City Council - Regular Meeting

All right, next up is public comments. Is there anyone from the public that would like to make a public comment?

Three minutes, love it. Andy Hancock, local business owner. At the public stakeholder workshop specifically called to discuss our special events system, I said, if tourism is South Padre Island's economic engine, we shouldn't rebuild the engine while leaving it attached to the same old golf cart. Having now seen the proposed policy, I have another question. Which golf course are we actually aiming at? At the August CBB meeting, or CBAB meeting, a board member asked, how many of the current events have met their contracted room night thresholds? The answer was none, zero. So yet the proposed system again contains substantial room night thresholds, more than 1,500 room nights for funding above 25,000. But now the total attendance and out-of-town attendance can provide alternative ways to qualify. So my first question is simple. What empirical evidence from South Padre Island's actual events produced these thresholds? Because when the alternative participant criteria were retrospectively applied to 16 existing events, seven go down in funding, five stay the same, and only four go up. At the same time, practical promoter event funding appears to be moving from approximately 700,000 to 450,000. There may be a perfectly reasonable explanation for this. But shouldn't the council hear that explanation before taking action? rather than afterwards. And then we have a bigger problem. At the same August meeting, a member of the CBA said, we need to address the critically important marketing strategy. I agree, because this policy proposed the scoring events on seasonality, marketing demographics, and brand alignment. But aligning it with what? Where is the comprehensive published marketing strategy that tells us which visitors we are trying to attract, which seasons we are trying to grow, what types of events do we actually want, and what measurable tourism outcomes are we trying to achieve? Without that, we're not implementing a destination strategy. We're creating a scoring system and hoping it becomes one. So before possible action today, I respectfully ask council to consider tabling this policy until we have the empirical evidence supporting these thresholds, the financial justification for the apparent reduction in event award funding, the published marketing strategy these funding decisions are supposed to implement, and the measuring systems that will tell us whether any of this actually works. We came here to rebuild the tourism engine, So let's not finish by refurbishing the golf cart without knowing which golf course we're on, where we're going, and with the handbrake fully on. Thank you.

Thank you. And just before we get any other comments, I've already had a request to pull 5.9 tonight, and we'll be combining 5.14, 5.15, and 5.18 into one item. Is there any other public comments? All right, any public comments from the staff?

Yes, sir. So I'm a little sad and excited to announce my retirement. I'm just kidding. But now that I have everybody's attention. That's horrible. That is. But now that I have everybody's attention, friendly reminder, early voting for the special election begins tomorrow at 8 AM. at the community center. So I wanted to make sure, we've been spreading the message everywhere, but I wanted to make sure it really resonated with you guys. So I think you guys all have it. Also, you can go to the city's website, www.myspi.org. On the very top in the center, you'll see SPI elections. Click there for all the hours for this October 3rd special election. Thank you.

Thank you.

You're not allowed to retire.

Is there anyone else from staff that we would like to make some public comments?

Mayor, if I may, I know there was a ceremony this morning, but I'm asking if it would be appropriate to just have a moment of reflection for those people that perished 25 years ago in our bridge collapse.

No problem, that was gonna be on my list, so if we could all rise for a moment of silence for all that were affected by the Causeway Collapse 25 years ago. Okay, thank you. And yes, as... As Ed mentioned, he was the mayor here when that collapse happened, and we all know where we were at that moment when we found out that news, whether it be at 2.30, like Ed found out, or if it was the next morning, the next day. Our prayers are with all the families and with the survivors and their families, and then we also have special thanks to you know, the community that got together and our, our tour boats that work together, the Murphys, the Bryans, the Kalos, the O'Leary's, they all kind of came together, created a hodgepodge transportation system for everybody. And before TxDOT stepped in and brought ferries down from Port Aransas and such. And so I really appreciate the, the, um, the Island and how much we all work together to get through our, our, our time, our troubles there. And, uh, We appreciate everybody working together and being positive and trying to get through this thing. So thank you again. All right, anybody else from council have anything that they wish to say?

I'd like to mention the ecotourism committee met at the beginning of this month. We had great attendance by constituents, even people from out of town that were interested in participating. And we were able to check the box on establishing five subcommittees, habitat enhancement and beautification, the ecotourism programming experiences, education and interpretation, the connectivity visitor, community and business engagement, funding grants and partnerships, and art and placemaking. So if any of you are interested in helping us participate on any of those subcommittees, we have a lot of work to do in a short amount of time. And we welcome your participation. That will be at the first, I believe, of first Thursday of this next month. Also, I just wanted to say congratulations to the Suwabes event. They had 70 volleyball teams at their event, which is incredible. We are super excited to have them. They have a series of events that they have. I think that was their third one. And then we had a very successful Causeway event. And I think it was probably one of the biggest ones that they've had. So congratulations. And then lastly, the Wahoo tournament is this weekend. So looking forward to everyone who's participating and best of luck to all those fishermen. Thank you.

Is there any other public comments from the board? All right. Hearing none, we'll move to consent. Agenda, is there a motion to approve 4.1 through 4.7?

Motion to approve.

Second.

All in favor, please raise your hand. Opposed? Motion carries. All right, then we'll move to item number five, which is regular agenda, which is 5.1, which is discussion of possible action to approve the city manager to renew the marketing partnership contract between Visit Sao Padre Island and the San Antonio Spurs for 26-27, 27-28, and 28-29 seasons.

Good evening, Mr. Mayor, Council. Glad to be the first one on your agenda this evening. Of course, we talked about this at great depth in the last meeting. I think it was pendant that Ed needed to look at the contract and make sure that that was amenable to the city. I did field some questions after the event last time that I'll share with you. One question was regarding the suites. What was the intent? And as we had stated in our presentation, it's a sales event or a sales effort. We provided a list of companies within Central Texas that we already court and we would hope to court, no pun intended. to bring down and book business here. There was a question as to what the retail value of that would be, and those retail suites run from anywhere about $5,900 to $15,000, depending on whose game night it is. If you're at the Rockets, then that's a $15,000 night. I think that there were other questions about what additional costs we would have around the VIP suites, and I think you should count on staff, our sales staff, to go maybe myself, depending on what kind of business we're trying to attract, and then we'll give out shotskis and stuff and maybe just a little bit more food and beverage. So I think you could probably expect for each of those events maybe another $4,000 at the off-side of it for us to mobilize and to be there to host those folks. Other than that, I didn't have a lot of questions about the buy itself, and since we've been over it, I'll leave myself up for any questions that you might have, but I am looking for approval this evening of the ability for the city manager to enter into a renewal of our three-year contract with the Spurs.

Thank you. Anybody have any questions? Ed, you've reviewed the contract.

I had four comments. Two resulted in revisions to the contract, and two were, in my opinion, given valid explanations, so I'm okay with the contract, except the contract is with the city and not Visit South Padre, so when you make the motion, I would suggest you make the contract between the Spurs and the city of South Padre Island. Okay. Looks good.

Appearing in that direction, would someone like to make a motion?

Motion to amend to visit South Badger Island.

I'll second.

Is there any other discussion? All right. Hearing no spurs. All in favor, please raise your hand. Opposed? Motion carries.

Great. Thank you, council. We appreciate that vote of confidence.

All right. 5.2, discussion of possible action to approve a budget amendment from the general fund excess reserves in the amount of $54,000 to execute a contract with Hans Scarborough, LLP, to provide lobbying services to the city of South Potter Island for the 2027 Texas legislative session. Anybody have any questions?

Are we in discussion? Sure. Which bills will be our priority bills?

Scheduled for the October 2nd meeting. is that we're going to talk about our legislative priorities.

So we're going to approve a $54,000 contract before we have the priorities or know what we're pushing forward? I don't like that. That's strange. Why?

I usually hire an attorney before I start talking to my attorney and asking them questions and asking them to represent me. But I guess that's maybe how some other people do it, is they ask the attorneys first and then decide to hire them. I think Hans Scarborough has done an excellent job for the city of South Padre Island over the next couple of years. Their contract expires, what, the 31st?

I understand that people need to be paid for their time, but do you not have the answers to what our priority bills would be?

Well, we had a whole list in the last meeting, and I don't have them in front of me because I wasn't prepared to talk about our legislative priorities. We were talking about a budget item, which I don't think we can talk about legislative priorities right now.

Mayor, I'd like to make a motion to approve because if the item fails, there's no agenda items or no priorities to talk about. I don't have any priorities. So motion to approve the contract?

I'll second.

Okay.

We would still... We would still be able to have representation through TML and, I mean, just our standard priorities, right? If we had specific things that we needed a lobbyist for, then we would be paying for those services, especially for him to be there to represent us. I'm just trying to understand, Mayor, so.

know that Hans Scarborough has done an excellent job. They have represented South Padre Island in the past and still representing them today. And they are tasked with reviewing the eight or 9,000 bills that might get filed this next year and trying to figure out what works for South Padre Island, what interferes with South Padre Island, what is best for South Padre Island. TML represents every municipal district in the state and sometimes there's a conflict between what one city likes and what another city likes and so, I'm always on the side of having a lobbyist that's there to represent South Pottery Island's interest, and Louie with Hans Scarborough has done an excellent job at it. Okay. No other comments. All in favor, please raise your hand. Opposed? Motion carries. Up is 5.3, which is discussion of possible action to approve resolution number 2026-24, authorizing the city manager to execute the closing documents for the purchase of land related to the SBI Park project.

Do you need a motion? Approve. I'll second.

Is there any other discussion? Hearing none, all in favor, please raise your hand. Opposed? Motion carries. Next up, we'll move with 5.4, discussion of possible action to approve a budget amendment in the amount of $765,000 from EDC funds balance to pay off the bond for the Birding and Nature Center. Oh boy. Right.

Trying to contain my excitement. Darla LaPere with the South Padre Island EDC. And I'm here to get permission to pay off the bond for the Birding Center. The funds, it was already approved by the EDC board, and the funds are sitting in an escrow account, and we can write a check on October 1st.

How much interest are we saving?

About $14,000. Nice.

That's the bad thing about amortization. It's how the principal's all at the end.

Mm-hmm. I'll second. Approve. I'll second.

Okay. Is there any other discussion?

Just please thank your board, especially the past board, the Mohrs, Tates. I know I'm missing like 10 people, but They did a great job turning that project around the last 10 years.

It's great to get this paid off in advance of 2028. So you can take that off your board there in your office.

Yes. I'm very excited. I think we're going to go ahead and we put it in other projects, but I've been talking to Sandra about another CD. We renewed the $248,000 one, and I think some of that we should put in a CD. So I'll be talking to the board about that.

That's great.

Okay.

All right, thank you. All right, we have a motion and a second. All in favor, please raise your hand. Opposed? Motion carries. All right. Next up is 5.5, which is discussion of possible action to authorize a city manager to enter into a contract negotiation with the highest ranked firm for the agency of record for professional services for the Mexico market for account strategy and creative services, a media buy and placement, meetings and groups, and PR Media Relations for South Padre Island, which is RFP number AORMEX-2606.

Great, thanks. We're here tonight to renew a couple of our contracts moving into the new year. This is a brand new contract. Really excited to bring it to you. We have three areas of marketing that we are doing. We had historically been marketing to Mexico out of our offices. I don't know if you all know the story about the Chevy Nova. that you can translate, but it doesn't always make the translation. Nova in Spanish didn't mean an astrological star moving through the sky. It meant the car, Nova, doesn't go. And so some of the things that we've been doing, while we think they translate into... Spanish and resonate, they don't. Marketing is about creating a connection with someone, and connections are best created by somebody who understands that culture, that environment, and what's trending there right now. We put out an RFP. We had numerous agencies, including the one of record for San Antonio, apply. We did rate these, and I believe that's in your sheet. We had four, five people on the review committee, and if you're interested in that, I can rattle off who that is, but the result of that review was that we're recommending Black Koi, which is a legally registered marketing agency in Monterrey, Mexico. And we'll work with the five states of Monterrey, Reynosa, and I'm not going to get them all right, but the ones that are bordering with Texas. You all graciously approved in our budget $600,000 of advertising spend in Mexico. And there's $120,000 for the retainer fee for them. So it's a total commitment of $720,000. And I am asking for your approval to allow the city manager to enter into negotiations and bring you back the strategy for Mexico with Black Coy.

Motion to approve.

I'll second.

Is there any other questions or discussion regarding it? Your board's all happy about it?

Yes, this was one of the things when I walked in, several people asked me to work on it and I'm really pleased that we were able to turn it around so quickly and it looks like it is a, No discussion, unanimous item, so.

All in favor?

All to vote, Mayor.

Opposed? Motion carries. Thank you very much.

Good job.

All right, next up is 5.6, which is presentation by half and associates related to the FEMA community rating system regarding the National Flood Insurance Program. I had asked Public Works, Alex, to research this, since he's our flood manager, because I was researching some flood program stuff regarding building, and I'm not sure if everybody knows, but if you bought If you bought property before 2019, you're in a legacy program. And if you bought property after 2019, your flood insurance might have tripled or quadrupled or whatever it might be. And FEMA has a program, and we'd be the only one on the coast that's currently entertaining the idea of becoming a community rating system. And the benefits of that is that it can reduce your flood insurance by 30% or 40%, I believe, but we're getting ready to have half and associates give us a good presentation on it. So anyway.

