[CALL TO ORDER ] [00:00:03] >> WELL, WELCOME. APPRECIATE EVERYBODY SHOWING UP FOR OUR DECATUR COUNCIL MEETING. I WILL GO AHEAD AND OPEN UP OUR MEETING. WE'LL START WITH A MOMENT OF SILENCE. IF YOU'RE ABLE, PLEASE STAND AND JOIN ME AND US IN A MOMENT OF SILENCE. THANK YOU. AT THIS TIME, I'D LIKE TO RECOGNIZE WE HAVE A SPECIAL GROUP OF INDIVIDUALS HERE WITHIN THE HOUSE. I WOULD LIKE FOR THAT TEAM TO GO AHEAD AND LEAD US IN THE PLEDGE OF ALLEGIANCE. YOU GUYS GO AHEAD AND START US UP WHEN YOU'RE READY. [PROCLAMATION: BUSINESS OF THE MONTH, WORLD TEACHER’S DAY.] >> [INAUDIBLE]. >> AT THIS TIME, I'VE GOT A COUPLE OF PROCLAMATIONS THAT I WOULD LIKE TO MAKE. I FEEL [INAUDIBLE]. YOUR HOUSE WAS ESTABLISHED IN 2013 IN DECATUR, TEXAS, [INAUDIBLE] BUSINESS. THAT IS MY VISION, PASSION AND DEDICATION FOR THE INDUSTRY, OUR COMMUNITY [INAUDIBLE] WAS LESS THAN TWO THOUSAND SQUARE FEET. [INAUDIBLE] [APPLAUSE]. >> I WENT DOWN TO BIGGAR HATS AND THEY GET THIS WHAT IS THE NAME OF OUR? >> CONFORMATEUR. THE CONFORMATEUR TO PUT AROUND YOUR HEAD, AND THEY WILL CUSTOM MAKE THAT HEAD FOR YOU, AND IT'S JUST A WONDERFUL THING. VERY UNIQUE. IT'S A GREAT EXPERIENCE, AND I WELCOME YOU ALL TO TRY IT OUT. THANK YOU, BIGGAR HATS. [APPLAUSE]. I DO HAVE ANOTHER PROCLAMATION TO MAKE. IT'S WORLD'S TEACHERS DAY. WHEREAS EDUCATION IS A [INAUDIBLE] IN THE CORNERSTONE OF AUTHOR SOCIETY. TEACHERS PLAY A PIVOTAL ROLE IN SHAPING MINDS OF FUTURE STUDENTS. WHEREAS TEACHERS INSPIRE INDIVIDUALS TO REACH THEIR FULL POTENTIAL, FOSTERING CRITICAL THINKING, CREATIVITY, AND FOR LEARNING [INAUDIBLE]. TEACHER DAY CELEBRATES CERTAINLY [INAUDIBLE] CONTRIBUTIONS OF TEACHERS AND TO ADVOCATE FOR THE RIGHTS AND PROFESSIONAL DEVELOPMENT. MILES [INAUDIBLE] EDUCATES AND THE PERCEIVED [00:05:08] EXCELLENCE, [INAUDIBLE] ACKNOWLEDGMENT, SUPPORT, AND RESPOND [INAUDIBLE] IS WORLD'S TEACHERS DAY [INAUDIBLE]. [APPLAUSE] IT'S NOT THAT THEY'RE PREPARING FOR CLASS TOMORROW. APPRECIATE EVERYBODY IN THE EDUCATION SYSTEM. YOU THINK? THANK THEM SO MUCH [INAUDIBLE]. THANK YOU. [2. CONSIDER SECOND READING AND TAKE APPROPRIATE ACTION REGARDING AN ORDINANCE PROVIDING AN AMENDMENT TO APPENDIX “B”, “ZONING” OF THE CODE OF ORDINANCES OF THE CITY OF DECATUR, TEXAS, TO GRANT A SPECIFIC USE PERMIT TO ALLOW A VETERINARIAN CLINIC, INDOOR PENS ONLY, IN A C-O, OFFICE BUSINESS ZONING DISTRICT, ON APPROXIMATELY 0.76 ACRES OF LAND LOCATED AT 1600 W. US HIGHWAY 380 BUSINESS, DECATUR, TEXAS. (SPECIFIC USE PERMIT APPLICATION 2024-07—DR. JOE ABEL, ON BEHALF OF PROPERTY OWNER WISE ASSOCIATES LP) (THE PLANNING AND ZONING COMMISSION RECOMMEND APPROVAL, 5-0, CHAIRMAN LEMOND AND COMMISSIONER BERUBE ABSENT.) SUP2024-07 ORDINANCE 2024-09-27.] >> THERE'S NO CHANGE TO THIS. >> [INAUDIBLE] >> MR. MAYOR I'D LIKE TO MAKE A MOTION, PLEASE. I MOVE TO APPROVE SUP 2024-07. >> SECOND. >> SECOND. >> ANY FURTHER QUESTIONS ON THAT MOTION? THAT PASSES. THANK YOU. [3. CONSIDER SECOND READING AND TAKE APPROPRIATE ACTION REGARDING AN ORDINANCE PROVIDING AN AMENDMENT TO REZONE APPROXIMATELY 0.541 ACRES OF LAND LOCATED AT 1102/1202 OLD CHICO ROAD AND 0.06 ACRES OF LAND GENERALLY LOCATED TO THE CENTERLINE OF OLD CHICO ROAD FROM THOROUGHFARE BUSINESS ZONING DISTRICT (C-2) TO SINGLE-FAMILY RESIDENTIAL ZONING DISTRICT (SF-2). (ZONING CHANGE APPLICATION 2024-05—RICK DEFALCO, ON BEHALF OF PROPERTY OWNER OSCAR FONSECA) (THE PLANNING AND ZONING COMMISSION RECOMMEND APPROVAL, 5-0, CHAIRMAN LEMOND AND COMMISSIONER BERUBE ABSENT.) ZC2024-05 ORDINANCE 2024-09-28] [INAUDIBLE] >> THIS IS THE ORDINANCE TO CHANGE THE ZONING FROM C2 TO SF2 AND THERE IS NO CHANGE FROM THE ORIGINAL READING. >> QUESTIONS FROM COUNCIL. LOOK FOR A MOTION. >> WELL, MR. MAYOR, I LIKE TO MAKE A MOTION, PLEASE? UNLESS DARLENE WOULD LIKE TO COME THROUGH. YEAH, SURE. I MOVE TO APPROVE ZC 2024-05. NO. QUESTION? >> YEAH. >> THERE'S ALSO ORDINANCE NUMBER IF YOU WANT TO INCLUDE THAT. COUNCIL MEMBER? >> YES, MA'AM. THANK YOU, COUNCIL. I MOVE TO APPROVE ZC 2024-05 ORDINANCE 2024-09-28. >> SECOND. >> HAVE A MOTION. WE HAVE A SECOND. ANY FURTHER DISCUSSION ON THAT MOTION? ALL OF THOSE IN FAVOR SAY, AYE. >> AYE. >> OPPOSED SAME SIGN. THAT PASSES. ITEM 4 CONSIDER A REQUEST FINAL PLOT, APPROXIMATELY 46.48 ACRES. [4. FP2024-02 CONSIDER A REQUEST TO FINAL PLAT AN APPROXIMATE 46.488-ACRE TRACT OF LAND CREATING 188 LOTS FOR MEADOW CREEK DEVELOPMENT, PHASE 1 LOCATED WEST OF FM 730 IN THE CITY OF DECATUR, WISE COUNTY, TEXAS. (FINAL PLAT APPLICATION 2024-02—MR. JODY BOYD, ON BEHALF OF DECATUR MC LLC) (THE PLANNING AND ZONING COMMISSION RECOMMEND DENIAL BASED ON DEVELOPMENT REVIEW COMMITTEE PLAT REVIEW COMMENTS, 5-0, CHAIRMAN LEMOND AND COMMISSIONER BERUBE ABSENT.)] DO WE HAVE A REPORT ON THIS? >> YES, SIR. WE DO. WE GOT A PRESENTATION HERE THAT IT GOES ALONG WITH IT. [NOISE] THIS IS THE MEADOW CREEK ADDITION FINAL PLAT. THE PRELIMINARY PLAT FOR THIS WAS FIRST CONDITIONALLY APPROVED BACK IN APRIL, AND SINCE THEN, IT'S HAD FIVE EXTENSIONS TO CONTINUE THIS THROUGH THE PROCESS. IT DOES HAVE A CONDITIONAL APPROVAL TO COMPLETE THE AGREEMENT WITH THE PIPELINE OPERATOR THAT'S ON THERE. THEY HAVEN'T BEEN ABLE TO DO THAT YET. WE APPROACHED THE DEVELOPER AND ASKED THEM IF WE COULD GO AHEAD AND MOVE THIS TO DENIAL, SO THAT THEY COULD HAVE THE TIME TO MAKE THE CORRECTIONS THAT NEED TO BE MADE, MAKE THE PROGRESS THAT NEEDS TO BE MADE WITHOUT HAVING TO GO EVERY 30 DAYS TO PLANNING AND ZONING FOR CONTINUANCES ON THIS. WE APPROACHED THE DEVELOPERS WITH THAT. THEY WERE RECEPTIVE TO IT. AND SO WE BROUGHT IT BEFORE PLANNING AND ZONING TO RECOMMEND DENIAL FOR THE REASONS THAT ARE IN THE STAFF REPORT, AND SO NOW WE'RE BRINGING IT TO CITY COUNCIL TO COMPLETE THAT. THIS IS THE REQUEST FOR THE FINAL PLAT FOR MEADOW CREEK. YOU CAN SEE IN THERE, WE DO HAVE ALL OF THE REPORTS. I GOT YOU. IT'S NOT WORKING RIGHT NOW. THERE IT IS. AS OF MONDAY, SEPTEMBER 23, THE REVISED DOCUMENTS HAVE NOT BEEN RECEIVED, AND WE HAVE DEFICIENCIES CITED IN ATTACHMENTS 1 AND 2 OF THE STAFF REPORT. PLAN AND ZONING DID RECOMMEND DENIAL OF THE FINAL PLAT APPLICATION 5-0 WITH CHAIRMAN LEMOND AND COMMISSIONER BERUBE ABSENT? [00:10:06] THIS IS BASED ON THE SPECIFIC DEFICIENCIES CITED IN THE ATTACHMENTS. THERE'S A COPY OF ALL OF THOSE DEFICIENCIES THAT THEY'RE WORKING THROUGH, AND THIS IS ON THE FINAL PLAT PORTION OF THIS, WHICH IS ALSO HAS THE REQUIREMENT TO MEET THE REQUIREMENTS FOR THE PRELIMINARY PLAT. WE ALSO PROVIDED THEM WITH A MARKUP OF THE CIVIL PLANS AND THE FINAL PLAT ON THIS. THEN WE HAVE ALL OF THE DATES THAT THE EXTENSIONS WERE MOVED THROUGH ON THIS, AND WE DO HAVE A PROPOSED MOTION THAT WE HAVE GOTTEN FROM LEGAL TO MAKE SURE THAT WE GOT ALL THIS IN THE RIGHT DIRECTION. THEY ARE ABLE TO BRING THIS BACK AT ANY TIME ONCE THEY CORRECT THE ISSUES WITH THE PRELIMINARY AND FINAL PLAT, AND THEN WE WILL HAVE IT ON AN AGENDA WITHIN 15 DAYS OF THEM BRINGING THIS BACK TO US. >> VERY GOOD. WELL, I CLEARLY READ ON THE BOTTOM OF THE SCREEN THE PROPOSED MOTION. BUT BEFORE THAT, DOES COUNCIL HAVE ANY QUESTIONS OR COMMENTS? >> THIS WAS A MUTUAL AGREED ON THING? >> YES, IT WAS. >> OTHER QUESTIONS OR COMMENTS? LOOK FOR A MOTION. >> MR. MAYOR, I'LL MAKE A MOTION. I MOVE THAT WE DENY FINAL PLAT FP 2024-02 FOR THE REASONS STATED IN THE DEVELOPMENT REVIEW COMMENTS. >> SECOND. >> WE HAVE A MOTION AND A SECOND. ANY FURTHER DISCUSSION ON THAT MOTION? ALL OF THOSE IN FAVOR, SAY, AYE. >> AYE. >> OPPOSED, SAME SIGN. THAT PASSES. THANK YOU. ITEM 5. [5. CONSIDER SECOND READING OF AN ORDINANCE OF THE CITY OF DECATUR, TEXAS, TO REPEAL AND REPLACE ORDINANCE 2024-03-07 AMENDING AND ADOPTING A NEW SCHEDULE OF FEES. ORDINANCE 2024-09-26] CONSIDER SECOND READING OF AN ORDINANCE OF THE CITY OF DECATUR, TEXAS TO REPEAL AND REPLACE ORDINANCE 2024-03-07, AMENDING AND ADOPTING A NEW SCHEDULE OF FEES. >> GOOD EVENING, MAYOR AND COUNCIL. THERE HAVE BEEN NO CHANGES TO THIS ORDINANCE SINCE YOU HEARD IT AT YOUR LAST APPOINTED MEETING TIME. VERY QUICK REMINDER; YOUR PACKET DETAILS CHANGES TO PORTABLE SWIMMING POOLS, DONATION BINS, AND VARIOUS FOOD AND FOOD TRUCK-RELATED ITEMS ALONG WITH A COUPLE OF OTHER MINOR FEE CHANGES, BUT NO CHANGES SINCE YOU SAW IT LAST. >> VERY GOOD. ANY OTHER COMMENTS OR QUESTIONS FROM COUNCIL? WE'LL LOOK FOR A MOTION. >> MR. MAYOR, I MOVE THAT WE ACCEPT ORDINANCE OR THAT WE APPROVE ORDINANCE 2024-09-26. >> SECOND. >> WE HAVE A MOTION BEFORE US. ANY FURTHER DISCUSSION ON THAT MOTION? ALL THOSE IN FAVOR OF THAT MOTION, SAY, AYE. >> AYE. >> OPPOSED, SAME SIGN. THAT PASSES. THANK YOU. ITEM 6. CONSIDER, TAKE ACTION TO AUTHORIZE THE CITY MANAGER TO EXECUTE [6. CONSIDER AND TAKE ACTION TO AUTHORIZE THE CITY MANAGER TO EXECUTE AMENDMENT NO. 2 TO THE MARKETING AGREEMENT WITH UTILITY SERVICE PARTNERS PRIVATE LABEL, INC. D/B/A SERVICE LINE WARRANTIES OF AMERICA, TO OFFER CITIZENS OF DECATUR EXTERNAL WATER SERVICE LINE WARRANTY, EXTERNAL SEWER/SEPTIC LINE