1999-05-24
SOUTHLAKE PARKS DEVELOPMENT CORPORATION MEETING
May 24, 1999
MINUTES
Board Members Present: Sherry Berman, Debra Edmondson, Ronnie Kendall, Norm Lyons, Rex
Potter, Rick Stacy, and Cara White.
Staff Present: Assistant City Manager Shana Yelverton, Director of Community Services Kevin
Hugman, Park Planning and Construction Superintendent Ben Henry, Deputy Director of Community
Services Steve Polasek, Chief Accountant Lynn Martinson, and Secretary to the City Manager Kim
Bush.
Agenda Item No. 1, Call to order. The meeting was called to order by Mayor Rick Stacy at 7:45
p.m. Mayor Stacy introduced and welcomed new members to the Board.
Agenda Item No. 2, Executive Session.
Mayor Stacy announced that the Board would be going into Executive Session pursuant to the Open
Meetings Act, Chapter 551 of the Texas Government Code, Section 551.072, land acquisition.
SPDC adjourned for Executive Session at 7:45 p.m.
SPDC returned to open session at 8:30 p.m.
Agenda Item No. 3. Reconvene.
There was no action necessary as a result of the Executive Session.
Agenda Item No. 4. PUBLIC FORUM.
There were no comments from the audience during Public Forum.
CONSENT AGENDA.
Item No. 5A. Approval of the meeting minutes.
Motion was made to approve the regular SPDC meeting minutes for April 26, 1999 and the Joint
SPDC and Parks & Recreation Board meeting minutes for April 26, 1999.
Motion: Kendall
Second: Lyons
Approved: Berman, Edmondson, Kendall, Lyons, Potter, Stacy, White.
Nays: None
Approved: 7-0
MINUTES OF SPDC MEETING MAY 24, 1999 - PAGE 1 OF 4
Agenda Item No. 6A. Consider Election of Officers.
Motion was made to nominate Ronnie Kendall as President.
Motion: Stacy
Second: Lyons
Ayes: Berman, Edmondson, Kendall, Lyons, Potter, Stacy, White
Nays: none
Approved: 7-0
Motion was made to nominate Deborah Edmondson as Vice President.
Motion: Berman
Second: Potter
Ayes: Berman, Edmondson, Kendall, Lyons, Potter, Stacy, White
Nays: none
Approved: 7-0
Motion was made to nominate Norm Lyons as Secretary.
Motion: Edmondson
Second: Potter
Ayes: Berman, Edmondson, Kendall, Lyons, Potter, Stacy, White
Nays: none
Approved: 7-0
Agenda Item No. 7A. Additional funding capacity for land acquisition program.
Financial Advisor Jim Sabonis with ls` Southwest presented to the Board the SPDC current and five-
year additional funding capacity and a proposed debt issuance program to fund land acquisition. Mr.
Sabonis explained that the key funding constraints and assumptions utilized in projecting the SPDC
sales tax corporation's additional funding capacity include: historical and projected sales tax revenues;
existing debt outstanding; and structure and type of new additional proposed debt. For internal
financial planning purposes, both SPDC and the City of Southlake have used a projection of 15 %
increase in sales tax each year. Mr. Sabonis explained that for the purpose of his analysis, the same
15 % annual increase was used. He commented that the year-to-date sales tax collection for February
1999 increased 19.2 percent over the previous year period.
Mr. Sabonis explained that currently the SPDC sales tax corporation has $14,225,000 of senior lien
debt outstanding. He stated that the two key bond legal covenants of SPDC's senior lien debt are (1)
additional bond test - 1.40 times maximum annual combined debt service and (2) debt service reserve
- maximum annual debt service reserve funded at issuance (funded with surety bond).
Mr. Sabonis further explained the options available for issuing additional debt which includes (1)
senior lien debt program continuation, which would require cutting back on projects in order to fund
the expanded land acquisition program, (2) a combination of senior lien and junior lien debt,
increasing the funding capacity for the upcoming fiscal year by about $6.3 million, or (3) a
combination of senior lien debt and self-supported City certificates of obligation, increasing funding
capacity for the upcoming fiscal year by about $10 million.
