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2022 07 07 MDD Minutes MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT July 7, 2022 The Board of Directors of the Baytown Municipal Development District(MDD)met in a Regular Meeting on Thursday, July 7, 2022, at 4:31 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Chris Presley Vice President Laura Alvarado Secretary Suhey Rios-Alvarez Director Mary Hernandez Director Charles Johnson Director Heather Betancourth Director David P. Jirrels Director Gary Englert Director Bandon Capetillo President Rick Davis General Manager Scott Lemond General Counsel Angela Jackson Assistant Secretary President Brandon Capetillo convened the July 7, 2022, MDD Board Regular Meeting with a quorum present at 4:31 P.M., all members were present with the exception of the absence of Director Jacob Powell, Director Mike Lester, Vice President Chris Presley who later arrived at 4:33 P.M., and Director Charles Johnson who later arrived at 4:33 P.M. as well. 1. MINUTES a. Consider approving the minutes of the Municipal Development District Regular Meeting held on April 7, 2022. A motion was made by Secretary Laura Alvarado and seconded by Director Mary Hernandez to approve the minutes of the Municipal Development District Regular Meeting held on April 7, 2022, as submitted. The vote was as follows: Ayes: President Brandon Capetillo, Secretary Laura Alvarado, Director Suhey Rios-Alvarez, Director Mary Hernandez, Director Heather Betancourth, Director David P. Jirrels, and Director Gary Englert Nays: None Other: Vice President Chris Presley(Absent), Director Charles Johnson(Absent), Director Jacob Powell (Absent), and Director Mike Lester(Absent) MDD Board Regular Meeting Minutes July 7,2022 Page 2 of 9 Approved 2. BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT FY2022-23 PROPOSED BUDGET a. Discuss the Baytown Municipal Development District's Fiscal Year 2022-23 Proposed Budget and budget process. General Manager Rick Davis introduced the item recalling from their last meeting that the MDD Board went over the proposed projects that would be included in the proposed budget. For example, Economic Development personnel expenses had been kept for the two positions Mr. Davis had presented to the Board. It had not been removed, pending the discussion that night, and staff was happy to take whatever direction the MDD Directors had for them. The other projects, likewise, had not been modified since their last meeting. Finance Director Victor Brownlees proceeded to present the draft budget. As Mr. Davis indicated, there had not been any changes to any of the projects. However, Mr. Brownlees believed it would be worth taking time to think about revenue which marked how successful the District had been in generating sales tax. The sales tax, in turn, marked the continued economic growth within the City. At that time, Mr. Brownlees relayed the MDD was already over the $8 million-dollar mark. In terms of other specific expenditures, Mr. Brownlees noted Economic Development also included the ongoing debt service for the Hotel Convention Center and the $1.4 million for the Citizens Bank building project.A couple of years ago,the City had budgeted for the Citizens Bank building within the MDD, the Water and Sewer Fund, and the General Fund. Thus, those funds had been expended first. The City was only then getting around to using the MDD's portion. Similarly, under Utility Projects, Mr. Brownlees recalled their conversation about the I-10 Lift Station. There was an agreement that there should be a contribution from the MDD towards that. The $600,000 in the proposed budget represented the MDD's portion of the debt cost related to that I-10 Lift Station. For the Parks Projects, Mr. Brownlees allowed his colleagues from Parks and Recreation speak on those at a later time. All in all, the proposed budget would provide a buffer for any unforeseen and new initiatives of over $700,000. Mr. Brownlees emphasized the MDD had been successful in generating revenue and investing in infrastructure, specifically referring to the Hotel and Convention Center. Of which, the success came at the cost of the MDD having negligible balances going forward. In the quarterly monitoring, Mr. Brownlees assured that he would run a close eye over its performance over the course of the year. With that, Mr. Brownlees was happy to take any questions. Director Betancourth noticed the ending working capital for the proposed year was$0 and inquired if that was normal. Mr. Brownlees answered that it was and that $742,148 was allocated to unforeseen and new initiatives. If the budget were to leave anything in the end balance, it could MDD Board Regular Meeting Minutes July 7,2022 Page 3 of 9 not be recommitted during the year. Therefore, by putting the money in to unforeseen and new initiatives, it gave the MDD the ability to allocate that in the year if the Directors so chose to. Director Betancourth further questioned when would be a good timeframe