WARRANTY, INTERIOR PLUMBING AND DRAINAGE WARRANTY AND WATER HEATER WARRANTY.] AMENDMENT 2 TO THE MARKETING AGREEMENT WITH UTILITY SERVICES PARTNERS PRIVATE LABEL. DO YOU HAVE SOME INFORMATION YOU WANT TO SHARE WITH US ON THAT? >> MAYOR, I'LL BE READING TO YOU FROM PAGE 55 OF YOUR PACKET. IF YOU GUYS MAY REMEMBER, THIS IS A WARRANTY ITEM THAT THE CITY DOESN'T DIRECTLY CONTROL, RATHER WE ALLOW FOR OUR LOGO TO BE PRINTED AND THIS TO BE DISTRIBUTED TO CITIZENS WHO RECEIVE PUBLIC UTILITY SERVICE. THE SERVICE LINE WARRANTIES OF AMERICA PROGRAM IS FOR INTERIOR PLUMBING AND PLUMBING LEADING FROM THE SERVICE TAP IN THE STREET UP TO THE HOUSE. THIS YEAR, THEY'VE ADDED WATER HEATER WARRANTY OPTION TO THIS COVERAGE, SO THIS WOULD JUST BE A NEW AND UPDATED AGREEMENT TO GAIN ADDITIONAL THREE YEARS WITH THE COMPANY, AND THEN ON PAGE 57, IT DETAILS THE EXPENSE THAT CITIZENS WOULD SEE IF THEY CHOSE TO OPT INTO THIS WARRANTY PROGRAM. IT'S OPTIONAL. CITIZENS DO NOT HAVE TO OPT INTO THE PROGRAM, BUT IT IS CONSIDERED A BENEFIT THAT WE OFFER AND ALLOW TO BE DISTRIBUTED TO THE RESIDENTS. >> VERY GOOD. ANY OTHER QUESTIONS OR COMMENTS FROM COUNCIL ON THAT? WELL, LOOK FOR A MOTION. >> MR. MAYOR I MOVE THAT WE APPROVED THE AUTHORIZATION FOR THE CITY MANAGER TO EXECUTE AMENDMENT 2 TO THE MARKETING AGREEMENT WITH UTILITY SERVICE PARTNERS, PRIVATE LABEL INCORPORATED, DOING BUSINESS AS SERVICE LINE WARRANTIES OF AMERICA. >> VERY GOOD. >> SECOND. >> WE HAVE A SECOND. ANY DISCUSSION ON THAT MOTION? ALL THOSE IN FAVOR OF THAT MOTION, SAY AYE. >> AYE. >> OPPOSED, SAME SIGN. THAT PASSES. THANK YOU. ITEM 7, CONSIDER APPROVAL OF A ROUTINE AIRPORT MAINTENANCE PROGRAM, [7. CONSIDER APPROVAL OF A ROUTINE AIRPORT MAINTENANCE PROGRAM (RAMP) AGREEMENT BETWEEN THE CITY OF DECATUR AND THE TEXAS DEPARTMENT OF TRANSPORTATION AVIATION DIVISION AND AUTHORIZE THE CITY MANAGER TO EXECUTE THE AGREEMENT.] RAMP AGREEMENT BETWEEN THE CITY OF DECATUR AND THE TEXAS DEPARTMENT OF TRANSPORTATION AVIATION DIVISION [00:15:01] AND AUTHORIZED CITY MANAGER TO EXECUTE THAT AGREEMENT. >> MAYOR AND, COUNCIL, THIS IS A TEXT.PROGRAM THAT WE APPLY FOR REGULARLY RAMP PROGRAM ROUTINE AIRPORT MAINTENANCE PROGRAM. IT'S A 90% FUND, MEANING, IF WE SPEND 111,000, THE STATE WILL PAY FOR 90% OF THAT, AND OUR PORTION IS ONLY 10%. WE HISTORICALLY HAVE DONE LOTS OF MAINTENANCE AND UPDATES TO THE AIRPORT USING THIS FUND, AND WE'RE ASKING FOR YOUR PERMISSION TO DO THAT AGAIN THIS YEAR. >> VERY WELL. ANY QUESTIONS OR COMMENTS FROM COUNCIL? LOOK FOR A MOTION? >> MR. MAYOR, I'LL MAKE A MOTION TO APPROVE THE RAMP AGREEMENT BETWEEN THE CITY OF DECATUR AND THE TEXAS DEPARTMENT OF TRANSPORTATION AVIATION DIVISION AND AUTHORIZE CITY MANAGER TO EXECUTE THE AGREEMENT. >> SECOND. >> WE HAVE A MOTION BEFORE US. ANY FURTHER DISCUSSION ON THAT MOTION? ALL THOSE IN FAVOR OF THAT MOTION, SAY AYE. >> AYE. >> OPPOSE, SAME SIGN. THAT PASSES. THANK YOU SO MUCH. ITEM 8, CONSIDER AND TAKE APPROPRIATE ACTION ON A CONTRACT OF SERVICE [8. CONSIDER AND TAKE APPROPRIATE ACTION ON A CONTRACT OF SERVICE BETWEEN WISE COUNTY AND THE DECATUR PUBLIC LIBRARY FOR SERVICES AS A COUNTY LIBRARY 2024-2025 AND AUTHORIZE THE MAYOR TO EXECUTE THE AGREEMENT.] BETWEEN WISE COUNTY AND THE PUBLIC LIBRARY FOR SERVICES AS A COUNTY LIBRARY. >> MAYOR, AND COUNCIL, THIS IS YOUR ANNUAL CONTRACT WITH WISE COUNTY TO PROVIDE LIBRARY SERVICES VIA THE DECATUR PUBLIC LIBRARY. ON PAGE 81, THE CONTRACT DETAILS THAT THE COUNTY WILL PAY OUR LIBRARY $57,062.21 FOR THEIR PORTION OF SERVICE AS A COUNTY LIBRARY. DAN IS HERE. HE CAN SHARE ANY SPECIFIC QUESTIONS, OTHERWISE, THE CONTRACT HAS ALREADY BEEN EXECUTED BY THE COUNTY AND IT'S READY FOR OUR EXECUTION. >> QUESTIONS FROM COUNCIL? COMMENTS? >> LOOK FOR A MOTION. >> MR. MAYOR, I MAKE A MOTION THAT WE APPROVE THE CONTRACT OF SERVICE BETWEEN WISE COUNTY AND DECATUR PUBLIC LIBRARY FOR SERVICES AS A COUNTY LIBRARY, 2024/25 AND AUTHORIZE THE MAYOR TO EXECUTE THE AGREEMENT. >> I'LL SECOND THAT MAYOR. >> WE HAVE A MOTION BEFORE US. ANY QUESTIONS ON THAT MOTION? ALL THOSE IN FAVOR SAY AYE. >> AYE. >> OPPOSE. SAME SIGN. THAT PASSES. APPRECIATE IT. ITEM 9. [9. HEAR PRESENTATION FROM LIBERTAS DECATUR, LP REGARDING A POTENTIAL DEVELOPMENT AGREEMENT WITH THE CITY OF DECATUR FOR DEVELOPMENT OF 200 ACRES OF REAL PROPERTY INCLUDING POTENTIAL ANNEXATION OF OVER 125 ACRES OF REAL PROPERTY CURRENTLY LOCATED IN THE CITY’S EXTRATERRITORIAL JURISDICTION.] HERE A PRESENTATION FROM LIBERTAS DECATUR LP, REGARDING A POTENTIAL DEVELOPMENT AGREEMENT WITH THE CITY DECATUR FOR DEVELOPMENT OF 200 ACRES OF REAL PROPERTY, INCLUDING POTENTIAL ANNEXATION OF OVER 125 ACRES OF REAL PROPERTY CURRENTLY LOCATED IN THE CITY'S EXTRATERRITORIAL JURISDICTION. >> MAYOR AND COUNCIL, I'LL GIVE THE PODIUM TO MR. KIM GILL, WHO REPRESENTS THE PROJECT AND THE DEVELOPMENT TEAM, AND HE HAS A FEW FOLKS THAT HE'LL LIKELY INTRODUCE AS HE DELIVERS HIS PRESENTATION, SO WELCOME MR. KIM GILL TO THE PODIUM. >> I'M WITH THE DEVELOPMENT COMPANY OF LIBERTAS REAL ESTATE GROUP. MY PARTNER IS HANDING OUT A VISUAL AID, SO YOU'VE GOT SOME TO LOOK AT TO LOOK AT THIS PARTICULAR PIECE OF PROPERTY. WE BROUGHT WITH US MINDY CANEY, WHO'S WITH COACH ROSE, WHO HAS REPRESENTED US ON SEVERAL DEVELOPMENT DEALS OVER THE LAST SEVERAL YEARS, AND THEY REPRESENT FINANCIAL REIMBURSEMENT VEHICLES. I WANTED MINDY TO COME UP AND GIVE YOU HER PRESENTATION ON THE DIFFERENCE BETWEEN MMD REIMBURSEMENT VEHICLES AND PID REIMBURSEMENT VEHICLES, SO YOU HAVE A FULL UNDERSTANDING OF WHAT WE'RE ASKING FOR. WE'LL LET HER COME UP FIRST AND THEN OBVIOUSLY, WE'LL HAVE RYAN NELSON COME AFTER HER, WHO IS THE FINANCIAL ADVISOR, WHO WE ALSO USE ON ALL OF OUR REIMBURSEMENT VEHICLES AND OUR DEVELOPMENTS AROUND DALLAS FORT WORTH. >> YOU'RE UP, MINDY. >> THANK YOU, SIR. >> HI, EVERYBODY. MY NAME IS MINDY CANEY. MY SPECIALTY IS SPECIAL PURPOSE DISTRICT. WHAT WE'RE PRESENTING TO YOU ALL TODAY IS A DEVELOPMENT AGREEMENT. UNDER THE TERMS OF THAT DEVELOPMENT AGREEMENT, WE WOULD ANNEX THE ENTIRETY OF THIS PROPERTY INTO THE CITY LIMITS, AND SO NONE OF THE PROPERTY WOULD BE DEVELOPED IN THE EXTRATERRITORIAL JURISDICTION. IT WILL BE A SINGLE FAMILY DEVELOPMENT. WE ARE REQUESTING UNDER THE TERMS OF THAT AGREEMENT THAT THERE BE A SPECIAL PURPOSE DISTRICT, AND MY SPECIALTY IS SPECIAL PURPOSE DISTRICTS. THEY ARE CREATED GENERICALLY TO FINANCE INFRASTRUCTURE, AND SO THEY'LL FINANCE THE WATER, THE SEWER, THE DRAINAGE, AND THE ROAD FACILITIES INSIDE THE BOUNDARIES OF THE DISTRICT. IN A TRADITIONAL DEVELOPMENT, ALL OF THE COSTS FOR THE WATER, THE SEWER, THE DRAINAGE, THE ROADS, THE LAND COSTS, ALL OF THOSE COSTS ARE PUT INTO THE PRICE OF THE LOT. HERE, WE ARE ABLE TO FINANCE INFRASTRUCTURE OVER TIME, [00:20:01] AND SO ALL OF THOSE COSTS ARE NOT BORN INITIALLY BY THE BUYERS. THE DISTRICT WILL BE A TAXING ENTITY. WE HAVE WORKED WITH YOUR LEGAL TEAM AND WITH STAFF TO DETERMINE WHAT TYPES OF SPECIAL PURPOSE DISTRICT WOULD BE FITTING FOR THIS PROJECT IN PARTICULAR. WE HAVE BOILED IT DOWN TO TWO DIFFERENT TYPES OF SPECIAL PURPOSE DISTRICTS. THERE'S A PUBLIC IMPROVEMENT DISTRICT, AND THERE'S A MUNICIPAL MANAGEMENT DISTRICT. THOSE DISTRICTS ARE CREATED AGAIN FOR THE SAME PURPOSE, WHICH IS TO FINANCE INFRASTRUCTURE, BUT THEY HAVE DIFFERENT NUANCES TO THEM. IT IS THE REQUEST OF THE DEVELOPMENT TEAM THAT THIS PROPERTY BE ALLOWED TO HAVE A MUNICIPAL MANAGEMENT DISTRICT IN LIEU OF THE PUBLIC IMPROVEMENT DISTRICT. THEY'RE BOTH VERY SIMILAR IN NATURE, BUT THE PUBLIC IMPROVEMENT DISTRICT IS A DISTRICT WHEREBY THE CITY LEVIES ASSESSMENTS INSIDE THE BOUNDARIES OF THE DISTRICT ONLY, SO IT WOULD NOT AFFECT ANY OF YOUR CURRENT TAXPAYERS, AND THE CITY IS THE ENTITY THAT ISSUES BONDS. WITH A MUNICIPAL MANAGEMENT DISTRICT, THE DISTRICT IS ITS OWN POLITICAL SUBDIVISION, THE STATE OF TEXAS. IT IS RUN BY A FIVE BOARD OF DIRECTORS, AND THOSE BOARD OF DIRECTORS TYPICALLY ARE RESIDENTS OF THE DISTRICT. IN MY MIND, THAT MAKES GOOD SENSE THAT ONCE THERE ARE RESIDENTS OF THE DISTRICT, THEN THEY CAN MAKE DECISIONS ABOUT THE LEVYING OF TAXES AND ISSUING BONDS. ONE OF THE BENEFITS TO THE CITY OF THE MUNICIPAL MANAGEMENT DISTRICT STRUCTURE, WHICH IS THE REQUEST OF THE DEVELOPER, IS THAT THE CITY DOESN'T HAVE THE ADMINISTRATIVE TASKS OF LEVYING ASSESSMENTS EVERY YEAR. THE CITY DOES NOT HAVE THE TASK OF ISSUING BONDS. THAT ALSO MEANS FROM YOUR FINANCIAL ADVISOR'S PERSPECTIVE, THAT'S BETTER FOR THE CITY AS WELL BECAUSE IT WOULD NOT AFFECT THE CITY'S BANK QUALIFIED STATUS, WHICH MEANS THAT WHEN THE CITY ISSUES BONDS, IT WOULD HAVE A LOWER INTEREST RATE ON ITS BONDS RATHER THAN HAVING TO ISSUE EXTRA BONDS FOR THE PUBLIC IMPROVEMENT DISTRICT. APOLOGIES, IF THIS IS TOO MUCH IN THE DETAILS. I DON'T KNOW THAT Y'ALL HAVE DONE A PUBLIC IMPROVEMENT DISTRICT YET OR APPROVED A MUNICIPAL MANAGEMENT DISTRICT. HAVE Y'ALL? I DON'T THINK YOU HAVE. >> MINDY WE HAVE DONE. >> VERY