MINUTES OF SPDC MEETING MAY 24, 1999 - PAGE 2 OF 4
Mr. Sabonis commented that City staff provided to him information concerning committed and
potential land acquisition totaling approximately $10,251,955. He stated that, based on this amount
and the debt capacity discussed earlier, option 3 is the only funding process that enables SPDC to
immediately fully fund $9,319,959 of capital needs and $931,996 of potential cost contingencies. He
stated that the funding process would require the City of Southlake to issue Certificates of Obligation
that would be repaid by a transfer of sales tax proceeds from SPDC. The time frame to implement
the debt issuance and funding program would take approximately 80 days. (For further information,
see the memo from Jim Sabonis to the SPDC dated May 24, 1999 included with the minutes.)
Board members were not comfortable with this amount of debt. Mr. Stacy suggested that we look at
funding for $6-7 million at this time and then later look at funding for an additional $2 million.
President Kendall agreed. Mr. Sabonis commented that he could prepare an analysis on any amount
requested. Board members agreed that they would not want to max out on their funding options.
President Kendall commented that there will be other types of things coming forward for the Board's
consideration, i.e., library, school issues, etc. Mr. Sabonis commented that he can prepare an
analysis that will also show payment capacity under different scenarios, i.e., possible decrease in sales
tax. Mr. Stacy pointed out that the only property we needed to be prepared for by January 2000 is
property T - there is not a rush on the other properties. Board member Potter asked Mr. Sabonis if
there would be any redundancy in fees if we decided to fund a certain amount now and then come
back at a future time to fund more. Mr. Sabonis commented that the redundancy would be small
maybe $20,000.
President Kendall asked staff if there was any alternate funding for Property T. Assistant City
Manager Shana Yelverton stated that there was approximately $1.3 million left in what was budgeted
by the Board for open space. President Kendall suggested that Mr. Sabonis prepare an analysis for
funding the rest of property T and the cost of property C. Ms. Yelverton commented funds for the
Wayland property (berm property at Bicentennial Park) have been budgeted in the CIP at $300,000,
however she feels additional funds may be needed for possible supplemental costs above what has
been budgeted. President Kendall suggested that if property S turned out to be something that should
be considered then perhaps at that time there may be some other alternative funding available. The
Mayor commented that there may be a possibility for owner financing. President Kendall clarified
that the $1.3 million should be left in the budget for any supplemental costs. Members agreed that
the Park Board should consider whether property M is really needed.
The Board suggested that Mr. Sabonis look at an analysis for $7.7 million. The Board agreed that the
15% increase in sales tax projections is a conservative percentage to use. Ms. Yelverton confirmed
that the 15% projection was used by former Finance Director Lou Ann Heath in the five-year plan.
Board member Edmondson suggested that staff contact Ms. Heath because she had earlier
conversations with Ms. Heath that indicated she had not been as conservative this year as she had
been in previously years. Ms. Yelverton confirmed that she had asked Ms. Heath if she had been
extremely conservative in her sales tax projections, and Ms. Heath commented "not extremely but
still conservatively."
Agenda Item No. 711. Financial Report/Budget.
There were no comments or questions from the Board.
MINUTES OF SPDC MEETING MAY 24, 1999 - PAGE 3 OF 4
Agenda Item No. 7C. Status Report of SPDC projects.
Director of Community Services Kevin Hugman commented that things were progressing on
Bicentennial Park Phase II construction. Mr. Hugman explained that the tennis courts were not quite
finished. The contractors are focusing more right now on completion of the pro shop, sidewalks, etc.
He commented that they estimate the courts will be ready for use by the first part of August.
Kevin Hugman commented that he would be happy to meet with any of the new members to bring
them up-to-date on the status of SPDC projects.
Agenda Item No. 14. Adjournment.
Motion was made and carried to adjourn the meeting at 10:00 p.m.
President Ronnie Kendall
ATTEST:
OKi ush
Se etary to the City Manager
MINUTES OF SPDC MEETING MAY 24, 1999 - PAGE 4 OF 4