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2018-06-18 TAX INCREMENT REINVESTMENT ZONE NO. 2 BOARD MEETING MINUTES MINUTES OF THE BOARD OF DIRECTORS MEETING TAX INCREMENT REINVESTMENT ZONE NUMBER TWO/SHADOW CREEK RANCH CITY OF PEARLAND TEXAS JUNE 18, 2018 4.00 P.M CITY HALL ANNEX BUILDING, 3523 LIBERTY DRIVE, PEARLAND, TEXAS. I. 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 f Director Kenneth R. Phillips Director Jo Knight i Director Geoff Tonini Director Ali Hasanali Director Larry Loessin \ / Chair Fain asked those present to introduce themselves and noted new Director Geoff Tonini. Others in attendance Tom Reid, Mayor,City ofJPearland, Cynthia Pearson, Director of Finance City; Rhonda Daugherty, Assistant Diredto?sof Finance City; Tom March, Financial Analyst City; Maria Rodriguez, Deputy City_Secretary; Clay\Pearson, City,Manager; Jon Branson, Deputy City Manager; Trent\Epperson,Assistant City, Manager;�JohOcCarter, Budget Officer City; Neelie Walker, Senior,Budget Analyslt City; Matt Buchanan, Pearland EDC; Daniel Baum and Vince Riley, Pearland Fire Department; Lynne Humphries, Allen Boone Humphries Robinson LLP; Drew Pelter;-Shadow'C eek Development; James Ross, LJA, Sue Darcy, Alan Mueller, and Jan,BuenlerrMarsh Darcy Partners,-Ta o Ilori`CPA CFE, McGrath &Co II. PURPOSE OF THE.MEETING 1 Consideration and Possible Action`- Regarding the Regular Meeting Minutes of the October 23,2017, Tax Increment Reinvestment Zone Number 2 (TIRZ No. 2) Board of Directors Meeting. A motion by Director`P`hillips,to approve the Regular Meeting Minutes of October 23, 2017 as presented was secon de d by Director Hasanali, and passed unanimously 2. Consideration and Possible Action a. Acknowledgement of service by Mike Pyburn to the Board. Mr Mueller reviewed a Resolution thanking Mike Pyburn, an original member of the Board, , who submitted a letter of resignation for his Board service A motion by Director King to approve the Resolution as presented was seconded by Director Cook, and passed unanimously Page 1 of 4—06/28/18 2 b. Elect Board Secretary Mr Mueller advised that Mr Pyburn had been Secretary of the board and requested a Director to volunteer for the position Director Hasanali requested clarification of the position and agreed to serve A motion by Director King was seconded by Director Phillips and passed unanimously c. Appoint member to the Invoice Review Committee. Mr Mueller advised that Mr Pyburn had been a member of the Invoice Review Committee, and described the process of the position. Director King volunteered to serve A motion by Director Phillips to appoint Director King to the Invoice Review Committee was seconded by Director Hasanali, and passed unanimously / 3. Consideration and Possible Action a. Financial Report for the Fiscal Year end ng September`30, 2017 Mr March reviewed FY 2017 CAFR report's noting TIRZ report g of Tvenue expense and asset liabilities, and the highlighted portions of the notes. Mr March,referred to the Auditors report noting that the TIRZ is a portion of the=.whole CAFR"which receiveddan unqualified opinion. b. Financial Report for the period ending April$30g2018. Mr March advised that the balance ish�eet-is reportingthrough April 30, 2018. A motion by Director'Tonini.to accept\the Financial Reports'a presented was seconded by Director Phillips and passed unanimously, ' < , \- / ti 4. Consideration and Poossible,A1ction - Investment Report for the Quarters Ending September 2017, December 201.7, and March 2018. jy Ms. P ars_o p ented the Inve t ent Rep.,orttf pthe periods ending September 30, 2017, December 31, 201.7 and Mar\ch,.31, 2018'noting the portfolio market value and interest earned, and the liquid y'of the-cd stribution of°holdings. 4, s. A motion by Director Hasaanali to approve the Investment Report as presented was seconded*by Director Cook and passed unanimously 5. Consideration\and Possible Action -2017 Annual Report. Mr Mueller reviewed`the 20,,17 TIRZ Annual Report noting that the reporting is based on a calendar year format. :He'referred to Table B noting the comparison of base market value by jurisdiction to the 2017 value. A review of Table C of increment revenue compared over years indicates a fund balance of$3.8 million with an additional $2.3 million in a suspense account of Alvin ISD Mr Mueller referred to the report of bond issues to respond to Director Loessin's question noting that the 2015 series debt refunded all bonds prior to 2013 A review of Table F listed all LFA's approved and outstanding A motion by Director Phillips to approve the 2017 Annual Report was seconded by Director King, and passed unanimously Page 2 of 4—06/28/18 3 6. 