GOOD. ONE OF THE MAIN REASONS WHY WE WOULD PREFER THE MUNICIPAL MANAGEMENT DISTRICT MODEL RATHER THAN THE PUBLIC IMPROVEMENT DISTRICT MODEL IS FINANCIAL IN NATURE. WE HAVE A FINANCIAL ADVISOR HERE WHO DOES SPECIAL DISTRICT WORK. HIS NAME IS RYAN NESMITH, AND HE IS GOING TO PRESENT THE FINANCIAL REASONS WHY WE WOULD PREFER THE MUNICIPAL MANAGEMENT DISTRICT OPTION. >> YOU USED SOME WORD TYPICALLY ON THE BOARD THAT IT'S TYPICALLY INSIDE THE DISTRICT THAT'S ESTABLISHED. DOES THAT MEAN THAT BOARD MEMBERS COULD BE OUTSIDE THAT? >> YES. TO SERVE ON THE BOARD OF DIRECTORS, YOU CAN LIVE INSIDE THE BOUNDARIES OF THE DISTRICT, WHICH MEANS IT WOULD BE RESIDENTS, AND THIS IS FOR THAT MUNICIPAL MANAGEMENT DISTRICT MODEL OR OWN PROPERTY INSIDE THE BOUNDARIES OF THE DISTRICT. IN THE EARLY STAGES OF A MUNICIPAL MANAGEMENT DISTRICT, BECAUSE THERE IS NO INFRASTRUCTURE THERE, THE DEVELOPMENT TEAM TYPICALLY CONVEYS A PIECE OF PROPERTY TO THE DIRECTORS, SO THEY CAN BE QUALIFIED TO SERVE, AND OF COURSE, WE HAVE METHODS FOR GETTING THAT PROPERTY BACK. BUT ACCORDING TO THE LAW, IT'S A CHICKEN AND THE EGG SITUATION. YOU CAN'T HAVE RESIDENTS BECAUSE THERE'S NO INFRASTRUCTURE, BUT YOU NEED A BOARD OF DIRECTORS TO SERVE. WE USE THIS PROCESS WHERE WE'LL CONVEY A PIECE OF PROPERTY TO REPRESENTATIVES WHO WILL SERVE IN THOSE EARLY STAGES OF A DISTRICT'S DEVELOPMENT. SOMETIMES THERE CAN BE A CITY REPRESENTATIVE IF THE CITY WOULD LIKE THAT. >> IN THE EARLY STAGES, CAN THE BOARD ADD BONDS TO THE MMD? >> THE DISTRICT WILL HAVE TO HAVE AN ELECTION. BUT ACCORDING TO OUR DEVELOPMENT AGREEMENT, WE'LL HAVE TO HAVE THE CITY AGREE TO THE AMOUNT OF BONDS THAT THE DISTRICT WILL ISSUE. EVERY FIVE YEARS, WE WILL PRESENT TO THE CITY A CAPITAL IMPROVEMENT PLAN THAT SHOWS WHAT IT IS THAT THESE BONDS ARE GOING TO BE ISSUED FOR. WE WOULD HAVE TO HAVE THE CITY'S APPROVAL FOR THAT. DISTRICTS, LIKE MUNICIPAL MANAGEMENT DISTRICTS ARE ALSO VERY HIGHLY REGULATED BY THE TEXAS COMMISSIONER ENVIRONMENTAL QUALITY AND THE ATTORNEY GENERAL'S OFFICE. THE TEXAS COMMISSION ENVIRONMENTAL QUALITY HAS VERY EXTENSIVE RULES OVER WHAT WE CAN ISSUE BONDS FOR, AND IT DOES BOIL DOWN TO WATER, SEWER, DRAINAGE AND ROADS ONLY. THERE ARE DISTRICTS IN SOUTH TEXAS THAT CAN ISSUE BONDS FOR PARKS AND RECREATIONAL FACILITIES, BUT IN NORTH TEXAS, THAT IS NOT ALLOWABLE BY LAW. >> CAN YOU GO OVER THE DIFFERENCE BETWEEN A PID AND MMD AS FAR AS TERMS, LENGTH OF TERMS, LIKE FOR THE WAY WE'VE DONE PIDS IN THE PAST, AND WHY WE LIKE PIDS IS BECAUSE IT'S ASSESSED TO EACH PROPERTY. SAY PROPERTY LOT 200 HAS $100,000 ASSESSED ON IT. ONCE THAT PERSON, WHOEVER BUYS A LOT, THEY COULD PAY THAT 100,000 OFF AND BE DONE WITH IT. WHERE THE WAY I UNDERSTAND IT MMD, [00:25:03] IT'S ACTUALLY A TAX LEVIED FOR THE LIFE OF THE PROPERTY OR UNTIL THE BOND IS PAID OFF, BUT THEN THE BOARD CAN ADD BONDS TO IT WHERE BASICALLY THE TAX NEVER GOES AWAY. >> FOR DISTRICTS IN SOUTH TEXAS, IT IS TRUE THAT SOMETIMES THE DISTRICT LASTS FOREVER BECAUSE THEY'RE GOING TO PUT IN TENNIS COURTS AND PARKS AND WALKING TRAILS AND THINGS LIKE THAT. BUT IN NORTH TEXAS, OTHER THAN THE INFRASTRUCTURE THAT THE DISTRICT HAS ALREADY PAID FOR AND IT IS NEEDED FOR THE DISTRICT, THERE WOULD BE NO REASON TO EVER ISSUE ANY ADDITIONAL BONDS BECAUSE THE DISTRICT DOESN'T NEED ANY ADDITIONAL BONDS. BECAUSE IT'S JUST WATER, SEWER, DRAINAGE AND ROADS. BECAUSE THE CITY IS GOING TO BE THE RETAIL PROVIDER OF THE WATER AND SEWER, THEN THOSE FACILITIES ARE GOING TO BE OWNED BY THE CITY. THEY'RE NOT GOING TO BE OWNED BY THE DISTRICT. TAKE A PROPERTY IN HOUSTON, FOR INSTANCE, IF IT OWNS ITS OWN WATER WELL, AND THAT WELL GOES DOWN, THEN THE DISTRICT WILL BE FORCED TO ISSUE EXTRA BONDS TO REPAIR ITS WELL. HERE, JUST LIKE ANY OTHER SUBDIVISION THAT'S LOCATED INSIDE THE CITY LIMITS, THE CITY WILL BE THE OWNER OF THE INFRASTRUCTURE, AND SO THERE'S NO REASON TO ISSUE ADDITIONAL BONDS. THAT IS AN OCCURRENCE IN SOUTH TEXAS, AND I THINK THAT IN NORTH TEXAS, PEOPLE OFTEN THINK THAT THAT'S THE CASE HERE AS WELL, BUT IN REALITY, IT'S JUST NOT PRACTICAL, AND THAT'S NOT THE WAY THAT IT WORKS. YOU ARE RIGHT THOUGH IN THAT PIDS LEVY ASSESSMENTS AND MMDS LEVY TAXES. THE ASSESSMENTS ARE FOR A SET NUMBER OF YEARS, TYPICALLY 25 YEARS, WHEREAS FOR DISTRICTS, THE TAXES CAN BE LEVIED LONGER. ONE OF THE MAIN DIFFERENCES FOR MMDS VERSUS PIDS ALSO IS THAT MMDS WILL LOWER THE TAX RATE THROUGHOUT ITS LIFE. IN THE LIFE OF A MMD, ONCE THE DEVELOPER HAS BEEN REIMBURSED FOR ALL OF THE INFRASTRUCTURE, SO SAY IT'S A FIVE PHASE PROJECT. AFTER PHASE 5, BONDS HAVE BEEN ISSUED REIMBURSING THE DEVELOPER FOR PHASE 5, THEN WE CAN START TO LOWER THAT TAX RATE. WHEREAS WITH A PID, THE ASSESSMENT REMAINS STEADY FOR THE ENTIRE 25 YEARS. >> DOES THAT TAX RATE EVER GO AWAY? >> IT CAN GO AWAY AFTER THE INFRASTRUCTURE HAS BEEN PAID FOR, BUT ALSO AS A PRACTICAL MATTER, IT TAKES A LONG TIME FOR THAT INFRASTRUCTURE TO BE PAID FOR. WITH PIDS, YOU'RE CORRECT THAT THE HOMEOWNERS ARE ABLE TO PAY OFF, LET'S SAY THAT THERE'S A 30,000 OR $50,000 ASSESSMENT ON A LOT. THEY ARE ABLE TO PAY OFF THAT $50,000 ASSESSMENT, WHEREAS WITH AN MMD, THEY AREN'T ABLE TO DO THAT BECAUSE IT IS AN AD VALOREM TAX AND NOT AN ASSESSMENT. BUT OF ALL THE PIDS THAT I'VE WORKED WITH, THERE'S VERY SELDOM ANYONE WHO'S WILLING TO PAY OFF THE PID, BECAUSE IF THEY PAY OFF THEIR PID AND SAY THEY INVEST $50,000, MOST PEOPLE MOVE EVERY 4-7 YEARS AND THEY'RE NEVER GOING TO GET BACK IN THEIR ASKING PRICE, WHAT THEY PAID INTO THAT PID ASSESSMENT. >> BUT IF THE VALUE OF THEIR PROPERTY GOES UP, THEIR RATE GOES UP AS WELL ON A MMD, BUT FOR A PID, THAT RATE IS THE SAME, CORRECT? >> STAYS THE SAME. IF THERE IS A SITUATION WHERE THE APPRAISAL DISTRICT DETERMINES THAT, THEY DETERMINE THE RATE EVERY YEAR. IF THE AD VALOREM TAX VALUE INSIDE THE BOUNDARIES OF THE DISTRICT GOES UP SIGNIFICANTLY, THEN THE MMD BECAUSE IT IS CONTROLLED BY THE RESIDENTS, THEN THEY CAN HAVE THE ABILITY TO LOWER THAT RATE SO THEY CAN GET THE SAME REVENUE COMING IN THAT'S NEEDED TO PAY THE DEBT SERVICE. >> WELL, IT'S CONTROLLED BY THE BOARD? >> THE BOARD MAKES THE DECISION EVERY YEAR OF WHAT THE RATE WILL BE. >> YES. I KNOW YOU SAID THAT IT'S TYPICALLY RESIDENTS, BUT I JUST WANT TO BE SPECIFIC ABOUT THAT. >> WHO DECIDES WHO IS ON THE BOARD AND HOW THE BOARD IS ELECTED? >> THE BOARD IS INITIALLY DETERMINED THROUGH THE TEXAS COMMISSIONER ENVIRONMENTAL QUALITY, AND IT IS BY APPLICATION SUBMITTED BY THE DEVELOPMENT TEAM. OFTEN WHEN I'LL DO A MUNICIPAL MANAGEMENT DISTRICT WITH THE CITY, THEY SAY, WE'LL HAVE A MEMBER OF COUNCIL OR STAFF WHO WANTS TO SERVE ON THE BOARD OF DIRECTORS SO THEY CAN ATTEND THE MEETINGS, ETC. WHAT WE'LL DO IS WE'LL PUT THAT LANGUAGE IN THE DEVELOPMENT AGREEMENT, WHICH REQUIRES US IN THE EARLY STAGES OF THE DISTRICT TO ALLOW FOR A COUNCIL REPRESENTATIVE TO SERVE ON THE BOARD OF DIRECTORS. THAT'S HOW THE DISTRICT STARTS. BUT THEN ONCE THE DISTRICT HAS BEEN ACTIVATED, EVERY TWO YEARS, THERE IS AN ELECTION. SOMETIMES RESIDENTS WANT TO SERVE ON THE BOARD OF DIRECTORS AND SOMETIMES THEY DON'T WANT TO SERVE ON THE BOARD OF DIRECTORS. SOMETIMES IF THE RESIDENTS ARE HAPPY, SOMETIMES THE DEVELOPER REPRESENTATIVES SERVE FOR 5, [00:30:02] 6, 8 YEARS. SOMETIMES AFTER PHASE 1, RESIDENTS WHO MIGHT NOT HAVE UNDERSTOOD WHAT WAS HAPPENING, THEY WILL QUICKLY WANT TO SERVE ON THE BOARD OF DIRECTORS. I ALSO SERVE ON A CITY COUNCIL. THE CITY THAT I SERVE IN, WE USE THAT PID MODEL FOR A VERY LONG TIME, AND FROM MY PERSPECTIVE, IT WAS HARD FOR ME TO MAKE DECISIONS ABOUT LEVYING ASSESSMENTS AND ISSUING BONDS FOR A COMMUNITY THAT I WASN'T A PART OF. I FEEL LIKE THE FAIR WAY TO HAVE A DISTRICT IS TO HAVE EITHER MUNICIPAL UTILITY DISTRICT OR A MUNICIPAL MANAGEMENT DISTRICT BECAUSE THOSE RESIDENTS HAVE THE OPPORTUNITY TO MAKE THE DECISIONS. IF YOU HAVEN'T FOUND IT ALREADY, WHAT YOU COULD FIND IS THAT WITH A PID, YOU MAY GET PHONE CALLS FROM RESIDENTS WHO MIGHT NOT HAVE UNDERSTOOD THAT THEY WERE BUYING PROPERTY INSIDE THE BOUNDARIES OF A PID, EVEN THOUGH I ASSURE YOU WE NOTIFY THEM MANY TIMES. I GET TO SAY THINGS LIKE, WELL, CALL YOUR MD BOARD DIRECTORS OR CALL YOUR MMD DIRECTORS BECAUSE THEY'RE THE PEOPLE WHO ARE MAKING THOSE DECISIONS. >> I THINK YOU HIT THE NAIL ON THE HEAD. THIS IS SO IMPORTANT THAT WE MAKE THE RIGHT DECISION BECAUSE WE WILL GET THOSE CALLS AND PEOPLE WHEN THEY GO TO THE CLOSING TABLE, THEY DON'T UNDERSTAND WHAT THEY'RE SIGNING, SO WE NEED TO REALLY MAKE SURE THAT AN MMD IS OKAY, WHICH IT BRINGS ME A LOT OF CONCERN THAT IT FLUCTUATES OVER TIME. HOW MANY PHASES ARE GOING TO BE IN THIS, DO YOU KNOW? TWO PHASES. THAT'S A LOT BETTER, BUT IF THE BOARD IS MADE UP BY THE DEVELOPERS THROUGHOUT, AND THEY GET TO THE MIDDLE PART OF PHASE 2 AND THEY DECIDE THEY NEED MORE MONEY, THEY CAN RAISE THAT, CORRECT? THEY CAN ISSUE ANOTHER BOND AND LEVY MORE TAXES? >> WE WILL PUT IN