R-2013-099-2013-06-24RESOLUTION NO. R2013-99
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, APPROVING THE 2012 ANNUAL REPORT FOR TAX
INCREMENT REINVESTMENT ZONE #2.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the Annual Report for Tax Increment Reinvestment Zone #2 is
hereby approved.
PASSED, APPROVED and ADOPTED this the 4th day of June, A.D., 2013.
ATTEST:
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
GREG HILL
MAYOR PRO -TEM
Resolution No. R2013-99
Exhibit "A"
REINVESTMENT ZONE NUMBER TWO
CITY OF PEARLAND, TEXAS
ANNUAL REPORT
2012
TABLE OF CONTENTS
City of Pearland, Texas, City Council 3
TIRZ Board of Directors 4
Description of the Zone 5
Purpose of the Zone 6
State of the Zone and Plan Implementation in 2012 7
TABLES
TABLE A: Taxing Entity Percent Participation 7
TABLE B: Base Values by Jurisdiction 8
TABLE C: Revenue Fund Balance by Year 8
TABLE D: Project Plan & Reinvestment Zone Financing Plan Budget 10
TABLE E: Outstanding Debt as of Fiscal Year End 11
TABLE F: Letter Finance Agreements Approved for Reimbursement 12
APPENDICES
Exhibit 1: Zone Boundary Map 15
Exhibit 2: Amended Zone Boundary Map 16
COMPLIANCE
Texas Tax Code Section 311.016 (a):
(1) 7
(2) 9
(3) 11
(4) 13
(5) 13
2
CITY OF PEARLAND, TEXAS
CITY COUNCIL
2012 Council Members
Mayor Hon. Tom Reid
Mayor Pro -Tem Hon. Susan Sherrouse
Council Member Hon. Scott Sherman
Hon. Woodrow Owens
Hon. Keith Ordeneaux
Hon. Greg Hill
City Manager William Eisen
Director of Finance Claire Bogard
3
REINVESTMENT ZONE NUMBER TWO
CITY OF PEARLAND, TEXAS
BOARD OF DIRECTORS
2012 Board Members
Position 1 Donna Coleman
State Senator Designee
Position 2 Gary Davis
State Representative Designee
Position 3 Herb Fain
City of Pearland Designee
Position 4 Gary Cook, Vice Chair
City of Pearland Designee
Position 5 Kenneth R. Phillips, Chair
City of Pearland Designee
Position 6 Jo Knight
City of Pearland/Alvin Independent
School District Designee
Position 7 Mike Pyburn
Alvin Independent School District Designee
Position 8 Ron Castillo
Fort Bend County Designee
Position 9 Larry Loessin
Brazoria County Designee
4
DESCRIPTION OF ZONE
In accordance with the Tax Increment Financing Act (Chapter 311, Tax Code), Reinvestment
Zone Number Two, City of Pearland, Texas (the Zone) was established by Ordinance 891 of the
City Council of the City of Pearland (the City), Texas on December 21, 1998. The original Zone,
also known as "Shadow Creek Ranch", consisted of 3,467 acres located in Brazoria County and
Fort Bend County, Texas. In addition, the Zone is located in Alvin I.S.D. (AISD), Fort Bend
I.S.D. (FBISD) and a small portion in Pearland I.S.D. (PISD). The original Zone is generally
bounded by Clear Creek on the north, State Highway 288 on the east, Broadway (the extension
of FM 518 west of S.H. 288) on the south and FM 521 on the west. A map illustrating the
original boundaries of the Zone follows on page 15 as Exhibit 1. On August 23, 1999, by
Ordinance No. 918 of the City, the Project Plan and Reinvestment Zone Financing Plan (the
Project Plan) for the original TIRZ boundaries was adopted.
st
1 Plan Amendment
On July 10, 2006, by Ordinance 1276 of the City, the Project Plan was amended and the Zone
was expanded to provide for the annexation of 457 acres of vacant land, adjacent to the Zone.
288 acres are in Brazoria County and 169 acres are in Fort Bend County.
nd
2 Plan Amendment
On November 13, 2006 by Ordinance 1312 of the City, the Project Plan was amended to
provide for development of public improvements to serve Shadow Creek Ranch Town Center.
The proposed development is within the boundaries of the original Zone and Brazoria County.
rd
3 Plan Amendment
On November 13, 2006 by Ordinance 1313 of the City, the Project Plan was amended and the
Zone was expanded to provide for the annexation of 8± acres to facilitate the improvement and
widening of Broadway from S.H. 288 to F.M. 521. The boundaries of the annexed area are
within Brazoria County.
