2023 07 06 MDD MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS
OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT
July 6, 2023
The Board of Directors of the Baytown Municipal Development District (MDD) met in a Regular
Meeting on Thursday, July 6, 2023, at 4:31 P.M., in the Council Chamber of the Baytown City
Hall, 2401 Market Street, Baytown, Texas, with the following in attendance:
Laura Alvarado
Vice President
David P. Jirrels
Secretary
Donna Winfrey
Director
Sarah Graham
Director
Kenrick Griffith
Director
Heather Betancourth
Director
Mike Lester
Director
Shaunna Bernshausen
Director
Bandon Capetillo President
Jason Reynolds General Manager
Scott Lemond General Counsel
Angela Jackson Assistant Secretary
President Capetillo convened the July 6, 2023, MDD Board Regular Meeting with a quorum
present at 4:31 P.M. All members were present with the exception of the absences of Director Gary
Englert, Director Suhey Rios -Alvarez, Director Jacob Powell, and Director Donna Winfrey who
later arrived at 4:38 P.M.
1. CITIZEN COMMUNICATION
a. Mr. Chris Presley has requested to appear before the Municipal Development District
regarding a proposal for a new Economic Development Program.
Former District Two (2) Council Member and MDD Vice President Chris Presley
Mr. Presley was present to speak on behalf of the Green Apple Salon. He informed the MDD
Board that the salon was displaced from their location a couple of years ago and wished to return.
Thus, they were asking for the MDD to adopt a program or to put a process in place that would
allow folks to acquire or to do something productive with the dozens of City -owned surplus lots.
Mr. Presley relayed the bottom line was that none of those properties were generating tax revenue.
It actually cost the City money because the lots required mowing, upkeep, et cetera. If the lots
were offered as an incentive for commercial development or to build homes, they would generate
tax revenue. Mr. Presley presented a flow chart, so to speak, of a process with the objective to have
all surplus lots producing tax revenue within three (3) or four (4) years. The way the process was
pitched was that the lots could go from the City, to the MDD, and to the prospect.
MDD Board Regular Meeting Minutes
July 6, 2023
Page 2 of 8
In February, Mr. Presley shared that he met and discussed with President and CEO of the Baytown
West Chambers County Economic Development Foundation (EDF) BJ Simon and the City of
Baytown's Administration. The feedback he received was positive from the City Administration,
Finance Director Victor Brownlees, and even a couple of folks from the Planning Department.
Based on that and to help advance the process, they submitted a proposal in April.
With regard to the lot in question for the salon, Mr. Presley relayed they believed new construction
would make a big impact. He also noted that the City had said that they wanted to see new devel-
opment there. Thus, they were present to ask for a process to be put in place for anybody and
everybody so the lots could be put to good use and taken off of the backs of the taxpayers.
General Manager
General Manager Jason Reynolds confirmed that he, Mr. Presley, Mr. Simon, and a few City Staff
Members had extensive conversations on the properties and projects. He noted that the project Mr.
Presley referred to did seem viable for the City. However, as they jumped in to the process flow
of selling the properties, they did run in to a few hiccups to legitimately sell those properties. In
addition to that, some of properties needed to be brought to the City Council for the strategic
holdings of the properties. He explained that had not been done as it had been a lower priority.
Furthermore, Mr. Reynolds relayed that the process presented was worth consideration from the
MDD Board. However, if the City Council wanted to look at selling properties, that would be a
totally different conversation that needed to be had with the Council. He explained that was due to
the MDD not being involved with City property at that time.
MDD Directors
While noting that there may be multiple lien holders on some of the properties, President Capetillo
agreed conceptually with what was presented and was interested in pursing that. Vice President
Alvarado also made note of the different circumstances certain properties may have. She relayed
they had to identify that and then start going in to the flow of how to handle each of the properties.
President Capetillo recalled that they had identified which were owned either by the City or other
entities. He believed they needed to have more discussions on that either with Council or the MDD.
Director Graham shared that she believed they needed to prioritize this matter. Director Griffith
echoed the sentiment and asked how soon they could get that on an agenda item. Mr. Reynolds
posed the question if it would be okay to move forward with this specific property and come back
with the other pieces of the pie. He did note that this specific property had been a strategic hold
for the City, but it was probably no longer relevant. He relayed they could see how this one would
work and then the process could be set up from there. Or, they could set up the process up first.