THE DEVELOPMENT AGREEMENT, ALL OF THE BONDS THAT WE WILL BE ISSUING SINCE IT'S ONLY A TWO PHASE PROJECT. NO, BECAUSE WE WON'T BE ALLOWED TO DO SO BECAUSE OF OUR DEVELOPMENT AGREEMENT. >> ALL THE BONDS WILL BE DISCUSSED OR WILL BE IN THE AGREEMENT PRIOR TO THE MMD BEING CREATED? >> CORRECT. THAT WOULD BE A PART OF THE DEVELOPMENT AGREEMENT. >> THESE ARE THREE PHASES. >> OTHER QUESTIONS OR COMMENTS? RON, YOU NEED TO TURN YOUR MIC ON. >> YOU SAID THAT YOU HAD CHECKED WITH PEOPLE AND THIS WAS THE MOST BENEFICIAL. HAVE WE CHECKED WITH OUR PEOPLE? IS THIS MOST BENEFICIAL FOR THE CITY? >> NO ONE THAT REPRESENTS THE CITY IN ANY PROFESSIONAL CAPACITY HAS TOLD US OR SPOKEN FAVORABLY OF AN MMD FOR THE CITY. NO. >> OKAY. >> MS MINDY, WHAT IS THE WHOLE RATIONALE WITH THE PUSHBACK ON THE PID? IS IT OBVIOUSLY MONEY IS INVOLVED WITH THAT AND DOES THAT BENEFIT THE DEVELOPER OR DOES THAT BENEFIT THE CONSTITUENTS? WHY IS THE PID NOT OKAY? >> TO BE CLEAR. >> WHY IS THE OPPORTUNITY THAT'S. >> I'M GOING TO LET YOU JUMP IN JUST A SECOND. BUT, FOR RYAN NESMITH IS GOING TO SPEAK ABOUT THE FINANCIAL IMPLICATIONS OF AN MMD VERSUS A PID. BUT BOTH TOOLS OFFER BENEFITS TO THE CITY. BOTH TOOLS OFFER BENEFITS TO THE DEVELOPER. BUT IT'S REALLY A FINANCIAL REASON WHY THE MMD IS THE PREFERRED ROUTE. HERE, IN PARTICULAR, THE CITY STAFF HAS EXPLAINED THAT THE CITY IS BUILDING A NEW WASTEWATER TREATMENT PLAN AND THE CITY CURRENTLY HAS CAPACITY FOR THIS PROJECT TO BE SERVED UNDER THE EXISTING FACILITY. THE CITY HAS REQUESTED THAT WE PARTNER WITH THE CITY TO PAY FOR A LARGE PORTION OF THAT PLANT. I SAY LARGE. IT'S ABOUT 10%. FOR US, THAT'S LARGE. THAT'S A BIG PORTION OF THAT PLANT AND SO WE'RE TRYING TO FIND A WAY TO ACCOMMODATE THE CITY'S REQUESTS. FROM A MUNICIPAL MANAGEMENT DISTRICT, THERE WILL BE MORE DOLLARS AVAILABLE AND YES, THERE ARE DOLLARS THAT WILL GO TO THE DEVELOPER, BUT THERE ARE DOLLARS THAT ARE GOING TO THE DEVELOPER BECAUSE THE CITY HAS REQUESTED WE PARTNER WITH A WASTEWATER TREATMENT PLANT THAT THE CITY IS PLANNING TO BUILD. RYAN. >> CAN YOU ADDRESS, YOU MENTIONED CAPITAL IMPROVEMENT PLANS? >> YES. >> YOU LEVIED THE BOND? DOES THE BOND EXPIRE BEFORE YOU LEVY A CAPITAL IMPROVEMENT PLAN ON TOP OF THAT? >> WHAT I WAS REFERRING TO WAS A CAPITAL IMPROVEMENT PLAN. THE CAPITAL IMPROVEMENT PLAN IS THE PLAN THAT SAYS, [00:35:03] THIS IS WHAT THE DISTRICT IS GOING TO FINANCE AND SO THAT PLAN WILL BE PUT TOGETHER AND BE A PART OF OUR DEVELOPMENT AGREEMENT PRIOR TO ANY DIRT BEING MOVED, PRIOR TO A DISTRICT BEING CREATED AND SO THAT'S SOMETHING WE DO WELL IN ADVANCE. >> WHAT HAPPENS DOWN THE ROAD? THE SUBDIVISION IS COMPLETED AND YOU NEED OF REPAIRS, HOW DOES THAT COME INTO PLAY? >> SURE. THE FACILITIES THAT THE DISTRICT PUTS IN ARE FACILITIES THAT ARE GOING TO BE CONVEYED TO THE CITY AND SO JUST LIKE ANY OTHER SUBDIVISION INSIDE THE CITY LIMITS, WE WOULD BE BUILDING TO CITY STANDARDS. THE CITY WOULD BE INSPECTING, THERE WOULD BE A MAINTENANCE BOND INVOLVED AND SO THE CITY WILL HAVE A LOT OF CONTROL OVER WHAT IS BUILT. BUT ONCE IT IS BUILT, THE CITY HAS THE CCN, WHICH IS THE CERTIFICATE OF CONVENIENCE AND NECESSITY, WHICH MEANS THAT THE CITY HAS THE RESPONSIBILITY TO BE THE RETAIL PROVIDER FOR THIS PROJECT, AND THEY WILL OWN ALL OF THE FACILITIES, AND SO THERE WILL NEVER BE A TIME WHERE THE DISTRICT HAS TO DO REPAIRS. THE REPAIRS WILL BE ACCOUNTED FOR IN THE WATER AND SEWER RATES. >> MINDY, BEFORE YOU BRING RYAN UP, I'VE GOT FOUR THINGS I JOTTED DOWN AND IF YOU WANT TO HAVE HIM, IT'S YOURS PRESENTATION. >> RIGHT. >> HELLO, SO LIKE MINDY. >> HE HAS FOUR QUESTIONS. SORRY. >> I WAS JUST REAL QUICK TO INTRODUCE MYSELF. I WORK FOR BAIRD. I'M A MANAGING DIRECTOR WITH BAIRD. I WORK UNDER THEIR PUBLIC FINANCE GROUP, AND WE SPECIALIZE IN SPECIAL DISTRICT FINANCING. WE REPRESENT MY TEAM. I HEAD UP OUR NORTH TEXAS PRACTICE. WE'VE GOT A BIG GROUP IN HOUSTON THAT DOES A LOT OF THESE MUNICIPAL UTILITY DISTRICTS AND MMDS AS WELL. THAT'S OUR ENTIRE PRACTICE IS WORKING ON THESE DISTRICTS SO WE REPRESENT ABOUT 450 OF THEM ACROSS THE STATE. ANYWAY, WHEN WE GET INTO SOME OF THE SPECIFICS OF THE FINANCING, THAT'S JUST A LITTLE BIT OF BACKGROUND ON WHERE I'M COMING FROM. BUT SORRY, GO AHEAD. >> NO. >> NO. I THINK WHEN WE DID A LITTLE BIT OF RESEARCH, THAT THE MADS ARE MMDS, THERE WAS COLLIN COUNTY HAD TWO. BUT WHY IS THERE A DISPARAGING DIFFERENCE BETWEEN NORTH TEXAS AND SOUTH TEXAS? WHY IS THAT OKAY TO DO. >> I DON'T KNOW IF THERE'S ANYTHING DISPARAGING BETWEEN THE TWO. IT'S JUST THESE DISTRICTS GOT STARTED IN THE HOUSTON AREA PRIMARILY. REALLY WHERE THEY GOT GOING, AND A LOT OF WHAT THE CITY OF HOUSTON HAS DONE, THEY HAD A MASSIVE EXTRATERRITORIAL JURISDICTION, AND THEY ADOPTED A SET OF RULES AND REGULATIONS THAT AS LONG AS YOU COULD MEET THESE CHECK BOXES, YOU COULD CREATE A MUD OUT THERE. WELL, IT GOT TO THE POINT WHERE IN THE MID 90S, THEY STOPPED DOING ANY ANNEXATIONS. THE REASON THESE DISTRICTS WERE STARTED WAS REALLY AS A WAY FOR GROWTH TO PAY FOR GROWTH. INSTEAD OF HAVING TO PUT THE OWNERS ON A CITY TO BUILD THE INFRASTRUCTURE AND HOPE THAT DEVELOPMENT COMES, THESE VEHICLES ARE DESIGNED TO BE A WAY FOR DEVELOPERS TO BE INCENTIVIZED TO PUT THE INFRASTRUCTURE IN THEMSELVES AND THEY GET REIMBURSED FOR THE PUBLIC INFRASTRUCTURE ONLY. IT'S A WAY TO KEEP HOUSING PRICES DOWN BECAUSE THEY'RE ABLE TO RECOUP THE COST OF THAT PUBLIC INFRASTRUCTURE BECAUSE OTHERWISE THEY WOULD HAVE TO PASS ON THE COST OF THAT PUBLIC INFRASTRUCTURE AND THE LOT PRICE, WHICH THEN IN TURN GETS TURNED INTO THE HOME PRICE. THIS WAS SEEN AS A WAY TO HELP GROWTH PAY FOR GROWTH OUTSIDE OF THE HOME PRICE. IN HOUSTON IN THE MID 90S, WHEN THEY STOPPED DOING THE ANNEXATIONS, IT PUT THESE DISTRICTS IN A PLACE WHERE THEY WEREN'T BEING ANNEXED BY THE CITY AND PUT THEM IN A POSITION WHERE THEY HAD TO BE ABLE TO MAINTAIN FACILITIES LONG TERM AND THAT'S WHY YOU'RE SEEING SOME OF THESE DISTRICTS THAT ARE OUT THERE FOREVER. THAT'S NOT WHAT THEY WERE TRADITIONALLY DESIGNED FOR. THAT'S NOT WHAT THE ORIGINAL INTENT WAS, IS THAT THESE ARE SUPPOSED TO BE VEHICLES TO HELP GROW THE CITY IN A MEASURED MANNER THAT THEY'RE PAYING FOR THEMSELVES, THE CITIES CAN THEN LATER ANNEX OR IN THIS CASE, ANNEX IN INITIALLY AND HAVE A WAY TO HAVE THE DEVELOPMENT ITSELF PAY FOR THAT INFRASTRUCTURE, NOT ON THE BACKS OF THE EXISTING CITY RESIDENTS. >> IF YOUR QUESTION WAS MORE SPECIFIC TO WHY MUNICIPAL MANAGEMENT DISTRICTS NOW WHEN THERE'S ALL THESE MUNICIPAL UTILITY DISTRICTS IN SOUTH TEXAS, I THINK THAT'S WHAT I WAS HEARING. THE LAW UNDER THE GENERAL LAW, I'M GOING TO CALL IT THREE SESSIONS AGO AND BEYOND FOR YEARS. IT WAS THE CASE THAT MUNICIPAL MANAGEMENT DISTRICTS UNDER THE GENERAL LAW COULD NOT LEVY TAXES ON RESIDENTIAL AND SO THEY WERE NEVER USED BECAUSE THE WHOLE PURPOSE OF THESE MUNICIPAL MANAGEMENT DISTRICTS IS TO FINANCE INFRASTRUCTURE FOR RESIDENTIAL DEVELOPMENT. THEY CHANGED THE GENERAL LAW, I THINK IT WAS EITHER THREE OR FOUR SESSIONS AGO THAT ALLOWS MUNICIPAL MANAGEMENT DISTRICTS TO LEVY TAXES ON RESIDENTIAL AND SO THERE HAS BEEN A BIT OF AN UPTICK. AS SOME NUANCES, I SAY, ALL THESE DISTRICTS ARE CREATED FOR THE SAME REASON, BUT THEY ALL HAVE DIFFERENT NUANCES AS A NUANCE, MUNICIPAL MANAGEMENT DISTRICTS UNDER THE GENERAL LAW CAN ONLY BE CREATED IN THE CITY LIMITS. IF YOU DON'T SEE A LOT OF MUNICIPAL MANAGEMENT DISTRICTS IN THE ETJ, AND THERE'S A LOT OF SPECIAL PURPOSE DISTRICTS IN THE ETJ, [00:40:02] AND YOU CAN'T CREATE THEM IN THE ETJ. THEY CAN ONLY BE CREATED UNDER THE GENERAL LAW IN THE CITY LIMIT. >> ONE OF THE THINGS THAT HAS BEEN APPEALING TO OTHER CITIES FOR AN MMD VERSUS A MAD IS THAT THE GENERAL LAW, THE WHOLE CAPITAL IMPROVEMENT PLAN, THE FACT THAT THE CITY GETS APPROVAL OF THAT BEFORE THE DISTRICTS IN A POSITION TO ISSUE DEBT, THAT'S ONE OF THE THINGS THAT TENDS TO BE MORE APPEALING TO A CITY, WHEREAS A MAD DOESN'T NECESSARILY HAVE TO DO THAT. IT CAN BE WRITTEN INTO THE DA, BUT AS A MATTER OF COURSE, THAT IS ONE OF THE THINGS THAT SETS THEM APART. YEAH, AND IT'S ALREADY IN THE SIDE TO THE LIMIT, SO THE CITY DOES GET A LOT OF SAY IN HOW THE DEVELOPMENT TAKES PLACE. >> YEAH. THIS COULD HAVE BEEN JUST AS EASILY AN IN CITY MUD. BUT AFTER HEARING THE CONCERNS FROM YOUR LEGAL TEAM ABOUT A LACK OF CONTROL WITH MAD'S AND THE ISSUES THAT YOU ALL HAVE BEEN BRINGING UP ABOUT THE POSSIBILITY OF YOU KNOW, ISSUING EXTRA BONDS AND THINGS LIKE THAT. WE DECIDED AS A DEVELOPMENT TEAM, YOU KNOW, SOMETHING THE TOOL THAT'S THIS HYBRID BETWEEN A PID AND A MAD IS THIS MUNICIPAL MANAGEMENT DISTRICT WHERE THE CITY DOES GET A SAY ON WHAT BONDS ARE ISSUED FOR WHAT FACILITIES. >> IS IT NOT POSSIBLE FOR YOU TO DO THIS UNDER A PID BECAUSE THAT WAS OUR PREFERRED METHOD THAT I SURELY YOU WERE TOLD THAT? >> THAT'S WHERE I WAS GOING TO COME IN AND TALK ABOUT A LITTLE BIT ABOUT WHY THE DEVELOPMENT TEAM WOULD PREFER THE MMD