Great, thank you so much. I can see the presentation in front of me. Do you have it in front of you as well? Yep. Okay, great. So good evening, council members, staff, everybody else here joining us today. My name is Ann Witko. I'm a water resources team leader with half associates in our Brownsville office. And I've lived and worked in the Rio Grande Valley for over 20 years now. specifically tackling a number of drainage issues across, particularly in Cameron County. I work with a fantastic team of folks that have worked with municipalities across the state and a lot of our efforts are largely focused on developing computer models that simulate where flooding events are likely to occur and then we develop projects to help mitigate some of that flood risk. And while that work's really important, it often comes with a lot of hurdles attached with it, one of which being high cost for implementation and various other things. So what I'm here to talk to you about today is another tool that's available to you to help prevent flood risk before it becomes a problem. And it comes at a much lower cost than trying to fix it after the flooding already occurs. And that's the Community Rating System Program. And so I'm going to give an overview of that. So for those of you that might not be familiar with the CRS, it's a voluntary incentive program that encourages community leaders to implement floodplain management practices that exceed the minimum NFIP or National Flood Insurance Program standards. The goals of the program are to reduce and avoid flood damages to property owners, to strengthen and support the insurance aspects of the NFIP program, and to foster comprehensive floodplain management strategies. South Padre Island is unique in Texas in that it has an unusually large concentration of flood policies. with over 8,000 policies that provide over $1.7 billion in total coverage. And this comes at an annual cost to residents of over $4.8 million. While enacting higher regulatory standards for new development can cause challenges and additional expenses for growth, they're important in that they protect existing residents from worsening flooding conditions and make the community as a whole more resilient to flooding. And they provide benefits to community members through reduced flood insurance premiums. So we'll talk a little bit about that. So to participate in the CRS program, communities must provide documentation on their stormwater management practices and what activities are in place that help advance the three goals that I mentioned of the CRS program. In total, there are 19 creditable activities that are organized under four different categories. The first, which is referred to as the 300 series in the coordinator's manual, is related to public information activities. That includes things like informing residents about flood hazards in the region, helping to promote the purchase of flood insurance policies, and providing information to the community on steps that could be taken to help minimize flood damages in the event of a rainfall event. The next category addresses mapping and regulations and encourages communities to provide flood risk data beyond the firm maps. It encourages preservation of open space to maintain the natural function of existing floodplains, and it promotes enforcing higher than minimum regulatory standards for new development. The 500 series covers specific flood damage reduction activities such as comprehensive floodplain management, planning, relocation, and or retrofitting of flood prone structures and maintaining your drainage systems so that they're performing as intended. Finally, the 600 series covers warning and response activities and includes things like rainfall monitoring networks, tide and storm surge monitoring, integration with NWS or National Weather Service forecasts, automating responses, and then having established evacuation routes and decision matrices during emergency events. Those are just some examples. There are many, many more. So this slide is showing a breakdown of the points that are possible under each of those four categories along with the maximum and average in each subcategory amongst Texas entities that are currently participating in the CRS program. Activities are outlined in the CRS coordinator's manual. This is a rather massive document. It's over 700 pages when you consider the 2021 addendum. It can be a bit cumbersome and intimidating to get into. But the point I really want to make with this slide is that there are over 12,000 possible points that you can get through your stormwater management program. And you only need 500 to initially get in as a class 500, or as a class nine, to begin realizing benefits. If you look at Texas communities across the state that are currently enrolled in the program, average scoring is right around 2,600. So while NFIP participation is relatively high across the state, you can see on this slide there are 219 total counties that participate in the NFIP program out of 254 total. So those are the ones shaded in blue. And then all the blue dots represent communities that also participate in NFIP. And that's roughly a little over 1,000 out of almost 1,200 total communities that participate in NFIP. But out of those same nearly 1,200 communities, there are only 74 that are currently enrolled in the CRS program. And those, if you can make a matter of the yellow stars on the map, and you can see they're generally concentrated around the major metropolitan areas of Dallas, Houston, Austin, San Antonio. The two highest rated CRS programs within the state are the City of Dallas, and they have a CRS Class III rating, and the City of Grand Prairie with a Class IV rating, both of which are cities that HAF has helped in developing their programs and establishing their status in the CRS program. One of the, what tends to be a compelling reason to engage leadership in implementing the program beyond reducing your community's flood risk is there is a direct savings to your constituents in the way of reduced flood insurance premiums. And Mayor, this is what you were getting at before with some of those reductions you had mentioned. So even entering the program as a class nine, you'll result in a 5% reduction in flood insurance premiums for your residents. You can see overall there's 10 possible classes with the highest class rating of one resulting in up to a 45% reduction in flood insurance premiums. Like I mentioned though, the highest one in the state of Texas right now is Dallas with a class three, so nobody's achieved that one or two rating yet. But a class three still has pretty significant reductions in flood premiums. I also want to note that the reduction applies to all residents and not just those that live in a significant flood hazard area. You'll see that abbreviated as SFHA, so that's what that means. They're just flood hazard areas, high risk flood areas. In recent years, it's been found that over 40% of flood insurance claims come from areas that have not been identified as a high-risk flood area on the maps. So this is also why it's really important to encourage everyone to get flood insurance and not just those in the SFHA areas. In addition to meeting minimum point levels for the various classes, there are also specific prerequisites associated with some of the class levels that must be met regardless of the number of points that you're able to garner. For the sake of simplicity, right now I'm only going to discuss prerequisites for initial entry into the program. and those associated with achieving a Class 8 or 9 rating. But note that there are additional prerequisites as you try to go for higher class ratings in the program. For starters, communities must be NFIP participants. That's the first most basic thing. Then you have to submit an application with a completed quick checklist to FEMA and then be able to provide documentation on your stormwater management program that helps support all the activities that you're trying to get credits for towards your class rating. To achieve a Class 9 rating, which is the lowest class that's associated with flood insurance premium reductions, enrollees must be able to earn a minimum of 500 points and be able to demonstrate how they track and maintain construction certificates. And you have to be able to do this with at least 90% accuracy level. FEMA will randomly ask to check a certain number of your certificates, and they'll look for level of completion, look for potential errors, and you have to show that 90% of the time you have that all right. You must actively track repetitive loss properties throughout your community, and then you must also maintain flood insurance on all municipally owned buildings that are within the significant flood hazard area. Class 8 rating or higher has to include a minimum one foot freeboard requirement on all new residential buildings that are constructed or substantially improved in the significant flood hazard area.

And the freeboard meaning one foot above the base flood elevation. Base flood elevation.

So yeah, right now your ordinance says you have to be at or above base flood elevation. So that would be your first hurdle to get past the class 9 to a class 8 is you'd have to increase that requirement. to be at least one foot above BFE. So going back to the table that showed the breakdown of points and premium reductions by the CRS class, we populated an additional column that shows the maximum potential savings that could be applied to SPI residents with CRS participation. So currently, with those over 8,000 flood insurance policies I mentioned at a premium value over 4.8 million, if you came in at a class 9 with that 5% reduction, it amounts to just over $200,000 combined savings. I know that doesn't sound like a huge amount of savings when you're looking at over 8,000 policies, but I'll note that is per year, and that Class 9 is really kind of a starting point to get into the program, and then you can kind of build from there. It's also critical to note that the value of the program extends far beyond the insurance discounts for residents. While the discount is the immediate and most visible return on your investment, the larger value is the reduced future flood risk to the community and the damages that won't occur due to the implementation of more stringent management practices. I also want to emphasize that implementing such a program is not anti-development, it's just pro-smart sustainable development that allows for continued growth without making flooding worse for your existing residents and developments. There are actually a couple other coastal communities that have recently started participating in the CRS program, and this table shows an example of three comparable cities. They include Corpus Christi, Rockport, and Galveston, which have achieved a class 8, 7, and 6 designations, respectively. So our recommendation for South Padre Island would be to set a target based on your current verified activities combined with low-hanging fruit that could easily be incorporated and sustained by city staff to initiate the process. This slide highlights a few of the lessons that our team has learned over the years as you think about implementing your program, if you go that direction. I already mentioned finding the low-hanging fruit on the last slide. These are activities that you already are performing and likely just need to develop in documentation to support the verification process. I think you'll find that there are a lot of things you're already doing that will get you points. And it's really just a matter of documenting those properly so that they can be presented to FEMA to get those points. The next important consideration is looking at the investment required to implement an activity versus the return that you'll get on it. There's some items that you might be able to get a lot of points for, but they're really labor intensive. They'll require a lot of staff time to inspect and maintain. But there might be other options that have equal benefits or similar benefits but have a lot less burden on staff. And so it's really about weighing out kind of the benefit you'll get from an activity versus what it will actually take you to implement and maintain it. So that goes into the other point that I mentioned, which is that I have listed on the slide, which is burden to staff. There is additional work that would be required from staff to maintain the documentation, There is an annual recertification process, and it really takes a lot of organization and communication with the ISO reps to maintain that program. I realized I did not define ISO on here. I know in the flood planning world, we have a lot of acronyms. It's the insurance, insurance, I just draw, I forgot the word. Yeah. Insurance Services Office. Real tough word, services. I blanked. OK. So the Insurance Services Office is the contractor that maintains the CRS program for FEMA, and they're charged with administering and implementing the program. So you need staff that's dedicated to maintain from all the different departments that would be affected by implementing your floodplain management program, and then have somebody overall that can kind of oversee and coordinate both between ISO and all your department staff. Usually that's your NFIP floodplain administrator that does this, but it could be anybody that you designate. So in closing, I'd like to share our recommended next steps for the City of South Padre Island. The first step would be to perform a baseline assessment of your stormwater management program. This consists of reviewing relevant ordinances, inventorying your existing program elements, and making sure that you can meet your minimum class nine prerequisites or whatever prerequisites would need to be met for whatever you're targeting. Once that initial assessment's complete and you set that target, you need to assign responsible parties, like I mentioned, from all the relevant departments and a main kind of point of contact that can oversee and coordinate with all the different department leads. From there, an application can be prepared that includes a letter of interest and an initial checklist that highlights where the city believes it can earn points towards your class designation. The ISO officer will then initiate a verification visit where supporting documentation will be reviewed and any questions can be addressed with staff. One last thing that I'd like to note is that initiating any of these steps does not commit the city to a specific class or does not commit you to changing your ordinance. You can take these initial steps, do the assessment, and then decide what's right based on the cost of implementation and the impacts to your community while you're verifying program benefits before you commit to anything. So that's all I have for this presentation. I have my contact information on this slide. Like I mentioned, I'm here locally in Brownsville. I also have contact information for Jack Young. He was going to join me here today. He had some conflicts that came up and wasn't able to come down. He's in San Antonio. But he's kind of our internal CRS guru. He helped the city of Dallas and Grand Prairie with their programs. And so he's really knowledgeable and a good contact as well. If you have questions now and I could address them, or if you'd like to reach out at some point later, you have my email there and can reach out.

I've got a couple of questions, if you don't mind. Yep. That freeboard one, that was, it could go plus one, that was to get you from a nine to an eight, right?

Correct.

Okay. And then your special flood hazard zones, are we calling AE a special flood hazard zone or just V? V.

As well.

As well.

Okay.

So like if people look at half the look at the island map, pretty much everything from the gulf surprising this way but gulf bull along gulf boulevard and and gets you close to padre boulevard a large portion of that is x but that's outside of a flood zone and then as you migrate towards the bay you start getting into the the ae6 and then i think there's some ae7 on the island but they we got rid of eight with the last map revision right and so or for the most part um until you get to the Shores, and the Shores has their own deal up there. But do we know if there's gonna be, is there any movement on another map revision? I think the last map, the flood map that we had is, what, about 15 years old, 10 years old?

There was one done in 2018 that was adopted. There is no plans right now for updating that. It's quite an expensive endeavor. I know there's some other communities in lower Oregon Valley counties that would like some updates to it, but it really comes down to funding. So FEMA has no plans for that right now. They're working with that 2018 revision. The last one before that was from the 70s. So this one's super new. Oh, 99? Yeah. Or 98, yeah. Yeah, further up in the different parts of the 70s.

And then that was in the 70s, yes.

It was all based on Beulah.

Yeah, okay. Does anyone else from council have any questions?

Could you give an example of five low burden items that are high points that the city could attack?

Really, so we'd have to evaluate what you're already doing, right? So those low hanging fruit really depends. It's finding what your program is already doing, and I haven't reviewed the specifics of that, so it's hard to identify those items. But really things just like if you have a resident that calls you up and asks you questions about their flood hazard area and what things that they can do, likely you have staff that's already doing that. It's just a matter of documenting and logging it so it can be submitted. And those types of activities you can get points for. Other things, let's see. Having a flood mitigation plan or capital improvement plan gets you points. Doing social media posts that inform residents about flood insurance or measures that they can take to reduce their flood risk, those things all get you points. And I think a lot of those things probably happen, although I can't tell you specifically. I haven't reviewed the program with staff. But it's really just a matter of having a formally documented process. We have templates that we use that are aligned specifically to the scoring criteria that FEMA uses. So it's really a matter of getting spreadsheets, basically, and just logging those types of activities.

I know that there was a 110-point deal about elevation certificates. And I know that Alex here is, have you ever found an elevation certificate that didn't have an error on it?

Good evening, Mayor, City Council. Oh, yes.

Yes. Seems like quite a few have errors on there. And he goes in there and tells them whether to fix it, does this. And every building has to have an elevation certificate for new construction. They come and audit us, what, every couple of years?

