Master Plannning - Regular Meeting

Okay, good morning, everyone. I think we have a quorum. So if Miss Rebecca, if you would, please call the roll.

Chairwoman Kaylin Paxson.

Present.

Board members Roland Barrera is absent. Sylvia Campos. Here. Eric Cantu, absent. Brent Chesney. Here. Paulette Guajardo. Here. Gil Hernandez. Here. John Maris. Here. Mike Pesley. Here. Everett Roy is absent. Connie Scott. Here. Mark Scott is absent. Carolyn Vaughn.

Here.

OK, we do have a quorum present to conduct the meeting.

Okay, thank you, Ms. Rebecca. So at this time, we will move on to public comment. Do we have anyone here that would like to make public comment? All right, seeing none, the next item is the minutes. Are there any corrections to the minutes? Has everyone had a chance to look over those? If there's none, then I'll entertain a motion to approve the meeting minutes. Okay, there's a motion and a second. All in favor say aye. All opposed? And the motion carries. Next on the agenda, we have our TERS 2 financial report.

Thank you, Chairwoman. Good morning, everyone. Sergio Villasana, Director of Finance and Procurement here. Included in your agenda packet are the unaudited financial statements for tax increment reinvestment zone number two, or TERS number two, Financial statements include the balance sheet and the income statement. This particular zone has two funds, one for operating and one for capital improvements. I do apologize, we had an oversight as far as the income statement for the operating fund, not included in the original agenda packet. Those should have been handed out this morning. So I do apologize for that oversight. But we'll jump into the presentation here. Did you resume?

Okay, so we'll jump into the presentation here.

Just briefly remind on tax increment reinvestment zone number two. The participants in the zone when the zone was extended includes only the county, Noyesis County, as well as the city of Corpus Christi. And the next slide here is a nice snapshot of the investment the board has done into public improvements for tax increment reinvestment zone number two. A total of $82 million has been invested for public improvements, with about $49 million or more than half coming from the city of Corpus Christi, followed by Noyesis County contributing about $23.6 million. This next slide is your statement of revenues, expenditures, and changes to fund balance, or most commonly known to folks as the income statement. So looking at your total revenues, starting with your amended budget, go into your total revenues line. For fiscal year 2026, a total of 8.2 million was budgeted. We have 8.1 collected, with about 38,000 of revenue spending to be earned. Moving down to total expenditures, a total of 11.4 million was budgeted for total expenditures for the fiscal year. 8.7 has been spent, leaving about 2.7 of the funds unspent, which is largely the transfer out to your capital improvement projects. Going to your bottom line, the anticipated fund balance on a budget basis was $472,820. As of April 30th, the fund balance amounts to $3,161,500. This next slide is a forecast of funds available for commitments. We start with the first row with fiscal year 2026 with a fund balance of $3.1 million. We expect those remaining revenues to come in, and we forecast out the Pending commitments and other expenditures, which is your capital commitments are pending of 1.7. Administration and other expenses amount to $328,000. This gives us a forecast of available funds at the end of fiscal year about $1.1 million or $1,085,563. So we take the current revenue and forecast that out with a 1% growth. You'll see here that your annual revenue somewhat decreases year-over-year and that's because of the participation in the TERS contribution amount starts to decrease starting in fiscal year 2028 with the city going down from 100% to 75% and from there both city and the county incrementally decreased by 5% to we hit a floor of 50%. Of course those projections can change with a nice increase in taxable value or with an increase in the property tax rate or it can also with a decrease in tax rate, if taxable values are stagnant, then we could also see a decrease in revenues going into this fund. Overall, we keep our development commitments and capital commitments lined up with what's been committed to as far as contracts. And then administration of the expenses are kept flat from the current year. So overall, you'll see we have a fund balance of $1.85 million. And looking at that last column, we kind of stay flat at $283,000. because we do have some major capital commitments, as well as development commitments, public improvement commitments. And then you'll see right around 2031, there's a ramp-up of funds available for commitments of 1.1, and it continues to grow over the following years. This next slide is a snapshot of project-specific development commitments. These expenditures, a total of 21.8 million has been committed to public improvements, We would only pay these out if there is incremental taxable value growth within the zone. So the improvements and the increase in value within that zone would fund these expenditures. If there is no increase, then we would not pay those out. The next is Lake Padre and Whitecap development public improvement commitments. A total of $13 million is pending here for these projects. We have no pending expenditures for fiscal year 2026. We anticipate about $3.7 million to be expensed here in 2027. We then have this slide covers in our capital commitments for public improvements. A total of $35.6 million has been committed for the remaining life of the zone with about $1.7 million, which is a transfer over to the Capital Improvement Fund pending for 2026, and then in 2027, we continue the transfers from the operating fund to the capital improvement fund for capital improvement expenditures. Last slide here is the administration and other expenditures. In 2026, we have $328,000 pending to be spent and or transferred out of the fund, with about $77,000 related to administration costs. $250,000 is set aside for PAC RECHANNEL maintenance, and about $500 for professional services.