OVER THE PID. IN BOTH CASES, SO I PUT TOGETHER SOME ANALYSES FOR THE DEVELOPER THAT LOOK AT WHAT IS THE FINANCING CAPACITY OF AN MMD VERSUS A PID FOR THE SAME SET OF FACTS, BASICALLY. ASSUMING AVERAGE HOME PRICES, I THINK, IN THIS CASE, 350,000 PER THE SAME EFFECTIVE TAX RATE, SO IF THE ASSESSMENT WAS DONE ON A TAX RATE BASIS, WHAT'S THAT ASSESSMENT LOOK LIKE VERSUS IF IT'S AN MMD WHAT'S THE TAX TACK? SAME FINANCING STRUCTURE OVERALL TO THE END USER TO THE HOMEOWNER. OKAY? WHAT ARE THEY GOING TO PAY AS THEIR TOTAL TAX? SAME ON THE SAME LEVEL PLAYING FIELD. THE DIFFERENCE THOUGH IS THAT IT IS AN ASSESSMENT FROM A BONDING PERSPECTIVE, WHEN YOU GO TO SOUTHERN MUNICIPAL BONDS, THE ASSESSMENT IS NOT AS SECURE A PLEDGE AS AN UNLIMITED TAX, WHICH IS WHAT IT'S CALLED AN UNLIMITED TAX, BUT IT'S AN OVERLOAN TAX PROPERTY TAX, THAT MMD WOULD LEVY. THAT IS SEEN AS A MORE FAVORABLE SECURITY OR A SOURCE OF PAYMENT FOR THE BONDS AND THEREFORE GETS A LOWER INTEREST RATE. WITH THE SAME AMOUNT OF REVENUE THAT'S BEING GENERATED BY THE TAXPAYER, WE'RE ABLE TO AMORTIZE OR ISSUE ADDITIONAL DEBT THAT CREATES MORE PROCEEDS TO HELP PAY FOR INFRASTRUCTURE COSTS, AND INTURN ALLOWS EITHER THE NUMBERS TO WORK TO MAKE THE DEAL HAPPEN AT ALL OR TO ALLOW THE HOMES TO BE SOLD AT A MORE MARKETABLE RATE THAT OTHERWISE MIGHT NEED TO BE DONE IN ORDER TO MAKE THE DEAL WORK FOR THE DEVELOPER. WE'LL BE HONEST, DEVELOPERS ARE NOT GOING TO DO IT IF THEY'RE NOT GOING TO MAKE A PROFIT AND THERE'S A PROFIT NUMBER THAT THEY'RE LOOKING TO MAKE, AND THIS IS ONE OF THE TOOLS THAT ALLOWS THEM TO MAKE THE NUMBERS COUNCIL. ALL THINGS BEING EQUAL, WHEN I RUN THE NUMBERS, IT'S ABOUT A 25 ALMOST 30% HAIRCUT ON IN TERMS OF WHAT THE FINANCING CAPACITY IS BETWEEN THE MMD AND THE PID. THAT'S REALLY WHAT IT COMES DOWN TO. >> OR FOR THE HOMEOWNER. >> I FEEL LIKE THERE'S A SYMBIOTIC RELATIONSHIP THERE IN A WAY BECAUSE IF THE DEVELOPER CAN'T MAKE THE NUMBERS WORK, THEY WON'T DO THE DEVELOPMENT AT ALL. IT'S A MATTER OF GETTING TO THE POINT WHERE THERE ACTUALLY ARE HOMES THERE. BUT LET'S SAY THAT OTHERWISE, IT MEANS THAT THEY CAN AFFORD TO SELL THE LOTS AT A LOWER PRICE THAN THEY WOULD OTHERWISE HAVE TO, RIGHT? OR IT MEANS THAT THEY WOULDN'T BE ABLE TO CONTRIBUTE AS MUCH TO SAY THE WASTEWATER TREATMENT PLANT EXPANSION. THESE ARE ALL THE THINGS THAT ARE PLAYING AGAINST THAT, IF THERE'S A CERTAIN AMOUNT OF MONEY THAT NEEDS TO BE GENERATED TO MAKE THE DEAL WORK FOR BOTH THE CITY AND THE DEVELOPMENT TEAM, THIS METHOD WHILE SLOWER BECAUSE IT'S A REIMBURSEMENT. IT'S AN EARNOUT, THAT'S ANOTHER THING I SHOULD POINT OUT THAT'S DIFFERENT. THE PID, YOU LEVY THE ASSESSMENTS UPFRONT BEFORE THERE ARE ANY HOMEOWNERS OUT THERE AND YOU HOPE THAT THE DEVELOPMENT GOES THE WAY YOU WANT IT TO. WITH AN MMD, IT'S SET UP AS A REIMBURSEMENT BASIS. THE DEVELOPERS ON THE HOOK TO PUT ALL THE INFRASTRUCTURE IN THE GROUND AND THEN THEY ARE HOPING THAT THE VALUE GETS CREATED. ONLY IF AND WHEN THERE'S ENOUGH VALUE CREATED THAT THE REVENUE STREAM IS LARGE ENOUGH TO PAY THEM BACK. ONLY WHEN THAT HAPPENS, DO WE ISSUE THE DEBT TO PAY THEM BACK. YOU ASKED EARLIER ABOUT THE TAX RATES AND WATCHING THEM FLUCTUATE. THE TAX RATE WHENEVER IT GETS ESTABLISHED, THE IDEA IS THAT YOU'RE GOING TO LEVY THE TAX RATE AS HIGH AS YOU EVER PLAN TO LEVY AND THAT WE WILL MANAGE THE ISSUANCE OF THE DEBT TO THAT TAX RATE, SO THAT THE RATE NEVER CHANGES. YES, IF THE VALUES GO UP, YOUR BILL CHANGES, BUT THE RATE DOES NOT. THAT WOULD TRANSLATE INTO A HIGHER MARKET VALUE FOR YOUR HOME. PRESUMABLY IF YOU MOVED OUT THERE EARLIER AND YOU'RE BUILDING VALUE, YOU'RE GETTING EQUITY IN YOUR HOME. THAT'S THE TRADE-OFF, BUT ONCE THE DEBT IS ISSUED THAT'S NEEDED TO REIMBURSE, THE DISTRICT DOESN'T SELL ANY MORE DEBT. [00:45:02] IT'S NOT A PROFIT DRIVER IN THAT SENSE. IT'S ONLY REIMBURSEMENT ON THE PUBLIC INFRASTRUCTURE. ONCE THAT DEBT IS ISSUED, YOU'VE GOT A FIXED RATE OR A FIXED AMOUNT OF DEBT THAT NEEDS TO BE COVERED. IF VALUES CONTINUE TO TICK UP OVER TIME, WE WILL DROP THAT TAX RATE, AND THAT'S WHAT WE SEE OVER TIME IS THAT OVER TIME THE TAX RATE DOES FALL, EVEN IN THESE DISTRICTS IN HOUSTON THAT HAVE BEEN OUT THERE FOREVER, THEY STARTED MAYBE $1.50 PER $100. THEY'RE AROUND $0.50 NOW. THEY END UP FLATTENING OUT. >> THE TAX RATE EITHER DROPS OR THE BONDS GET PAID OFF QUICKER, CORRECT? >> THAT'S ALL CORRECT. YOU EITHER PAY THEM OFF FASTER OR YOU LET THE TAX RATE FALL AND IN THIS CASE, BECAUSE WE'RE IN THE CITY, ONCE THE DEBT HAS BEEN ISSUED, THE DISTRICT COULD BE DISSOLVED BECAUSE IT HAS FULFILLED ITS REALLY IT'S ONLY PURPOSE. WE TYPICALLY WOULD SELL THESE AT 25 OR 30 YEAR BONDS PHASED OUT AS THE DEVELOPMENT HAPPENS. YOU'RE LOOKING AT 30 TO 35 YEARS, WHICH IS A LONG TIME, BUT THAT'S ABOUT THE SAME TIME FRAME THAT THE PID WOULD BE OUT THERE. IT'S JUST A QUESTION OF HOW THIS LOOKS AT THE END. ONE BENEFIT THAT COULD BE DERIVED FROM THE CITY'S PERSPECTIVE, AND EVEN FROM THE RESIDENTS PERSPECTIVE. WITH THE MMD, YOU HAVE THE OPTION OF KEEPING IT THERE, IF THAT'S THE PLAN THAT EVERYBODY AGREES TO, BECAUSE WHAT IT CAN DO IS IT COULD LEVY A MODEST TAX RATE JUST TO COVER MAINTENANCE AND OPERATIONS OR DO UPKEEP ON FACILITIES THAT ARE OUT THERE. IF THERE'S ANYTHING THAT WAS CONSTRUCTED THAT NEEDED TO BE MAINTAINED, AND YOU WANTED IF THERE NEEDED TO BE ANOTHER REVENUE SOURCE TO HELP MAINTAIN TO A CERTAIN LEVEL, IT'S AN OPTION. ANYWAY, THESE ARE ALL. >> WE'RE PRETTY DEEP INTO THE INTO THE SCOPE HERE. YEAH. >> WHAT WOULD THAT BE? BECAUSE I THOUGHT YOU SAID THAT EVERYTHING WAS TURNED OVER TO THE CITY. >> I'M SPEAKING IN GENERAL. I DON'T KNOW. >> WHAT IF OUR CURRENT SEWAGE TREATMENT FACILITY NEEDED AN UPDATE, YOU COULD ASK THAT MMD TO PITCH IN TO HELP UPDATE THAT SEWAGE OR YOUR PORTION OF THE SEWAGE TREATMENT FACILITY. >> OR IF THERE'S PUBLIC LAND OUT THERE, PUBLIC DRAINAGE DETENTION, THOSE ARE THINGS THAT CAN BE DISCUSSED, BUT IT ALL STILL HAS TO WORK WITHIN THE FINANCIAL METRICS AVAILABLE. >> THE BOARD OF DIRECTORS WHO ARE THE RESIDENTS, I MEAN, THEY WOULD HAVE TO WANT WHATEVER [INAUDIBLE] >> THAT WAS MORE OF A GENERAL THING, NOT NECESSARILY SPECIFIC, JUST UNDERSTANDING SOME OF THE NUANCES BETWEEN THE TWO, BECAUSE THE PID WANTS IT THAT'S REALLY THE ONLY THING THAT IT WOULD DO IS THE FINANCING, AND THEN IT'S ALL ON THE CITY AND THIS IS A WAY WE CAN HAVE A LITTLE BIT MORE OF GOING SYMBIOTIC. >> YEAH. I GUESS I MAY HAVE HEARD IT INCORRECTLY OR MATHS. I MEAN, I JUST NEED TO HEAR YOU. YOU DESCRIBED A HAIRCUT A MINUTE AGO. THERE'S A FINANCIAL DIFFERENCE FROM THE PID. IT'S THE MUNICIPAL DISTRICT. >> BASED ON THE ANALYSIS THAT I PUT TOGETHER, WHICH AGAIN, TRYING TO LOOK AT WHAT INTEREST RATES WERE ABOUT A MONTH AGO WITH THE SAME REVENUE STREAM FROM EACH TYPE, IT'S ABOUT A 30% HAIRCUT IN TERMS OF FINANCING CAPACITY GOING FROM AN MMD TO A PIT. YOU LOSE ABOUT 30% OF THE PROCEEDS THAT COULD OTHERWISE GO TOWARD PROJECTS. >> IF YOU WENT WITH A PID AS OPPOSED TO AN MMD? >> CORRECT. >> CAN YOU GIVE ME A BIGGER EXAMPLE THAN IN THE BARBER SHOP? >> I THINK HE. >> WITH THE ANALYSIS THAT WE PUT TOGETHER, THE MMD IS GOING TO NET ROUGHLY $38 MILLION WHEREAS THE PID WOULD NET ABOUT 29. >> TO THE BOTTOM LINE, MAYBE THE BOTTOM LINE HERE. WE'VE HAD GREAT MEETINGS WITH SOME OF YOU FOLKS AND CITY MANAGER, CITY ATTORNEY. WE OPERATE MULTIPLE MADS NOW, WHICH ARE IN ETJ. THE CONTRIBUTION THAT HAS BEEN TALKED ABOUT FOR THIS PROJECT TO GIVE TO THIS POTENTIAL SEWER TREATMENT PLAN WOULD BE ABOUT 6, $7 MILLION. UNDER THE MMD, WE CAN AFFORD TO DO THAT. UNDER A PID, THAT NUMBER DROPS FOR US TO ABOUT $2 MILLION. CAN'T AFFORD TO CONTRIBUTE THAT MUCH MORE WITH A PID THAN WE CAN WITH THE MMD, BECAUSE THERE'S MORE REIMBURSEMENT CAPACITY WITH AN MMD THAN THERE IS WITH A PID. YEAH, AND THAT'S THE BOTTOM LINE. >> AT THOSE NUMBERS THAT YOU GAVE, LIKE 39 MILLION, 20 MILLION I IT'S JUST AN ESTIMATE. >> YEAH THAT'S TRUE. >> THE TAX LEVIED ON THE CITIZENS OF THIS MMD WOULD BE THE SAME. >> IN THIS SCENARIO, YES. >> IN THAT SCENARIO. SO OKAY. >> REALLY JUST TO DO THE FINANCING VEHICLE ITSELF, RIGHT? LIKE IT'S THE TYPE OF BONDS THAT GET SOLD. THEY SELL AT LOWER INTEREST RATES, AND THERE ARE FEWER RESERVE SET ASIDES THAT ARE NECESSARY WHEN YOU'RE SELLING A TAX BACKED BOND VERSUS AN ASSESSMENT BACKED BOND. >> I MEAN, HE'S THE FINANCIAL MIND. I AM NOT. ALL I KNOW IS I HAVE TO BORROW MONEY AND I HAVE TO PAY IT BACK. [00:50:05] >> IT'S IT'S BASICALLY LIKE IF YOU'RE GOING TO A BANK TO BORROW MONEY AND YOU HAVE A CREDIT THE PID GIVES YOU A CREDIT SCORE OF 500 AND THE MMD GIVES YOU A CREDIT SCORE OF 850 AND THAT DETERMINES YOUR INTEREST. >> THAT'S PRETTY MUCH IT. THAT'S ACTUALLY A PRETTY GOOD COMPARISON. >> OKAY. >>IT MAY NOT BE 500, BUT IT'S DEFINITELY WORSE THAN THE 850. >> THAT'S THE BOTTOM LINE. >> I GOT TO APOLOGIZE BECAUSE I CUT MY OWN HAIR. SO MAYBE I GOT LOST IN THAT WHOLE CONCEPT OF SAVING MONEY. I