The Zone is now composed of 3,932+ acres, of which 3,125± acres are within Brazoria County
and 807± acres are within Fort Bend County. A map illustrating the boundaries of the Zone as
expanded follows on page 15 as Exhibit 1.
5
PURPOSE OF ZONE
The objective of the Zone is to facilitate quality mixed-use development with a self-sustaining
tax base for the City and the other participating taxing entities.
The City Council, in adopting the ordinances creating and expanding the Zone, found that the
development described in the Project Plan, and its subsequent amendments, would not likely
occur, to the quality, standards and densities described in the Project Plan, but for the creation
of the Zone.
The City Council further found that improvements in the Zone will significantly enhance the
value of all taxable real property in the Zone and will be of general benefit to the City. The Zone
will pursue its objective by acting as a financing vehicle for regional public improvements, as
described in the Project Plan as amended. The methods of financing and the sources of funding
available to the Zone, including the participation levels of the various participating entities,
including the City, Brazoria County, Fort Bend County and Alvin ISD, are described in the
Project Plan and its amendments.
6
STATE OF THE ZONE AND PLAN
IMPLEMENTATION IN 2012
1. The information provided in this section is in accordance with § 311.016 (a) (1) of the
Texas Tax Code, which requires inclusion of the amount and source of revenue in the tax
increment fund established for the zone.
In addition to the City's tax increment revenue, interlocal agreements with Brazoria County, Fort
Bend County and Alvin ISD provide for each taxing unit's participation in the Zone. The Project
Plan also allows for the participation of Brazoria Drainage District No. 4 and Fort Bend
Independent School District, though neither is currently participating. Levels of participation are
detailed in the Project Plan and current levels of participation are shown in Table A.
TABLE A
Taxing Entity Participation
Taxing Entity
Zone Years
Percent Participation
City of Pearland
9 through 30
100% (1)
Brazoria County
1 through 30
38%
Fort Bend County
11 through 20
75% (2)
Alvin ISD
1 through 30
100% (3)
(1) 64% to be repaid as an administrative cost, provided the TIRZ retain at least $.255 / $100.
(2) In years 21 through 30 participation drops to 50%.
(3) 75% to be used by AISD for the construction of educational facilities.
The obligations of the participating taxing jurisdictions, as defined in their respective interlocal
agreements, include the timely deposit of tax increment into the City's tax increment revenue
fund.
Table B illustrates the growth in appraised value from base year to tax year 2012 for each
participating jurisdiction. Table C illustrates the amount of the incremental revenue, which has
been transferred to the increment fund. These amounts are based upon actual taxes collected
as of December 31, 2012.
7
1
v
6
co
9Rgwrn
NO
C N
Cd
N
1
cl
Eeee
pN
ry
N g 2 S N n 8
g'4"88'
O� .- V N
Hww Ylww ww
O
N44444,6444444-44
O N 3i 4 M ID
ui � ni
w w w w w w w w
35 �O• pp O1 I� N u) N tqqT
IC v N Y M
w w w w w w w w
:1§,g g
N �
(8
M .- 1_ O W q
O a k L 5 sN OJ .
6444444444.066464
Nry 1� 10 N M tfDV p��
ID iD OD �ID G+ — §
tO
wwwwwwww
yyN Yr'y. r{D� OD
N W R
6404400
zup
NOON,
NOD
N P)
AA
6444
w
8
44 44 w w 44
g.
• s
w w w
w
8
w
8
z
w
Ot
p8
o.
w
O
K
w
w
e
w
N
w
a
w
G
T
1
o h
t
gI
• tlig
1118
otlli
I
Eeeeet
00
2. The information provided in this section is in accordance with §311.016 (a) (2) of
the Texas Tax Code, which requires inclusion of the amount and purpose of
expenditures from the fund.
The Board of Directors of the Zone has been granted by City Council, in accordance with
Section 311.010 of Texas Tax Code, the power to administer, manage, and operate the
Zone and to implement the Project Plan. The Zone was created for the duration of 30 years,
or until dissolved by the City.
The total cost of the public improvements within the Zone, as outlined in the original Project
Plan, amounts to $294,482,034. Of this amount, the City will fund $35,471,061 worth of
improvements, and the Texas Department of Transportation (TxDOT) will fund another
$10,277,050 worth of improvements. The Zone will fund the remaining improvements,
which amounts to a cost of $248,733,923, unadjusted for inflation.
1st Plan Amendment
The original list of project costs was amended with the approval of the 1st Plan Amendment,
which included improvements, estimated to total $34,724,218. These improvements address
the water, wastewater, storm sewer, lakes channels, roads and landscaping costs for the
457+ acre annexation.