Yes, go ahead.

That is a cumulative amount from 2026 through 2042 to fund the administrative cost for the city. Yes, sir. Lastly, we have a snapshot of your capital improvement projects. A total of $40 million has been budgeted for these projects. Expenditures up through April amount to $18.3 million. We also have about $1.4 million of encumbrances. This leaves a budget balance for these projects of about $20,913,409. And I'll stand by for any questions.

Thank you very much for your presentation. Do we have any questions on the financials? One here. Board Member Morris.

Thank you, Madam Chair. I had a question on the administrative costs for this tourist and others just in general. I mean, there's always going to be an anticipated administrative cost. Is that correct? Would you say that's a fair statement? Yes, sir. Most of the time it's done internally, though, right? But there are Based on other terms, there are administrative costs that are passed on to, say, an entity that's separate to still run the administration of it.

So any of our funds outside general fund have an administrative cost. So whether it be the water fund, wastewater fund, stormwater or utility funds, enterprise fund, all the tax increment investment zones or type A, type B funds. The cost of accounting for those and other administrative expenses are charged to these separate, basically how we treat them as separate checking accounts. We don't come up with that calculation. We provide support documentation for time worked to a third party that does this for a living, and they kind of determine, okay, what is the cost to maintain these funds? And they come up with that value and send that back over to the city's finance department, and the finance provides that to budget to put into the different funds' budgets.

I appreciate that and it's just more for clarification for myself that there's a cost that's always built in to run each of these funds and especially each of these zones as well. So thank you, appreciate it. Yes, sir.

Board Member Chesney.

Yes, ma'am. And then do you have any calculation? Because this is the general fund administration. Do you or would you have it somewhere else? Because this is then it's a plus plus plus. There's also admin costs on every project that gets charged back as well. Is that not a question for you at this point?

So the transfer of general fund that you're seeing that's on the presentation, that is strictly for the administrative cost or I guess the overhead cost for accounting IT. General fund? Right. So like my position and the finance department positions, we're housed in general fund, but we're managing over hundreds, at least 200 to 300 funds outside of general fund. And so that's kind of the cost to fund us.

So depending on the number of projects that are done, $40, $50 million of the projects that we're looking at, there's also going to be administrative costs on top of that. It's going to come out of each project for engineering, for X, Y, Z.

That's going to be another large chunk that we don't know at this point, I'm sure. That would be a separate cost on the cost of the project. That would be for the engineering services. So this is more for the general fund. Right. This is just the accounting side. Okay. Thank you.

Board member Puzzley.

So tell me again, how do they determine this? I mean, you said you the city hires a third party company that calculate these. Is that what you say?

Yes, sir. So annually we provide we're provided with worksheets from this third party to complete as far as time and effort for the we commit to different the way the tours and other funds are set up are different funds or what we call departments and organizations within the within the city. and we provide this third party with the time and effort spent on these funds, and they determine what that cost allocation should be, and then they provide that back to the city. We review it with the budget department to kind of identify any discrepancies, if there's any significant changes. Those are usually questioned by the budget department, back to finance, and finance hands it over to the third party and say, hey, what happened here, and then they'll provide us kind of the explanation for that. Once we kind of come to agreement that the numbers look accurate, those are then budgeted between the different funds.

Okay, thank you.

Okay, any other questions on this item? All right, there's no questions for this one. Thank you for that presentation again.

Thank you.

So, Board, for our next item, we are to approve the proposed fiscal year 2027 operating budget. My understanding is... board member Chesney is interested in potentially requesting a table on this item, and I know working with city managers and ONI, there may be some other items that we're looking at adjusting, but I'll let you speak real quick. Commissioner, board member.

Thank you, Madam Chair. I appreciate that. Yes, I would respectfully ask that we table this budget to allow for the county's financial officer and county attorney to get together with the city to review some questions that I think I really don't want to get into an hour debate today. I know y'all got a full day and I'd rather try to do some of this between the staffs before I bring it all out here. I just have a lot of questions that I think will take a long, long time if we go into it. So I would respectfully make a motion to table the budget. and have a specially called meeting in July for the downtown tourists. Cause I know I always forget your budget cycles ahead of ours. And so y'all got to get yours in by July. Uh, and so I would make a motion to table this to a specially called meeting in July so that we have some opportunity to review some things.

So we have a motion and a second. Board, if his motion prevails, what we can do is set a meeting. We don't have one scheduled until the fall, if I'm not mistaken. So if we can set one for July, then we'll be able to really go over those concerns and any adjustments necessary.

And I'm happy to make that part of the motion. If there's a date now that you want to set it for a Tuesday that y'all are meeting, I'm happy to do that.

i keep looking at you miss buxton but do we need to go confer calendars before we set that now okay so we'll just say to a to a date in july will that work okay perfect do we have any other discussion on that or consideration are we okay with passing that presentation for now all right so there's a motion on the second and a second on the floor with no further discussion all in favor say aye aye Any opposed? Nay? Okay, the motion carries, and that being our final business item, this meeting is adjourned. Thank you.