KNOW YOU CAN'T TELL. >> ABSOLUTELY. >> AND I WOULD FURTHER ADD THAT JAKE SHOULD PAY HIS BILLS ON TIME BECAUSE NOBODY SHOULD HAVE A 500 CREDIT SCORE. MR. RYAN I HAD FOUR THINGS I JOTTED DOWN IN NOTES. YES, SIR. >> SORRY, I DIDN'T MEAN TO CUT YOU OFF. >> NO, NO PROBLEM. >> PLEASE, ASK YOUR QUESTIONS. I WAS JUST EXPLAINING MY STEPPING IN THERE WHEN I DID. >> FOUR STATEMENTS. A COUPLE OF THINGS YOU'VE TOUCHED ON, BUT I'M GOING TO RE READ THIS JUST IN CASE YOU WANT TO ADD ANYTHING TO THAT. WITH THIS PROJECT, WE MUST CONSIDER AND COMPLIMENT A LONG TERM INFRASTRUCTURE EXPANSION STRATEGY TO ENSURE THE SUSTAINABILITY OF SERVICE DELIVERY, INCLUDING WATER, WASTEWATER, AND ROAD SYSTEMS. HERE AGAIN, THAT'S A DIFFERENCE BETWEEN A PID AND A MUD. I'M HEARING, WHAT WAS IT 29 MILLION VERSUS? >> YEAH. LET'S CALL IT 30 MILLION VERSUS 39 MILLION. SOMEWHERE IN THAT RANGE. >> THAT'S A LITTLE MONEY. >> WHATEVER YOU PUT OUT THERE, YOU STILL HAVE TO PAY. >> NO, I GET IT. >> IT'S WHAT YOU CAN BORROW. >> IS THERE A INABILITY TO GET THE FINANCING DOING A M&D VERSUS A PID, MEANING, WILL ONE BANK SAY, YEAH, PID, DOESN'T MAKE MUCH SENSE VERSUS M&D, YOU KNOW WHAT? WE WANT TO COME THROUGH? THAT'S NO PROBLEM. >> I THINK THE MARKET FOR EITHER TYPE OF BOND ISSUE IS THERE. YOU'RE GOING TO FIND A BUYER FOR BOTH? JUST A QUESTION ABOUT WHAT RATE AND HOW EFFICIENT IS THAT BOND TO THE PROJECTS THAT YOU'RE WANTING TO FINANCE. >> HYPOTHETICALLY, IF WE CLOSE THIS TOMORROW, A PID WOULD BE AT WHAT PERCENTAGE RATE, GIVE OR TAKE? >> FIVE-AND-A-HALF. >> M&D WOULD BE WHAT PERCENTAGE? >> RATED 1 WOULD BE AROUND 4% RIGHT NOW. >> THAT'S A LOT OF MONEY, CONSIDERING 39 MILLION VERSUS 30. I GET THAT. OTHER NOTES. HANG ON. >> I'M SORRY, I WAS TALKING. >> THE DIFFERENCE OF 9 MILLION IS AFFECTED BY THE BOND. SO IT'S EVEN LIKE 30 MILLION, BUT WHEN YOU GO TO BOND IT OR GET FINANCING, THEY'RE DIFFERENT. AM I RIGHT ON THAT? >> YEAH, YOUR DOLLARS GO FURTHER. >> AS THE TAX, WITH A MUD OR AN MMD, THE TOTAL TAXES, I DON'T KNOW IF WE'RE COMFORTABLE WITH THAT BEING MOVED ON TO FUTURE CITIZENS. OBVIOUSLY, I DON'T LIVE IN THAT THEORETICAL FUTURE SUBDIVISION. LET ME SAY TOO, I DON'T WANT TO GET IN THE WAY OF ANY TYPE OF LAND DEAL BEING FRAGGED, ESPECIALLY AS A SMALL BUSINESS OWNER. THAT TAX RATE AND ALL THOSE OTHER THINGS ARE JUST FOR THAT. >> IN ALL OF THESE SCENARIOS THAT WE'RE TALKING ABOUT HERE, NONE OF THESE WOULD BE PASSED ON TO THE EXISTING CITY RESIDENTS. I SHOULD POINT OUT ONE OTHER BIG ASSUMPTION IN THIS. WE DID ASSUME A TAX INCREMENT REINVESTMENT ZONE THAT WOULD ALSO REINVEST IN THE PROPERTY. >> I'M SORRY, IT'S CALLED A WHAT? >> A TAX INCREMENT REINVESTMENT ZONE OR A TIRZ. BOTH SCENARIOS DID ACCOUNT FOR THAT, BUT THE RATIOS BETWEEN THE TWO IN TERMS OF FINANCING CAPACITY WOULD STILL HOLD TRUE. >> WE HAVE A SEWER MASTER PLAN THAT POINTS US FOR ANOTHER SEWER PLANT ON HIGHWAY 380. WE SHOULD PROBABLY STICK WITH THAT PLAN. AS THE PROJECT REQUIRES IT, WE NEED TO FOLLOW THE PLAN. I MISTYPED THAT. [LAUGHTER] SOMEBODY WANT TO JUMP IN AND HELP ME ON THAT ONE. FUTURE PROJECT'S GOING ON. IF THE SUBDIVISION WERE TO COME THROUGH. >> WHAT'S GOING TO BE NEEDED TO SUPPORT IT? >> THAT IS CORRECT. >> APPARENTLY, I JUST MADE YOU THE NEXT STATEMENT. >> I'M READY TO ANSWER THE QUESTION. >> WE'RE ON BOARD. >> IT LOOKS LIKE WE'RE IN AGREEMENT OF THAT. [00:55:03] THERE WILL ABSOLUTELY BE A NEED FOR ADDITIONAL WATER AND WASTEWATER. >> IT'S NOT UP TO WHEN WE GET AN OPPORTUNITY TO HAVE A VOLUNTARY ANNEXATION OF LAND. >> THEN, GOSH, WE HAVE POLICE AND FIRE HERE, SO I'M SURE THEY'RE THINKING THERE'S ADDITIONAL POLICE AND FIRE. >> THAT'S A GOOD SEGUE. NO, I LIKE THAT. >> [INAUDIBLE] >> I ONLY COUNTED TWO, BUT WAS THERE FOUR IN THERE? >> [INAUDIBLE]. >> VERY GOOD. OTHER QUESTIONS FROM COUNCIL. >> I'M A LITTLE SLOW, SO YOU'RE GOING TO HAVE TO PLACATE ME A LITTLE BIT HERE. THE SUBDIVISION HAS PUT TOGETHER ALL THE INFRASTRUCTURE AS BUILT. HOUSES ARE PUT IN PLACE. YOU ARE STILL TAXING, CORRECT? >> YES. >> FACILITIES NOW ALL BECOME RESPONSIBILITY OF THE CITY. >> YES. >> ROADS BECOME RESPONSIBILITY OF THE CITY. EVERYTHING IS NOW THE RESPONSIBILITY OF THE CITY. WHERE'S THE MONEY FOR THE TAXING GOING? >> THE TAXES ARE USED TO PAY OFF THE DEBT SERVICE ON OUR BONDS. THE WAY THAT THE DISTRICT WORKS IS A DISTRICT IS CREATED OVER A PORTION OF LAND, THE DISTRICT STARTS TO LEVY TAXES, AND THEN TAXABLE VALUE IS CREATED INSIDE THE BOUNDARIES OF THE DISTRICT, I.E., HOUSES. ONCE THE TAXABLE VALUE OF THE DISTRICT IS HIGH ENOUGH THAT WE'RE ABLE TO SELL BONDS, WE SELL BONDS BASED UPON THAT REVENUE STREAM. THE TAXES CONTINUE ON TO PAY OFF THE DEBT SERVICE ON THE BONDS. >> WHEREAS IN A PID, IT'S ALL DONE UP FRONT. >> THE ASSESSMENTS LEVIED FOR 25-30 YEARS. >> THE BONDS WOULD BE ISSUED TO MATCH THE TERM OF THE ASSESSMENTS, WHICH TYPICALLY IS ABOUT 30 YEARS. WHEREAS WITH THE MMD, DEPENDING ON THE STRUCTURE OF THE BONDS, THEY COULD BE 25 OR 30-YEAR DEBT. IF WE'RE SELLING DEBT OVER A FIVE-YEAR PERIOD, THEY WOULD BE PAID OFF IN 30-35 YEARS AS WELL. UNLESS THEY PREPAID AN ASSESSMENT, THE TIMELINE FOR HOW LONG PEOPLE WOULD BE PAYING ASSESSMENTS OR TAXES INSIDE THE DEVELOPMENT WOULD BE PLUS OR MINUS FIVE YEARS, ROUGHLY. >> YOU GET A BETTER INTEREST RATE FOR PUTTING IN THE INFRASTRUCTURE, AND THE CITY DOESN'T ACTUALLY BENEFIT FROM THIS LONG TERM. >> I'D SAY THE BENEFIT IS THAT THE PROPERTY GETS ANNEXED INTO THE CITY LIMITS, AND THE TAXES THAT THE CITY LEVIES WOULD ALSO BE GENERATED THROUGH THE RESIDENTS WITHIN THE COMMUNITY AS WELL WITHIN THE DISTRICT. >> THE TAXES FOR THE MMD ARE ABOVE AND BEYOND WHAT WE TAX OUR HOMES. >> WHAT HAPPENS IF YOU CAN'T BUILD THIS OUT? WHAT IF YOU CAN'T FULFILL ALL THE LOTS, AND YOU SIT HERE NOW WITH EMPTY? >> ONE OF WHAT I THINK IS A BENEFIT TO THE WATER DISTRICT MODEL IS THAT THE DEVELOPER IS THE ONE THAT [INAUDIBLE]. THEY'RE WILLING TO PUT THAT CAPITAL AT RISK AND BANKING ON THEIR ABILITY TO GET THE DEVELOPMENT DONE AND HAVE A MARKET FOR THOSE HOMES TO BE CONSTRUCTED. IF THAT DOES NOT HAPPEN, THERE IS NOT ENOUGH REVENUE TO GO AROUND TO PAY THEM BACK. THEY DON'T GET PAID BACK UNTIL THE DISTRICT CAN AFFORD TO DO SO. THEY'D HAVE TO BASICALLY WAIT FOR THE NEXT CYCLE FOR THE DEVELOPMENT TO RESTART. >> THAT'S WHAT RYAN WAS SAYING EARLIER ABOUT MMDS BEING REIMBURSEMENT STYLE FINANCING. THE DEVELOPER HAS TO PUT IN THE FACILITIES, I.E., PAY FOR THE WATER, THE SEWER, THE DRAINAGE, THE ROADS, AND HE HAS TO CREATE THE TAXABLE VALUE, I.E., SELL HOUSES, AND HE HAS TO SELL ENOUGH OF THEM TO WHERE THE REVENUE STREAM IS HIGH ENOUGH TO SUPPORT THOSE BONDS THAT WERE ISSUED. EVEN IF ANOTHER HOUSE WAS NEVER BUILT AFTER A BOND ISSUANCE, THE PROBLEM WITH THAT SCENARIO IS ONE FOR THE DEVELOPER, NOT THE CURRENT RESIDENTS, BUT THE DEVELOPER DOESN'T GET ALL OF HIS INFRASTRUCTURE PAID FOR THAT HE PUT IN HIS PROFORMA. WITH A PID, THE BONDS ARE ISSUED UPFRONT, WHICH MEANS THAT BEFORE ANY HOUSES ARE OUT THERE, THE CITY WILL ISSUE PID BONDS IN THE HOPES THAT THE HOUSES WILL BE BUILT ONE DAY AND THAT TAX TAX PAYMENTS WILL BE SPREAD TO MULTIPLE LANDOWNERS. >> BECAUSE WHEN THEY FLOAT THE INITIAL BOND AND ASSESSMENT DEAL, THE ASSESSMENTS ARE LEVIED AGAINST ALL THE PROPERTY OUT THERE, AND YOUR DEVELOPER IS THE ONE THAT'S ON THE HOOK TO PAY THOSE ASSESSMENTS. [01:00:01] THEY'RE INCENTIVIZED TO GET EVERYTHING BUILT, BUT IF IT DOESN'T HAPPEN, THEY'RE STUCK HOLDING THE BAG IN TERMS OF PAYING THOSE ASSESSMENTS, AT SOME POINT, THEY MAY CUT BAIT AND SAY I'M OUT AND STOP PAYING THE ASSESSMENTS. THEN HOW DO YOU PAY BACK THOSE BONDS? WHEREAS WITH THE MMD OR WITH THE TAX BACK DEAL, BECAUSE WE ARE TYPICALLY SELLING THOSE ON WHAT WE CALL A NO GROWTH BASIS, MEANING IF THE VALUE THAT'S ON THE GROUND ALREADY WOULD SUPPORT THOSE BONDS, YOU DON'T RUN INTO THAT ISSUE WITH THE TAXPAYERS HAVING TO CARRY THAT ASSESSMENT. BECAUSE IF SOMETHING WERE TO CHANGE AND THINGS WERE TO WALK AWAY, YEAH. >> BASICALLY WHAT I'M HEARING ON A PID, THE DEVELOPER COULD POSSIBLY WALK AWAY. >> IT'S A LOT OF INCENTIVE FOR THEM TO HAVE THIS THING WORK OUT, BUT YEAH. >> WITH AN MMD, THEY'RE MORE ON THE HOOK THAN WITH A PID? >> I THINK THEY ARE, BECAUSE THEY'RE HAVING TO PUT ALL THE CAPITAL IN UP FRONT, AND THEN THEY'RE HOPING FOR THE REIMBURSEMENT. >> THE REIMBURSEMENT IS CREATED BY THEM SELLING THE HOUSES, AND SO UNTIL THEY SELL THE HOUSES, THEY CAN'T GET REIMBURSED. >> GOT YOU. >> THEY SELL BONDS UP FRONT FOR INFRASTRUCTURE AND HOPE THAT PEOPLE COME AND BUY THE HOUSES. THEY'RE NOT THE ONLY ONES WHO ARE PAYING THE ASSESSMENTS, BECAUSE IN ON THAT FIRST LEVY OF ASSESSMENT, THERE'S ONE LANDOWNER AND IT'S THE DEVELOPER, AND SO HE HAS TO PAY THE ENTIRE ASSESSMENT. HE DOES THAT IN THE HOPES THAT HE CAN SELL HIS LOTS AND HIS DEVELOPMENT COMES TO FRUITION. BUT IN AN MMD, IT'S THE OPPOSITE. YOU MAY BUILD INFRASTRUCTURE, YOU SELL THE HOUSES, YOU CREATE THE REVENUE STREAM, THEN