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Home My WebLink About20240910 TIRZ 2 Meeting MinutesMINUTES OF THE BOARD OF DIRECTORS MEETING TAX INCREMENT REINVESTMENT ZONE NUMBER TWO / SHADOW CREEK RANCH CITY OF PEARLAND TEXAS SEPTEMBER 10, 202414:00 P.M. CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS I. CALL TO ORDER AND ROLL CALL Chair Phillips called the meeting to order at 4:03 p.m. and declared a quorum. Directors, City Staff and Consultants present were: Buck Stevens, representative of Senator Mayes Middleton, board member Tommy King, representative of State Representative Ed Thompson board member/vice chair Kenneth Phillips, City of Pearland representative, board member/chair Henry Fuertes, City of Pearland representative, board member Ali Hasanali, representative of Fort Bend County, board member/secretary Trent Epperson, City Manager, City of Pearland Lorenzo Wingate, Director of Public Works, City of Pearland Victor Brownlees/Assistant City Manager, City of Pearland Kendra Murphy, Deputy Director of Finance, City of Pearland Everett Deao/LJA Griselda Lee/McGrath & Co Alan Mueller, Sue Darcy, Jan Buehler with Marsh Darcy Partners administrators for the TIRZ IL PUBLIC COMMENTS There were no comments. III. PURPOSE OF THE MEETING: 1. Consideration and Possible Action - Regular Meeting Minutes of the September 26, 2023, Tax Increment Reinvestment Zone Number 2 (TIRZ No. 2) Board of Directors Meeting. A motion by Director Hasanali to approve the Regular Meeting Minutes of September 26, 2023 as presented was seconded by Director King, and passed unanimously. 2. Consideration and Possible Action - Financial Report for the period ending July 31, 2024 (unaudited). Ms. Murphy reviewed the Income Statement through 07/31/24, noting property taxes collected of $42,133,408.29. The total interest earnings of $453,100.38. The current expense totals of $14,719,229.69. The Balance Sheet reported current assets of $9,417,312.91 and current liabilities of $17,563.01. A motion by Director Stevens to approve the Financial Report as presented was seconded by Director Fuertes and passed unanimously. 3. Consideration and Possible Action — Investment Report for the Quarter Ending June 2024. Ms. Murphy reviewed the Pledged Collateral Reconciliation Report for the City as of June 30, 2024 indicating the total balances including all Wells Fargo accounts of $18,071,724.95 and noted that the account is 269.8% collateralized. The Development Authority account total balance of $861,794.24 showed 331.1% collateralized. A motion by Director Stevens to accept the Investment Report as presented was seconded by Chair Phillips and passed unanimously. Page 1 of 3 — 09/10/24 4. Consideration and Possible Action — Ratification of invoices authorized for payment by the Invoice Review Committee and approving invoices presented for payment. Mr. Mueller reviewed the list of invoices noting that items 1-7 had been reviewed and approved by Mr. Phillips and Mr. King as the invoice review committee and had been paid. Items 8-9 had not been reviewed by the committee and were presented for approval for payment. A motion by Director Hasanali to ratify invoices 1-7 and approve invoices 8-9 was seconded by Director Fuertes and passed unanimously. 5. Consideration and Possible Action — 2023 Annual Report. Mr. Mueller presented the report to highlight changes from the previous year and reminded that the information is based on the calendar year 2023. A review of the table of values indicated the 2023 overall zone captured value of $4,096,853,891 noting an increase over the prior year. He reported that the TIRZ budget was not amended in 2023 and remains current. Mr. Mueller noted the two LFAs approved in 2022 after the AUP reports were completed for the library and trail improvements. He reviewed the Outstanding Debt table indicating $74,658,937 yet to be paid. Director Hasanali asked if there is anticipation of future bond issuance which Mr. Mueller advised that it is unlikely that any further debt would be issued in the life of the T1RZ. Mr. Mueller reported that cash reimbursements in the amount of $11.2 million bringing the total cash reimbursement to $131 million since the beginning of the zone. Mr. Mueller reviewed the list of LFAs that have been reimbursed. A motion by Director Hasanali to approve the 2023 Annual Report as presented was seconded by Director Fuertes and passed unanimously. 