SL Logo

Tax Increment Reinvestment Zone No. One

Agenda Request

Agenda Of:

3-05-10

Agenda Request No:

ii-a

Initiated By:

Nelda McGee,

executive secretary

Responsible Department:

City Secretary

Presented By:

Glenda Gundermann,

City Secretary

Department Head:

Glenda Gundermann,

City SecretaryINITIAL

 

 

Additional Department. Head (s):

N/A

Subject / Proceeding:

minutes Tax Increment Reinvestment Zone No. One September 25, 2009

Approve Minutes

Exhibits:

Minutes September 25, 2009

Clearances

Approval

Legal:

N/A

Director:

Regina Moralesregina_initinial

Purchasing:

N/A

Assistant City

Manager:

N/A

Budget:

N/A

 

 

Recommended Action

 

Approve minutes of the Tax Increment Reinvestment Zone No. One Board of Director meeting September 25, 2009.

Exhibits

 

STATE OF TEXAS

§

COUNTY OF FORT BEND

§

CITY OF SUGAR LAND

§

 

CITY OF SUGAR LAND

TAX INCREMENT REINVESTMENT ZONE NUMBER ONE

Friday, September 25, 2009

 

REGULAR MEETING

 

Tax Increment Reinvestment Zone Number One convened in regular meeting open to the public, in Conference Room 161 of Sugar Land City Hall on Friday, September 25, 2009 at 8:00 o'clock A.M. and the roll was called of the members; to wit:

 

Greg Stirman, Chairman

Robert Treacy, Vice Chairman

Vincent DiCosimo, Secretary

Cynthia Bartholomew, Director

Allen Bogard, Director

Fred Fogarty, Director

John Gamble, Director

Jared Jameson, Director

Anthony Lacsamana, Director

 

QUORUM PRESENT

 

All of said members were present, with the exception of Director Gamble, who was absent, and Director Bartholomew, who arrived at 8:09 o’clock A.M.

 

Also present were:

 

Karen Daly, Assistant City Manager

Joseph Esch, Executive Director Business and Intergovernmental Relations

Regina Morales, Director of Economic Development

Jennifer Brown, Budget and Research Director

Nelda McGee, Executive Secretary, and

A Number of Staff and Visitors

 

CONVENE MEETING

 

Chairman Stirman convened the session, open to the public, to order at 8:01 o’clock A.M.

 

Minutes

 

Chairman Stirman introduced consideration on approval of the minutes of the Tax Increment Reinvestment Zone Number One meeting held on July 10, 2009.

 

Following a full and complete discussion, Vice Chairman Treacy, seconded by Director DiCosimo, made a motion to approve the minutes of the Tax Increment Reinvestment Zone Number One meeting held on July 10, 2009.  The motion carried unanimously.

 

financial

 

Chairman Stirman introduced consideration on Tax Increment Reinvestment Zone Number One Fiscal Year 2010 budget.

 

Fiscal Year 2010 Budget TIRZ No. 1

 

Ms. Jennifer Brown, Budget and Research Director stated the certified tax roll of $99,509,869 less $5,570,200 base value, leaves an incremental value of $93,939,669 for 2009.  As of certification, $3,431,069 in residential was under review by the Central Appraisal Review Board.  The ARB recommends using 80 percent ($2,744,855) of the review value to estimate revenues for the taxing entities, calculate the effective tax rate, and publish legal notices.  That brings the total value for estimating revenues to $96,684.524.  Applying the tax rates from the City, LID No. 2, and Fort Bend County to the value yields total tax revenues of $879,947.00.

 

Vice Chairman Treacy asked how the tax rate was determined.  Ms. Brown stated assumptions were made on level tax rates for both the City and the County and a declining tax rate for the LID as it paid off its debt.  The intent for the future is to keep the tax rate level at 30 cents when possible. Exemptions are currently being used to offset increases in residence valuations. 

 

Vice Chairman Treacy stated he did not understand why all three entities were not at the same level.  Ms. Brown explained the tax rate for each entity is based on funding needs for the year.