2nd Plan Amendment
The list of project costs was amended again with the approval of the 2nd Plan Amendment,
which included improvements estimated to total $11,749,618. These improvements address
major road infrastructure, detention, drainage, landscaping and the relocation of pipelines
and overhead utilities. All projects associated with this annexation have been completed.
3rd Plan Amendment
The list of project costs was amended a third time with the approval of the 3rd Plan
Amendment, which included improvements estimated to total $8 million. This amendment
addressed the need to fund and construct a section of Broadway. All projects associated
with this annexation have been completed.
These costs are detailed in the amended Project Budget, a copy of which follows as Table
D. The Zone as now enlarged is composed of 3,932± acres, of which 3,125± acres are
within Brazoria County and 807± acres are within Fort Bend County. A map illustrating the
boundaries of the Zone as amended follows on page 14 as Exhibit 2.
9
TABLE D
Reinvestment Zone NO. 2, City of Pearland, Texas - Shadow Creek Ranch
Budget
Item TIRZ Budget as
approved
(08/23/99) (1)
1st Plan
Amendment (2)
2nd Plan
Amendment (2)
3rd Plan
Amendment (2)
TIRZ Budget as
Amended (3)
Infrastructure
Streets
Pavement
12,610,050
1,634,000
14,244,050
Sidewalks
1,859,400
1,859,400
Landscaping and Irrigation
9,675,350
9,675,350
Entry Monuments
735,320
735,320
Lighting
125,900
125,900
Broadway Widening and Signalization
2,831,789
2,831,789
Business Center Drive Paving
852,722
852,722
Memorial Hermann Drive Paving
383,107
383,107
Water System
3,026,863
363,000
3,389,863
Wastewater System
6,940,964
1,029,000
7,969,964
Storm Water System
10,195,776
1,649,000
11,844,776
Lakes and Channels
Improvements
29,121,915
5,625,600
34,747,515
Land Cost
4,597,889
6,675,000
11,272,889
Detention and Drainage
Land Cost
2,850,000
2,850,000
Beautificaiton / Deepening I Pond Creation
200,000
200,000
Site Drainage Facilities
1,842,000
1,842,000
Parks and Recreation
Improvements
5,155,524
5,573,025
10,728,549
Land Cost
2,383,545
2,383,545
Landscaping
Business Center Drive
157,500
157,500
Memorial Hermann Drive
67,500
67,500
Overhead Utilities Placed Underground
1,200,000
1,200,000
Pipeline Relocation
700,000
700,000
Major Improvements
Water Plants
Land Cost
20,000
20,000
WWTP
340,000
340,000
Lift Station
300,000
300,000
Traffic Signals
600,000
550,000
1,150,000
McHard Road Reimbursables
Miscelaneous
150,000
150,000
Signal
100,000
100,000
SH 288 Access Road
1,000,000
1,000,000
FM 518 Improvements
6,485,600
6,485,600
Broadway 1 FM 518 Improvements
7,100,000
7,100,000
Contengencies and Engineering
Contingencies (10%)
8,181,116
1,733,620
9,914,736
Engineering (15%)
11,274,211
2,860,473
490,000
900,000
15,524,684
Master Drainage Plan Costs
70,000
70,000
Environmental Study Costs
100,000
100,000
Subtotal
108,267,923
34,474,218
11,574,618
8,000,000
162,316,759
Zone Administration / Creation
TIRZ Administration (1-3 Years)
466,000
466,000
Reimbursable TIRZ Creation Costs
900,000
900,000
Annexation Costs
250,000
250,000
Plan Amendment Costs
175,000
175,000
Subtotal
1,366,000
250,000
175,000
1,791,000
Total
109,633,923
34,724,218
11,749,618
8,000,000
164,107,759
City Facilities
Library
Improvements
2,395,000
2,395,000
Land Cost
105,000
105,000
Fire / Police Station
Improvements
2,255,000
2,255,000
Land Cost
245,000
245,000
Subtotal
5,000,000
5,000,000
Educational Facilities
AISD Elementary School
41,600,000
41,600,000
AISD Jr. High School
21,450,000
21,450,000
AISD Fresh/Soph Campus
34,050,000
34,050,000
FBISD Elementary School
11,000,000
11,000,000
FBISD Middle School
26,000,000
26,000,000
Subtotal
134,100,000
134,100,000
Grand Total
248,733,923
34,724,218
11,749,618
8,000,000
303,207,759
(1) The original TIRZ Budget as approved in 1999 dollars has not been adjusted for inflation.
(2) The amended Budgets as approved in 2006 are shown in 2006 dollars and have not been adjusted far inflation.