for the MDD to utilize that unforeseen balance? Was there something the MDD Board should keep in mind around the June-July timeframe, or did Mr. Brownlees have a recommendation? Mr. Brownlees recommended, similar to how the Crime Control Prevention District (CCPD) dealt with that the previous year, tracking that quarter by quarter. In the first quarter, it was identified there were significant increases in revenue, so it was left to the end of the second quarter before committed. Mr. Brownlees believed that was good rule of thumb to use and why he pointed out in quarterly monitoring to look at that closely because the MDD did not have a large fund balance. Under Utility Projects, Director Betancourth wondered what kind of parameters would be considered to allow projects to be funded with the MDD? Mr. Brownlees explained there were three line items: 1)was related to the development cost share with developers for upsizing; 2)was only related to grown and development, such as the I-10 Lift Station; and 3) was related to the ongoing debt cost for the Wastewater Treatment Plant. The presumption only was that the MDD contribute to growth and development. Director Betancourth clarified it was not legal nor their own policy to use MDD funds for existing infrastructure needs. It was mainly for growth. Mr. Brownlees confirmed that was correct as the assumption was that the MDD was a development district focused on development and growth. Director Betancourth's final question was when the North East Wastewater Treatment debt service would be scheduled to be paid off. Off the top of his head, Mr. Brownlees recalled it would be twenty years from 2016. Thus, it would be 2036 before it would be finally extinguished. Regarding the money allocated for unforeseen and new initiatives,President Capetillo commented that would be the opportunity for anything the MDD Directors felt needed to be considered as a line item in the budget.While things did happen mid-year,President Capetillo suggested any ideas from the Directors to be spoken up for a cost estimate and so something could be budgeted. President Capetillo had a few,himself,but would like to hear from the Directors if there were any. As there were none at that time, President Capetillo proceeded to give his own. President Capetillo noted the Art League Building was City-owned and staff had attempted to address repairs and improvements. Yet,he did not think the City accomplished everything needed for that building. Thus, President Capetillo would like to address some of the larger things, such as: flooring, things to present the building better, and the second story. Mr. Brownlees noted the Art League Building had been picked up in the Capital Improvement Plan(CIP)for$600,000. Mr. Davis added that $600,000 was only as relevant as the budget turned out to be. City staff were currently in the process of putting numbers to each of those items to make the building functional, and would return the budget back to the MDD Directors to see the costs.President Capetillo agreed $600,000 was a lot of money, but that was not what he was seeking. He would like to address the first floor to make the gallery more presentable and accommodating for what they needed. MDD Board Regular Meeting Minutes July 7,2022 Page 4 of 9 Director Hernandez made note of their discussion on Pirates Bay parking and inquired if staff continued to research that as well as the Cricket Field outside of that area. Mr. Davis replied staff did continue to probe the possibility of acquiring the property adjacent to the existing Pirates Bay parking. Furthermore, he believed there were other plans for additional parking and deferred to Public Works and Engineering Assistant Director Andrea Brinkley. Ms. Brinkley stated on the City Council agenda for July 14th, Public Works staff would bring forward an amendment for the design of additional parking to serve the Wayne Gray and the Pirates Bay complex. Director Hernandez further questioned if the Cricket Field would be expanded or would be looked at for another location? At that time, Ms. Brinkley relayed staff would not impact the Cricket Field by making it smaller or expanding. The Cricket Field was only being planned for additional parking. Director Betancourth queried if the real estate negotiation for the parking was successful for the land acquisition. Ms. Brinkley replied not yet, so Director Betancourth clarified the agenda item she previously referenced was just for the design. Ms. Brinkley responded it was everything involved with acquiring all the due diligence and the design thereof. Staff was hopeful and confident that the acquisition would go through. Director Betancourth expressed concerns if it did not go through, the City would have designs for a property it did not own. Without getting in to how the City procured real estate, Ms. Brinkley relayed staff wanted to put forth a fair offer at market value, so the City would be successful. The design would help with that. President Capetillo