 

Director Bogard stated that the tax rate is the County’s primary source of revenue; the City has supplemental sources of revenue, such as sales tax.  The economics for each entity are completely different, therefore the tax rate is set accordingly.  The TIRZ itself does not have a tax rate; the entities pledge a portion of tax revenues generated from properties within the TIRZ to the TIRZ.

 

Ms. Brown stated the revenue estimate for 2010 included property taxes of $879,947.00; interest income of $300.00; and miscellaneous income, payment for underground conduit, of $2,800.00.  Total revenues of $883,047.00 are lower than was originally presented in July due to the decrease in the tax roll.  The decrease also accounts for the reduction in Sugar Land Development assignment in the 2010 Budget. 

 

Mr. Joe Esch, Executive Director Business and Intergovernmental Relations stated the City, Parks Department, and POA are working together to develop a funding plan for a permanent sound system that will enhance larger events and attract visitors to Town Square. 

 

Ms. Brown stated the projected ending balance is $40,774.00.  There is no minimum fund balance requirement for the TIRZ; sufficient funds are allocated to cover expenses; the remainder of available revenues is allocated to Sugar Land Development Corporation for infrastructure reimbursements to the developer.  The allocation to SLDC does not cover the full debt service; the goal is to cover as much of the reimbursement as possible and still allow the TIRZ to fund events and improvements.

 

Director Jameson asked if the interest payment was being deferred.  Ms. Brown stated that SLDC has the capacity to make debt payments and is making the payments as scheduled.

 

Mr. Esch commented that the TIRZ was never intended to make full payments; the TIRZ infrastructure investment was a source of revenue with the SLDC making up the difference.  Director Bogard stated the contractual obligation of SLDC is for reimbursement using TIRZ allocations and paying the difference.  The City, TIRZ, SLDC, and SL4B all support a combined approach to expanding events in Town Square and citywide to promote tourism and retail.  Reimbursement from PCD to the 4B Corporation and the reduction in the contribution that needed to be made by the TIRZ to the 4B resulted in the ability to do extra things and still make payment to SLDC; because of the reduction in the taxable value in the final numbers presented, there is a reduction in the traditional reimbursement to the SLDC. 

 

Ms. Brown stated that reduction was due to the $10,000,000 decline in the tax roll from 2008 to 2009 associated with the Minute Maid Building abatement.  In the prior year there was partial value since the building was under construction; in the current year the building was completed and no longer abated, so the taxable value came off the tax roll.  Director Bogard stated that the revenue stream to the TIRZ and SLDC would be significantly enhanced by future taxable values of buildings that are currently abated. 

 

Director Lacsamana asked if there was an anticipated payout of the debt.  Ms. Brown stated the debt was structured to pay out in 2025, which coincides with the expiration of the TIRZ.  Director Bogard stated the revenues which had been used to pay the debt would then go directly to the City and the County.

 

Parks and Recreation Department Funding Plan

 

Ms. Teresa Preza, Event Production Manager stated the City 50th Anniversary celebration was included in the $100,000.00 for additional event funding in the 2010 Budget and will be hosted in Town Square.  The 50th Anniversary celebration will be combined with New Year’s Eve festivities with the goal of branding Town Square as the “beating heart” of Sugar Land and increasing awareness of Town Square as a destination location.  The program will be divided into a children’s celebration and an adult celebration:

 

 

Ms. Honor Iosif, Event Coordinator, stated the goal of the celebration is to showcase the square through creation of a “streetmosphere,” or environment of entertainment and festivity throughout Town Square using multiple stages and street performers.  Performance pieces include a Supernatural Museum of History featuring combination stilt walkers and puppet performers; Shan the Candyman; Cirque entertainment acts; and “The Living Fountain.”  There will also be historical vignettes through living statues and a video montage showcasing the people and stories of Sugar Land through prerecorded and live footage.  The overall ambience will feature the buildings of the Plaza through state-of-the-art light projection of patterns, logos, and images.  The Grand Finale will feature a midnight Sugar Cube Drop for the countdown to the New Year and fireworks from City Hall and surrounding buildings.