Every five years.

every five years, and we're already probably passing that really well, I would think. So you pick up 100 points really quickly just because of something that we're already doing. And then there's the matrix to where you can get the other 5,000 points or 4,000 points or whatever it was. I think that if we go through the process of, and I don't know how this works, do you go out for an RFQ for someone to help assist this or do you just internally do this? What do most cities do and how do they go through that process besides just making the application?

In terms of trying to get support to help you implement a program or assess your existing program, it really varies city to city. Sometimes there might be an RFQ. Sometimes if you have some kind of rotation list that you work from, we've done it under a rotation list for professional services. It depends on what the scope is. For really basic initial assessments, Sometimes there might be, depending on what your authority is, your staff's authority is to approve contracts without commission approval. We've helped cities that way too initially to do an assessment without getting into too much detail working with ISO. So it really varies city to city based on what they want to do and what they're trying to achieve.

Alex, you're our flood manager and you're part of the flood management program. Where do you think we could get to with minimal changes and where do you think we could get to with just a little bit of changes?

With minimal, we'll definitely get to mine. We're basically doing all that. The freeboard, if that's something.

Freeboard's the hardest one.

Yeah.

And that's something that we would have to look at Our biggest problem that we have on the freeboard being going one foot above the required elevation is Padre Boulevard. The buildings along Padre Boulevard in some places is two and a half feet above sea level. And then you've got a base flood elevation of AE6 or AE7. So you're having to build four or five feet above the street. And that would be the biggest area that we would have to survey and try to figure out what that... that implication would be on Padre Boulevard development. But it wouldn't be like, nope, not all the existing buildings. No existing building has to certify. It's just new construction. And so that would be the hardest survey area that we would have to do. And then some parts of Padre Boulevard are a little bit higher than others. And so we'd have to really dig into that to get to eight.

Well, it looked like there was a lot of low fruit items on there, too, though. Evacuation plan? Go to the bridge, go.

You have a lot of things that you likely can get points for to get to the class nine fairly easily. To get to the class eight, you have to have the free board requirement. If you had that, you probably have lots of other points you can get to go further. You might get to seven. But you have to meet that prerequisite of the free board requirement to get to eight.

Just seems like a smart guy like Alex can get us to nine next week.

Well, it takes some time to get them to come and review, but yeah.

I'll do the evacuation plan. I'll draw that up tomorrow.

Well, I just think it's, you know, this is one of those deals that we need to look and see what the cost is, but if we can start saving $230,000, $500,000 a year for our residents, I mean, that's, you know, again, it doesn't sound like a lot when you're saving someone, you know, $250 or more. $500 on a policy, but that adds up over a period of time.

And then what you're saving them in damages that aren't occurring with the march?

Correct, correct.

Yeah, the Army Corps is finishing up their study, so we're going to have that. And then they're going to be giving us some recommendation on the evacuation route, just for the low areas and part of the lower.

To go around to Laguna or Gulf? That's kind of what they got. At least to have some. Right, something documented for it. All right.

Anything else?

No, I guess that's it. It's just a presentation item, and if council members would like to continue this task, please email Randy and let him know, and we'll figure out next steps if that's something that we would like to do.

Thank you.

Thank you. All right, then we'll move to item number 5.7, which is discussion and action to approve the scope of work for ITBGWPW-2608, Island Gateway Project.

Good evening. So basically, we're looking at the... Can I have the overhead, please? Oh, okay. This is fine. We got the base bid will be... The base bid will be coming into the... into the island. And then we've got alternate number one. They'll be to the north of the entrance. And then alternate two will be to the south. So basically, this includes all the landscaping and base bed. And the base bed also includes all the lighting. And then alternate one will be just the plants and anything there on the north side. And then same thing would be on alternate two. So the base bid more or less will be about $550,000. Alternate one will be about $345,000. And alternate two will be about $331,000.

So, and you're wanting this now because the next item is to authorize negotiation of a contract or execute a contract with the highest bidder.

Yeah, so that we can determine how much.

So we got, it's basically a $1.2 million project that includes a $50,000 betterment, right? 1.22? Yes, sir. And we've got the base bid is 571, which we have that. We will have that in the tiers account as soon as we get Cameron County's check in for their deal, for their share. Or we might be off like $5,000 or something like that. And the tiers expires this year.

Yes, sir.

We won't be getting a check next year for tiers, correct? We're verifying that just to make sure. We still have not verified that. Okay. Okay. So we have a shortfall of roughly $650,000. We have 3 million in excess reserves right now, but we just approved a contract to purchase some land, or a resolution, so that's gonna move us down to about 2.6 million in excess reserves. And so we've got to decide We know that if we don't, what was told to you at the Cameron County meeting, that if we didn't spend it by the end of the year, they were gonna take their share back?

That's correct.

That was Commissioner Garza, I think, or someone, or anyway.

I don't remember.

So we gotta spend it or they're gonna take it. So we've got enough money for the base bid and it's just whether or not we wanna dig in and do alternate one, alternate two, or both. Alternate 2 is cheaper than alternate 1, right?

Yes, by about $20,000.

By almost $106,000, right? Alternate 1 is $420,000, and alternate 2 is $314,000. Hold on. Don't check that. Sorry. Where did it go? Alternate.

Yeah, it depends on who you go with. But both bidders are about the same amount. But if you're looking at one bidder, alternate one is 325 and alternate two is 315.

I was just looking at the southern landscape one because that was in our packet. Was that the low bidder or was that the?

Yeah, that's the low bidder.

So their base bid was lower or something like that?

Yeah, the base bid was higher.

Yeah, okay. I mean, what you could do is, this is not the best way to do things, but you could go and approve, sign the contract for A, or for the base, and then you could put the alternates two and one and two out to bid six months from now. when they're done, or we could ask staff to figure out a way to find out how to pay for alternate one or alternate two or both, since we already know we've got earmarked money for base bid, which we'll lose. It's up to council to try to figure out how we wanna want to get there, if we want to extend this, or if we want to just do this phase. How much money do you think we have in these copper lights compared to?

I've got SSP here that they can answer the question. OK.

I'm not trying to beat up your copper lights. They look really nice, but they're like $1,000 a piece.

Actually, the lights are in the base bed. So they're actually incorporated into the base, but they're in that money that you already have budgeted. Right. I believe it was $100,000. I don't have the actual bid form.

The reason I ask is like Southern Landscape had $242,000 in for the lighting package, but... I don't know how much of that's the actual lights, but if it's $100,000 and you go out and buy different lights for $50,000, that isn't going to get you any savings to help out with anything really.

Correct, correct. I mean, I think that when you negotiate the base bid and whether you do alternate one or two, I think you have, I mean, obviously you'd ask council, but I think you'd have the authority to look at line items and adjust the contract based on that as long as it's within that 25% addition or deduction from the bid amount. You're allowed, I think, by state law to 25% change order amount above the bid. Right, right.

But you can do whatever you want to in reductions. All I know is that this is the first thing that people see when they come on the island. And we want it to look great. You can't see it at night. And more people take left-hand turns than right-hand turns. You know, and I wish we had included a little circle, an alternate two versus alternate one, but maybe that's where the $90,000 delta is on the southern landscapes bid. So, you know, maybe you'd just be doing one or the other, but I don't know. It's up to council. I would like to see it all done, but we would have to, you know, figure out how we can get there and still protect our excess reserves and stuff. I know. Wendy?

Sure. Hi, Director of Operations Wendy Delgado. I just wanted to comment on the TERS agreement. I had started reviewing that yesterday related to your question about the 2027 payments, and I had sent it to legal, and that's what we were just talking about. Based on our initial review, both me and Ed, we do believe we are going to receive a check in 27 for the 26 payments.

Well, that makes that decision pretty easy because we receive about $250,000 from this county and we put in $275,000. So that's another half a million dollars. So all we're looking for is $200,000 at that point in time.

So it basically says that the agreement expires in...

Right, but that's what my question was, is that tax money should come through to us because it includes the 26th year.

And there's a statement in there, I think Ed has it on his phone, but there's a little clip in there that basically says that all the money would basically be already collected and received except for those in 27. It makes a statement that we both feel that we're going to get that check.

Or delinquent.

We just barely looked at it yesterday.

Or delinquent accounts.

Yes, yes, or delinquent, yes.

Or delinquent, but what about for people who start paying their taxes on October 1st? That's where I'm getting into this question.

I believe that it expires, the agreement between us and Cameron County expires December 31st, 2026. So anything collected during the 2026 for that agreement would be paid to the city in 27.

How?

The county, I'm so sorry, Sandra, I'm sorry. The county will be billing the tax, it's the tax year 26. So the statements that are going out in October are for tax year 2026. Correct. So there we will be collecting, the county will be billing tax year 26 and we will be collecting in 27 the check for the bills that went out starting October for the people that are going to start to pay.

Right, and that's where it gets into this deal is that the tax bill is for 26, people are paying the money in 27, or I don't know how many people prepay early to save their 3% or whatever it might be to pay in October, or October 31st, like I like to do. But if we're able to pick up that half a million dollars, then that makes a big difference. difference in what we're discussing right now.

Yes, because we did budget that money. When we were working on the budget, I did talk to the tax office because I did have a question as to when this contract agreement was going to end because I always heard 26. But it's tax year 2026. So those bills are barely going to go out.

Yes. OK. Well, if that's the case, then you've got maybe $1.1 million there for this project.

but they.

Only short $100,000.

Yes, the county only gives us, reimburses us. We will bill them what we think that they're gonna collect, but the county's only gonna reimburse us and pay us what they've actually collected on actual accounts.

Right, they haven't even written us a check yet for 2025 yet. Correct. We're still pending a $250,000 check from 2025.

We're still pending some money on that, yes.

Okay, well.

Ed, can we approve that and commit those funds even though we haven't collected them yet? I didn't hear that, I'm sorry. Can we approve that to commit those funds, even though the county hasn't collected it yet? I believe we can.

I would think that we can make a, you know, approval saying base bid, all one, all two, subject to confirmation of the, you know, that we will be receiving 2026 tax receipts. And that way it gives them a little bit of time to work it out, negotiate the contract and do that. And we don't put our excess reserves in jeopardy.

That would work. Is that a motion on alternate two?

I'll make that motion. I normally don't make motions, but I'll make that motion.

On two?

One and two. Do all of it. Yeah, all of it.

I'll second.

Because, yeah, if we can get the next two, obviously they owe us one payment, and if we have another payment and we're already planning on putting that other payment into tiers, then... This project's not gonna finish until next year. We can pull a little bit out of excess reserves as a short-term bridge loan while we're waiting for collection and then reimburse ourselves for that. And as long as that works out legally, I think that that would be the best way to go.

The contract expires in 2026, but we'll get the funds in 2027, so I don't see any problem in doing that.

Fantastic. Okay, and then we let them know we allocated it, because I mean that is part of what you do with tiers. Most of the time you'll sell bonds to build something, and then the tiers program for 10 years pays the bond, and so it makes sense that you would calculate it that way, but okay. Well, that's exciting. Okay, is there any other comments? All right, all in favor, please raise your hand. Opposed? Motion carries. Thank you all very much. All right, next up we'll move to item number, we skipped nine, we're gonna go to 10, which is, wait, what? No. 5.8, I'm sorry. I've got ITGB whatever here twice.

Yeah, right.

Discussion now. Okay, we'll move to 5.8, which is a discussion in action to authorize the city manager to execute a contract with the bidder determined to be in the best interest of the city of South City for ITBGWPW-2608 Island Gateway Project.

Yes, this was... The bid opening was on August 28. And we got two bidders. We scored them. It was evaluated by Lisa Graves, Reese Landston, Donald Bloom, and myself. The highest score was Valley Garden Center. Can I have the overhead? So this is the breakdown of the bid tabulation. Overall, Valley Garden Center is a low bidder. But they're very close, both of them. CHRIS JERRAMSEN.

Well, they got very close to the SSP Designs number, or Green Thumb did. CHRIS JERRAMSEN.

And these are the scores that came out of those. So Valley Garden was 4.83. And the other one was 4.24.

Very close. Did both receive addendum one and acknowledge it? Yes, sir. You had that sheet up there. I was trying to find it and track it. Reese? All right, well, would someone like to ask any questions?

Yeah, I'll make a motion to approve. I'll second.

Is there any discussion? Before we do this, the one thing I do want to, have we put out those copper lights for testing yet?

Yes, sir, we've installed them today.

Did you install them next to a sprinkler?

No. I'm not sure it's going to work.

Yeah, it's not going to work. Anyway, let's let the people know where you installed it. And then the other thing is let's try to run a spray hose on it or something every once in a while if it's not near a sprinkler head. And before we commit to the copper, those very expensive copper lights, let's put it through the ringer and make sure that they're doing everything they're supposed to do. Yes, sir, we can do that. Because you can always deduct it and change it from the contract after it's negotiated. So just don't have them go out and buy it tomorrow if you sign it tomorrow. Okay. Well, we have a motion and a second. It's hearing no more discussion. All in favor, please raise your hands. Opposed? Okay. Motion carries.

Thank you.

We'll move to 510, which is discussion and possible action to authorize the city manager to renegotiate the contract agreement with Greenhouse. Visit South Pottery Island's agency of record. Kelly.

