Transportation and Economic Development Corporation - Regular Meeting

All right, good evening. I'll call the July 23rd meeting and the Transportation Economic Development Corporation meeting to order. Anne, will you do the roll call, please?

President Flores?

Here.

Vice President Therrell?

Here.

Secretary Villareal?

Here.

Board Member Bassey? Here. Board Member Mossman? Here. Board Member Lit-Yvonne? Here. Board Member Sherwood?

Here.

Thank you. Item C, citizen communication. Anybody here wishing to speak to the commission? Seeing none. Item D, approval of minutes. D1, consider approval of the minutes from the May 28, 2026 Transportation Economic Development Corporation meeting. Anybody have any questions on the minutes? Entertain a motion to adopt the minutes. I make a move. Second. Second.

All right.

I have a motion by Secretary Villarreal, second by Vice President Thurow. Any other discussion? All right. All in favor, signal by raising your hand. That passes unanimously. Thank you. Item E, presentations. E1, consider a presentation for the third quarter financial update. Kevin.

Good afternoon. Good afternoon. This item E1 is a third quarter financial update with actuals due June 30th, 2026, covering the first three quarters of this current fiscal year. Sales tax has been weird the last few months. June 2025, going back a year ago, was a record sales tax collection for the city of Round Rock. As a reminder, Type B Corporation gets half cent of the two cent total local option sales tax that goes to Round Rock. So June 2025 was a record month, the highest we've ever collected in sales tax in a single month before. June 2026, came in 15% higher than that record month. When we got July sales tax in, we were up 55% over what we brought in in July 2025. So definitely a good problem to have. Again, sales tax is just looking weird. We are not... IMMEDIATELY SPINNING THIS EXCESS. WE DID NOT GO INTO OUR FIVE-YEAR ALLOCATION PLAN, WHICH WE'LL COVER LATER THIS EVENING, AND MAKE ANY CHANGES IN OUR ASSUMPTIONS. WE'RE PROJECTING 3% SALES TAX GROWTH. ALL TO SAY THE CHART BEFORE YOU, AGAIN, LOOKS WEIRD. WE'RE TRENDING 10.6% ABOVE FISCAL YEAR TO DATE. We are in contact with we have a sales tax consultant works for the city. He's looking into this few months of Extremely high collections making sure that the city does indeed get to keep those revenues we have in the past had Circumstances where some sales tax revenues come in and then they are taken back once corrections are made it's all to say the chart looks Different than normal, we're trending 10.6% fiscal year above the prior year. Hopefully you'll have some more answers for you when I'm back for the quarter four financial update. We continue to watch sales tax closely, and that's how it's trending. Looking at our expenses through June 30th through the third quarter. Transportation expenses are trending right about where we expect them to be at $69.15 million spent on the TCIP projects, the debt service on the outstanding debt that the Type B Corporation has agreed to pay for those roadway CEOs that we issued. Economic development in parks trending, again, right on track at $25.55 million. We see some of the economic incentive payments. Some of the economic incentive payments, The work that they're paying is continued to move at a quick clip, so we're happy to see that $20.13 million going out in line with the budget, and we're trending on track for the fiscal year. Just as a reminder, looking back at Type B business this year to date, we met back in April and had that debt service payment agreement in association with issuing those 2026 combination tax and limited revenue CEO bonds, $30 million was issued. And that completes my quarterly financial update. Happy to answer any questions you may have.

Any questions for Kevin?

Is there anything to the sales tax that's driving those numbers up? Is there something specific?

Yes. There is a new sales tax payer that is a significant one. The sales tax is confidential down to the payer level, but there is a significant new payer we've identified and looking at if that is a new revenue source for the city or not.

Any other questions? Do you anticipate that sales tax revenue to continue to go 10% for the rest of the year, or what are your thoughts on that?

I would estimate that June and July will stay like they are. August will come out. It always comes out the second. First Wednesday after the first Friday of the month. So we'll get August and we'll see. I frankly didn't expect July to come in like it did. So, I mean, normally sales tax is pretty regular. There's little swings. This is just a large one. So, yeah, I really don't have a projection for August. Thank you. But we'll definitely keep the board informed.

All right, no other questions? All right, thank you, sir. I'm going to take us to resolutions. Resolutions F1, consider public testimony regarding and a resolution approving the FY26-27 operating budget for the Round Rock Transportation Economic Development Corporation.

It's that time where we bring forth the proposed budget for the upcoming fiscal year. The city of Round Rock had their all-day budget workshop this morning, so we covered all the city's funds, the Type B included. So this evening we have proposed to the board the fiscal year 2027 budget, which again will cover October 1 of this year through September 30 of 2027. We have a total proposed budget of $94 million for 2027. This is the proposed years in blue on this table in front of you, along with the five-year outlook that we'll see again in the next agenda item. Let's look at the five-year allocation plan. Revenues for the year are projected at $97.9 million. We have sales tax revenues projected at $33.3 million. Again, we're projecting just a conservative 3% increase from this year's, the actuals we were trending on before June and July. We have $14.6 million in contributions and other, that is participation from Williamson County, which is contributing towards some of our roadway projects. We have grant proceeds of $3.4 million roll into that, as well as interest earnings budgeted. And then we do have budgeted $50 million issuance of transportation COs as we continue to fund roadway projects through that debt instrument. 2027, as proposed, is the kind of last big year. It then drops off to $15 million planned for 2028 and nothing beyond that as of now. On the transportation uses, we have $91.9 million planned for 2027, part of the city's community investment program capital projects. Economic development, we have $1.7 million. And in parks and recreation, we have $6.2 million, which has already been approved by the board for Old Settlers Park Track and Field Project. And that concludes my presentation on the proposed budget. Happy to answer any questions the board may have.