inquired for the date of the approval of the budget. Mr. Davis answered the General City Budget would be approved in September and believed the same deadline applied to the MDD.With that,President Capetillo suggested for any ideas the MDD Directors had to contact Mr. Davis. Mr. Brownlees added the public hearing for the budget was on July 14th as well. 3. PROPOSED RESOLUTIONS a. Consider a resolution approving changes to the guidelines for the Business Improvement Grant Program. President Capetillo announced Mr. David Isaac had signed up to speak on the item. Mr. Isaac commented his approval of the resolution. Economic Development Manager Bret Gardella had stated a lot of people were interested, and Mr. Isaac hoped applicants would be approved depending on their merits. However,he believed there was more the MDD Board could do. Mr. Isaac shared that he had driven from his office all the way to City Hall as there were no other way to appear live during the MDD Meeting. Considering the MDD dealt with sales tax,Mr. Isaac thought it was important the MDD Board be as transparent and participatory as possible. Mr. Gardella then spoke on the item noting the Business Improvement Grant Program had struggled in getting applications filled out. Thus, the goal in changing the guidelines was to make it more accessible. Raising the limit to $40,000 on a 50-50 match gave people the opportunity to do more interior projects as it was expanded from just life-safety issues. Interior improvements could include: new flooring(excluding carpets), doors, windows, and built-in fixtures that would beautify the space. Mr. Gardella felt that was necessary and doable for the City to help out with. MDD Board Regular Meeting Minutes July 7,2022 Page 5 of 9 In addition, the program also had problems with people that had already started the work before getting involved with the program. Mr. Gardella rewrote the guidelines to allow a ninety-day window, or grace period. If applicants started before they found out about the grant and applied, the City wanted to be as amendable to them as possible. With that, Mr. Gardella believed those were the two biggest changes to the guidelines of the Business Improvement Grant Program. The Committee reviewed five applications that had been submitted and presented to the MDD Board. Mr. Gardella noted a couple of the applications had legal issues with the state regarding paperwork filing and naming issues. Once those were fixed with the state and once the City was comfortable moving forward on a legal level, Mr. Gardella relayed everything should be okay. With the five application,only one was looking at the$40,000 level, Lercy's Diner. Mr. Gardella explained that was due to issues with their sprinkler system on their end as well as the City's. Staff wanted to make that correction, and Lercy's would be able to take advantage of that rather quickly. Vice President Presley recalled the MDD had approved the Revolving Loan Program and that Mr. Gardella had iterated there were challenges with that. Vice President Presley noticed that did not appear to be an option, so could that funding roll in to the Business Improvement Grant Program? Mr. Gardella answered yes. In fact, he had approached different loan banks to be involved with that program. Even though it was the City's money with no expense nor liability on their side, no loan bank wanted to get involved. Thus, as of yet, the City did not have a Revolving Loan Fund. However, Mr. Gardella would not stop as he and Mr. Brownlees continued to approach other entities outside of the City to see if they could get that Revolving Loan Fund created. Mr. Gardella reiterated those monies were rolled over in to the Business Improvement Grant Program and in to the next year's budget. It was not under a Revolving Loan Fund line item. Similarly, Director Jirrels recalled there had been an obstacle with an applicant that had to come up with a cash contribution before qualifying for the grant. He questioned what that was and what was the City proposing at that time. Mr. Gardella replied it was still a 50-50 match program. The applicants had to do the work,pay for the work, submit the receipts, and the City would reimburse them. As a grant program, Mr. Gardella could not justify coming in front of the MDD Board to write a check up front. The City must make sure the applicant would do the work they said they would do. Once done, it would be approved by his department and then the applicant would be reimbursed. It was a matching program and Mr. Gardella believed the guidelines to stay with that were important. Director Jirrels clarified if he were to apply for the$40,000 grant, he would have to put in $20,000 before he could get reimbursed? Mr. Gardella relayed the guidelines of the program where: 1)the applicant got accepted in to the program;2)the applicant would do the work at whatever extent that would be; and 3) once completed, the applicant could submit it. For example, if an applicant had$80,000 worth of