Hello, good evening again. Kelly DeShawn, CEO for Visit El Padre Island. We have a standing contract with Greenhouse Marketing that does the majority of our marketing. That contract is vigilant for two more years. I am here to ask for city council's approval to renegotiate the existing contract. In discussions with Greenhouse, I've been able to get their consent to remove the 12.5% commission that they put on the $1.9 million worth of marketing. Part of that discussion is simply because it's as a client, we want to make sure that they're buying at the lower levels with social media as much as they're buying at the higher levels with big ad placements. And as we know, or maybe some of us know, the lower levels require a lot more work sometimes than placing one big ad in the newspaper or in a magazine or on TV. And so we were successful in renegotiating that. They're eliminating that 12.5%, which on a $1.9 million Budget is a $395,000 savings. In exchange for that nicety, two things. One is that the retainer has gone up. The retainer was $55,000 a month. It'll now be $75,000 a month. That is a $95,000 increase from where we were, so part of that $395,000 has been consumed by an increase on retainer, but we're still about $150,000 to the good. In exchange for that, they have asked, and I do agree with this, there is a clause that we could remove ourselves at any time, that we renew the contract again for three years, as opposed to renewing it just for the year that's left, under the new terms. If you're agreeable with that, I'd like to put the contract in front of legal. We would negotiate it, and if Ed gives the sign-off for that renewal, we would be back next month to get you to approve it.

So basically we've got a term sheet, we've kind of negotiated the good part of the term sheet, but now we gotta get down to the bulk of the document and allow legal to.

And I have a standing contract that you all have already approved, and so before I take the act of renegotiating that contract, I wanna make sure that council is in agreement with me.

So you're just looking for a motion to approve the negotiation today, correct?

Yes, sir.

Motion to approve.

I'll second.

May I speak, Mayor? Sure. The only thing, great job, first of all. It's always nice to save money. The only thing I really saw in there that I would like for you to take another look at is the production services. I noticed that there was an extra cost in addition to like our normal production services that they help us with. So just if we can get a really good deal on that.

Yeah, what that is is simply a line item so that they don't consume that in advertising, that we maintain that for direction. But yes, I will take that back to them and see what else I can do upon council's direction. That's always helpful.

Thanks for the clarification.

Are there any other comments, questions?

Did I get the impression there was a termination clause from you?

Yes, sir, there is. If at any point any of us are dissatisfied, we can walk away with the contract with no commitment to continue to pay the retainer.

And we always, in those type of contracts, have the availability of funds, do we not?

Yes, sir. Okay. You've done a good standardized contract for us, so we'll be building on that.

Okay, there are no other comments. All in favor, please raise your hand. Opposed? Motion carries.

Thank you, council.

Thank you. Now we'll move on to 5.11, which is discussion and actions of select a firm for professional auditing services and authorized city manager to negotiate the contract.

Yes, good evening. We went out for bids for an auditor for a contract. We received six bids. We had a ranking committee comprised of five people, four city staff, and one council member. The highest ranked there in the tab sheet is our current auditor, Carr, Riggs, and Ingram, and we would like council to award the contract to them.

Okay, our summarized score sheet ended up blank in the packet, that's why I was asking. But it's Carr, Riggs, and Ingram?

Yes, sir.

And we had, it looks like... Let me get there. One, two, three, four, five people on the committee that audited them?

That is correct, sir, yes. It was myself, Debbie, Christina, Councilwoman Hartwell, and Maria. And the score for Carrigg and Ingram was 87. The second highest was Pattillo, Brown, and Hill with 76. And then a firm scoring 73 was Burton-McCumbert and Longoria.

OK.

All right. Car rigs was the high?

Yes, sir. It was, they scored 87.

Proof.

Contra with car rigs. Is there any other questions or discussion?

I just want to mention that I was on the scoring panel, and this particular panel, it was a little bit different. I probably answered 158 questions by answering each one of these questions for all six panelists or five, I think six, right? Yeah, so it was a lot of work. And to be perfectly honest, I would have rather not chosen an auditing company that we have already worked with, but that's the way that it goes when you do the work with these rubrics and you just go with it, because that's what's fair. So thank you for all the time that you put into that RFP as well, Sandra.

Well, thank you for participating. I apologize, Mayor Kinn. I did not catch the second. Me. Thank you, ma'am.

Okay. If there's any other discussion? Hearing none, all in favor, please raise your hand. Opposed? Motion carries. Thank you. All right, then we'll move on to 512, which is a discussion and action to authorize. The city manager negotiated a contract with the most qualified real estate appraisal services submitted for RFQ number R-E-A-C-M-O-2607. Hi, Mayor, City Council.

Wendy Delgado, Director of Operations for the city. This item was for an RFQ for land appraisal services for real estate. We released this RFQ on August 8th. We advertised on the 8th and 15th. I'm sorry. The closing date was August the 24th, and we had a review of those by a panel which included Council Member Reese Langston. I'm sorry, Mayor Pro Tem Reese Langston, City Manager Randy Smith, and Shoreline Director Christina Boberka. Unfortunately, we only received one statement of qualifications. This was posted in the papers. It was put on our website. It was put on the beacon portal that goes out to all the companies that are registered for certain types of RFQs and RFPs. We did have, you can kinda see on our end as staff, when we have people register, we had a couple companies register in there for information related to the bid. It was also emailed to all the local real estate appraisals companies that we were, I think it was about 13 or 14 different companies, but we only received the one, so I was surprised. But basically, we went ahead and scored it to determine or asked that the panel score it to determine if it was a qualified statement. And they did come out with very high scores that would meet qualifications based on the things that were in the RFQ. And this is for the land. in the area south of the causeway that could potentially be the marina and or agora properties. And so.

Or a nature park.

Or a nature park. It's just all of that land on the south side of the causeway on both the right and left of Padre Boulevard.

It's basically trying to figure out if we want to, you know, we can now let, if we approve this, we can let Randy negotiate a contract. We'll have to approve the contract, but we can see how much it would cost to appraise wetlands, basically. Yes. And that's the million-dollar question that we all have is that, you know, people like to sell land that's wet, that put high numbers on their wetlands and what can you do with it and what's the real value of it and this is just this is how the conversation started in this process

And just to clarify, this is, we have not contacted the company, so this motion would basically be for you all to authorize the city manager's office to basically contact this company and negotiate. We don't know what the price would be at this point for these services, so we would have to bring back a cost to you at that point. This would be basically for us to just reach out to see if we can get a draft contract in front of you all.

And that's where I think you gotta start. We don't know how much it's gonna cost, but we gotta have someone pick up the phone and call. Because we have to go through the RFQ process, because it's professional services, so you can't put this out to bid.

No, you cannot.

So I guess we'd be looking for a motion to.

I'll make a motion. I'll second.

Is there any other discussion? All right, hearing none, all in favor please raise your hand. Opposed?

Thank you.

Thank you. All right, next up we have 5.13, which is update from Broaddus & Associates regarding the convention center renovation and annex project.

Mayor, council, thank you for having us again. There's been a lot going on with what we're trying to do over at the South Padre Island Convention Center. You may have seen blueprints. There have been a lot of iterations of this moving around. We're doing our best to fit everything that the city wants into the existing area without having to do demolition, et cetera. I want to emphasize one thing. All of these blueprints right now are very conceptual, very preliminary. Changes can happen, and I guarantee you they will happen. As we move forward with this project, the very next step, assuming that the next action item, I believe number 15, is approved tonight, The next step will be to gather a grouping of stakeholders, sit down, and hammer out what the true floor plan is going to look like. And then we'll give that to the architect, the contractor, and our firm, and we'll all start heading toward a project that has all of the aspects that you want for the budget that you impose. I wanted to, I'll cover a couple of things here. Looking down at number one, the exhibit halls actually shrunk a little bit and I remember Councilwoman Hartwell asked specifically about the $50,000 square, 50,000 square foot size. Nobody liked that. The architect didn't like it. People, stakeholders didn't like it, basically because it gave the overall exhibit hall in L shape. And a lot of people felt like we were going to be closing off about a 7,000 square foot area that was not going to be very usable. So we have, and like I say, this is a preliminary drawing. But what we did was just make the exhibit hall really big, really rectangular. It's still a little over, the total exhibit hall will be a little over 43,000 square feet. We have also moved the restrooms around a little bit. They don't have to be moved. They were originally over on the right-hand side up against number 10, the storage that you're looking at. We've moved them over to the other side for two reasons. Number one, so that they would be accessible to people off the main concourse, and number two, because Joey over here, the maintenance and operations guy said, I'd rather have the storage. We can move them back, we can put some on both sides. Like I say, this is a very conceptual, very preliminary drawing. We have increased the size of the ballroom, not so much the three meeting rooms, but we increased the lobby as a pre-function area and put some restrooms up there. This is based on the theory that if you have a ballroom, you're going to be doing a lot of expensive meals. with a bar and nobody wants to have to hike all the way down to the existing restroom. So we put some over there. We're gonna have restrooms now, right now you have to go to one center area and that's where the two large restrooms are. It'll be a lot easier to go to the bathroom. It'll be a friendlier building. We were asked to do away with the area shown as number four up above. That was an exterior concourse, air conditioned, was gonna cost a lot of money to put in. And they were actually going to turn the hallway in between the existing meeting rooms in the kitchen into just back of house space. It would be a waste. It would just be storage. And so we're now going to use that to enter directly into the pre-function and lobby area of the ballroom. There's a lot of work that's actually not shown on this graphic that still has to be done. HVAC upgrades. We're scheduled to put in two new chillers. Joey just redid one of his chillers a couple of years ago. It's in pretty good shape. We're proposing to add that as redundant chilling capacity. Once this building is complete, You can cool it with two chillers, but you're not going to be able to cool it with one. If you lose one of the new ones, we're in trouble. So we're saying let's take the good one that's existing and put that in as additional emergency use. We're gonna retrofit the lights. We're spending money in the kitchen. The existing concourse needs a lot of work. The roof needs to be fixed. We're thinking about covering all of those big steel beams with some wood to make them look like wood beams. We're going to be re-roofing parts of the building, et cetera. Like I say, all of this is Very preliminary, very conceptual. The next step will be to sit down with all of the stakeholders and determine exactly what this building is going to look like. The motion that's about to come up in a few minutes will give us the budget. And so we will proceed forward from there. I'd be happy to answer questions if anybody has any.

I think we might have some questions on another agenda item. So you're really sticking around, right? Yes. Glad to hear y'all are working diligently on it. has been brought to our attention. We have a running clock going on fees and all of that fun stuff, so we wanna make sure that we're getting our best value dollar for it, so we appreciate that. Does anybody else have any questions? All right, thank you. Thank you. All right, we're gonna move to item number 5.14, which is a presentation and discussion by the chief executive officer of the Visit South Potter Island regarding the profit loss projections for the convention center renovation and annex project. And we're gonna combine it with presentation by chief financial officer related to funding opportunities for the convention center renovation annex project. And then we'll add another member to the team or to our group discussion so it stays on task. Well, I'll just, we'll move up 5.18 above 5.16. We'll move into that after we combine these two items so that teamwork can start here.

Yeah, good evening again. Kelly DeShawn, CEO for Visit Sal Padre Island. Really excited to be here tonight to share with my colleague Sandra Garcia some of the work that we've done. Thank you to Brodus and some others who helped to input on this. I am going to be presenting a pro forma or a forecasted profit and loss statement for 2027 until 2031. which would be two years after the construction of the Convention Center, so we can kind of get a feel for what your expenses are and what your revenue is going to be on the other side of it. I just wanted to remind you that we have three funds that the hotel occupancy tax feeds into. One of them I call Operation Sandra will call it Hotel Motel Fund 2. That is funding the administration, the marketing, the culture, arts, and events. And if this discussion is successful and you elect, then part of the debt service is also going to be out of the operational costs, as opposed to the venue tax, which you see down there, Fund 03. We also have the Convention Center, which is the operations of the Convention Center and the sales to sell that unit. And then you have the venue tax, which is Fund 03, which can only, of course, as you all know, be used for those voter-approved projects that you pass the referendum on. And we are asking for you to assume in this scenario 25% of that debt, which would be 1.5 million a year, is attributed to the venue tax, whereas operations is picking up the other one. I do want to pause here for a minute to say I haven't worked in a community where you have the opportunity to assign that venue tax. In Galveston, we had venue tax, but they committed the venue tax for 30 years to the payment of the debt service, which meant once you committed that, you couldn't commit that venue tax for a new venue activity until, of course, you completed what you had said to the voters you were going to do before. I like this idea of having the debt service inside of my operations. We can hold it for the moment. It's going to be a tight for the first couple of years. But if you're a business person, you assume capital and debt service inside of your operations. you don't make your profit and then count for that separately without that. So I find this to be a very entrepreneurial manner to proceed and a way that allows you, after you've made this commitment, if you decide to do it, to continue with some of those other projects that you all are talking about and are going to be important to the overall tourism development of the island.

Can I ask a question while we're on this slide? How is it that we can take a debt service out of venue tax if we're issuing our bond against Fund 2 and 6?

My understanding, and Cassandra's going to keep me on, and Ed are going to keep me on track and make sure I keep honest. My understanding is that the citizens have agreed that you can charge that venue tax and you can use the venue tax to pay off some of that debt. So that's a legitimate use. The debt service, if I understand your question, is a legitimate use of venue tax. Are you sure?

