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2013 03 07 MDD MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT March 07, 2013 The Board of Directors of the Baytown Municipal Development District (MDD) met in a Regular Meeting on Thursday, March 07, 2013, at 4:43 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Stephen DonCarlos Scott Sheley Robert Hoskins Dave Jirrels David McCartney Terry Sain President Vice President Director Director Director Director Robert D. Lciper General Manager Ignacio Ramirez, Sr. General Counsel Jason Cozza Deputy Assistant Secretary President DonCarlos convened the March 07, 2013, Municipal Development District (MDD) Board Regular Meeting with a quorum present at 4:43 P.M., all members were present with the exception of Directors Brewer, Capetillo, Hernandez, and Renteria who were all absent. 1. MINUTES a. Consider approving the minutes of the Baytown Municipal Development District (MDD) Board Regular Meeting held on February 07, 2013. A motion was made by Vice President Scott Sheley and seconded by Director David McCartney approving the February 07, 2013, MDD Board Regular Meeting minutes. The vote was as follows: Ayes: President Stephen H. DonCarlos, Director Robert C. Hoskins, Director David P. Jirrels, Director David McCartney, Director Terry Sain, Vice President Scott Sheley Nays: None Other: Secretary Reggie Brewer (Absent), Director Brandon Capetillo (Absent), Director Mary Hernandez (Absent), Director Mercedes Renteria III (Absent) Approved MDD Board Regular Meeting Minutes March 07, 2013 Page 2 of 6 2. REPORTS General Manager Leiper recommended that the agenda be taken out of order to consider agenda item 2.b. b. Present the Economic Development Foundation Annual Report for 2012. Mr. B.J. Simon presented the 2012 Baytown Economic overview report and stated that the mission and purpose of the Economic Development Foundation (EDF) is to foster economic growth through programs of work from the following: Stimulate & Encourage Business, Workforce Development and Analysis, Facilitate Tax Incentive Programs, Conduct Educational & Informational Seminars, Support Foreign Trade Zones, Economic Data Clearinghouse, Collaborate with Public Officials & ED Allies, and Promote Regional Tourism. He stated that in 2012, the EDF responded to 168 requests for information and had 25 site visits. Mr. Simon stated that the following projects were announced in 2012: Chevron Phillips On- Purpose I - Hexene; ExxonMobil Ethane Cracker / Downstream Projects; Enterprise Products; NEOK "Frac" #3; and Lone Star NGL "Frac" #2. He stated that the following retail established in 2012: Texas Roadhouse, Pipeline Grill / "WashaBeeria ", Firehouse Subs, Carl's Jr., Vitamin Shoppe, Fish Place, Baskins, and Chambers Town Center. Mr. Simon stated that the EDF facilitated incentive programs for the following: Chambers County Tax Abatements, Harris County Tax Abatement, City of Baytown IDA, Texas Enterprise Zone Program, Texas Enterprise Fund Program, Economic Development Diversification Program, Chapter 380 Agreements, CH. 313 Tax Incentive — GCCISD, and the FTZ - alternative site field (ASF). Further in the report overview, Mr. Simon stated that in 2004, the economic development strategic plan was to focus on growing the following industry sectors: advanced manufacturing, energy, logistics & distribution, and retail /restaurants with recommendation in 2010 to include healthcare. He stated that in 2010 some key recommendations of the workforce development were to: align the efforts with "P -16" initiatives (pre -k - 4 year college completion); support Lee College and the local school districts in marketing efforts for vocational training optimizing dual- credit; to serve as a catalyst to leverage work force development resources, and to promote the use of Texas Workforce Commission (TWC) training programs. Mr. Simon stated that the quality of life recommendations were to market the Baytown/Chambers County area as "Stay - Cation" destinations, develop plan(s) to attract day tourism to the area, to develop and implement plans to integrate and optimize programming of Community Amenities and Assets, and to formalize image and branding efforts. Mayor DonCarlos inquired about the efforts being made in Austin to change the education system regarding the vocational education and apprenticeship program. In response to Mayor DonCarlos's inquiry, Mr. Simon stated that there's been positive feedback and that the Senate Bill 2, which gears toward increasing the number of course exams and allow for reciprocity for career and technical education courses to qualify for the end of the course examinations, has strong support of being passed. MDD Board Regular Meeting Minutes March 07, 2013 Page 3 of 6 a. Present the 2012 Baytown Economic Overview Report. Mr. Steve Spillette, President of Community Development Strategies (CDS) presented the 2012 Baytown economic overview report and stated that the data from the report reflected information up to the month of December. Mr. Spillette stated that Baytown's population grew fastest from 1960 to 1970 and its growth rate decelerated considerably from 1980 to 2000, well below that of Harris and Chambers counties and the overall region. He stated that Baytown's growth rate began to increase again after year 2000, but because Baytown's relatively slower rate of growth compared to other cities in the region meant that its total population rank dropped from 3rd in 2000 to 6th in 