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2018 04 03 MDD Minutes, SpecialMINUTES OF THE SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT April 03, 2018 The Board of Directors of the Baytown Municipal Development District (MDD) met in a Special Meeting on Tuesday, April 03, 2018, at 4:32 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Stephen DonCarlos Laura Alvarado Reggie Brewer Charles Johnson Gary Englert Robert Hoskins Dave Jirrels Rick Davis Ignacio Ramirez, Sr. Leticia Brysch President Secretary Director Director Director Director Director General Manager General Counsel Assistant Secretary President DonCarlos convened the April 03, 2018, MDD Board Special Meeting with a quorum present at 4:32 P.M., all members were present with the exception of Directors Betancourth, Hernandez, Himsel, and Presley who were all absent. 1. MINUTES a. Consider approving the minutes of the Municipal Development District Special Meeting held on March 08, 2018. A motion was made by Secretary Laura Alvarado and seconded by Director Charles Johnson approving the March 08, 2018, MDD Board Special Meeting minutes. The vote was as follows: Ayes: Director Charles Johnson, President Stephen H. DonCarlos, Director Gary Englert, Director Robert C. Hoskins, Director David P. Jirrels, Secretary Laura Alvarado Nays: None Other: Secretary Reggie Brewer (Absent), Director Mary Hernandez (Absent), Director David Himsel (Absent), Vice -President Chris Presley (Absent), Director Heather Betancourth (Absent) Approved 2. PROPOSED RESOLUTIONS MDD Boar Special Meeting Minutes Apn103, 2018 Page 2 of 6 a. Consider a resolution approving the Baytown Municipal Development District's Investment Policy and Strategy Statement in accordance with the Public Fund's Investment Act. Finance Director, Wade Nickerson presented the agenda item and stated that Resolution No. 329 approves the MDD's Investment Policy and Strategy Statement changes that included adding authorized training organization; identifying eligible collateral securities and frequency of valuation; and amending the diversification level. Director Hoskins inquired if this policy limited opportunities for better investments with more yield being that the safest securities are those with the less yield. In response to Director Hoskins inquiry, Mr. Nickerson stated that this policy could potentially limit the return of the investment, but staff perceives the policies interpretation to say that they will follow the procedures in order to not lose the principal and invest it in the best rate environment possible, in which he further noted that staff s goal is to never lose the original principal amount of the investment. Director Hoskins further inquired of the reason for primarily looking into short term securities. Mr. Nickerson stated that these funds are put in such a pool for immediate accessibility purposes. With regards to the training portion of the policy, Director Hoskins inquired for clarity if there was an amendment that included adding "but not limited to" as well as "providing a list of agencies" to the part in the policy that references the statement to the effect of professional organizations and associations that may provide investment training. Mr. Nickerson stated that he believed that this paragraph is the same in other City documents and noted that the reason for the statement in the policy as it is proposed is because there are many training available, but much is not recognized by the state as adequate training to meet the PFIA requirements. Director Hoskins further inquired if CD's were worthy investments being that they have a very low yield. Mr. Nickerson stated that, generally, they don't invest in this type of investment although this policy allows for such, but if they did it would normally be from a local bank that paid competitively. Additionally, he responded to Director Hoskins inquiry regarding the ratios being set to amortization of the fair market value versus the book value and stated that the fair market value and the book value are set close together to allow for a better investment control. A motion was made by Director Robert C. Hoskins and seconded by Director Charles Johnson approving Resolution No. 329, regarding agenda item 2.a. The vote was as follows: Ayes: Director Charles Johnson, President Stephen H. DonCarlos, Director Gary Englert, Director Robert C. Hoskins, Director David P. Jirrels, Secretary Laura Alvarado Nays: None Other: Secretary Reggie Brewer (Absent), Director Mary Hernandez (Absent), Director David Himsel (Absent), Vice -President Chris Presley (Absent), Director Heather Betancourth (Absent) Approved MDD Boar Special Meeting Minutes April 03, 2018 Page 3 of 6 RESOLUTION NO. 329 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT ADOPTING THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT'S INVESTMENT POLICY AND STRATEGY STATEMENT IN ACCORDANCE WITH THE PUBLIC FUNDS INVESTMENT ACT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 3. REPORTS a. Receive the Economic Development Foundation's First Quarter Report. Mr. Rusty Sinac, Chairman of the Baytown West Chambers County Economic Development Foundation "EDF" stated that over the last eight (8) years working closely with the EDF this area has received great returns on all areas of economic development. He stated with regards to development that it takes much time and effort to close a deal and further noted that it might be worthwhile for the MDD board to consider having a couple of work sessions with EDF staff. Mr. Sinac stated that the City of Baytown, Harris and Chambers Counties, Lee College and the GCCISD all have had significant increases in tax revenues because of the direct involvement of the EDF assisting company's investment in this community. Additionally, Mr. Sinac noted that the EDF accomplishes a huge amount of work with a very modest staff budget and introduced Mr. BJ Simon to present the detailed EDF report. Mr. Simon stated that the EDF's first quarter report for October through December 2017, was submitted for the boards review and extended an opportunity for the board to ask questions in its regard. Afterwards he presented the EDF's annual report and stated that its mission and purpose is to foster economic growth. He stated that in 2006, they adopted their programs of work which included the following categories: Stimulate & Encourage Business, Workforce Analysis & Development, Facilitate/Administer Tax Incentive Programs, Conduct Educational & Informational Seminars, Support Foreign Trade Zones, Research & Economic Analytics, Collaborate with Public Officials & Economic Development Allies, and Promote Regional Tourism. Mr. Simon stated that in the year 2017, they responded to 316 requests for information and hosted 25 site visits physically, virtually, and table -topped. He noted that virtual and tabletop was emerging trends that the prospects used for interactive meetings. He stated that manufacturing was the most represented sector that they came across and that petrochemical continues to be an area of interest. He stated that the logistic distribution and transportation sector is growing significantly in response to all of the polyethylene, plastics, and petrochemicals being produced by the chemical expansions in this area. Mr. Simon stated that Baytown and Chambers Counties continue to be on the radar for foreign investments from Japan, South Korea, Malaysia, India, China, Turkey, and Greece. He stated that there was approximately $600 million in investments with regards to business recruitment and expansion with the creation of 468 jobs. He noted that they provided support for jobs that included Targa Downstream LLC, Vinmar International, Lone Star NGL, Denbury Onshore, Talke USA, Vortech, Port 10, AmeriPort B7, MDD Boar Special Meeting Minutes April 03, 2018 Page 4 of 6 JSW USA, Covestro AG. He further noted that the following activities were coming online: Ravago Americas, Plantgistix, PIRET (Clay), DUNA-USA, TopSail Energy, Tidal Tank, SBE/Raven, and Enterprise. Additionally, he provided a list of some major area employers. During further discussion, Mr. Simon presented a chart created by Dr. Bill Gilmer of the University of Houston, which indicated a precipitous drop from the year 2017 to year 2018, of $5 billion of potential investments in the petrochemical sector. Mr. Simon noted that there were still projects announced that plan to develop and/or expand. He stated that sales tax trends were very active from the year 2000 to year 2017, but further noted that after Hurricane Ike there was a negative impact, in which there's the same expectancy for Hurricane Harvey. Mr. Simon stated that they hosted the first Industrial Expansion Symposium back in the year 2012, and when the expansions were first announced they looked at how the expansions would impact the socio -economical profile of the City of Baytown. He stated that in reviewing such data, around year 2014, 15.4% of the families were living at or below poverty and has since decreased to 9.3%. Additionally, he stated that in a comparison from the year 2013 to 2016, the percentage of families living at or below poverty also decreased. With regards to retail development, Mr. Simon stated that as recommended by consultants, they attended