Director Graham preferred to have a process first and Director Betancourth agreed to do it holisti-
cally and to not piecemeal it. While understanding the merit of not piecemealing this matter, Di-
rector Bernshausen relayed that it could be a good way to work through some of the kinks so they
do not have to go back and keep changing the process. When they would put it out to the public,
it would look nice and organized. President Capetillo further questioned if the City Council would
visit this first or the MDD. Since it was a Council property, Mr. Reynolds responded with Council.
MDD Board Regular Meeting Minutes
July 6, 2023
Page 3 of 8
As Director Winfrey entered late and questioned what properties were in question, President Ca-
petillo requested Staff to provide that information in some format to the entire MDD Board.
2. BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT'S FY 2023-24 PROPOSED
BUDGET
a. Conduct a public hearing concerning the Baytown Municipal Development District's
Fiscal Year 2023-24 Proposed Budget.
At 4:48 P.M., Director Betancourth stepped out of the MDD Board Regular Meeting.
At 4:49 P.M., President Capetillo opened the public hearing concerning the Baytown Municipal
Development District's Fiscal Year 2023-24 Proposed Budget.
General Manager Jason Reynolds summarized the subject of the hearing with the following visual:
ACTUAL
FY22
ADOPTED
BUDGET FY23
PROPOSED
BUDGET FY24
Revenues
$8,179,021
$8,292,097
$8,824,304
Expenditures
Economic Development Projects
$2,498,764
$4,138,050
$4,632,400
Infrastructure Projects
$1,910,669
$2,062,725
$2,118,718
Parks Projects
$2,518,796
$3,130,329
$726,080
Project Administration/Contingency
$300,000
$1,042,148
$830,127
Total Expenditures
$7,228,229
$10,373,252
$8,307,326
Beginning Working Capital
$1,023,298
$1,974,090
($107,065)
Revenues Over (Under) Expenditures
$950,792
($2,081,155)
$516,979
Ending Working Capital
$1,974,090
($107,065)
$409,914
At 4:52 P.M., President Capetillo closed the public hearing concerning the Baytown Municipal
Development District's Fiscal Year 2023-24 Proposed Budget.
b. Consider a resolution adopting the Baytown Municipal Development District Fiscal
Year 2022-23 Budget.
President Capetillo first noted that while Item 2.b. was posted for the "2022-23 Budget," the Item
was supposed to read: "Consider a resolution adopting the Baytown Municipal Development
District Fiscal Year 2023-24 Budget. "
Overview
General Manager Jason Reynolds proceeded to introduce the item by describing the exhibits in
front of the MDD regarding the budget. The MDD Budget break down was presented as follows:
• 34% — Economic Development; • 31 % — Parks and Recreation; and
• 25%— Infrastructure; 0 10%— Admin and Contingency.
MDD Board Regular Meeting Minutes
July 6, 2023
Page 4 of 8
Moreover, Mr. Reynolds relayed that there were multiple options the Board was able to go through
for a philosophical stance on how they wanted to look at that money. However, after that was
ready, a change happened to the MDD budget. Mr. Reynolds informed the Board that there was
an insurance payment for the Hyatt Regency at a number that was not expected. The bill was
roughly one million and eight hundred thousand dollars ($1,800,000) which had forced a complete
restructure of the projects for the MDD. In addition to thinking about the makeup of the MDD,
they also had to consider how to pay for any other hiccups that may come along. Mr. Reynolds
relayed that this meant they needed to start focusing on building a healthier reserve.
Mr. Reynolds advised the MDD Board on moving to a reserve balance of roughly four million to
five million dollars ($4,000,000 — $5,000,000) which would take a few years to get to. In referenc-
ing the table from Item 2.a., he relayed the FY23 Budget Working Capital was projected to end in
a negative balance of one hundred seven thousand and sixty-five dollars ($107,065). However,
with their revenues, they would be at four hundred nine thousand and nine hundred fourteen dollars
($409,914). So, to get to a five million -dollar ($5,000,000) reserve, they would have to move some
of the projects that were already adopted by the MDD to the General Fund to ensure that those
would be paid for. Mr. Reynolds projected those were most likely to be the Parks projects.
With that said, Mr. Reynolds's recommendation was for the Board to not adopt the budget that
day. Once they could ensure the projects were funded, they could come back and adopt the budget.
After a few questions of clarification from the Directors, they proceeded to give their comments.