2010. Mr. Spillette stated that in the 10 years between the decennial census reports, Baytown's population has not changed dramatically by age group. He stated that the older working age population of 45 -64 increased 27% by almost 3,500 persons and the Baytown median age increased from 30.8 to 32.1 in that 10 -year period. Mr. Spillette stated that when comparing Baytown's population by age to the metro area it has a slightly lower proportion of working age adults (50.2 %) than the region (53.8 %), as well as, a slightly higher proportion of children and older adults but has, overall, a younger population. He stated that the median age of the region's population in 2010 was 33.2 compared to Baytown with 32.1. In regards to school district demographics, Mr. Spillette stated that the most prominent trend for Baytown in terms of ethnicity has been the rapidly increasing share of the Hispanic population and has primarily displaced the Non - Hispanic White population. He stated that Baytown's and Goose Creek ISD's Hispanic shares are similar to the region overall. He stated that Barbers Hill and Chambers County have much smaller Hispanic population shares and much larger Non - Hispanic White shares than the City of Baytown or the region. He stated that both Goose Creek ISD and Barbers Hill ISD have experienced strong enrollment growth with a noticeable uptick after 2000. Mr. Spillette stated that the share of economically disadvantaged students has remained relatively constant in Goose Creek ISD over the last several years and it has been slowly rising in Barbers Hill ISD though it remains at a much lower proportion of students. He stated that in terms of students meeting state testing standards the gap is much closer between the two districts. Mr. Spillette stated that Goose Creek ISD's student body is becoming predominately Hispanic, the African American population is relatively stable, and the Non - Hispanic White students is lower than that in the district's residential population. He stated that Barbers Hill ISD's student population is also trending more Hispanics, though it is still approximately ' /a Non - Hispanic White. Mr. Spillette stated that in terms of the adult population of 25 and older, Baytown's educational attainment profile is improving. He stated that from 2000 to 2010, a majority of the working age adults had a high school education and the proportion who was college graduates increased from 18.9% to 21.1% of the working age population. He stated that the share of college graduates is considerably lower in Baytown than in the region and that 21.1% of the Baytown adult population has achieved at least an Associate's degree or higher as compared with 33.2% in Harris County and 34.4% in the region. He stated that a large percentage (27.5 %) of Baytown adult residents are "near- completers ", and have completed some college courses. MDD Board Regular Meeting Minutes March 07, 2013 Page 4 of 6 Mr. Spillette stated that the City of Baytown has been adding households at a much slower rate than other entities tracked, including Goose Creek ISD. He stated that the proportion of family households as a share of City of Baytown total households is similar to that of Harris County. He stated that entities in Chambers County, including the portion of the City in Chambers County, have a higher proportion of houses labeled as family households. He stated that Baytown is dominated by middle - income households making between $35,000 and $99,999 accounted for roughly half of all households in 2010. He stated that the share of higher - income households has increased since 2000, and the share of the lowest- income households dropped significantly from 2000 to 2010. Mr. Spillette stated that Baytown household income is slightly lower than Harris County or the region as a whole. He stated that 27.5% of the Baytown households have income in excess of $75,000 as compared with 33.5% and 34.7% in Harris County and the region. Mr. Spillette stated that Baytown's labor force (the resident population working or seeking work) has increased since 2005 and by August of 2012, the labor force had risen to roughly 35,000 from the 2000 Census estimate of approximately 29,000. He stated that the Texas Workforce Commission estimated Baytown unemployment rate at 11.6 %, having risen significantly since 2008 which was substantially higher than the statewide unemployment rate of 7.0% in August 2012. There was inquiry as to what method was used to determine the unemployment rate. Mr. Spillette stated that he wasn't sure of how the workforce calculates the estimate on municipal level, but that they normally publish their data at the county level and some of the data comes from surveys of people. Mr. Spillette stated that the labor force and unemployment data is population based and not job based. Mr. Spillette stated that Baytown's businesses and jobs (the businesses in the City of Baytown and employees working in those establishments) are estimated at roughly 37,000 in 2013 and is expected that both the number and share of jobs in the construction sector would increase over the next several years to manufacturing facility development. Mayor DonCarlos inquired if this reflected jobs in Baytown or Baytown residents that have jobs in Baytown and where the Exxon employees are classified. Mr. Spillette stated that the data reflects jobs in Baytown. During further discussion, it was made aware that many of the industrial jobs, such as Exxon, are not