6. Consideration and Possible Action — Agreed Upon Procedures Reports (AUPs) for completed Letter Finance Agreements (LFAs) — Shadow Creek Park Phase 2 (LFA 20-09- 001) and Shadow Creek Sidewalk Extensions (LFA 21-02-001). Mr. Mueller reviewed the LEA process and Mr. Deao presented two LFA's for reimbursement as LFA # 20-09-001 Shadow Creek Ranch Park Phase II and LFA # 21-02-001 Shadow Creek Ranch Sidewalk Extensions. Mr. Deao described the procedure by LJA to compile and review all documentation to recommend reimbursement to the City for LFA # 20-09-001 in the amount of $10,204,239.06 plus developer interest; and for LFA # 21-02-001 in the amount of $655,715.85 plus developer interest. Ms. Lee of McGrath reviewed the Agreed Upon Procedures Reports noting that the final amount for SCR Park Phase II with interest is $12,133,548.11 and for SCR Sidewalk Extensions is $740,786.54 with both amounts under previously approved costs. Director Hasanali requested clarification of how interest rates for accrual during project are determined. Mr. Mueller advised that the developer interest is set at 6'/2% as in all TIRZ agreements from 1998; and that the allowable budget is adjusted based on the Engineer News Record Construction Cost Index which Mr. Deao explained is specific to the area. A motion by Director King to accept the AUP for the combined LFAs as presented was seconded by Director Stevens and passed unanimously. 7. Consideration and Possible Action — Recommendation to Development Authority of Pearland of Fiscal Year 2025 Developer Reimbursement Report. Mr. Mueller provided a description of the flow of increment funds from entities to the TIRZ fund and, based on interlocal agreements between the City and DAP, an annual August 15th calculation is made for funds available for transfer to the DAP for reimbursement. Based on the calculation prepared by City staff, he reported that the August 15, 2024 TIRZ fund balance was approximately $37.2 million and, after certain amounts held in reserve per the agreements, the amount to be transferred to the DAP is $28,977,572.85. He reported that, after the DAP fund reserves for debt service and other obligations, the surplus funds available to reimburse LFAs in FY2025 is $16,750,302.02. Ms. Lee presented the McGrath AUP disbursement report, indicating Page 2 of 3 — 09/10/24 that $16,463,698 is payable to the Library LFA 19-10-002 and $286,604 is due to the Nature Trail Connection LFA 19-10-003. Ms. Lee reviewed the schedule of all reimbursements to date. Mr. Mueller stated that the item is presented for the board's recommendation to the DAP to make the reimbursements. He also noted that the representation letter would be signed by the DAP chairman. A motion by Chair Phillips to recommend to the DAP to make the payments as indicated in the report was seconded by Director King and passed unanimously. 8. Discussion Item — LFA and financial projection mpdate. Mr. Mueller reviewed the 8/15/2024 Property Tax & TIRZ Participation Rates of the entities. He reviewed the Property Value Projections noting that the value of the zone in 2025 would be $4 billion. A review of the TIRZ increment flow with the transfer to the DAP increasing next year to $27 million, and thereafter lower primarily due to the lower AISD tax rate this year. A review of the DAP cash flow projection indicates that an estimated $33 million of excess funds at the end of the life of the zone. A summary of the LFA reimbursement projections indicates all LFAs will be paid by 2029 and the participating entities will receive distributions from surplus funds at the end of the Zone. 9. Discussion Item — City of Pearland9 `wojects update. Mr.Wingate presented an update of the three projects and their status. 10. Discussion item — Comments by Mayor Cole, TIRZ Board members or TIRZ Consultants. Mr. Epperson expressed appreciation for the TIRZ board's support to bring major improvements to the community. DV. ADJOURN There being no further business, Director Hasanali moved to adjourn at 4:57pm, which was seconded by Director Fuertes and passed unanimously. APPROVED: Kenneth R. Pkit ips Chair, Board of Directors ATTEST: Board of Directors Minutes approved as submitted and/or amended on (CR. 6 (o• 21:22•S - Page 3 of 3 — 09/10/24