MDD Directors' Comments
Director Graham expressed her frustration as she was unable to understand how they did not pro-
ject that insurance bill. She relayed it was a sad day as she felt they had to scrap all of their Parks
and Recreation items from the budget in order to pay an insurance bill they did not see coming.
At 5:01 P.M., Director Betancourth returned to the MDD Board Regular Meeting.
Director Griffith wondered if this would mean the Lakewood Dog Park item was scraped as well.
Mr. Reynolds clarified that the Park items were not scrapped. They were being moved to the Gen-
eral Fund; however, it did mean they would have to compete with the other projects the General
Fund addressed. Nevertheless, Director Griffith echoed Director Graham's sentiments and ex-
pressed disappointment with the discrepancy. He wished to see that dog park break ground soon.
President Capetillo inquired if there was a reason, or what was the biggest cost driver, for the
increase to the insurance. Finance Director Victor Brownlees relayed he initially anticipated the
amount to be around three hundred thousand dollars ($300,000). He explained that was based on
the advice he received from the people that advised the City on the Hotel. Everyone had been
astounded and this had also happened in the City of Conroe, Abilene, and other hotels throughout
the State. Mr. Brownlees further explained it was a factor of the insurance industry and the location
of their Hotel. However, while it was all of those factors together, there was no easy answer.
Vice President Alvarado wondered what would their future insurance policies look like. Mr. Reyn-
olds proceeded to discuss the ways in which Staff were working to address that and Mr. Brownlees
touched on matters concerning the Hotel/Motel (HOT) Fund. Vice President Alvarado shared that
she understood that it would take a couple of years to get that investment back from the Hotel. She
MDD Board Regular Meeting Minutes
July 6, 2023
Page 5 of 8
expressed that it was just the sticker shock of what they anticipated versus what they were getting.
Vice President Alvarado relayed it was a very big shock and was at a loss for words.
To conclude the MDD Directors' comments, Director Lester expressed that he was pleased to see
them try to roll the Parks issues in to the General Fund. He shared that he had been pushing that
for a while because the MDD was supposed to spur municipal and economic development.
3. PROPOSED RESOLUTIONS
a. Consider a resolution approving a Business Improvement Grant application not to
exceed $60,000.00.
Senior Economic Development Analyst Emilio Levario presented the item to the MDD Board. In
April of the current year, the MDD Board adopted revisions to the Business Improvement Grant
(BIG) Program's policy and guidelines. Mr. Levario reported that this was their first application
and project to be processed under those new guidelines. The building was at 2817 North Market
Street and various exhibits were presented of the existing conditions and proposed improvements.
The total estimated project expenditures were at one hundred thirty-four thousand, four hundred
eleven dollars and twenty cents ($134,411.20). The total estimated reimbursement for the eligible
improvements were just under sixty thousand dollars ($60,000). Mr. Levario ended on the note
that Staff recommended approval. Ms. Leticia Sandoval from the Spirit Real Estate Group also
presented herself and relayed she was available in case there were any questions from the MDD.
Considering the report they had previously received, Director Betancourth questioned if it was
prudent to still be spending money on these other programs. General Manager Jason Reynolds
answered yes as the money was already budgeted. Chief Financial Officer Teresa McKenzie fur-
ther spoke on matters concerning their budget and the funding of the different projects. Upon ad-
ditional questions, Mr. Reynolds expressed that he was confident that the money was there
A motion was made by Vice President Laura Alvarado and seconded by Director Sarah Graham
to approve Resolution No. 463, related to Item 3.a. The vote was as follows:
Ayes: President Brandon Capetillo, Vice President Laura Alvarado, Secretary
David P. Jirrels, Director Donna Winfrey, Director Sarah Graham, Director
Kenrick Griffith, Director Mike Lester, and Director Shaunna Bernshausen
Nays: Director Heather Betancourth
Other: Director Suhey Rios -Alvarez (Absent), Director Jacob Powell (Absent), and
Director Gary Englert (Absent)
Approved
RESOLUTION NO.463
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MU-
NICIPAL DEVELOPMENT DISTRICT APPROVING A BUSINESS IMPROVE-
MDD Board Regular Meeting Minutes
July 6, 2023
Page 6 of S
MENT GRANT APPLICATION SUBMITTED BY LETICIA SANDOVAL; AU-
THORIZING REIMBURSEMENT FUNDING UNDER THE BUSINESS IM-
PROVEMENT GRANT PROGRAM IN AN AMOUNT NOT TO EXCEED SIXTY
THOUSAND AND NO/100 DOLLARS ($60,000.00); 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 had nothing to add on the Hotel as it was previously discussed.
b. Receive the Baytown Municipal Development District's Quarterly Financial and
Investment Reports for the Quarter Ending December 31, 2022.