in the city limits of Baytown and would not reflect in this data. Mr. Spillette stated that the workforce doesn't tract the ETJ. General Manager Leiper requested that Mr. Simon verify if data could be tracked by zip codes to include the industrial jobs. Mr. Simon stated that a customized survey could be done. Mr. Spillette stated that according Nielsen Business Facts and the Census, estimates less total jobs than what the workforce commission estimate for the city although the number of establishments has increased. He stated that the Texas Workforce Commission showed strong job growth in Baytown from 2011 to 2012 after a long period of stagnation, but that since 2005, Baytown has experienced a much slower rate of job growth than its local counties. Mr. Spillette stated that retail sales in Baytown after often lagging the county and region in terms of annual retail sales growth rate before 2008, is now experiencing change and is similar to those of larger areas. He stated that information provided by the state comptroller office states shows that Baytown used to exceed Harris County and the region overall in gross retail sales per capita MDD Board Regular Meeting Minutes March 07, 2013 Page S of 6 but fell behind after 2007. He stated that Chambers County's retail sales per capita were very high after 2005, indicating additional retail activity without much population growth. In regards to development related statistics, Mr. Spillette stated that building permit data received from the City of Baytown, shows that the recession, starting in the latter part of 2008, had a pronounced effect on new construction activity in Baytown, especially residential which activity declined to less than half of its typical pace prior to 2008. He stated that commercial permitting was slow from 2009 to 2011, but picked up in 2012. Mr. Spillette stated that in this report there was no comparison for permit activity for the overall regions. Mr. Spillette stated that according to Census, the City of Baytown and Goose Creek ISD have lagged the overall regions in terms of the rate of housing growth. He stated that the City of Baytown and Goose Creek ISD also have much lower housing occupancy rates than the neighboring jurisdictions. He stated that in 2010, the housing occupancy rate for Barbers Hill ISD and Chambers County were at 90% while Baytown's declined to the mid 80 %, dropping the occupancy rate. Mr. Spillette stated that the neighboring jurisdiction and Chambers County share of vacant units increased. Mr. Spillette stated that Baytown's single family / multifamily housing unit split is very similar to that of the region and that Harris County has a higher proportion of multifamily housing than the City of Baytown. He stated that in all geographies except Chambers County, the share of single family housing increased from 2000 to 2010. He stated that Baytown's proportion of renters is slightly higher than the region, and much higher than that in Chambers County. Mr. Spillette stated that the average home prices in Baytown and Goose Creek ISD declined significantly after 2007, in contrast to prices in Barbers Hill ISD, Chambers County, Harris County and the total region area. In further overview of the report, Mr. Spillette stated that Baytown's hotel room inventory has increased dramatically since 2003, at a faster pace than the metropolitan area; however its room revenue has increased slower, which could mean that there is lower rental rates or there is no increase in rates. He stated that 60 -65% is generally considered the healthy occupancy and Baytown is a little lower than that point. He stated that Revenue per Available Room (RevPAR), which estimates on a nightly per room basis how much revenue is being earned by the entity in Baytown, has remained constant for a decade and is at levels far below region overall and considered to be under performing. Mr. Spillette stated that Baytown's taxable assessed value has grown substantially since 2002, but did have some drops. He stated that these trends have roughly mirrored that of Harris County, but recent growth and decline swings have been more dramatic in Baytown. General Manager Leiper stated, in regards to the assessed values, that the City received rating call reports from Moody's and Standard Poor's and what's not shown in the $3 billion in assessed value, is the $5.4 billion of the IDA plants (facilities) and stated that the city receives 45% of the general fund revenue from those plants. MDD Board Regular Meeting Minutes March 07, 2013 Page 6 of 6 Mr. Spillette stated that the information that they are retrieving may also be requested from others looking to invest in the Baytown community and if there are any suspected discrepancies they should be addressed. 3. ADJOURN A motion was made by Director David McCartney and seconded by Director Terry Sain adjourning the March 07, 2013, MDD Board Meeting. The vote was as follows: Ayes: President Stephen H. DonCarlos, Director Robert C. Hoskins, Director David P. Jirrels, Director David McCartney, Director Terry Sam, Vice President Scott Sheley Nays: None Other: Secretary Reggie Brewer (Absent), Director Brandon Capetillo (Absent), Director Mary Hernandez (Absent), Director Mercedes Renteria III (Absent) Approved With there being no further business to discuss, President DonCarlos adjourned the March 07, 2013, Municipal Development District (MDD) Board Regular Meeting at 6:02 P.M. `� ac Leticia Brysch, Assis eGretary �\ City of Baytown