It's very similar that we're using the venue tax right now to pay for the medians project. We're spending about half a million a year out of the venue tax project to pay for the medians.

but you also have a bond taken against the venue tax for that project, which is why you're able to take a debt service from that venue commitment.

I have our financial advisor, Dave Gordon, he would be better equipped to answer your question. Lovely, thank you, Sandra.

Thank you, Sandra. Good evening, Mayor, Council. Again, Dave Gordon with Estrada Hinojosa. The venue tax, as was already stated, can only be used for the projects that were voted for, which includes the medians, includes the convention center annex, parking garage, a number of different things. You can... use it to support this project. You can also use it for deserts on those projects. The 8% HOT, which is the Convention and Tourism HOT, could actually also be used to support the venue project. So there's a little bit of, you could kind of go back and forth depending upon what specific project you're talking about and what was voted. I'll also just address a point that was just made about other projects. You can actually have an election and add additional projects to your current list of projects for the venue tax. So you could not stop levying the tax and actually have a future election to add a different project.

And another way to skin the cat, if there was some argument about whether or not you could use venue funds to pay the bond, which I think you most definitely can, because it's a bond with the city of South Potter Island and it's a venue project, the venue tax is also set up for maintenance. So if any project that's a venue project uh like we do now we assign maintenance numbers to the medians because that was a median that was a venue tax product you could put a hundred percent of debt service into the the o2 fund and then you could take 375 000 a year out of the venue fund and apply it to maintenance for the convention center, and you just flip, all you're doing is moving the shells around, but it's still the same concept. So if someone says, well, you can't use the venue money to pay debt service on a venue project, which is kind of really weird, You could go in and say, well, OK, well, we're not going to do that, but we're going to take $375,000 a year out of the venue project and use it for maintenance of the venue facility. And you're right there.

You can go both directions as long as, again, the venue tax is more restrictive and it has to be only for the voted projects where the Convention on Tourism 8% is broader. And of course, as you pointed out, you already have debt supported by the venue tax. So you, of course, can issue it. You've already done that before.

I think the question that was, and I was interested as well. Can I just ask the question instead? Yeah, go right ahead.

Thanks. I think that you've made a really good point there. And I just want to reiterate and put this on the record that when you state that these are the venue tax projects that the voters had voted for, this is not that project. And we have evidence of the former mayor who initiated the venue tax project stating exactly what the annex project was. And it is not what we are implementing in. And I will go on record to say that I do not think that it is a very good idea, and potentially even legal jeopardy, in moving forward with this vision, being that it was not the vision that all of our voters voted on.

So, and I'm not the lawyer. You do have bond counsel who represents in that regard. I did look at the election language, however, and it does specifically say the convention center annex. Now, it doesn't have drawings necessarily and say that this is what the annex is, this is what we envision, and now we're doing this. But that would be a question for legal counsel to determine whether or not that's the case. But I would say bond elections happen all the time where somebody says they want to build a new elementary school and it becomes an elementary school, but it's different than it was originally envisioned. So I doubt that you can actually, that you're actually restricted by the exact way that you decided to do it before. Having said all that, the financing option that we were looking at was to use the 8% hop, which is broader. That's the Convention and Tourism Act as the legal pledge to support that part of the debt service. And how you do things internally is a question that we can, I guess, debate. And again, we can bring in bond counsel at a later time if we need to get a better opinion on that.

And for the record, I just want to read what the proposition was that everyone voted for in 2016. It said, authorizing the city of South Potter Island to provide for planning, design, development, acquisition, renovation, and construction of a convention center annex, Padre Boulevard, medians and improvements, amphitheaters, plural, or possibly plural, improvements for sports, community venue projects, and related land purchases, automobile parking facilities, and related land purchases, on land or facilities owned by the city of South Padre Island and to impose a hotel to occupancy tax and a rate of 2% for the purpose of financing the venue project if approved the maximum hotel occupancy rate tax rate imposed for all sources for the city of South Padre Island would be 16.5% of the price of the hotel rooms and this is very similar to where like you just said, too, is that people have different visions. It's like back in 2015, we sold bonds to do the sidewalks along Padre Boulevard. And then 16, we got a grant, or 17, we got a grant to pay for those sidewalks on Padre Boulevard. So we didn't give that money back to the bondholders. We took that money, and we started improving streets with it. and we improved like five or six streets with it. So people have different ideas of what may have been. I mean, I remember too when the Quiet Water Sports Park originated, we were gonna have campgrounds there and we were gonna have dog parks and dogs running around and fires and all sorts of stuff and that has changed to where we're gonna have a very restricted area to protect the area from damage and destruction and keep our environment looking beautiful and great and allow our windsurfers and kayakers a place to go out and do that. And so things do change and logic changes. But in 2005 and 2012, the Johnson study specifically showed an expansion of the exhibit hall. So I would say that when I voted in 2016, I looked at a renovation of a building and an exhibit hall expansion and a ballroom annex. So I mean, that's what I voted for. So I can't tell you what everybody else voted for. But they voted and passed it by, I think, 65%, 70%.

There was lots of dialogue that is recorded that anyone can go and watch. And it was not this vision at all.

Well, I think visions change.

Well, you can't change a vision that you keep telling everyone that the constituents voted for and then have a completely different vision to implement.

In 2005 and 2012, Johnson's study that had been produced that started a lot of this conversation has the expansion of the exhibit hall and renovation of the facility.

Shall we continue?

Sure. Thank you.

Great, so to look at the impact on each of these budget funds, we've prepared the following, thank you, performance for you. This is out of the convention center per se. So this is going to be the 06 fund. I always get the numbers confused. And we'll start in 2027, which is the fiscal year that we're about to enter into. These rental fees are very low. This year you can expect to see between 350 and $400,000 coming in in rental fees. So we've dropped the rental fees for 27, 28, and 29, and begin to move them up. We did hear you that we will be maintaining business as best we can in the convention center, and we've had lots of dialogue with Broadus about how we can do that. We have some very consistent clients in the convention center, so I feel good about being able to talk to them. We've also done the same with the catering. I said this to you before, these catering are great numbers. Because if you see us making, like you do in 2031, $125,000 off the food and beverage, that means somebody in town sold a million dollars worth of food and beverage as catering in the facility. Same thing with the equipment rental. That's not external. That's internal. Joey's got some tables. He's got bar tables. you all approved as part of our budget a 20% increase on the services that we're offering and so we're gonna have a meeting with our clients and begin to roll out this new fee structure for them. The occupancy tax is something that we went around and around about. This is the portion of the total tax that would be assigned to the convention center alone. This represents, those of you who've talked to me, I talk about pennies. You have 17 cents that you're applying, every cent is a penny, and one penny is worth about $1.5 million today. And so this represents just under a commitment of two pennies to maintain the occupancy tax. We're hitting this number currently in 2027. We don't have to grow to meet that number. We're there. And then we've only got a 1% increase until you get to 2029. And then that 2029 tax projection is a 1.5% increase. That's a pretty low increase, I do have to say. This year you're sitting 14% above budget. We'll see how it ends the year. But I think this is a very conservative way to approach it. You've got some interest income. If you were paying attention to the budget before, you would have known that we were making about half a million dollars on interest. As we spend it, of course, the interest is gonna drop. Then you've got your personnel. This is the budget in 2027. As you all approved it, there was enough money in all of the budgets to be able to assume the first year of debt service, which is 1.3. In year two, it grows to 1.5. You'll see personnel there. There's a slight increase as we move along, not much, but then in 2030 when the project's done and open, then we'll foresee having to have some more guys working with our director of facilities, Joey Rodriguez. Same thing for goods and supplies, maintenance and repairs. The big one is miscellaneous services, and I've talked to you all about this. This is my electric and my water. It's killing us over there. We're forecasting in the new facility, once it's open and running, a 75% increase in the water and a 60% to 70% increase in the electric. That, of course, is congruent with as we book it, but we expect to be booking it like we're booking it right now. But that increase in your utilities is inside of this pro forma. There's some inter-fund transfers in there, bulk goods. That brings you down, and by the hair of our chinny-chin-chin, we are positive for those five years moving forward. Questions?

Yeah, I have a few about this one. In your personnel services, it looks like when you take that sum, you're adding three full-time employees?

Yeah, you all were gracious to us this year. We added three this year, and we can hold until 2030 with the three that we got.

So we'll have a new facility and a total of six new employees to run it?

Mm-hmm.

OK. The repairs and maintenance looks like it stays pretty steady across each of these years. You're confident that we won't have any new repairs, any new maintenance. We're just going to be slow and steady from 275 to 283 of opening 2030 year.

Yeah, this is an average of what we've been spending over the last couple of years. And so this is not your big capital expenditures. This is your got to keep the place open. If the window cracks, we got to replace it. If there's a stain on the carpet, we got to get in there. So yeah, we feel comfortable with that number.

I think when you're expanding by two times that you would want to have at least a cushion for a little bit more repairs for twice the amount of building.

Well, I'm hoping these guys are going to build us a building that I don't have to repair the first three years, please. But that does not negate, Councilwoman, the fact that 90% of the facility we're not touching.

And then just wanted to point out there might be a typo right there in your bulk goods and supplies number. It looks like 6,690.

Oh, you're absolutely right. Thank you. So we need to subtract another $60,000. That's why that year popped. So we're down to $40,000 revenue as opposed to the $610,000. Thank you for that. Can I field any other questions moving forward? This is what I call my operational account. Sandra calls it the hotel motel account, and this is the O2 account. This is where we'll service the debt out of. I just collapsed all the departments into this one pro forma, and this represents your sale, I'm sorry, your marketing is in here, your events culture, and your administration is here with your debt service. Again, these allocations at the top for the hotel-motel occupancy tax are increased at a 1% rate year over year until you get to 2030. And then it's a 1.5% increase, some additional miscellaneous income there. You come down, you're servicing the debt at $1 million the first year, because we're taking 75% of the debt, and we're recommending 25% goes into the venue tax. And Sandra's going to present that. But then the rest of it. After year one, this is the payment that we'll be making right about $1.2 million a year or under a penny. And then your total expenses, again, with a line item. And this operational budget has more flexibility for us in regards to we are dropping more revenues to the end line at that one. And these, of course, will all continue to accrue in our reserves. Questions?

What's the jump from the 2029 projected revenues from 29 to 30? You got $707,000 and then $342,000 with a difference of $491,000.

You're on the income? Your operational performance, yes, ma'am. And ask me the line item again.

I'm sorry. The last line item, revenues over and under expenses.

Uh-huh. That first year, it's true that because we'd already approved the budget, shoe hoarding the debt into next year is tricky, but we did it. Once we get past next year, then we've got a little bit more wiggle room. Why we're coming up at $707,000 on our year three, I can't tell you exactly. But what I can say to you is I feel confident in the numbers that we've put forward, predominantly in revenues. Expenses are going to be able to change a little bit, but we do have a cushion to be able to absorb some changes there. I'll dig into that one a little bit more.

You're not going to spend any more on marketing when you have a bigger facility, a newer facility. It's like marketing budget stays the same. So we're not even going to be marketing this definitely?

80% of our visitors are actually what we call leisure, with only 20% coming from business. And so out of that greenhouse budget that you all saw, the $1.6 million, $200,000 of that is allocated for group sales. The way we book the convention center is through our sales team more so than our marketing. Marketing is very limited for the convention center.

We were attracting all new things, like sports and a whole other vision.

Yeah, and Sandra and I arm wrestled in our office about this. I wanted the revenues to project higher. She's your CFO, and rightly so. She said, project lower, Kelly. My hope and expectation is that this is the minimum threshold, and when I come back to you to get approval in 2028, 29, we're sitting in a place where we can continue to invest in our marketing.

And basically, you've projected very little growth from today until 2031, and you're hot.

Yes.

No new business, no this, no that. Correct. And no inflation, really.

We were very conservative. Problems. I don't think it's going to go down. We were very conservative in our projections of our revenue. Right now, we started with a base of, let me get you that number. We started a base of 15.5 million and every year for the first three years, we added 1% to that.

1% growth.

1% growth. Then after that, we're adding 1.5%. If I look back and do an average of the last four years, we're about 15.8 million per year.

15.8%.

No, 15.8 million each on average.

On average each year.

Each year.

But you didn't say that. You just said, no, we're going to keep it the same just to be very conservative.

Exactly. That's like when we were working on the budget, I said, I'm a very conservative person. I like to be more conservative with revenues. I don't want to mislead you and get your hopes up saying that we're going to come up here at $16 million, $17 million when that may not be true. may not really happen.

I mean, I wouldn't suspect that it would if we're in the middle of construction. Yes.

So that's why we wouldn't hit them.

We're not going to hit the same hot tacks. We'll be down. So we haven't even talked about the contingency.

I don't think we'll be down. Sao Padre Island is growing. We've grown very well. The Rio Grande Valley is growing like incredible. uh you know when i had a meeting with our county administrator a couple weeks last week he said that you know one of the things is he said we're going to be shocked at what the what cameron county and rgb looks like in five years with all the new investment that's scheduled here and if if anyone you know if anyone thinks south potter island's going away that's not what that's not what's going to happen this valley the rgb is going to grow significantly and as as mentioned 80% of our hotel collections don't even ever go into the convention center. It's leisure travel. We're trying to build the convention center travel and they haven't even included that into this. So, I mean, if you think that we're going to lose because South Padre Island's dying, then I guess we, I mean, I personally think South Padre Island is growing at the best rate that it ever has, and I am so looking forward to our future for the Valley, for Cameron County, and for South Padre Island, and for the state of Texas in general.