(3) The Budget as amended shows budget line items as approved in their respective years without adjustment for inflation.
10
TIRZ-Funded Projects:
Since the creation of the Zone a series of infrastructure improvements have been funded
and constructed. Project #12-06-001, Village 7, Phase 1 was initiated in 2012. The
proposed improvements total $8.8 million (2006 dollars) for construction, design, and
contingency for streets, water, sewer, drainage, land, and landscaping.
During calendar year 2012 Shadow Creek Ranch Development Company reported
approximately 367 home sales and 361 closings. This brings the total number of homes in
the Zone to 5,238 as of December 31, 2012.
City Funded Improvements:
• There were no City funded projects in 2012.
TxDOT Funded Improvements:
• There were no TxDOT funded projects in 2012.
3. The information provided in this section is in accordance with §311.016 (a) (3) of
the Texas Tax Code, which requires inclusion of the amount of principal and interest
due on outstanding bonded indebtedness.
Bond Issues
In accordance with a Tri -Party Agreement dated October 11, 2004 between the TIRZ, the
City of Pearland, and the Development Authority of Pearland (DAP), the TIRZ has pledged
increment to provide for the repayment of debt issued on its behalf. In this regard, the DAP
sold bonds in 2004, 2005, 2006, 2007 and 2009. The bonds were refunded in 2012 and are
outlined in Table E.
TABLE E
Development Authority of Pearland Outstanding Debt as of Fiscal Year End
Tax increment Contract
Revenue Bonds (1)
Principal Amount
Issued
Principal Amount
Outstanding
Total Debt Service
Outstanding
Series 2012
$;6,915.000
$54.23;,000
$69.866.212
CO Series summary provided by City of Pearland fiscal year ended September 30. 2012 CAFR.
In addition to developer reimbursements made via the sale of bonds, the DAP has also
made payments from cash reserves. In 2012 the DAP made direct payments to the
developer totaling $13,105,300. Total direct payments as of the end of 2012 for the DAP is
$35,068,430, all of which are reflected in the reimbursements outlined in Table F.
Additional LFA's Approved for Reimbursement
The Zone Board has approved a series of Letter Financing Agreements (LFA's) for
reimbursement. Prior to Board action all project costs related to each LFA were reviewed by
the Zone's Auditor, McGrath & Co. PLLC, and summarized in a reimbursement report, which
included eligible project costs plus interest.
Table F outlines Letter Financing Agreements approved through the end of 2012.
11
TABLE F
Letter Finance Agreements Approved for Reimbursement
Letter Finance Agreement (LFA)
LFA Date
LFA Amount (1)
Reimbursements
Through 2012 (2)
Creation Costs
6/19/2000
S 900000
S 1,235,408
LFA 99-11-001 (Entry)
11/8/1999
919,150 '
1,220,281
LFA 00-01-001 (V1P1A)
221/2000
6,524.629
5,243,529
LFA 00-10-002 (V1P1B)
10/912000
10,318,290
10.593,290
LFA 01-04-001 (V1P1B)
812312001
1,967.061
805,884
LFA 03-10-004 (Kingsley Drive, Phase 3)
1017/2003
3,529.173
2,791,877
LFA 04-07-006 (Traffic Signal
7/1312004
287.788
293,578
Shadow Creek PKWY/Kingsley)
LFA 04-07-007 (Parks and Trails
7/1312004
1,007,256
877,201
Grading and Infrastructure)
LFA 03-10-001 (Remaining Village
101712003
7,554.654
8,493,040
2. Phase 2 Improvements)
LFA 04-07-002 (Fire/Police Station Land Cost)
7113/2004
408.668
555,954
LFA 02-08-001 (Village 1 and Village
8/6/2002
4.727,516
6,029,532
2 Phase 2 Improvements)
LFA 01-11-002 (Additional Village 1 and
11/1212001
24 509,430
33,055,576
Village 2 Improvements)
LFA 03-10-002 (Village 3, Phase 1 and
1017/2003
7.809.950
11,734,369
2 Improvements)
LFA 06-03-001 (Elementary School 42 Site)
3/27/2006
1.687,801
1,886.601
LFA 06-08-002 (Library Site)
8/28/2006
481.569
557,100
LFA 04-07-003 (Regional Nature Park)
7/13/2004
760,988
245,910
LFA 03-10-005 (Kingsley Drive Phase
10107103
4.486 342
-
4 Improvements)
LFA 03-10-006 (Village 5 Improvements)
10/07/03
7.055,177
-
LFA 04-07-005 (Village 4, Phase 1 and
04./07105
3,354,452
-
Refelction Bay North Improvements)
LFA 03-10-003 (Village 3, Phase 3 Improvements)
10107/03
7,711,582
LFA 04-07-004 (Village 3. Phase 4 Improvements)
07/13/04
8.204,999
-
LFA 06-01-003 (Remaining Village 4 Improvements)
01130106
7,120,532