THE DEVELOPER GETS REIMBURSED, WHICH IS ONE OF THE REASONS WHY IT'S A MORE EFFICIENT FUNDING TOOL, WHICH IS WHY BOND BUYERS, IF I'M GOING TO BUY BONDS, BECAUSE THEY ARE TAX EXEMPT AND FOR ALL OF THESE REASONS, I WOULD WANT MMD BONDS RATHER THAN ASSESSMENT BACK BONDS BECAUSE I AM A SAVVY INVESTOR, AND I REALIZE THERE'S ONE PERSON PAYING THE ASSESSMENTS AND WHAT HAPPENS IF HE GOES AWAY. WHEREAS WITH SPECIAL PURPOSE DISTRICTS LIKE MMDS, THERE IS DIVERSITY OF TAX BASE. WE'VE ALREADY CREATED THE REVENUE STREAM, WHICH IS WHY THERE IS THAT LOWER INTEREST RATE. ANYTIME THERE'S A LOWER INTEREST RATE, IT'S MORE EFFICIENT FOR THE DEVELOPMENT TEAM BECAUSE INSTEAD OF THE INTEREST RATE JUST GOING INTO THIN AIR, THEY'RE ABLE TO USE THAT TO FINANCE MORE OF THE INFRASTRUCTURE. >> MINDY RYAN, QUICK QUESTION. I LIKE THE IDEA OF MULTIPLE SIZED LOTS WITH THIS. IT'S A GOOD LOOKING PROJECT. I BOUGHT AND SOLD A COUPLE OF HOMES. IF I SIT AT A CLOSING TABLE, I KNOW THAT I LOCKED IN A RAY TO SAY 5%. PRINCIPLE IS THIS AMOUNT, INTEREST IS THIS AMOUNT, HOW ARE THE TAXES WHEN YOU'RE AT THE CLOSING TABLE? WHAT DOES THAT LOOK LIKE WITH THE CLOSING COMPANY? >> IT LOOKS THE SAME AS THE CITY TAX, THE SCHOOL DISTRICT TAX, IT'S THE SAME. IT'S A RATE PER $100 EVALUATION. HERE, WHAT WAS THE TAX RATE WE WERE PROPOSING? >> WE WERE TARGETING A TOTAL TAX, LIKE FOR THE MMD, ROUGHLY $0.85 PER $100. THAT'S WHAT WE HAVE MODELED OUT SO FAR. >> [INAUDIBLE] >> TOTAL TAX FOR THE MMD, OR THE PID ASSESSMENT RATE AS WELL. THAT'S WHAT WE'VE MODELED OUT. BUT THAT CAN ALL BE PART OF THE TERMS TOO. THEY WILL GET A NOTICE AT THE TIME THAT THEY ENTER INTO THE SALES CONTRACT THAT, HEY, THIS IS WHAT THE DISTRICT IS CURRENTLY LEVYING OR INTENDED TO LEVY, AND THEN AT CLOSING, THEY WILL GET IT AGAIN. MY TYPICAL ROLE IS ULTIMATELY, MOST OF THE TIME, I AM THE FINANCIAL ADVISOR, THE MUNICIPAL ADVISOR TO THE DISTRICT. YOU THE CITY HAVE YOUR OWN FINANCIAL ADVISORY TEAM, SO WHEN IT'S TIME TO SELL BONDS, THAT'S WHO YOU RELY ON FOR INPUT. THAT'S WHAT I DO AS WELL FOR THE DISTRICTS THEMSELVES. THE BIG THING THAT I AM CONCERNED ABOUT, THE WHERE I REALLY FEEL LIKE THE RUBBER MEETS THE ROAD IN TERMS OF MY FIDUCIARY RESPONSIBILITY IS THAT WHATEVER THE TAX RATE IS THAT WE LEVIED UPFRONT SAYS, THIS IS THE MAXIMUM TAX RATE THAT WE INTEND TO LEVY, WE MANAGE THE DEBT ISSUANCE TO THAT. THEY ARE GOING EYES WIDE OPEN INTO WHAT IT'S GOING TO COST TO LIVE THERE IN TERMS OF WHAT THEIR CURRENT TAX RATE IS, AND THEN WE WILL MANAGE THE DEBT ISSUANCE PROCESS AND THE OPERATIONS OF THE DISTRICT WITHIN THAT RATE. THAT'S THE PLAN. THAT'S THE IDEA. >> JUST SO I CONFIRM THAT $0.85, THAT'S ABOVE THE CURRENT CITY AND COUNTY TAX RATE? >> THAT'S ONE OF THE SCENARIOS THAT WE RAN, YES. >> DOES CITY STAFF, ANYBODY FROM THE CITY HAVE ANY QUESTIONS THAT THEY WANTED TO INQUIRE ABOUT? >> CAN I ASK ONE MORE QUESTION ON THAT? >> SURE. >> IS THE $0.85 APPROXIMATELY THE SAME FOR THE PID OR THE MMD? >> WITH THE NUMBERS THAT I RAN, I ASSUME THE SAME IMPACT. [01:05:03] THAT WOULD PUT THE TOTAL TAX, THIS IS BASED ON 2023 TAX RATES, AT RIGHT AROUND 265, WHICH FOR THE DFW MARKET IS RIGHT IN LINE WITH THE MARKET FOR NEW DEVELOPMENTS 'CAUSE MOST NEW DEVELOPMENTS THAT WE SEE TEND TO NEED SOME FINANCING VEHICLE JUST TO MAKE THE NUMBERS WORK. >> THE AVERAGE TAX RATE THAT'S FOR THE WHOLE DFW AREA, THAT 265 THAT YOU CAME OUT? >> WHEN I SAY THE WHOLE AREA, WE DO SAMPLING OF DEVELOPMENTS IN DENTON COUNTY, COLLIN COUNTY, COUNTY OF JOHNSON, REALLY THE WHOLE CLOCK FACE THAT IS DFW. I WOULD SAY THE RANGE IS SOMEWHERE BETWEEN 245 AND 295, 265 IS RIGHT IN THE MIDDLE. I'VE SEEN SOME NORTH OF $3, BUT THOSE ARE OUTLIERS. >> ANY OTHER QUESTIONS FROM COUNCIL? >> AT THIS TIME? >> NOT FOR YOU GUYS. BUT NATE, DO WE HAVE SOMEONE ON THE LINE OR SOMEONE THAT CAN ANSWER, MAYBE DEBATE, OR TELL US WHAT THEY SAID THAT WASN'T RIGHT? BECAUSE HONESTLY, I HAVE A WHOLE DIFFERENT PERSPECTIVE ON THIS FROM WHEN I CAME IN. I'M REALLY JUST STUDYING THIS RIGHT NOW. >> WE DON'T HAVE OUR FINANCIAL ADVISOR ONLINE. WHAT WE WERE MORE PREPARED FOR WAS THE DISCUSSION ON INFRASTRUCTURE, WATER, WASTEWATER, THAT THING. I WON'T TELL YOU, THOUGH, JAKE, WE ARE INCLINED TO LEAN ON OUR SPECIALIST. OUR FINANCIAL ADVISOR WOULD DEFINITELY NEED TO WEIGH IN ON THIS IN THE SAME FASHION THAT THESE FOLKS HAVE TO BE ABLE TO TELL YOU OUR VERSION OF THEIR FACTS. I WOULD ASK IF YOU WANT TO HEAR FROM OUR SPECIALIST, KIMLEY HORN WHO HAS BEEN DEALING WITH THE WATER AND WASTEWATER SIDE OF THIS FORCE FOR A WHILE. IF THERE'S ANY QUESTIONS YOU ASK SPECIFIC TO THAT ELEMENT OF THE CONSIDERATION TONIGHT, CONNOR IS HERE AND ABLE TO ANSWER QUESTIONS, IF THERE'S ANY. >> WELL, JUST FOR YOUR OTHER POINT ABOUT GETTING YOUR FINANCIAL ADVISOR HERE, WHEN WE DO THAT, IF THEY COULD BE HERE AS WELL, BECAUSE IT STINKS JUST HEARING ONE SIDE OF THE STORY. >> I'M SURE WE'D BE WILLING TO SET UP A MEETING WHERE WE CAN GO THROUGH THAT TOO AND WHETHER IT'S A WORKSHOP OR WHATEVER THE APPROPRIATE SETTING. >> PERFECT. THANK YOU. >> I WOULDN'T MIND OUR REPRESENTATIVE KIMLEY HORN MAYBE JUST GIVING US A RUNDOWN OF WHAT THE IMPACT IS AND WHAT THEIR VIEWPOINT IS ON HOW TO MEET THAT. >> THANK YOU. >> THANK YOU ALL. >> THANK YOU. >> WELL, GOOD EVENING, COUNCIL. THANKS FOR HAVING ME. I'M CONNOR MANLEY WITH KIMLEY HORN. I'VE BEEN WORKING WITH THE CITY FOR FIVE YEARS NOW, DOING ALL YOUR POCO WATER LINE, STREET WATER LINE, SUNSET TANKS. PRETTY FAMILIAR WITH THE CITY AND WHERE YOU ARE AT WITH YOUR WATER AND SANITARY SEWER SYSTEMS. AFTER HEARING FROM FOLKS HERE, TO MY UNDERSTANDING, THE DEVELOPMENT HAS 680. IT'S 680 LOTS. HOW MANY RESIDENTS ARE THERE CURRENTLY IN THE CITY? IT'S 7,500? >> JUST OVER 7,000, CORRECT. >> JUST OVER 7,000. USING CITY OF FORT WORTH DESIGN CRITERIA FOR A SINGLE FAMILY HOUSE, USUALLY, IT'S 3.5 PEOPLE. THAT'S ABOUT 2,200 PEOPLE THAT WE'RE ADDING TO THE CITY. THAT DIVIDED BY 7,000, THAT'S OVER 30% GROWTH IN ONE DEVELOPMENT. WHEN WE'RE TALKING ABOUT CAPACITY NOW, WE'RE TALKING ABOUT POTENTIALLY 30% MORE FLOW GOING TO THE TREATMENT PLANTS BASED ON POPULATION FULL BUILD OUT. THEN FROM WHAT OUR ESTIMATES ARE FOR DOING A COMPLETE NEW PLANT NORTH OF 380, YOU'RE LOOKING AROUND $42,000,000 TO DO THAT. FACILITY PRICES HAVE GONE UP ASTRONOMICALLY SINCE COVID. UNFORTUNATELY, AND WE HAVEN'T SEEN THEM SLOW DOWN. WE'VE BEEN SEEING A TREND OF THE COSTS OF BUILDING INFRASTRUCTURE GOING HIGHER AND HIGHER SO EVERY YEAR, THIS COST IS ALSO GOING UP, UNFORTUNATELY. >> IF I UNDERSTAND CORRECTLY, WHERE THIS IS LOCATED, WE HAVE TO PUT THAT SEWAGE TO THE NORTH SIDE PLANT, NOT OUR MAIN PLANT ON THE SOUTH SIDE, CORRECT? [01:10:01] >> CORRECT. IF WE WERE TO SEND IT TO THE EXISTING PLANT, THERE WOULD HAVE TO BE A SERIES OF LIFT STATION IMPROVEMENTS THAT WOULD HAVE TO BE REQUIRED. FOR A LONG TERM PLANNING, THE NORTH SIDE WASTEWATER TREATMENT PLANT WOULD BE VERY BENEFICIAL TO SERVE EVERYTHING NORTH OF 380. THEN ESSENTIALLY, WE'D HAVE TO BUILD THE TREATMENT PLANT, NO MATTER WHAT, BECAUSE OF THE DEVELOPMENT THAT'S HAPPENING NOW, AND WITH THIS DEVELOPMENT THAT'S ADDING ON. YOU'D BE PUTTING FOR LACK OF GOOD MONEY AFTER BAD IF YOU UPSIZE THE LIFT STATIONS AND THEN EVENTUALLY SWITCHED OVER TO THE TREATMENT PLANT. >> DO WE HAVE A LOCATION TO BUILD THIS? >> WE OWN ADDITIONAL LAND AROUND THE CURRENT WATER TREATMENT FACILITY THAT COULD POTENTIALLY HOUSE IT. WE ALSO HAVE OUR EYES ON SEVERAL OTHER PIECES OF PROPERTY THAT WE'RE NOT READY TO RELEASE DETAILS ON YET, DEPENDING ON HOW THIS CONVERSATION GOES AND OUR PLANNING WITH KIMLEY HORN. >> I THOUGHT I UNDERSTOOD HIM TO SAY IT NEEDED TO BE NORTH OF 380, IS IT? >> THE EXISTING WATER TREATMENT FACILITY IS NORTH OF 380 JUST WEST OF TOWN. WE HAVE A PIECE OF LAND AROUND THAT WE DO OWN THAT IS A POTENTIAL SITE. WE HAVE OUR EYES ON OTHER PIECES OF PROPERTY AS WELL. >> YOU'RE SAYING TO BUILD THAT SITE IS 42 MILLION APPROXIMATELY? >> APPROXIMATELY. IN 2024 DOLLARS. >> IN 2024. THIS IS INCREASING OUR GROWTH BY 30%. THE ESTIMATE THAT THIS GROUP WOULD PAY IS 6 MILLION TOWARDS THAT TREATMENT FACILITY. >> YOUR MULTIPLIER WAS 3.5? >> YEAH. 3.5. THAT'S THE CITY OF FORT WORTH STANDARD WATER DESIGN CRITERIA. I MEAN, IF YOU USED THREE INSTEAD, WE COULD LOOK AT CITY DECATUR DENSITIES. BUT FOR A SINGLE FAMILY RESIDENTIAL THREE TO 3.5, THAT'S SOMETHING WE TYPICALLY DO IN OUR PLANNING EXERCISES. BUT AT THREE, YOU'RE STILL LOOKING JUST SOUTH OF 2000, SO LIKE 1,900, 1,800 FOLKS AT BUILD OUT. >> IT LOOKS LIKE THERE'S A QUESTION BRING OVER HERE. >> WELL, SORRY. >> PLEASE. >> HOW MUCH OF OUR CURRENT CAPACITY COULD BE DIVERTED TO THE NORTH-SIDE TREATMENT FACILITY IF WE BUILT A TREATMENT FACILITY UP THERE. >> WITH REGARDS TO THIS DEVELOPMENT, IT'S HARD TO SAY BECAUSE THERE'S OTHER DEVELOPMENTS THAT ARE HAPPENING RIGHT NOW. WE JUST FINISHED THE ROSE AVENUE APARTMENTS. WE'VE GOT CHISHOLM, WE'VE GOT VISTA PARK, MEADOW CREEK