 

Ms. Preza stated the City has designated $69,000.00 in general funds for the event and is asking TIRZ for up to $50,000.00 of the $100,000.00 event enhancement funds.  The goal is to obtain $20,000.00 in sponsorship for the 50th Anniversary celebration; if that goal is met, only $30,000.00 of the $50,000.00 TIRZ funds would be used for the event.  The remaining $20,000.00 would be used to enhance events in the Plaza such as Halloween Town or the Christmas Tree Lighting event. 

 

Director DiCosimo asked if there would be shuttle service, since the Plaza would be shut down.  Ms. Preza stated Mercer Stadium had been requested for parking and there would be shuttle service provided.

 

Director Lacsamana asked whether inclement weather plans are in place for the activities.  Ms. Preza stated the Marriott ballroom and first floor parking garages could possibly be used as alternative activity sites; the fireworks display would still take place, depending on the severity of rain. Staff does not anticipate cold weather being an issue, only rain.

 

 Director Bartholomew commented that signage was needed to advertise the event. 

 

Director Fogarty asked about sponsorship.  Ms. Preza stated that the minimum sponsorship would be $5,000.00; either a large corporate sponsorship or several smaller ones would be acceptable. 

 

Director Fogarty asked if the new sound system would be in before New Year’s Eve.  Mr. Esch stated that it would not; staff is researching the scope of the project and will bring it back to the board at the next meeting.  The $80,000.00 cost is based on estimates received over the years and may need to be updated as the process for a permanent sound system for the Plaza moves forward. 


Director Jameson asked for clarification on how much of the $100,000.00 budgeted for city events would be designated for the celebration.   Mr. Esch explained that there is $100,000.00 budgeted for augmented events; $50,000.00 goes to City events and $50,000.00 goes to augment POA events. 

  

Director Jameson asked if the 4A or 4B could pay for the event.  Mr. Esch stated the structured reduction in the TIRZ 4A contribution that would have paid debt service is essentially paying for the event.

 

Sugar Land Town Square POA Plaza Events Schedule and Budget

 

Ms. Rita Sosebee, Marketing and Event Manager, SLTS Management Company, LLC, stated event objectives remain the same:  to keep the Plaza full of fun family activities, increase traffic for retailers, and assist economic development by making the Plaza a destination location.   2008-09 event information includes:

 

Event                                      #          $ Committed              Attendees       $/person          Recommendation

Concert Series                         36        $65,000                       17,500             $3.71               Continue

DUTS                                      4          $8,000                         2,400               $3.33               Continue

Movies                                    12        $25,000                       14,400             $1.74               Continue        

Chili Cook-off                       1          $10,000                       1,500               $6.67               Discontinue

Tree Lighting                         1          $35,000                       15,000             $2.33               Continue

Carriage Rides-Dec                 6         $3,200                         1,200               $2.67               Discontinue

4th Qtr Holiday                        16        $22,000                       6,100               $3.61               Continue

Santa Photos                           4          $8,000                         800                  $10.00             Continue

Food Sculpting                       1          $6,000                         400                  $15.00             Modify           

Menorah Celebration              1          $500                            250                  $2.00               Continue

Carriages - Feb                        3          $2,400                         150                  $16.00             Discontinue

Health Fair                              1          $5,000                         2,000               $2.50               Continue

Fashion Show                         2          $5,000                         3,000               $1.67               Increase Frequency

Grad Fest                                1          $12,000                       1,500               $8.00               Continue

International Fest                    1          $3,500                         3,000               $1.17               Continue        

SL’s Cutest                             1          $7,000                         1,800               $3.89               Continue

Car Shows                               3          $2,000                         1,200               $1.67               Continue

Sugar Land Superstar             3          $12,500                       13,500             $0.93               Continue

Thurs Night Jazz                     7          $18,000                       4,200               $4.29               Continue

Children’s Series                     6          $19,000                       4,500               $4.22               Continue        

Print/Media Promos                            $45,039

Administrative                                    $118,230

Events Remaining                   2          $2,400                         500____________________________________

Total                                       112      $434,769                     94,900             $4.58

 

Retailers indicate that frequency of events helps them the most; to accomplish, SLTS recommends discontinuing the Chili Cook-Off and reallocating the $10,000.00 into sponsorship of two or three other events that will bring in 800-1,000 people each.  SLTS also recommends discontinuing the carriage rides in December and February due to safety concerns voiced by the Sugar Land Police Department.