-
LFA 06-08-001 (Additional Sidewalks)
08/28/06
2,356,305
-
LFA 06-01-001 (Kingsley Drive North)
01/31/06
6,417,644
-
LFA 06-01-002 (Additional Village 4 Improvements)
01/31/06
9 392.437
-
LFA 06-08-003 (S.H. 228 Frontage Road
08/31/06
1,276.667
-
LFA 06-10-001 (Road Infrastructure, Pipeline
10(23/06
9 949 618
-
Relocation and Site Drainage: Part of 2nd
Plan Amendment)
LFA 07-03-002 (Shadow Creek Ranch Town Center
03112/07
1.851,598
-
Improvements: Part of 2nd Plan Amendment)
LFA 07-03-001 (Village 7, Phase 1 Broadway
31122007
1.271,499
Improvements)
LFA 08-05-001 (Broadway to FM 521)
5/5/2008
9,482,989
LFA 08-05-002 (Broadway Landscape - Northside)
5/5/2008
1,158.218 '
LFA 08-01-001 (Broadway Improvements)
1115/2008
8,449.086
City of Pearland
LFA 10-06-001 (Discovery Bay Extension to SH288)
6/7/2010
912,908
LFA 10-06-002 (SCH-4 Site)
6/7/2010
2.530,620
LFA 10-06-003 (SCH-5 Site)
6/7/2010
4,935 370
LFA 12-06-001 (Village 7, Phase 1)
6/11/2012
8.824.599
$ 180.136.565
$ 85,619.130
(1) LFA amounts have been adjusted for inflation per the Project and Financing Plan and related budget
(2) Amounts reimbursed include actual interest per the Developer Reimbursement Agreement
" Actual costs exceeded the amount of the LFA. Per the governing agreements, reimbursement is
limited to the amount of the LFA
12
4. The information provided in this section is in accordance with §311.016 (a) (4) of
the Texas Tax Code, which requires inclusion of the tax increment base and current
captured appraised value retained by the zone.
In each year subsequent to the base year, the Zone will receive tax increment revenue
based on ad valorem property taxes levied and collected by each participating taxing unit on
the captured appraised value of the Zone. The captured appraised value of the Zone is the
total appraised value of all real property located within the Zone as of January 1, less the
total appraised base year (January 1, 1998) value.
As of December 31, 2012, development schedules for the original Zone
remained unchanged from projections in the Project Plan. However, because the pace of
development is unpredictable, and because the Project Plan provides a best estimate of
captured appraised values, the actual captured appraised value in any future year may not
equal the projected estimates of such value.
As of January 1, 1998, the base year for the Zone, the area encompassed by the original
Zone was undeveloped land, with a total appraised value of $7,172,980. On January 1,
2012, the area encompassed by the Zone had a total appraised value of $1,296,306,653.
As a result, the total captured appraised value (net base year value and exemptions) on the
tax roll as of January 1, 2012 was $1,289,133,673 for the City, as illustrated in Table B.
The City of Pearland base year (2006) value for the 457± acres annexed in the 1st Plan
Amendment was $4,381,680. As of January 1, 2012 the total appraised value was
$9,781,810. As a result the total captured appraised value on the roll as of January 1, 2012
was $5,400,130. All lands associated with the 2nd Plan Amendment are within the
boundaries of the original Zone. All lands associated with the 3rd Plan Amendment are
either owned by a municipality or are dedicated right-of-way with no taxable value.
5. The information provided in this section is in accordance with §311.016 (a) (5) of
the Texas Tax Code, which requires inclusion of the captured appraised value shared
by the municipality and other taxing units, the total amount of tax increments
received, and any additional information necessary to demonstrate compliance with
the tax increment financing plan adopted by the governing body of the municipality.
As previously stated, the City, Brazoria County, Fort Bend County and Alvin ISD are the only
taxing units currently participating in the Zone. As of December 31, 2012 the Project Plan
and the total appraised value in the TIRZ was $1,294,533,803 for the original and annexed
areas of the Zone. The total amount of tax increment revenue received is detailed in Table
C.
(This report was written in accordance with the provisions of Chapter 311.016 of the Texas
Tax Code)
13
REINVESTMENT ZONE NUMBER TWO
CITY OF PEARLAND, TEXAS
2012 ANNUAL REPORT
EXHIBITS