Chief Financial Officer Teresa McKenzie provided the MDD's Quarterly Financial and Investment
Reports for the Quarter Ending December 31, 2022, as follows:
Revenues
Sales Tax
Miscellaneous
Total Revenues
Expenditures
Administration
Economic Development
Parks
Streets
Sewer
Debt Service - Transfers
Total Expenditures
Net Change
Beg. Fund Balance
End. Fund Balance
Balance
$ 8,290,844 $ 2,083,611 $ 6,207,233
1.253 25.843 dI24,590
109,453 6,1
to
% PYActual Change$
25% $ 1,954,272 $ 129,339
486,762
75,000
411,762
15%
75,000
-
4,178,221
953,632
3,224,589
23%
160,988
792,644
2,700,091
998,859
1,701,232
37%
1,021.574
(22,715)
186,124
186,124
1
100%
494,365
(308,242)
500,000
-
500,000
0%
-
-
2,322,054
1,019,362
1,302,692
44%
187,487
831,875
10.373,252
3,232,976
7,140,275
31%
1,939,414
1,293,562
(2,081,155) (1,123,523)
MDD Budget Received ''
$8,292,097 / $2,109,453
25%
Investments (Book Value)
MDD Budget Spent Texpool
a$ $10,373,252 / $3,232,976 Balance $3,819,936
31% Earnings $25,843
14,923
Personnel, Services,
$32.3 K $343.1 K
MDD Board Regular Meeting Minutes
July 6, 2023
Page 7 of 8
C. Receive the Baytown Municipal Development District's Quarterly Financial and
Investment Reports for the Quarter Ending March 31, 2023.
Chief Financial Officer Teresa McKenzie provided the MDD's Quarterly Financial and Investment
Reports for the Quarter Ending March 31, 2023, as follows:
Revenues
Sales Tax
Miscellaneous
Total Revenues
Expenditures
Administration
Economic Development
Parks
Streets
Sewer
Debt Service & Transfers
Total Expenditures
Net Change
Beg. Fund Balance
End. Fund Balance
-- -
-
CY to PY
Budget
CYActual
Balance
%
PYActual
Change$
$ 8,290,844 $
4,174,366
$ 4,116,478
50% $
4,042,310
$ 132,055
1,253
80,980
(79,727)
6463%
649
80,331
8,292,097
4,255,346
4,036,751
51%
4,042,960
212,386
486,762
216,059
270,703
44%
75,000
141,059
4,178,221
1,794,778
2,383,443
43%
160,988
1,633,791
2,700,091
1,282,104
1,417,987
47%
1,021,574
260,530
186,124
186,124
1
100%
494,365
(308,242)
500,000
500,000
0%
-
-
2,322,054
1,161,027
1,161,027
50%
187,487
973,540
10,373,252
4,640,092
5,733,160
45%
1,939,414
2,700,678
(2,081,155)
(384,746)
2,103,546
2,081,155
1,183,697
(306,373)
$ 0 $
798,951
$
1,797,173
Personnel,
$116.5K Services,
MDD Budget Received ;t;�r,F-Ill
..a�rau+.'t.-
$790.0 K
$8,292,097 / $4,255,346
x) 51
4
r
Investments (Book Value)
MDD Budget Spent Texpool
as $10,373,252 / $4,640,092 Balance $2,904,085
723f
45% Earnings $80,980
2 3 3"K
MDD Board Regular Meeting Minutes
July 6, 2023
Page 8 of 8
5. MANAGER'S REPORT
a. The next Baytown Municipal Development District meeting is scheduled for
Thursday, August 3, 2023 at 4:30 p.m., in the Council Chamber located at City Hall, 2401
Market Street, Baytown, Texas, 77520.
General Manager Jason Reynolds recited that the next MDD Meeting was scheduled for Thursday,
August 3, 2023 at 4:30 P.M., in the Council Chamber.
6. ADJOURN
With there being no further business to discuss, President Capetillo adjourned the July 6, 2023,
MDD Board Regular Meeting at 5:21 P.M.
i
Angela Ja kson, Assistant f% eta
City of Baytown s