the ICSC Conferences: Texas Deal Making held in Dallas and RECON held in Las Vegas. He stated that hotel development/recruitment emerged with two (2) developers interested in the Bayland Island development: Gatehouse Capital and Garfield Public Private. He stated that the Mall's development plan is in place and there's been some consensus by all of the anchors so that they can move forward with the final development plan. Mr. Simon stated that MDD funded an investment platform called SiteSeer, which is primarily to understand a retail leakage in a dynamic format for a broader basis. He provided a map generated by SiteSeer that illustrated data collected for one (1) year from those who patronized Buc-ee's through an app called Uber sector. He explained that the Uber sector app absorbs the data from the assumption that if a smart phone has a location app, it's able to track the phone; therefore, if the location app is static for six (6) to eight (8) hours, that's where the phone owner lives. He noted that the people who patronized Buc-ee's were from Houston to Beaumont. Additionally, he noted that developers are no longer hesitant about bringing their business to Baytown and that there's harmony between the retail, residential, and industrial developments. During further discussion, Mr. Simon stated the EDF supports H-GAC's sub -regional planning, Chambers County Industrial Development, and the environmental strategy that's managed by Airco. He stated that Cedar Bayou continues to be an area of interest and they work with the (3) improvement district's in Chambers County. He noted that Chambers County has undertaken a sub -regional drainage project along the Kilgore area. Mr. Simon stated that the heavy haul roads that the county has been working on since 2004, was brought online last year and coincidentally a bill was also passed that increased the allowable weight to 1,000 pounds. He stated that they facilitate local, state, and federal tax incentive programs, as well as, provide support for workforce preparedness programs provided through Lee College, the Texas Workforce Commission, United Way, GCCISD, HGAC, and Gulf Coast Workforce board. He noted that they had 28 referrals for recommendations for assistance and that the economic vitality benchmark analysis will be presented towards the end of this year. MDD Boar Special Meeting Minutes Apnl 03, 2018 Page 5 of 6 Lastly, Mr. Simon stated that the target clusters that they will focus on in the next five (5) years include: advanced manufacturing; logistics and distribution; and healthy lifestyles and recreation. 4. EXECUTIVE SESSION a. Recess into and conduct an executive session pursuant to Sections 551.071 and 551.087 of the Texas Government Code to deliberate the offer of a financial or other incentive to a business prospect and to seek the advice of the District's attorneys on legal matters related thereto. At 5:18 P.M., President DonCarlos recessed into and conducted an executive session pursuant to Sections 551.071 and 551.087 of the Texas Government Code to deliberate the offer of a financial or other incentive to a business prospect and to seek the advice of the District's attorneys on legal matters related thereto. At 5:49 P.M., President DonCarlos reconvened the Open Meeting of the MDD Board Special Meeting and announced that in accordance with Section 551.102 of the Texas Government Code, no action was taken in the Executive Session. 5. MANAGER'S REPORT a. The next regularly scheduled Baytown Municipal Development District meeting is Thursday, May 03, 2018, at 4:30 P.M. in the City Council Chamber, City Hall, 2401 Market Street, Baytown, Texas 77520. General Manager Davis stated the next regularly scheduled MDD meeting is Thursday, May 03, 2018, at 4:30 P.M. in the City Council Chamber, City Hall, 2401 Market Street, Baytown, Texas 77520. 6. ADJOURN A motion was made by Director Charles Johnson and seconded by Director David P. Jirrels adjourning the April 03, 2018, MDD Board Special Meeting. The vote was as follows: Ayes: Director Charles Johnson, President Stephen H. DonCarlos, Director Gary Englert, Director Robert C. Hoskins, Director David P. Jirrels, Secretary Laura Alvarado Nays: None Other: Secretary Reggie Brewer (Absent), Director Mary Hernandez (Absent), Director David Himsel (Absent), Vice -President Chris Presley (Absent), Director Heather Betancourth (Absent) Approved MDD Boar Special Meeting Minutes April 03, 2018 Page 6 of 6 With there being no further business to discuss, President DonCarlos adjourned the April 03, 2018, MDD Board Special Meeting at 5:50 P.M. eticia Brysch, Assistant S c etary City of Baytown