Any questions on F1? Ms. Mosman.

Yes, if you can give some clarity, please. There's some pretty significant differences in a couple of items, and I just wanted to make sure that we understood what this was going forward in regard to the economic development expenses committed. This year we had a significant amount of $23 million, and next year we're projected or estimated for $450,000. Is that going to be a significant impact to the city in regard to economic development that we're trying to incur?

Yes. So this item is looking at the proposed 2027 budget. The biggest difference in economic development payments In the current fiscal year we are had the economic incentive deal with the district That's going out so that capital outlay as they are continuing to Put in that public infrastructure that our agreement has us reimbursing them for we project them spending through their whole 25 million dollars this fiscal year so none of it showing up next year when we looked at the proposed budget for the current fiscal year and We didn't anticipate them moving quite this quickly, so we had those payments spread over fiscal year 2026 and fiscal year 2027, but in bringing forth this proposed budget and the revised five-year allocation plan, they just are moving through so quick. They have a few million dollars remaining, but again, we're expecting another reimbursement request to come forward to them, which explains why the economic development expenses for 2027 are so much lower.

And then also, can you please clarify on the TCIP projects? It's not as significant by any means, but we went from 119 million to only 81 million. Is that just due to the fact of timing in regard to the project completions?

Yes. As we move forward, those roadway projects, we just had more expenses budgeted to occur during the current year. So as we're looking at next year, we're still expending a lot. But as we wrap up some of those projects, just the amount budgeted for 2027 has fallen off.

Thank you.

Any other questions? All right. This is a public hearing, so I'll open up the public hearing to anyone wishing to speak on item F1. Seeing none, public hearing is closed. Entertain a motion to adopt Resolution F1. So moved.

All right.

Do we have a second?

Second.

All right. I have a motion by Board Member Mossman, second by Board Member Sherwood. Any other discussion? All right, all in favor signal by raising your hand, please. All right, that passes unanimously. Thank you. That'll take us to item F2. Consider public testimony regarding a resolution to adopt a five-year funds allocation plan for FY27 through 2023 for the Round Rock Transportation Economic Development Corporation. Kevin.

President and board members, this item is the adoption of the revised five-year funds allocation plan, which will cover us from fiscal year 2027 to fiscal year 2031. Just a reminder of our financial policies. The policy directs a five-year plan to allocate funds based on needs, and this is reviewed and updated at least annually. We typically bring it to the board in conjunction with consideration of the annual budget, but we also do have the ability to review and adopt as other changes come up mid-year. The plan does include our whole transportation community improvement program, looking at type B funding, some of the certificates of obligation, SIP loans that we've taken down in the past, et cetera. Projects do return for the board for approval for significant changes in scope and or an increase to the budget. None of this is proposed to be changed this year. Looking at revenues, again, fiscal year 2027, as the board just considered the budget, we have $33.3 million projected in sales tax revenues coming from the half-cent sales tax that funds the Type B Corporation. We are assuming 3% growth to continue throughout the duration of this five-year plan out to $37.5 million by 2031. Looking at the five-year funds allocation plan, we have $349.4 million. You can see here some of those differences from prior year we just discussed as we have continued to spend down and get some of those transportation projects completed, taken off the funding table as they're actually on the real streets out there. Excuse me. Looking at transportation, it includes $328.7 million. This makes up 94% of the total five-year funding allocation plan. We have $123.7 million in TCIP programmed on the TCIP list approved by the board. Some other projects there, we have $48.3 million planned for principal and interest on the outstanding debt. Those are the roadway CEOs that we've issued over the past and have planned in the future. And then $140.6 million in pipeline planned projects On the economic development side, we have $14.6 million in the five-year funds allocation plan, including the continuation of the chamber contract. Under the EIP to be allocated, we have $6.7 million kind of on hold out in the plan to cover us the next five years of what is known and may still be to come. I don't have a separate slide, but again, there is an amount for Parks and Recreation, $6.2 million to be expensed all in fiscal year 2027. You saw that earlier on the slides. And that concludes my walk through the five-year allocation plan. Happy to answer any questions the board may have.

Any questions for Kevin? All right, seeing none. This is a public hearing, so I'll open up the public hearing if anybody wishes to speak on item F2. Seeing none, public hearing is closed. Entertain a motion to adopt item F2. So moved. So I have a second. Motion by Vice President Thurow, second by Board Member Sherwood. Any other discussion? All in favor, signal by raising your hand. Passes unanimously. Thank you. And that is everything on our agenda. So we are adjourned at 514. Thank you.