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 invoices that had been reviewed by the IRC since the last meeting in October 2017 A motion by Director King to ratify payment of the invoices and pay new invoices as presented was seconded by Director Cook, and passed unanimously 7 Consideration and Possible Action—Cancellation of LFA 04-07-001 Mr Mueller advised that the referenced LFA had been previously approved yet never acted upon, therefore, for recordkeeping purposes, the request i to cancel the agreement as described by Mr Ross. A motion by Director Hasanli to cancel the LFA.as.req sted was seconded by Director Cook and passed unanimously '\ \:\ 8. Consideration and Possible Action—Acknowledgement of the assignment of the right to TIRZ reimbursements from Shadow Creek Ranch Development Company, LP to SCRDC Liquidating Trust. `\ ` 1 Mr Cook described the provisio ofn the Development.Agreement where the developer had the right to assign its interest to anotheef ntity Mr Cookdvised that the developer's interest has been assigned to a liquidating.trust now that the development entity has completed the development of its property `Mr,Mueller further noted that this acknowledgement.will aid in, todirecting`the City make-payments to the proper entity A motion by Director Pillipsstoacknowled e the assignment from Shadow Creek Ranch Development Comp ny, L.P to SCRDC Liquidating Trust. The motion was seconded by Director Hasanali, and passed unanimously 9. Consideration and Possible;Action-Professional Services Agreement with McGrath &:Co..to perform-VA upon procedures reviews and interest calculations. Mr Mueller presented for renewal the Professional Services Agreement with McGrath &Co to review completed LFAs pr,\esented,fgr reimbursement and verify interest calculations. To a question°from Director Hasanali regarding the new fee schedule, Mr Hobreplied that the prior fee schedule was from 2010, and the new agreement also contains updated professional standards requirements. He also noted that a management representation letter would be presented for signature. A motion by Director H.asanali to accept the updated Professional Services Agreement and Management Representation Letter as presented was seconded by Director Phillips, and passed unanimously 10 Consideration and Possible Action—Auditor's Report for completed LFA numbers 13-06-002 and 14-06-001 and recommendation for reimbursements. Mr Hob presented an updated report for Southlake Phases 2 and 3 and reviewed the details of each schedule Mr Mueller reported that both LFAs completed actual cost was substantially less than what was approved in the budget. Ms. Humphries advised that ABHR and LJA had previously reviewed the updated report. Page 3 of 4—06/28/18 4 A motion by Director Hasanali to approve the amended Auditor's Report as presented was seconded by Director Tonini, and passed unanimously 11 Consideration and Possible Action - Projection of future TIRZ Fund performance and payment of existing LFAs. Mr Mueller reviewed the highlights and assumptions of the projection model, and presented the tables of value, increment, reimbursement and cash flow projections. He noted that all existing LFAs are expected to be paid off by 2025 and that the end of the zone would be in 2028, with final payments in 2029 Mr Mueller advised that the projection model would be updated as needed 12. Consideration and Possible Action—Recommendation t City Council of Plan Amendment#4. r/ Mr Epperson presented the proposed amendment reporting that certain projects, including the library and fire station, in the original TIRZ need to be revised4or increased budget amounts to match the current scope and cost of the projects. A`discsion ensued of each project description and planned improvements. Mr Epperson repusorted,that the overall recommended budget increase would be app4roximately,$ million.\� A motion by Director Phillips tofrec7mend to City Co n it to accept the 4 ,Amendment to the Project Plan and Reinvestment.Zone Financing'Pla was seconded by Director Hasanali, and passed unanimously` �` , \\\) 13. Discussion Item— Possible dateslor next•Board meeting. Mr Mueller statedthat the extt meeting ill occur laterin,September when the financial advisor is ready to recommend debt issuance and cash reimbursement calculations have been completed ' L., h f Mayor Reid-complimented•the Board'of Directors,and acknowledged all of the progress within the Zone and,,area:, ( ,... • III. ADJOURN ,,`\ y \ There being,,further business; Director Phillips moved to adjourn at 5.25pm, which was seconded by Director King e 6 APPROVED `• \ Herb Fain Chair, Board of Directors ATTEST Director, Board of Directors Minutes approved as submitted and/or amended on September 24, 2018. Page 4 of 4—06/28/18 5