 

The Food Sculpting event should be continued with modifications and the Fashion Show frequency should be increased to showcase new, innovative retailers and what they offer.

 

The 2008-09 income/expense statement balances at $434,769.00.  The number of events increased from 102 the previous year to 112 in 2008-09, and there was a 7,100 increase in attendance.  A year by year overview from 2004 to 2009 shows the number of events and attendees has steadily increased, while the cost per person has gone down.

 

Vice Chairman Treacy asked if the process of measuring attendees is accurate.  Ms. Sosebee stated that aerial shots of the larger events can be taken from the top of the hotel or condominiums; the primary measure continues to be the police officers who gauge the crowd, including customers seated in front of Starbucks, Benn and Jerry’s, and Vineyard on the Square.  Garage patrols also gauge the parking garages, which is a good indicator of attendance.  Ms. Sosebee stated that attendance usually exceeds expectations, and the Plaza Event Board meets monthly to review each event and impacts to attendance; accurate information is crucial to obtaining sponsorship for future events. 

 

Director DiCosimo asked if SLTS targets the demographic within the numbers.  Ms. Sosebee stated that feedback from retailers indicated the Thursday Night Jazz Series audiences tend to be working professionals attending with their fraternity/sorority or significant others; they come for dinner, stay for the concert, and retail traffic is higher.  This type of feedback helps SLTS determine what events work well and when, and the retailers benefit from the analysis.

 

Director Lacsamana asked how retail traffic on event nights compared to non-event nights.  Ms. Sosebee stated there was no comparison for that other than feedback from the retailers. 

 

Ms. Sosebee stated the following events did not occur since SLTS presented to the Board last time:

           

 

New events include:

 

 

Events to be modified:

 

 

Events to be continued:

 

 

Director Fogarty asked about the increased cost of event security.  Mr. Les Newton, Planned Community Developers stated that First Colony Management District practice has been to use off-duty security as contract employees to supplement private security.  Since the Management District exercises some control over where and what hours the off-duty policemen patrol, this practice violates federal law; the off-duty officers are considered employees for federal tax purposes. 

 

The POA contracts off-duty officers through the City; since the officers are city employees, the POA will have to pay overtime and burden that they have not had to pay in the past. The budgeted amount is based on highest possible rate assumption of $54.00 times the number of event hours worked last year; the pay range is from $38.00 to $54.00 per hour. 

 

Director DiCosimo asked if SLTS is planning to underwrite any events other than the Anniversary celebration.  Ms. Sosebee stated that ideally all events would be underwritten or have a title sponsor; since there is no guarantee of that, funds need to be allocated for essentials for each event.

 

Ms. Sosebee stated an estimated 119 events will be held in the upcoming year with an anticipated 10-15% drop in attendance due to lack of billboard advertising.  The $200,000.00 TIRZ allocation will include:

 

·         76 Series Events @ $169,000.00

·         6 Landmark Events @ $86,500.00

·         35 Community Events @ $47,500.00

 

Additional TIRZ funding is requested for:

·         Possible Events/Enhancement @ $50,000.00

 

Other expenses include:

 

·         Media Promotions @ $45,000.00

·         Administrative Costs of $128,000.00

o   Administrative support for SLTS and private events

o   Purchase of event materials

o   Administrative staff

o   Office expenses

o   Monthly calendar signage

o   Website and additional materials needed for events

 

Total SLTS expenses for 2009-2010 are $526,000.00 and balances with projected income; revenue sources include:

 

 

Vice Chairman Treacy asked for additional information on the Fort Bend I.S.D. Health Fair event.  Ms. Sosebee stated it is a partnership with Fort Bend Independent School District for WATCH Week, which takes place every spring and stands for “Weight, Activity, Tobacco, Cholesterol, and High blood pressure; it is an initiative for kids heart health.  Vice Chairman Treacy voiced his concern that the TIRZ was funding the event when Fort Bend I.S. D. chose not to participate in the TIRZ. 

 

Mr. Esch stated the presentations on the budget, event funding, and sound system process were complete and requested consideration and action on approval of the budget. 