I would agree with that. I don't think that the island is going to die. I think that our visitors are going to continue to come. We will be having a construction period there at the convention center for a couple of years. Once we get that established, once we finish the construction, if that's what the council wants, we're hoping to increase it. You and I had a conversation last week. The convention center is never going to pay for its own debt. The purpose of that convention center is to attract people to come. We're trying to attract.

Which is my point, Sandra? Excuse me? Which is my point? Correct. The convention center is there to attract people and to help us attribute hot tax towards our investment, right? Correct. So what kind of hot tax does the convention center actually produce? And what are we going to be missing in those two and a half years that we're not working? So you're going to either tell me that it's going to produce a whole lot, or we don't produce anything, Erin, so it's a moot point. And you're kind of saying both of the same things, so...

The instructions that we understood from council is that you wanted us to continue to book the convention center while it was operating. The BROADUS team has come up with a design schedule and a manner to do that. And we are pulling the list. And as soon as you all make a decision, then we will reach out. As we stand today, right now, for 2027, not the fiscal year, but the calendar year, we have already $160,000 booked into the convention center in 28 groups. For the year 2028, I have another, they have, because I didn't contribute to any of this, another $40,000 worth of business booked in seven different groups. In 2029, we've got the same. And so it's not true that we're not going to be operating the center. We might be lopsided a little bit we might have to give us some more incentives to keep people coming in but our hope and expectation is that we can hold hands with some of these clients that we've had a long time and that they'll accompany us through this if we discount a little bit the convention cost of the venue but they'll still book the rooms then in town so you know again our our hope is that is that it doesn't hurt too much. And this is the conversation, and I don't want to skip over it. We are collecting more money currently than what she is projecting for next year. We're already ahead of the game, not by a lot, but by about $600,000, about a half a million dollars.

So the construction's kind of like a hospital or airport renovation. It doesn't close down. Correct. There's just a small inconvenience for the users.

Correct. They don't close the hospital. They don't close the airport.

They just work next to it.

It's going to continue operational. We're going to try to continue operations at 100%. The broadest group has informed us that based on how Option B has now been scaled down that they don't anticipate there to be a significant interruption in service at the Convention Center. So that is, bless you, that's how we're taking it. We're taking them at their word. They're the experts and so we're going with that. Yes, ma'am.

I do recall a stakeholder in the room when we had our workshop kind of pseudo-argue with Broadus about that exact point, that it would be next to almost impossible to continue to operate in full capacity while we were underway in construction. So I don't need to hear the rebuttal or the argument again from Broadus. I just want to make that clear, that this stakeholder is a developer and is currently developing a very similar size situation in Brownsville for half this price. And that is... That's appalling. And the fact that he made those statements to us at that workshop and we're just gonna keep on coasting through, I just think that we're really taking a lot of risks here. And this doesn't show any projections for hot tax increases. I know that you've said that. But at the same time, I know you're trying to be conservative here, but at the same time, I feel like that would be almost helpful in your case to kind of add some more cushion to this. Because it doesn't look like after we've taken all the money out of these budgets, we're going to have much room for anything.

So let's continue on with the presentation and then there's gonna be some other slides that'll show you where the revenues will continue to grow and how the funds will be continuing to grow. Is that okay with you? Yes, ma'am, thank you. Thank you. Okay, so we're gonna be looking at the venue fund per forma. The venue fund here, as you can see it at the bottom on the revenues over expenditures, the bottom line, year one is gonna take the biggest hit because we do have the wind and water sport venue project of $1.8 million that we budgeted in there. So that's gonna be the lowest year that we're gonna be collecting, that we're gonna be growing that fund by. Every other year, is going to be growing over $2 million. That includes already the $375,000 debt service payment that we're budgeting in for every year moving forward. So there is going to be a growth in that fund. I do want to go back to the other funds. The other funds will be growing as well. That revenue over expenditure, that's what we're projecting those funds to be growing at that rate. We're going to talk about the cost, the total project cost. We hired project managers at Broadus. Their contract is $3.6 million. We hired architects, GNAC, at $3.4. They have a reimbursable consultant cost of $831,000. We have a general contractor. The total construction cost there is $38.8 million. There's an MEP betterment of $3.8 million and a finish out and contingency of $3.8 million. There's a furniture fixture and equipment number for $1 million for a total project cost of $55,530,258.36. We're going to start with that number, the $55 million. We've already paid invoices to GNAC of $3.1 million. So that leaves us funding that we still need to come up with of $52.4 million. Where are we getting this money from? We're going to pull $5 million from the convention center. We're going to pull $14 million from the hot fund. We are planning on pulling another $14 million from the venue tax fund, and we're here tonight to discuss an issuance of $19.5 million bond. That gives us total funding of $52.5 million, which would be sufficient to cover the leftover project cost. Let's see what this is going to do to our funds moving forward. So our fund O2, our hotel-motel tax, we have a six-month reserve of $4.9 million with an excess above the six-month of 19.7. Total funds available of $24.1 million. We're not touching the six-month excess reserve. We're getting the $14 million from the excess reserve funds only. So that leaves us excess reserve funds of $5.7 million. In the Convention Center Fund, we have the six-month reserve of 965,000. I'm sorry, the six-month reserve of 965,000, the excess reserve above the six-month reserve of 5.7 for total available funds of 6.6 million. We're going to be pulling the $5 million only out of the excess reserves, and that's going to leave us $725,000 plus the six-month reserve of 965,000. The venue tax. The venue tax right now has a balance of $17.3 million. We're going to be pulling $14 million from there. That's going to leave us funds remaining of $3.3 million in that fund. So here is where we see how those funds are going to grow through the next five years that we're projecting. You see that we start the Hotel Moto fund. We have 11.3. We project that fund at the end of 2031 to be at 13.1 million. The venue project fund at 2.6, we project that to have available funds of 11.7 at the end of 31. The convention center, 1.8 million. We project that to have a little bit over $2 million at the end of 31. This is how we're seeing the hotel-motel tax, how it's replenishing these funds. This is where you're going to see the increase in the revenues that you were talking about. wanting to look at. It's in the growth of the funds. If the hotel revenues did not come in, we weren't budgeting that and that money didn't come in, you would not see the growth that we're seeing on these funds. So that's where you see it. So if you go back to the line items, it's not necessarily growth though sandra it's the it's what we have already it's what we're already making we have yes we are budgeting we are i can't i can't in good faith come to you and say we're gonna start the budget at 15.8 million dollars and then we're gonna escalate that one percent every year for the next three years and then one and a half two percent the years after that you You know, we had the same discussion when we were working on the budget. Finance people tend to be more conservative. We're at a more conservative number of $15.5 million. That was the starting point that we used to do that. Like Kelly said earlier, we have surpassed the $15.5. Really, year to date, we're probably going to end up the year at about more like $16 million, $500,000 more than what I've started the base projection. But even if I increase your revenue to 15.8 and I go up those $242,000, you're gonna see an even bigger growth in these funds that you're seeing right now is what the point I'm trying to make. Even at what we're all right now.

You're projecting growth, but you didn't do it in the numbers here.

Exactly. Even if we don't get any more people to come in, even if we're stagnant the same way we are, I want to tell you, you're going to be okay. You're going to have the stability. You have that money coming in, even if there's no growth. Even if you're continuing just... but like we are right now, we're gonna be able to make our debt service, our funds are gonna grow.

That's true, but we won't actually be able to grow or do very many new projects for a very long time.

You have, by the end of, I'm sorry, I didn't mean to interrupt, but by the end of the venue, look at the venue project here. I don't know, can I point here? Yes. The venue fund, which is the venue tax fund. By the end of 2031, we're projecting that fund to have $11.7 million. That fund is growing at a rate of $2 million plus per year.

It is plus. And out of the 2.6, we're taking 1.7 right now out of that.

The reason why we're doing the debt service from hot tax is so that we can move forward with other venue projects if that is what the council wants. If the council decision is we want to do the parking spaces, then you have that money earmark there. You're not issuing the debt and tying up your debt from the venue project. It would have been a much easier ask for us, to be honest with you, paying from the venue tax. But that's not the direction I was given. We were told, let's see if we can make it happen from the hotel motel tax. And we were able to make it happen from there, with a little bit of help from the venue. But you still have enough to do other projects that you want to do. You, maybe not in the first year, but you're gonna start accumulating those monies and that money's gonna accumulate and you will, that fund is going by two million plus every year. So that's, yes, that's definitely a positive.

It'll take like two or three years minimum to get another venue project shovel ready. We haven't decided what the next venue tax project would be. Then we have to go out and we have to hire an RFP, or RFQ. And then we have to go through that. And we have to go through all this process to find out what's next on the list of the few items that are on the list. I mean, I think that any council would have a hard time supporting an amphitheater development, since we already have one in Cameron County. And so, you know, you're kind of getting left with a parking garage and that's it, right?

That's it. That's number five.

So, I mean, you know, in a parking garage, if you took $2 million in debt service, we know that can borrow $26 million based off of just what we're seeing today of borrowing $19.5 for $1.5 million or whatever it is. I mean, you might be able to get $24 million or whatever. I can't do the time value money in my head real quick. By leaving $2 million a year plus to allow the venue tax to continue to build, you could have $9 million in there when you have a shovel-ready project for 2030, and you'll still be earning at a base, assuming that nothing ever grows on South Padre Island, and God help us if nothing ever grows on South Padre Island in the next four years. which it never has never done that before, but you know, let's just say it does. You'll still have $2.1 million in the bank growing every year. So we're building, we're building and banking money at the same time. And we're banking money in the hotel fund just a little bit. And we're banking money in capital reserves for the convention center. But you know, anybody who knows that if you have a brand new building and brought us, if you could come up here, I mean, if you want to. If not, that's fine. But I mean, I don't think we're going to have any major repairs for seven years on basically a renovated plus brand new building. I would hope that we're not looking. I mean, y'all are the ones who are responsible to make sure that we get a perfect class A project.

Part of our project. We have two or three people on site every day now that will continue through construction. We have Doug Joel, who used to be an architect. I've been doing construction and maintenance since I was 16 years old. We will be watching everything that happens over there. We're redoing a lot of the existing systems that need maintenance. Maintenance costs actually should not increase. over the next few years.

And there should be no capital improvements unless we authorize building a new building. That's right. We're not going to have to replace the roof in five years, right?

Right, no. We're putting on mostly new roof. Yeah. I mean, it's... Existing building. Right.

You better ask David. Yes. OK, so now we're going to go into the funding part of it. We have Dave Gordon here to discuss the options for the bond. I will preface by saying he's going to discuss two options, 25- and 30-year bonds. The presentation here was at the 25-year bond because it was the highest ed service. So we went with the higher debt service payment, because obviously it's a shorter period to pay. So that's the number that we use. If the council decides to go with the 30-year bond, there's going to be a little bit of changes in the numbers, but not that much.

Before we move on, I just want to ask, in our project funding sources and throughout this paperwork that we just received today, by the way, it's like a 30-page packet just for everybody to know. Is there a contingency of five to 10% in here at all? Because it seems like a single change order will move this into a funding gap.

Hold on.

Eight million.

There's a finish out contingency of $3.8 million.

NBP Betterment, 3.8 million, that's 20% there plus a million for FF&E and then you're leaving What, could you go back to that slide where you're leaving the balances at what, 07, what our fund balances are gonna be?

Okay, hold on. Like 6.6 in pot and 3.3 in venue. Yeah, 5.7, the 6.6 and the 7.25.