COULD POTENTIALLY HAPPEN BEFORE ALL THIS. ALL OF THIS HAS TO BE CONSIDERED AS WELL IN A LONG TERM PLAN, SO SOME OF THESE DEVELOPMENTS, IF THEY ALL GO TO THE EXISTING TREATMENT PLANT, I CAN'T EXACTLY REMEMBER. IT'S AROUND 2.3 TO 2.4 MILLION GALLONS PER DAY, AND THE CAPACITY IS THREE. THOSE DEVELOPMENTS ARE GOING TO PUSH YOU PRETTY CLOSE, AND FOR WASTEWATER, SPECIFICALLY, AT 80%, TYPICALLY TCQ STARTS GETTING INVOLVED WITH GETTING INTO DESIGN AND STUFF. >> YOU'RE SAYING WE CAN PUSH SOME OF OUR CURRENT LIKE SO VISTA PART, COULD THAT ALL GO TO THE NORTH SIDE? >> I'D HAVE TO REMEMBER GEOGRAPHICALLY WHERE IT'S AT BECAUSE IT'S PRETTY MUCH EVERYTHING NORTH OF 380. IF THAT NEW TREATMENT PLANT IS THERE, THAT WOULD BE THE IDEA, EVEN ON THE EAST SIDE FROM 380, IT WOULD TRAVEL WEST TO THE NORTH WASTEWATER TREATMENT PLAN. ALSO, BUT THE BENEFIT IS YOUR EXISTING TRADITIONAL PLANT IS GOING TO EXTEND THE LIFE. >> CORRECT. >> WITH THE NEW PLANT. YEAH. >> THAT'S WHY I'M SAYING. IF WE TOOK THE PRESSURE OFF OF OUR EXISTING PLANT AND SENT IT TO THE NORTH PLANT, IT WOULD EXTEND THE LIFE OF THE EXISTING PLANT. WE'D HAVE THE NORTH PLANT. RIGHT. BUT THAT'S WHY I ASKED ABOUT VISTA PARK IF VISTA PARK COULD PUSH THAT UP. DO YOU WANT TO WEIGH IN? >> JAKE, YOU DON'T WANT ME TALKING SEWER BASINS ON A RECORDED MEETING, I GUARANTEE YOU THAT. BUT WHAT WE DO KNOW IS THAT AROUND 20 TO 30% ROUGHLY COULD COME OFF OF THE LEGACY PLANT, THE LEGACY SEWER PLANT ONCE THE NEW FACILITY WAS IN PLAY. [01:15:03] >> TWENTY TO 30% OF OUR CURRENT CAPACITY. >> THAT WOULD BE S 200,000. >> THAT 200,000 GALLONS A DAY OF TREATMENT OFF OF THE LEGACY PLANT. THE LEGACY PLANT IS MAXED OUT AT 1.2 MILLION GALLONS A DAY TREATMENT CAPACITY. THAT'S WASTEWATER. YOU'RE GOING TO HELP EXTEND THE LIFE OF THE EXISTING WASTEWATER TREATMENT PLANT BY PUTTING IN A NEW NORTH SIDE PLANT, PLUS YOU'RE GOING TO REDUCE THE NEED FOR SO MANY MORE LIFT STATIONS TO BE ADDED TO GET THAT SEWAGE THERE IN RAW FORM FROM THE BEGINNING ANYHOW. I WOULD JUST REMIND EVERYBODY THAT THE COMPREHENSIVE I WOULD SAY THE WASTEWATER MASTER PLAN HAS THIS IN A NORTH SIDE TREATMENT FACILITY AT SOME POINT. THIS PROJECT JUST HAPPENS TO BE BRINGING A COUPLE THOUSAND FOLKS AND SPEEDING UP THE NEED FOR THAT SOONER THAN WHAT THAT PLAN CALLED FOR. >> VERY GOOD. ANY OTHER QUESTIONS OR COMMENTS AT THIS POINT FOR KIM HORN? >> WELL, I GUESS MY OVERALL POINT OF THAT IS THERE'S NO REASON THAT MAKES GOOD SENSE IF WE ALREADY TODAY COULD DIVERT 30% UP TO THE NORTH SIDE, AND THEN WE'RE ADDING 2,200 PEOPLE TO THAT NORTH SIDE. I WOULDN'T WANT TO BUILD A PLANT UP THERE IN ALL OF OUR DEVELOPMENTS AT THE SOUTH, AND THEN WE HAVE TO BUILD 100 LIFT STATIONS TO GET IT ALL UP TO THE NORTH, SO THAT WOULD NOT MAKE SENSE FINANCIALLY, OBVIOUSLY, BECAUSE IN THAT CASE, WE SHOULD JUST ADD ON TO WHAT WE HAVE. >> RIGHT. THIS IS GOOD TIMING, TOO, NOT FOR OUR DEVELOPMENT PARTNERS, BUT FOR YOU GUYS TO HEAR. WE'VE BEEN WORKING THROUGH THE VARIOUS PIECES OF WATER RATE STUDY, IMPACT FEE STUDY, THAT SORT OF THING. VERY SOON, CONNOR AND ANDREW WILL BE BACK TO TALK TO YOU ABOUT THE PLANS FOR PLANT EXPANSION. THIS HAS BEEN A GREAT PRIMER FOR THAT OPPORTUNITY. WE'LL MAKE SURE THAT THEY'RE READY TO DISCUSS WHAT CAN BE DIVERTED IN THIS NEW PLANT SCENARIO. I WOULD JUST SAY THAT THAT NEW PLAN LIKELY HAS TO COME NO MATTER THE LIBERTAS DEVELOPMENT. WE'RE STILL GOING TO BE STARING DOWN PLANT EXPANSION BOTH FOR WATER AND WASTEWATER, NO MATTER WHERE WE LAND WITH OUR PARTNERS AT LIBERTAS. >> ALL RIGHT. THANK YOU, SIR. >> ALL RIGHT. THANK YOU. >> ANY OTHER COMMENTS FROM CITY STAFF ON THIS ITEM? >> YES, SIR. I WANT TO CLARIFY SOME OF THE MEETINGS WE'VE HAD WITH STAFF AND ENGINEERING. WE'VE BEEN I'LL SAY LED TO BELIEVE. I'LL KEEP THE WORD PROMISE OUT. BECAUSE THIS IS A TWO PHASE PROJECT. WHAT WE'VE BEEN TOLD IS THAT THERE'S CAPACITY FOR OUR FIRST PHASE NOW. THEN, OF COURSE, THE SECOND PHASE WOULD BE SEVERAL YEARS DOWN THE ROAD, DEPENDING ON THE MARKETPLACE. BECAUSE OBVIOUSLY, OUR SELLERS ARE NOT GOING TO WAIT AROUND FOR A BRAND NEW PLAN. >> RIGHT. >> I JUST WANT TO CLEAR THE AIR THERE A LITTLE BIT. >> THAT'S A GOOD LEVEL SETTER FOR US. PERFECT. >> [INAUDIBLE] >> THIS IS PHASE 1? >> YEAH. PHASE 1. WE GOT TO GET OVER TO HERE, SO THIS WOULD BE PHASE 1. THIS WOULD BE PHASE [OVERLAPPING]. >> THE SOUTHERN PART IS PHASE 1. GOT IT. THANK YOU. >> [INAUDIBLE] >> YOU WANT TO GIVE US THE PRIDE. YEAH. POINT OUT YOUR PHASE 1, PHASE 2. >> PHASE 1 [INAUDIBLE]. >> GOT YOU. >> TWO. >> ALL RIGHT. >> [INAUDIBLE]. >> PERFECT. THANK YOU. YEAH. ALL RIGHT. THANK YOU, EVERYBODY. APPRECIATE EVERYBODY'S COMMENTS AND EVERYONE'S PATIENCE AND HEARING ALL THAT DISCUSSION FOR THAT. WE APPRECIATE IT SO MUCH. [10. CONSIDER AND TAKE APPROPRIATE ACTION ON A SECOND AMENDMENT TO THE CHAPTER 380 ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT BETWEEN THE CITY OF DECATUR AND NS DEVELOPMENT PARTNERS, LLC REGARDING A DEVELOPMENT COMMONLY REFERRED TO AS “BISHOP HEIGHTS” AND AUTHORIZE THE MAYOR TO EXECUTE THE NECESSARY DOCUMENTS.] CONSIDER AND TAKE APPROPRIATE ACTION ON A SECOND AMENDMENT TO THE CHAPTER 380, ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT BETWEEN THE CITY OF DECATUR AND NS DEVELOPMENT PARTNERS, LLS REGARDING A DEVELOPMENT COMMONLY REFERRED TO AS BISHOP HEIGHTS. >> MAYOR, COUNCIL, THIS PROJECT, BISHOP HEIGHTS, IS A MULTI FAMILY AGREEMENT FOR APARTMENT COMPLEX. [01:20:02] THE DEVELOPER ORIGINALLY WAS SHOOTING FOR AUGUST 31ST, 2024 PERMIT FROM THE CITY FOR THEIR BUILDING PLANS. THEY'RE REQUESTING TO MOVE THAT DATE TO MARCH 31, 2025. NO OTHER DEALS, DEAL POINTS RATHER IN ITEM TEN WILL CHANGE. MEANING NO MORE INCENTIVES WILL BE GIVEN, NONE WILL BE TAKEN AWAY. THEY JUST SIMPLY NEED A LITTLE MORE TIME TO GET TO THE BUILDING PERMIT PIECE OF THEIR ENVELOPMENT. I KNOW WAYNE IS HERE AND HAS HAD SOME CONVERSATION WITH THEM, BUT I DON'T KNOW IF IT WOULD BE ANYTHING MORE THAN JUST THAT. >> IS THIS AN APARTMENT COMPLEX OR IS IT TOWN-HOME? >> MULTI FAMILY APARTMENT COMPLEX AT THE INTERSECTION OF THOMPSON AND DEER PARK ON THE OPPOSITE SIDE FROM THE CHISHOLM PROJECT. >> QUESTIONS FROM COUNCIL? OTHERWISE, LOOK FOR A MOTION. >> OKAY, MAYOR. I'LL MOVE THAT WE APPROVE THE PARTNERSHIP EXTENSION. IT WOULD BE SECOND AMENDMENT TO THE CHAPTER 380 ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT BETWEEN THE CITY OF DECATUR AND NS DEVELOPMENT PARTNERS. OKAY. I MOVE THAT WE APPROVE THE SECOND AMENDMENT TO THE CHAPTER 380 ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT BETWEEN THE CITY OF DECATUR AND NS DEVELOPMENT PARTNERS, LLC REGARDING A DEVELOPMENT COMMONLY REFERRED TO AS BISHOP HITS AND AUTHORIZED THE MAYOR TO EXECUTE THE NECESSARY DOCUMENTS. >> SECOND. >> ALL RIGHT. WE HAVE A MOTION AND A SECOND. ANY FURTHER DISCUSSION ON THAT MOTION. ALL THOSE IN FAVOR. S. A. I OPPOSED SAME SIGN. ALL RIGHT. THANK YOU. ITEM 11, [11. RECEIVE UPDATE REGARDING THE DECATUR CONFERENCE CENTER FEES.] RECEIVE UPDATE REGARDING THE DECATUR CONFERENCE CENTER FEES. >> MAYOR AND COUNCIL, I BELIEVE CARLA IS HERE TO PRESENT THAT INFORMATION TO YOU. THANK YOU, CARLA. >> I DISTRIBUTED NEW MENUS AND OUR NEW RENTAL FEES FOR THE UPCOMING FISCAL YEAR. VERY SHORT SUITE. WE INCREASED OUR RENTAL FEES 10% ACROSS THE BOARD. THE NONPROFITS WE'RE PAYING $100 AN HOUR, NOW THEY'RE PAYING 110 FOR THE BALL ROOM, FOR EXAMPLE. THAT'S A FAIRLY MINIMAL. WE'RE STILL RIDICULOUSLY COMPETITIVE PRICE WISE WITH ALL OF THE VENUES IN THE METROPLEX, AND THEN ALSO IN THE SURROUNDING AREA. FOR THE MENU, WE DID INCREASE ALL OF OUR DISHES 2 TO $3 PER PLATE, BUT WE ROLLED IN THE BEVERAGE PACKAGE THAT USED TO BE A SEPARATE PRICE, AND WE ALSO UPGRADED ALL OF OUR SERVICE WARE. NO MORE FOAM PLATES, NO MORE FLIMSY PLASTIC SPOONS. >> ALL RIGHT. ANYBODY HAVE ANY QUESTIONS FOR CARLA? WELL, THANK YOU. >> THANK YOU. >> ALL RIGHT. OUR NEXT ITEM IS THE CONSENT AGENDA. [12. CONSENT AGENDA] AS ALWAYS, IF THERE'S SOMETHING YOU WANT TO PULL FROM THAT FOR FURTHER REVIEW OR DISCUSSION, DO SO. OTHERWISE, WE'LL LOOK FOR A MOTION. >> MR. MAYOR, MOVE THAT WE APPROVE THE CONSENT AGENDA AS WRITTEN. >> SECOND. >> ANY FURTHER DISCUSSION ON THAT? ALL THOSE IN FAVOR, SAY AYE. >> AYE. >> BOTH, SAME SIGN. ALL RIGHT. [14. EXECUTIVE SESSION] ITEM 14 IS AN EXECUTIVE SESSION ITEM UNDER THE TEXAS GOVERNMENT CODE, SECTION 551.001, AND THIS IS UNDER PERSONNEL MATTERS 551.074 TO DELIBERATE TO THE APPOINTMENT EMPLOYMENT EVALUATION, REASSIGNMENT DUTIES, DISCIPLINE, OR DISMISSAL OF A PUBLIC OFFICER OR EMPLOYEE, CITY MANAGER. WE WILL ADJOURN INTO EXECUTIVE SESSION AT 7:24. WHAT? OKAY. ALL RIGHT. [15. RECONVENE INTO OPEN SESSION] WE WILL ADJOURN BACK INTO OPEN SESSION AT 8:38. THAT'S ITEM 15, AND THERE'S NO ACTION ON THAT. ITEM 16, AS COUNCIL MEMBERS REQUEST FUTURE AGENDA ITEMS, AND WE WILL ADJOURN AT 8:38. THANK YOU, EVERYBODY. * This transcript was compiled from uncorrected Closed Captioning.