work, the $80,000 would get them the $40,000. To follow up on Director Jirrels question, Vice President Presley gave a hypothetical instance where that applicant would not have the$80,000 in a lump sum. He inquired if it would be possible to entertain dispensing that money in phases.For example,finishing half the work got the applicant half of the money with the remaining to be given when all the work was finished. Mr. Gardella stated he would have to think about that. For anything small, Vice President Presley agreed it did MDD Board Regular Meeting Minutes July 7,2022 Page 6 of 9 not make sense to split up $5,000, for example. However, when it would be major, perhaps there could be two phases the applicant could conquer that in. Mr. Gardella explained the Business Improvement Grant was one tool. For projects $80,000 or larger, the City had a separate tool. Nonetheless, Mr. Gardella would work at whatever level the MDD Board wished, but requested that he further research that. If the guidelines were acceptable, Mr. Gardella could make those changes at that moment and would later research how the City might be able to do some type of phased-in approach. He could also re-present that to the MDD to have another conversation to see if that would be acceptable. General Manager Rick Davis suggested they look at a limit of phases. The MDD Board further discussed the issues of the Business Improvement Grant Program, such as: its attainability, marketing, and the timing of the applicant. Mr. Gardella noted when people heard about the program, it tended to be after the fact as applicants were supposed to be in the program first before doing the work. That being why Mr. Gardella edited the guidelines to that ninety-day level. In fact,Mr.Gardella was willing to entertain if the MDD Directors thought ninety days was too short of a period. He had chosen ninety days because that seemed to be the window where people heard about the program,but had already started the renovations to their space. Vice President Presley wondered if the City could automate the process in giving applications to the program when individuals applied for a permit. Mr. Gardella was happy to work with Planning and Development Director Martin Scribner and his department on that. Mr. Scribner stated he would have to check with his staff to see how that would function. Mr. Davis noted it would just be a matter of looking at the process and seeing where the appropriate place would be for that. As it currently stood, Mr. Scribner relayed when Planning heard about new businesses, staff checked with Mr. Gardella to make sure that he had some contact with them. Nonetheless, that was something Mr. Scribner and Planning were willing to assist Mr. Gardella with. Although, Mr. Scribner was unsure of what the limits would be at that stage with their technology. With the Reinvestment Zone, Mr. Gardella believed it would be important for anybody starting a business in that area to also have the knowledge that they could get permit fees waived and etc. A motion was made by Director Charles Johnson and seconded by Vice President Chris Presley to approve Resolution No. 441, related to Item 3.a. The vote was as follows: Ayes: President Brandon Capetillo,Vice President Chris Presley, Secretary Laura Alvarado, Director Suhey Rios-Alvarez, Director Mary Hernandez, Director Charles Johnson, Director Heather Betancourth,Director David P. Jirrels, and Director Gary Englert Nays: None Other: Director Jacob Powell (Absent) and Director Mike Lester(Absent) Approved RESOLUTION NO. 441 MDD Board Regular Meeting Minutes July 7,2022 Page 7 of 9 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT APPROVING THE REVISED GUIDELINES FOR THE BUSINESS IMPROVEMENT GRANT PROGRAM; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a resolution approving Business Improvement Grant applications in the amount of$40,000.00 per approved grant application. President Capetillo announced Mr. David Isaac had signed up to speak on the Item 4.b. as well. Mr. Isaac wished to discuss the procedures of the Business Improvement Grant. The MDD Board had just approved the increase of$20,000 to$40,000.Now,the City had applications for$40,000? He believed that was sloppy. When people saw a change to a policy, perhaps they needed a week or so to apply and for that to be made available. In regards to the marketing issue mentioned in the previous item, Mr. Isaac inquired how would the City get out to those small businesses and help them. He knew big developers got the attention they needed and he believed the same should be applied to small businesses. In the previous item, Mr. Isaac heard and disapproved of the apprehension in giving people money first. Of the five applications, Mr. Isaac spoke favorably of Khadija Williams and her hair business. He further touched on others ways to help businesses when he was reminded of the nature of the agenda item—to approve applications. While challenging Vice President Presley and President