 

Director Jameson asked if the $50,000.00 should be shown in the POA budget line instead of City Events.  Ms. Brown stated that category was used to illustrate the supplemental funding; at the time the budget was created, it had not been determined how the funds would be split. 

 

Director Jameson asked for clarification regarding the process of creating the budget.  Director Bogard stated this was the first year any discretion had been applied; the budget process has been stable since inception.  Discussion regarding the sound system and supplementing events began when the additional funding became available from the change in the 4B Corporation contribution.  The state of the economy and changes and vacancies in Town Square lead to a more aggressive role in expanding events as reflected in the

budget; the remaining line item numbers are the same as the original Plan Finance adopted by the TIRZ and/or contractual obligations.

 

Director Jameson asked if the City Council was involved in the decision-making process for the TIRZ budget.  Ms. Brown stated the City Council reviewed the proposed additions to events and the sound system, but does not approve the TIRZ budget.  Director Bogard commented that the City Council does approve both the 4A and 4B budgets and the Parks budget. 

 

Director Jameson asked if consideration was given to using an entity outside the Parks Department to plan and implement the Anniversary celebration.  Ms. Preza stated that possibility was investigated, the staffing and infrastructure required to plan the event would have cost twice as much. 

 

Chairman Stirman entertained a motion to approve the 2010 TIRZ Budget. 

 

Following a full and complete discussion, Director Fogarty, seconded by Director DiCosimo, made a motion to approve the 2010 TIRZ Budget with the condition the $200,000.00 line item for Town Square POA events is increased to $250,000.00 and the line item for City Events is decreased to $50,000.00.  The motion carried unanimously.

 

Contracts and agreements

 

Chairman Stirman introduced consideration on a Contract by and between City of Sugar Land and Tax Increment Reinvestment Zone Number One for funding, an amount not to exceed $50,000.00, for events in Sugar Land Town Square Plaza.

 

Mr. Joe Esch, Executive Director Business and Intergovernmental Relations stated the Board had to approve the budget before it could act on the contract because the budget anticipates funding.  The contract with the POA is not for a specific amount, but for whatever the Board decides to budget; the starting point is the contract between the City and the TIRZ for $50,000.00 for events.  Since the Board has approved the budget, staff recommends approval of the contract.

 

Following a full and complete discussion, Vice Chairman Treacy, seconded by Director Jameson, made a motion to approve a Contract by and between City of Sugar Land and Tax Increment Reinvestment Zone Number One for funding, an amount not to exceed $50,000.00, for events in Sugar Land Town Square Plaza. The motion carried unanimously.

 

Director Bogard suggested that next year the Board set up a Budget Committee before the process begins, since more discretion is being utilized than has been in the past. 

 

Chairman Stirman asked Director Bogard to discuss sales tax revenue.  Director Bogard stated sales tax receipts were up approximately 2-3% through the fiscal year end (September 2009), but there has been a downward trend in sales tax receipts over the last 4 months.  The sales tax receipts for September 2009 were approximately 5% lower than September 2008.  Staff is monitoring the situation very closely; budget projections are conservative with no anticipated growth for the next 12 months, staff will keep the Board

apprised as conditions evolve. 

 

Director DiCosimo asked if staff relates the analysis to factors like the economy, a late school start, and a late Labor Day.  Director Bogard stated traditionally sales tax is very elastic to the economy as a revenue stream; compared to other communities Sugar Land has been very resilient up to this point and that he believes the condition is a late impact of the economy coupled with the elimination of retailers.

 

Vice Chairman Treacy commented there is also an abundance of choices in Fort Bend County.  Considering all the shop destination points, Sugar Land has done remarkably well.  Director Bogard stated that Sugar Land has a higher concentration of shopping opportunities, but has to continually be effective in attracting shoppers; Town Square has been very successful by offering special supplemental activities in the Square. 

 

ADJOURN

 

There, being no further business to come before Board, Director DiCosimo, seconded by Vice Chairman Treacy, moved that the meeting adjourn.  The motion carried unanimously and the meeting adjourned, time at 9:26 o'clock A.M.

 

 

 

                                                                       

Greg Stirman, Chairman of the Board

 

 

 

                                                                       

Vincent DiCosimo, Secretary

 

(SEAL)