Well, that's another nine million dollars in there and if we god forbid we get anywhere near like that We've got major problems because we can only increase the contract by 25% max Any other questions, thank you, okay Thank you senator again Dave Gordon with the strata hand house, we're a financial advisor to the city and

Just real briefly, I just wanted to go over the debt the city has overall. You do have about 13.375 million outstanding general obligation bonds that are mostly tax notes. Others have a AA plus rating, which just shows you guys are doing a great job in terms of managing your debt. You have the venue tax, hotel occupancy tax revenue bonds that we discussed a minute ago, about $7.3 million outstanding, and you can see those are basically level debt service out through 2047. Those are currently callable, but the coupons on them are relatively low, mostly 3% and 4% coupons, and they're not callable economically in the current environment. And then you have the EDC revenue bonds. This is a little misleading since the payment is on 10-1, so the 2026 payment was a long time ago. The 2027 payment, as Darla LaPera mentioned, is coming up on 10-1, and you guys have opted now to pay off the other payment that was due on 10-1 of 27, which is FY28 early. So those will be paid off here very shortly. With regard to the upcoming proposed transaction, just again briefly, we're a financial advisor. Parker St. Horton is your bond counsel. In working with Sandra, we had basically proposed that we use two underwriters for the transaction, Raymond James and Frost. Those are both entities that have done a lot of business over the years with the city and called on you guys routinely. And they would have underwriters counsel, and then you use Bank of New York Mellon as your paying agent. So just again to real briefly discuss the different HOT revenues that we're talking about. You do have a half a percent for beach nourishment that is restricted. It can only be used for that. That's about $800,000 a year and this is FY25 numbers. You have the Convention and Tourism HOT that we were talking about, the 8%. I know internally you split that between the, I think it's the 02 and the 06 funds. That's an internal policy but the pledge on the debt would actually be, the entire 8%, even though we wouldn't expect that you would ever use that. That's about $12.8 million. And then you have the venue hot tax, which is 2%, about $3.2 million. So a total of 10.5% for the city. Then you've got the county has a half a percent for their venue projects, and then the state has a 6%. So you're at the maximum. Without a state law change, that's the maximum hot that can be levied. As I mentioned before, you could have another election to actually add another project to the list of approved venue projects. Or you could pay that debt off early and redo all the projects and things of that nature. So you have some options there. So as Sandra mentioned, we're looking at 30- and 25-year debt. But the analysis is really the same. Again, you've got about $12.8 million worth of the 8% hot revenue that would be pledged basically on a gross basis. That would be a senior lien in terms of debt service would get paid first. Then you have, in this case, we're looking at $19.5 million in project funds. Again, I know there's a lot of discussion about contingencies, different things. Pretty easy to change this number to a different number if you wanted to do $20 million or if you wanted to do $19 and not $19.5, whatever, as we go through this process, which I'll talk about in a minute. Pretty easy to change that up to a certain point in the time schedule. We would be funding a reserve fund that's dedicated to the debt. You have a similar one with a venue tax. That's money that you can invest and you can use the earnings on those investments to actually help pay debt service. You will have some cost of issuance. This is just kind of a round number that we haven't done a budget yet, but it would be something around this line. So the rate in today's environment, about 5.6%. We actually have 25 basis points of cushion in there, so it would be less than that. But I'll talk about the market in a minute. It has been fairly stressed lately, as you probably have seen in terms of what's going on in the Treasury market and everything else. So I know there's a lot of discussion about Whether you showed growth or not in terms of the revenues We didn't show any growth here either and part of the reason is be again the conservative nature of being in finance and want to make sure that you have The revenues available to pay debt service, but also as you are well aware Although your hot revenue has been growing hot revenue the nature of that particular credit is that it could Could be down in a particular year because of a pandemic or because of a you know a hurricane issue or whatever else Obviously over time the expectation is that's going to grow robustly the county's growing and by leaps and bounds as it was discussed I fully expect that the the city will continue to grow as well But you can see on column Gee there the total debt service again. You don't have any debt service outstanding for this credit I'll call it mage is the residual revenue after debt service that again I know that you guys do divide this between a couple of funds, but that's an internal policy You can divide it how you saw fit, but you can see that you have very robust coverage you have you know almost nine times coverage in terms of 2025 revenues over this debt service now what you use is the money's for in terms of supporting the convention center operations and in terms of other things that you do in terms of promoting tourism and those types of things, those would come afterward, but again, you do have significant revenue that you can use.

Can I just ask a question quickly? If we have a reserve fund of the 1.4, does that mean that we're only gonna be getting the 18 out of that?

This was, you notice actually above the kind of the number in the box, the 19.5, we have a par amount projected of 21.74. Oh, I see, above that. And that par amount depends on, everything is sized off what you want, which is the 19.5. So that's the starting number. And then we basically factor in the cost of issuance, the reserve and deposit. But then it gets a little more complicated than that because of the way the municipal bond market works. It depends on the yields and the coupons that are sold. you're typically gonna sell it at a premium. In this case, based on what's happened with rates recently, it may be a little bit less of a premium, but the fact is is that we're sizing it off the 19.5. That's what you're gonna net.

Historically, with our credit rating, every time we've sold a bond, we've collected more money than we anticipated because the interest rate that we had projected was actually less, but people were willing to take a smaller interest rate to have South Padre Island bonds is what you, and to break that down.

Unlike the treasury market, for example, where let's say there was something that had a yield of 3.5%, you would sell it also at a rate, a coupon rate of 3.5%, so it would be sold at par. The municipal bond market doesn't really work that way. quite often sold at a discount or at a premium, just the way the market works. And I don't want to go down a rabbit hole and talk about it too much. But basically, again, the idea is that you would be getting $19.5 million. There's also another reserve fund that's not shown here that you have similarly on your venue tax revenue bonds that are basically, we call it the seasonal reserve. It just kind of recognizes the fact that you collect much of your hot revenue basically between June and September. Um, obviously during the, the, the peak kind of tourism months, you also have obviously spring break is another area that you, you do a lot as well. But so there's a, there's a fund that we kind of accumulate some money in to make sure that you have the appropriate liquidity as you go forward. And so there would be a deposit of probably about 250,000 or so still working with Sandra on that. That would be, uh, uh, outside of the bond transaction, but basically kind of pre-fund that account. Again, you have that same mechanism in your revenue tax revenue bonds right now. So we would expect that this would be rated A, unlike the city, which is a double A plus credit, just because of the nature of the credit. But our expectation is it's gonna be the same as the venue tax, and again, just because when the rating agency looks at that, they're gonna look at what can happen with the venue tax and things of that nature.

So just to clarify, trying to take out my calculator while I ask this question here, but does that mean that we're actually borrowing not 19.5 but a little bit more?

We're borrowing 20, his projection there, the par amount is the 21,745, okay? That's what we'd be issuing in bonds. But then 1.473163 goes into a reserve account with Frost or whoever is our servicer. I can't remember who else was on that list. And they're going to hold that. And technically, in reality, that money can earn interest or whatever it might be over a period of time. And it also kind of makes the last year's payment because you've paid off 29 years. You're holding one year in reserve. And now you don't have to make that last year payment. So. the bank pays it for you because they've got it there. Kind of similar, I'm guessing, with some of what we have with the Burding Center bond, but maybe not. I don't know if we have any reserves in that.

I believe we did. I mean, the typical would be to have on the sales tax revenue bond to have that amount. And I know I shared that with Darla LaPere a month or two ago when we were doing the analysis for the payment.

I know. We've got to stay back here. But this is very common. So there's a one-year reserve that we're bonding that we can earn the interest on it. and it basically sits at the bank and it pays for the last year of the note.

Exactly, and as you mentioned, Mayor, you invest, it's an asset, it'll be on your books as an asset, it's your money, but it is restricted, just like you have a lot of other things that are restricted, it's restricted for use in terms of paying debt service. Understood, thank you. So the other thing that I'll mention, In the municipal bond market, most debt is sold with a nine or 10-year par call, they call it. In other words, after nine or 10 years, you can call the debt. Typically, the reason you would do that would be for economic savings. If interest rates have gone down or if based on the way the yield curve works, just the fact that what used to be, let's say, a 30-year debt, 10 years later is 20-year debt. And the way that works, it typically makes it so you can call that economically. Not always, but you typically can. So I know there was some interest in exploring a shorter call. We can do that as we get closer to pricing. But there is potentially some cost to that. But we'll explore that in the pricing process.

And so what he's talking about is that you can buy yourself out of the bond. And if you buy yourself out early without a callable window, then you have to do defeasance and you have to pay the interest that's going to be earned during that callable window. So the bondholders are made full based on their general principle. With our interest rates right now being high and probably, I don't know what you want to forecast where they're going to be over the next couple of years. but a lot of people don't think they're gonna be going down anytime soon at least the bond the bond market doesn't and so I had asked to research a shorter window in case in seven years and interest rates become favorable again and might be at 4%, could we find our way and exit out of that and refinance this at 7 versus 10 years? And that's a question that we'll have to answer down the road.

Right. As we get closer to the pricing, we should discuss that. What you don't want to do is you don't want to pay a big, a large amount for a day to have that option because you're kind of not using it. doesn't necessarily work then. And the municipal bond market again is used to seeing that nine or 10 year call. So that's my reticence there. So you can see here debt service about 1.47 million. I know in the presentation that was given earlier it was kind of split between the two funds. but I'm assuming that it added up to this number, or actually to the 25-year debt, which is, this is the same analysis here. It's 25-year debt versus 30. Obviously, the total interest expense over time is going to be lower. The present value is basically pretty close to the same, just because if you're present valuing it back at the same discount rate or a similar discount rate, it's going to be around the same. So part of it has to do with affordability. What do you want to pay on the annual basis? Here, it's about $1.75 million or so. Here, about $1.47 million or so. So about $100,000 difference between debt service. You have a lower reserve fund deposit when you do the 30-year debt. Interest rates are similar. Here, we're showing 5.5%. And over here, we're showing 5.6%.

Do you have a question? No, that was, you answered it, thank you.

And tonight, when they were showing us the performer on everything, we were projecting a use of $1.5 million. That was what we were projecting for debt service, just for everybody to kind of understand. So we kind of rode the middle between the high, the 25 and the 30, of trying to figure that one out.

And one side of the slide, I know I stood up and asked Sandra about it, because I saw that it didn't really match what we were talking about here. But it was because it was split between two funds. So between, I think, the 02 and 06 fund, I believe. So in terms of, okay, just briefly then on the venue hot revenue bonds, again, you have about 3.2 million a year right now, $500,000 or so in terms of debt service. You can see the residual revenue. Again, very robust coverage. A lot of discussion about what's being used to pay for what. Again, these bonds, the concept would be that we would pledge the 8% hot. not the venue hot, but again, as we talked about, there's some mobility between paying for different things from different ones as long as we're talking about venue projects, venue hot can only support venue projects, which the annex is one of them. Councilwoman Hartwell, I did send an email to Bond Council just to kind of confirm the issue with regard to what was the vision in the past versus now, and I'll try to get an answer for you on that, but again.

But did you send that email to you?

To bond council.

The bond council would have the vision for the 2016 menu tax project?

No, they would be able to opine on how closely you're held to what that vision might have been versus just the language on the proposition, which was, as the mayor read earlier, the language is fairly broad. It does specifically say a convention center annex. And anyway, I'll let him decide whether or not he thinks that there's

If there was a particular vision back in... That particular vision actually included the parking garage. So to hear that the fifth project is the parking garage is concerning because it was supposed to be in... It was envisioned to be part of the annex and actually to help the downtown district parking.

It's interesting that our legal counsel at the time wanted the venue tax to be broken out into five individual items and the mayor at that time did not like that idea. specifically asked for this vague language, and then if I remember correctly, Joe, you can correct me or whoever else if I'm wrong, but if I remember correctly, that he didn't like the answer that Paul Cunningham kept giving to counsel, and so we switched ships on our attorney, basically, because we didn't like that answer, so we continued with the vague approach versus What most cities do is do a line item approach and then you vote yes or no, yes or no, yes or no on each individual item. But that was decision of council to do that against our city attorney, Paul Cunningham's recommendations.

Right. And I remember all that discussion, Mayor. And in this particular case, it does say, without reading it again, there is a comma between commissioner annex and parking garage. They're different things. But as the mayor mentioned, typically for a venue tax election, it is one very specific project. But I'll just say, in doing this for over 20 years, when you look at a bond election, or in this case, you're basically voting for the tax itself. You know, you don't have the exact vision. There is a vision, but you may build something slightly different.

But there was a vision that was deliberated on the dais by the council, by the mayor, and the people understood that vision. That was what they voted for, regardless of the ambiguity of how the proposition read. That is my point.

What they voted for was what was on the piece of paper, and they circled yes or no right next to it. They also understood what it was. That's what they did. They didn't go out there and say, I'm voting for the Grinch because the guy, and it's the Grinch from I Stole Christmas or whatever versus the guy's last name, Paul Grinch. They voted for Paul Grinch. They might have had an idea that the guy was going to steal Christmas, but Paul Grinch wasn't stealing Christmas. Point of order.

Why are you yelling?

I'm not. I'm just trying to explain.

And also, sorry to jump in. I was here during that time as well. In 2017, there was a potential vision of the kayak launching area from the convention center. And that might have been a merge of a couple of the components during that time. And I know that was many years ago, but that was also in discussion.

A vision that wasn't carried out by the next administration.

No, that's not correct. when we went to the windsurf community, they said they didn't want the facility there because it was dirty air. They asked us to move it and find other land for that. I'd just like to make this one comment real quick. We keep talking about it's a different vision and a previous mayor who wrote this proposal had a different vision in mind. That previous mayor on September 6th, 2023 was on the selection committee to hire Gignac architects, and he sat through the same meeting with, I think there were nine or 10 of us on that committee, and all the renderings that Gignac and the other five or six architectural firms showed us were a lot more grandiose than what we're building right now. It was a bigger, one project had a hotel attached. Another one had a giant turtle over the whole facility, and I think it added 80,000 square feet. So this has always been an expansion, always. I served 10, 12, 14 years on the CVB. This has always been the proposal. This started off with Mayor Pinkerton in 2012, and I think the budget back then was $30 million. I'm excited that we're at 19.5 now, and this is 15 years later, with the funding source in place. And I wanna thank finance for being very frugal on their projections. But we've had 42% growth in the hot tax the last six years. We went from 8.5 million, we're over, we've been averaging sustaining in the mid-12s. So we're in a great spot for this, and this is gonna be a tremendous, asset for the island moving forward. If anyone has any questions about the vision, you can look at the September 6, 2000, just do a Freedom of Information request with Ms. Soto over there. Yeah, that was because the mayor had, we had a $2 million investment already there.

You're not telling the whole truth. No, you're not.

You weren't at the meeting. This is not how we do things. We don't argue people. I'm not here to argue. I'm just September 6th, 2023. Look up the selection committee who hired the engineers to design this, which was Gignac who was chosen. Okay.

Let's get back on track. I'm sorry for taking your time.