Capetillo, Mr. Isaac's time had run out. A motion was made by Vice President Chris Presley and seconded by Director Charles Johnson to approve Resolution No. 442, related to Item 3.b. The vote was as follows: Ayes: President Brandon Capetillo,Vice President Chris Presley, Secretary Laura Alvarado, Director Suhey Rios-Alvarez, Director Mary Hernandez, Director Charles Johnson, Director Heather Betancourth, Director David P. Jirrels, and Director Gary Englert Nays: None Other: Director Jacob Powell (Absent) and Director Mike Lester(Absent) Approved RESOLUTION NO. 442 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT APPROVING BUSINESS IMPROVEMENT GRANT APPLICATIONS; AUTHORIZING REIMBURSEMENT FUNDING UNDER THE BUSINESS IMPROVEMENT GRANT PROGRAM IN AN AMOUNT NOT TO EXCEED THE MAXIMUM GRANT AMOUNT OF FORTY THOUSAND AND NO/100 DOLLARS MDD Board Regular Meeting Minutes July 7,2022 Page 8 of 9 ($40,000.00) PER APPROVED GRANT APPLICATION; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 4. REPORTS a. Receive the Monthly Construction Status Report for the Baytown Hotel and Convention Center Project. Finance Director Victor Brownlees introduced Hugh Cronin from Broaddus, the construction monitors, who produced the report before the MDD Board. Before handing it over to Mr. Cronin, Mr. Brownlees mentioned that he had been on call with SMP as part of their regular monitoring of the bonds issued in respect to the Hotel and Convention Center. Mr. Brownlees apprised SMP on the progress, current construction activities, and issues relating to the wider economic growth of the City. SMP was pleased with the responses from the City and would advise bondholders accordingly. Public Works and Engineering Assistant Director Andrea Brinkley presented to the MDD Board recent construction photos. With the images on display, Mr. Cronin began giving the report by stating the contract price, or current IGMP, was $60,626,237. Mr. Cronin noted that amount included an amendment the MDD Board approved in June which had been the only amendment approved thus far. There were no other pending amendments at that time other than the receipt of the final GMP which was anticipated for the end of July.The amendment also included transferring the cost of the kitchen and laundry equipment from the soft cost budget over to DPR. As of the end of June, DPR had been invoiced for$20,268,021—about 35%of their total contract value. Mr. Cronin relayed DPR were nine months in to the construction project as per their schedule. DPR started on November 8, 2021 with an aggressive seventeen-month schedule. Therefore, they were about 53%in to the construction schedule and had been invoiced for 35%of the total cost of the project. As of that day, DPR was on schedule. Mr. Cronin had been on site the week prior and shared that the contractor was getting ready to pour level four concrete. DPR tracked their own critical path and Broaddus felt they would finish, or achieve substantial completion, by the end of February—as per the contract—in 2023. Mr. Cronin further discussed the contents of the displayed images and then inquired for any questions from the MDD Directors. Director Jirrels recalled a conversation about the Directors touring the site and asked if they were still going to do that. Mr. Cronin replied they would love to do that, but was unsure how to coordinate that. General Manager Rick Davis had run in to Sam Sprouse who was formerly with Broaddus and was now with DPR Construction. Mr. Sprouse gave Mr. Davis his contact information, so Mr. Davis recommended they contact Executive Assistant Jason Burlin to arrange a tour. President Capetillo suggested they plan one tour for the MDD Directors and propose a date. In regards to the tour, Mr. Cronin noted at the end of the following week there would be a final review of the model room so the Directors could see what the rooms would look like. Moreover, President Capetillo knew there were renderings that had been sent to Council and suggested that be sent to the MDD Directors as well if it had not been done already. MDD Board Regular Meeting Minutes July 7,2022 Page 9 of 9 5. MANAGER'S REPORT a. The next Baytown Municipal Development District special meeting is scheduled for Thursday, July 14, 2022, at 5:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street,Baytown,Texas, 77520. On the note of the Hotel and Convention Center, General Manager Rick Davis forwarded to the MDD Directors what the interior would look like. Mr. Davis then relayed there would be a special, budget-oriented MDD Meeting on Thursday, July 14, 2022, at 5:30 P.M. there in the Council Chambers. Before adjourning, Vice President Presley requested the consideration of having a Sergeant at Arms present at MDD Meetings. Mr. Davis agreed to have a discussion about that. 6. ADJOURN With there being no further business to discuss, President Capetillo adjourned the July 7, 2022, MDD Board Regular Meeting at 5:10 P.M. Angela JacZcson, Assistant-Se t City of Baytown =z!( �, ✓\ vtzt Mom\