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
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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
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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,
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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.
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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
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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