Procedurally, I just wanted to kind of go through what we were talking about in terms of the steps to basically get to. So we have to prepare an offering document. We actually, in anticipation of this, no risk to the city of this, we started preparing that already. We've already talked to the rating agency about potentially having a sale. Assuming that you decided that you want to go forward, we'll complete the rest of the steps. We'll have to, again, go through the process of completing that offering document called the preliminary official statement. We will get the rating affirmed. Again, my expectation is the rating would be an A rating. We will also go through the process of basically talking to, there's two what are called bond insurance companies out there. There might be the ability to basically pay a small fee out of cost of issuance to the bond insurer to basically market the bonds on their AA credit, which is what you did last time. We used a company called Assured Guarantee. We'll go through and ultimately post the POS and then we would have the sale on the morning of October 21st and then bring that final results to council on the evening of the 21st and then we would close on November 19th. So unlike larger entities in Texas, we can't do a delegation for this type of offering. The city doesn't meet certain criteria that the state outlines. So normally what I would do is I would go and I would basically have an ordinance that was passed that basically gave us parameters that allowed us to complete the sale under certain circumstances. In this case, we don't have that before you. Again, we can't do that for a city of your size. So we would be doing these steps, and we would bring it to the council on October 21. But obviously, I can't get you to vote on that right now. But the expectation is that you would hopefully support the sale. What we do have on the agenda tonight is a reimbursement resolution. which is a later agenda item that basically also doesn't really commit the city to anything, but it basically says that you have the ability to reimburse expenditures that you have made or will make from the proceeds of these bonds. So again, I think it was 3.2 million you've already spent on certain things. You could reimburse yourself from these. Again, we're targeting 19.5. If you thought about it more and you decided you wanted a little bit of a different number because of reserves or because you wanted to reimburse yourself for some of those prior expenditures, you could do that. But that is on the agenda for later tonight. But otherwise, this is the process we would go through. And again, the expectation is we would continue to work with Sandra and with Randy to make sure that the process was completed, the document was posted, the offering document, and that we actually successfully priced the bonds. The underwriters would do that on the morning of the 21st of October. At that time, when it came back, we would have, here is the actual results. And this is the actual sale. And the expectation is it would be something in line with what I showed. Again, we had 25 basis points of cushion in there. In other words, the expectation is if we sold it the day we prepared this, which was last Friday, that we would be 25 basis points better than that. We have seen, as I'll mention just on, I've got a couple of slides in here on the market, but I'll just summarize that. Basically, again, if you've been following the news at all, there is a little stress in the bond market right now. We do have the Federal Open Market Committee is meeting today and tomorrow. The expectation from the market is there will be a 25 basis point increase in the federal funds overnight rate, which really affects the short end of the yield curve. It doesn't affect the long end. In fact, it could actually cause the long end rates to go down a little bit because of the way that psychology works and the economics and whether people think there's a recession or not coming, those types of things. But hopefully it would be under what I had presented. Otherwise, rates have gone up significantly this year. We've seen Treasury rates go up about 75 basis points. Let me just look at those numbers again. If we looked at the beginning of the year, since the beginning of the year, 10-year Treasury has gone up about 77 basis points. The 30-year Treasury, about 52 basis points. On the municipal bond market, which is a tax-exempt bond market that we spread off of a particular index, and each credit is different. Again, this credit we're talking about is the hot credit. It's gone up on the 10-year about 60 basis points, or 0.6%. But on 30-year, it's gone up almost 1.5% since the start of the year. So unfortunately, the market has kind of gone in the wrong direction. There's a lot going on with geopolitical issues, an election coming up, those types of things. So hopefully, this will quiet down a little bit. But unfortunately, it has been going in the wrong direction. So that's, again, I've kind of laid out the process. You talked about the reimbursement resolution, which is on the agenda for later. The economy, are there any other kind of questions?

I think we're good. Thank you, sir.

Thank you.

All right, now we're going to move into.

Before we move into something, can we go over the lost business since it's relevant to these agenda items?

Can we, okay, can we, sure. I mean, can we move into 18 and then ask that question since it's still relevant to that item?

Sure, absolutely.

All right, we'll go to item number 5.18, which is discussion on plan of finance related to hotel occupancy tax bonds. Okay, Erin, you had a question?

Well, the last business report that was provided to us by Hendon, I have some questions about this. I mean, this is kind of part of the data that we've been utilizing to justify this against. And there's some things in here I'd like to point out. For one, there's an event on here called the Student Mobilization Event in 2022. It says that we would have captured an economic impact of $14 million, which actually means that the $27 million of lost business that we're trying to justify, $14 million of that would have came from this student mobilization, implying that that would have been $8,000 per room night, which is strange because the rest of the file median is about $150 per room night. So there's got to be some sort of a typo or something here. I did do some research here, and it looks like they found They found a home at Comerica Center in Frisco, Texas. That seats a max of 7,000 people. This event was looking for only 1,700 attendees. So how could we say that that was lost business when that's... It doesn't seem like that would really add up. But there's other things like the 36 with any public. Oh, 36 of these events had a public had a public match, but 122 had none. So that either means that the event lead name wasn't entered correctly, wasn't documented correctly, but there was no data. It's just kind of like the vagueness of whoever entered this stuff, like quinceanera. And then you're considering that lost business and lost revenue. I don't think that that's, the kind of data that we're looking for. 14, where a venue size comparison is even possible. and eight that actually went somewhere larger than SPI. So about a third of the lost business had less than 50 people. So when we're talking about this, I mean, you really got to dive into what this data is showing us. A third of it was lost business for less than 50 people. That's what we're justifying our $73 million convention center off of. I'm sorry. That's really difficult. I provided this to everyone, and this kind of sums up a lot of what I just described to you. So that's what I had to say about that. Thank you.

Okay, we're here for a discussion item on the financing plan using hotel occupancy tax and using $14 million from venue tax, $14 million from the excess reserves of the HOT, and $5 million of the excess reserves of the convention center fund. That's 0206. And we're talking about funds, 0206. and 03, I think, and borrowing potentially $19.5 million to come up with a sum of 55 million, well, 53 million, because we've already paid three, whatever it might be.

This is one of the items that we put together, the three items together. That was just a presentation that Dave gave.

Right, right. And so now it's a discussion of it. And I guess we've had a discussion. Oh, there's no action. All right, cool. Thank you for pointing that out. I don't know if anybody else has any other questions, because it's not like we have to act on this. This is just how they're presenting how we can pay for it. All right, hearing none, we'll move on to item number 5.1919, which is discussion of possible action on a resolution number 202625 expressing official intent to reimburse with tax exempt obligation proceeds cost associated with construction and constructing, enlarging, renovating, improving, and equipping the city convention center facility. This resolution, it's not binding, right? when this is pending?

Correct, Mayor, this is just because you would be selling tax exempt bonds. There are certain IRS restrictions in terms of your ability to have an expenditure, for example, from five years ago and then you're gonna issue bonds to pay that back. So this is just a kind of check in that box and it does indicate that obviously that you have some intention of moving forward and that you can reimburse yourself for anything that you expend, let's say, next week or whatever, but also some things in the past.

I'm kind of jumping order. We'll do this 519, then we'll go back to 516, 517. Is there someone who'd like to make a motion?

Motion to approve resolution 2026, that's 25.

Is there a second? I'll second. All right, is there any other discussion? All right, hearing none, all in favor, please raise your hand.

Opposed?

Motion carries. Then we'll go to 5.16, which is discussion of possible action to authorize Roddison Associates as owner's project manager to work with Junak, Fulton, and Fulton Construction to refine the design development documents for option B and achieve a construction budget not to exceed $50 million.

Hi, Mayor, City Council, Wendy Delgado, Director of Operations for the city. Randy and I both have been meeting with Broaddus on a regular basis as they've been working with Janak and Fulton. And they feel at this point that they need authorization based on the update that Grady provided at the earlier agenda item, basically you all had already selected option B. This would also give them a target budget for construction not to exceed 50,000 or whatever number under that you all feel is appropriate. His presentation from the last meeting was in the packet just and y'all talked about it a lot today but just for refresher they have the project basically down to rough estimates of 46 million 649 577 and that includes the two contingency line items that are around 3.8 each so they're just looking for that target budget that they need to work with Fulton and Jeanette because they'll now need to take those correct me if I'm wrong, Grady, but 100% design development documents that you all have for the big scope project and just dial those down to this project that is currently estimated around 46 million.

Right. 100% DD.

I'm sorry, what was the question?

Is it 100% DD?

100%, yeah, we actually have 100% design development documents now for a project that's $100 million. We're going to have to do some redesign. But what we're trying to do now is get your permission to proceed to, to bring the documents forward far enough for the contractor to say we will give you a guaranteed maximum price of X for X scope of work. Once we get that, as I've said, then we'll sit down with a group of stakeholders, we will determine the overall, the 50,000 foot level of what the building should look like. and then we'll give that to the contractor and the architect and we will all start working toward that scope of work and that budget.

Okay. Anybody have any questions or someone would like to make a motion?

Is it okay for a question from the audience?

Please state your name for the record.

My first council meeting, so bear with me. CHRIS JERRAMSEN.

You signed up for a doozy.

MARY SHIVLEY. Marie Shively, 500 Padre Boulevard. My question is, does it make sense to go any further, since my understanding is the county hasn't yet given us approval to do the construction?

This is to get plans, and I had a conversation in front of several people with the county administrator, and they're aware that we're going through this process, and they are actually wanting us to come through this process so we can show them exactly what we wanna build. And that's kinda what we have to do. It's like this chicken and the egg thing. And that conversation was had just a couple days ago.

Thank you.

Thank you.

Okay. I'll make a motion to authorize Broaddus & Associates as the owner's project manager to work with Gagnac Architects and Fulton Construction to refine the existing design development documents for option B and to achieve a construction budget not to exceed $50 million.

Second. All right.

Is there any other discussion? All right, hearing none, all in favor, please raise your hand. Opposed? Motion carries. Now we'll move to 5.17, discussion of possible action to schedule special city council meetings regarding the venue tax project. Grady, don't go anywhere, because this is kind of, I have a question for you.

Oh, you went this far from a clean getaway.

Yeah, I understand. So I put this on the agenda because we've talked about how we're paying the consultants a large amount of money every day. And I know in construction projects that questions come up. And I don't know if Rodas would like us to be able to, and we can't move nimbly. Like if I'm building someone's home, I can pick up the phone and call the owner and the owner can tell me, Yay or nay on whether or not he wants the house pink or purple We don't have that ability and so the idea of putting this was on the agenda was is that we could file You know in a proper amount of time and notice do the Open Meeting Act have a scheduled meeting and if we don't If we don't need anything or Broadus doesn't need anything for us Then we can just cancel said meeting and we could just have this on the agenda And I don't know if this would be helpful to you sir or not. I

I appreciate the city's forethought in putting this on the agenda. It's a really good idea. Usually, we deal with a project oversight committee that is appointed by the city council. And they say, OK, these people are going to make the decisions on our behalf. And we work with them. And it doesn't require open meetings and all that. But in this case, we

We've decided to have open meetings.

Yeah, we've decided to have open meetings. I think that's great. But being able to respond quickly with already scheduled meetings is very important in these next couple of months because we're going to be making a whole lot of decisions. So I really appreciate this agenda item.

So again, if they don't have anything for us, then we won't meet and we can cancel the meeting. But this is kind of getting everyone's thoughts about being able to meet every Wednesday at 5.30 p.m. Nothing, not a noon, not anything like that, just a 5.30 p.m. There might be something else that gets thrown on the agenda because we have something that didn't make another agenda or something like that. But we'd only have the meeting if we had something that brought us needed our attention on.

Right.

but none of these meetings will have any discussions about new venue tax projects or if someone wants to add it they if someone wants like to add it they can but we're i'm just trying that's why i just said there might be other agenda items that end up on it because i mean i can't predict the future but let's say that claudine has a week to get a grant in for $100,000 for a new police vehicle and she can throw it on this meeting really quick, well, we're gonna throw that on that meeting because we have a meeting scheduled.

But this is more so because the clock is ticking and the meter's running with him.

Yeah, for sure.

We're not doing you no favors.

We're trying to get what he's worth. We're paying this team for November.

It's a good idea.

I'll make a motion to approve. Okay.

Is there a second?

I'll second.

Okay. Any other discussion?

Yes, I just want to reiterate to staff listening or that may watch this meeting, this does not mean you can miss your internal deadline for regular agenda items. I just want to make that clear.

Yes, yes, please. Okay, thank you. Please make that clear for your sanity. Yes. Okay. All in favor, please raise your hand. Opposed? Motion carries. All right. Then we'll move to, well, we're going to table 520 because we didn't have a resolution attached to that. So if we want to move to executive session, if we're to make a motion to go into closed executive session pursuant to section 551.071 of the Texas government code to consult with the city attorney about legal issues involved and related to a convention center lease agreement with the Cameron County and the recent correspondence from Cameron County designating an area of the lease premise as the Laguna Madre Bird Sanctuary at Andy Bowie Park. I need to make a motion.

I'll make a motion to go into closed executive session.

All right, all in favor, please raise your hand. Opposed? Do what? Motion, second. It is 8-17, we're going to go to executive session. There is no action on this item, so we will be coming straight out to adjourn after this. We're returning from an executive session. Seeing that there is no other items on our agenda, we are adjourned. Everybody have a great night. Rush to a restaurant before they close.