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2003-03-04 TAX INCREMENT REINVESTMENT ZONE NO. 2 BOARD MEETING MINUTESMINUTES OF THE BOARD OF DIRECTORS MEETING Tax Increment Reinvestment Zone Number Two CITY OF PEARLAND, TEXAS March 4, 2003 A regular meeting of the Board of Directors ("Board") of the Tax Increment Reinvestment Zone Number Two ("Zone"), City of Pearland, Texas, was held in the Council Chambers of City Hall, located at 3519 Liberty Drive, Pearland, Texas, on Tuesday, March 4, 2003, at 4:00 p.m. The meeting was open to the public. Board Members in Attendance: Gary Cook, Vice Chair Jo Knight James McFeron Bobby Verdine George Sandars Mike Pyburn Developers in Attendance: Drew Pelter — Shadow Creek Ranch Dev. Co. City of Pearland Representatives in Attendance: Hon. Torn Reid Alan Mueller Gene Simeon Board Members Not in Attendance: Nigel Harrison John Knox Larry Loessin Consultants in Attendance: David Tinney — LJA Engineering Mark McGrath — Null-Lairson Lynne Humphries — Vinson & Elkins, L.L.P. Erin Smykay — Vinson & Elkins, L.L.P. Bob DeForest — KGA/DeForest Designs Sue Darcy — Knudson & Associates Charles Knight — Knudson & Associates James Ross — LJA Engineering L Introduction. The Vice Chair, Gary Cook, welcomed those in attendance. 2. Call the meeting to order, take attendance and verify that a quorum is present. Mr. Cook called the meeting to order at 4:05 p.m. and took attendance. The following Board Members were present: 1. Gary Cook, Vice Chair 2. Jo Knight 3. James McFeron 4. Bobby Verdine 5. Mike Pybum 6. George Sandars Board Members Nigel Harrison, John Knox and Larry Loessin were not in attendance. 1 3. Discuss and approve minutes of August 6, 2002 Board meeting. Board Member Verdine moved that the Board approve the minutes of the August 6, 2002 meeting without revision. Board Member Knight seconded the motion. Following discussion, the Board unanimously approved the motion. 4. Project report from the City; take appropriate action. Alan Mueller, Deputy City Manager for the City of Pearland, reported that the water storage tank on F.M. 521, where water from the City of Houston is stored, is nearly complete. Mr. Mueller expects final acceptance by April 2003. Mr. Mueller expects the wastewater treatment facility to process approximately two million gallons of wastewater a day and has the capacity to process up to eight million gallons a day. The facility is expected to be operational by June 2003. Mr. Mueller expects the sewer improvements for Shadow Creek Ranch, Phase 2 will be advertised for bid within the next 30 days. The Board took no action on the Report. 5. Project report from Developer and PowerPoint Presentation; take appropriate action. Gary Cook of Shadow Creek Ranch Development Company L.P. reviewed the status of construction with the Board. Mr. Cook reported that by December 2002, approximately $10 million worth of infrastructure improvements had been completed, with development and lot production continuing southward. Approximately 533 lots were delivered to builders in 2002, and 1,178 lots are expected to be delivered in 2003. Approximately $8.5 million worth of infrastructure is currently under construction with an additional $15-16 million worth of infrastructure through the end of the year. The trails along the gas pipeline easement are nearing completion, as well. David Tinney of LJA Engineering reported that the fifth lake is nearly complete, and construction of the BFI outfall channel had just begun. The remaining lakes that are under construction are estimated to be completed in the third quarter of 2003. Plans have been made for luxury town homes to be built on the 15` lake. Mr. Tinney also reported that the budget for all work completed to date amounted to approximately $20 million, with the actual amount spent amounting to $18 million, adjusted for 2003 numbers. Mr. Cook added that nine homebuilders have sold 230 homes to date. Presently, 133 homes have closed and 120 are under construction. Currently, home sales are averaging between five to tem per week. Mr. Cook expects sale to increase to between 10 and 15 per week during the summer. Home sale prices have ranged between $150,000 - $600,000, with most prices between $150,000 2 and $300,000. With over 200 home sales in 2002, Mr. Cook said that the community is becoming the one of the fastest -selling communities in the Greater Houston area's history. Presently, 10,000 square feet of commercial development has been built in the area. Three multi- family apartment sites are planned with construction slated to commence in late 2003. 48 acres of land have been sold to HCA Hospital Corp. for a 300-bed hospital and office campus. 52 acres of land have been donated for use as a University of Texas medical research and office facility. At this time a construction schedule has not been set. 115 acres of land have been donated for a park area on the North boundary along Clear Creek with a 38-acre nature portion. 10.2 acres of land has been offered to the YMCA as a donation, but the YMCA has yet to accept. Mr. Cook also reported that Shadow Creek Ranch Development Co. has been working with developers to have two day-care facilities built within the Zone by the end of 2004. Also, Villages 1 and 2 have been platted, and platting for Village 3 has been put on the fast track. The Developer is working with Texas Department of Transportation (TxDOT) and City regarding expansion of: S.H. 288, Frontage Road, F.M. 518 and Shadow Creek Ranch Parkway. The Board took no action on the Report. 6. Discuss and recommend 2002 Annual Report be presented to City Council for approval. Sue Darcy of Knudson & Associates reviewed the report with the Board, noting that the TIRZ projects remained within the Project Plan budget. Following discussion, Board Member Pyburn moved that the Board approve the 2002 Annual Report and recommend that it be forwarded to City Council for approval. Board Member McFeron seconded the motion. The Board unanimously approved the motion. 7. Discuss and take necessary action regarding Auditor's Report on TIRZ invoices presented for payment and approval of outstanding administrative invoices to date; Mark McGrath of Null-Lairson presented his report and reviewed the current outstanding administrative invoices contained in the Auditor's Report. Mr. McGrath recommended payment of the invoices. Board Member Pyburn moved that the Board accept the Auditor's Report and approve payment of the outstanding administrative invoices. Board Member Verdine seconded the motion. The Board unanimously approved the motion. 8. Discuss and take necessary action regarding Letter Financing Agreement for Administration of the Zone for fiscal year 2003. Lynne Humphries of Vinson & Elkins, Attorneys for the Zone, reviewed the Letter Financing Agreement (LFA) with the Board. The Board is being asked to consider and approve the execution of the LFA for 2003 administrative expenses in an amount not to exceed $175,000, which is the annual TIRZ administrative budget. Board Member Cook asked if future payments 3 could be made out of the City's increment fund. Board Member Sandars moved that the Board approve the Letter Finance Agreement as presented. Board Member Knight seconded the motion, and the Board unanimously approved the motion. 9. Presentation and discussion of TIRZ Project Budget Report. Sue Darcy reviewed with the Board the overall status of the budget to date. The Board took no action on the report. 10. New Business No new business was brought before the Board. 11. Any other matters which may properly come before the Board. No other business was brought before the Board. 12. Adjournment. Board Member Pyburn moved that the meeting be adjourned. Board Member Sandars seconded the motion, and the Board unanimously voted to adjourn the meeting at 4:51 p.m. Approved: Mike Pyburn Board Secretary Tax Increment Reinvestment Zone Number Two City of Pearland, Texas 4