive a presentation from the Financial Advisors to include an
Overview and Schedule of Events for Tax Increment Contract Revenue Bonds, Series 2019.
Debt Discussion and Overview AIR -19-428
Director of Finance Cynthia Pearson stated this is a third -party agreement between the City, the
TIRZ and the Development Authority that states the Development Authority is the debt issuing
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component since the TIRZ cannot issue debt. She further stated each year the City brings in an
advisor to determine the amount of debt that can be issued.
John Robuck BOSC Financial Advisor provided a brief summary and recommendation on the
issuance of Tax Increment Contract Revenue Bonds to be used for the reimbursement of
developers. He provided to the Board estimated sources and funds for the TIRZ Revenue Bonds
Series 2019 and stated revenue bonds have a current interest rate of 3.295% and a 5.572 year
lifespan.
Conversation ensued between Boardmember Carbone, Lynne Humpheries Allan Boone
Humphries and Robinson and Allen Mueller regarding bonds and the amount of interest that is
being earned.
Voting "Aye" Boardmembers Reid, Baker, Carbone, Rizzo, and Pool
Voting "No" None.
Motion passed 4 to 0 with Boardmember Baker absent
ADJOURNMENT
Meeting was adjourned at 4:49 p.m.
Minutes approved as submitted and/or corrected this 14" day of October A.D., 2019
ATTEST//:
ED BAKER
SECRETARY
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�feN
TOM REID
CHAIR