[ BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT NOTICE OF MEETING BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT REGULAR MEETING THURSDAY, AUGUST 3, 2023 4:30 P.M. COUNCIL CHAMBER, CITY HALL 2401 MARKET STREET, BAYTOWN, TEXAS 77520 AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM ]
[00:00:21]
SO NOW CALL THIS MEETING THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT TO ORDER.
COUNCIL CHAMBERS, UH, WE WILL FIRST HAVE APPROVAL
[a. Consider approving the minutes of the Municipal Development District Regular Meeting held on June 1, 2023. ]
[b. Consider approving the minutes of the Municipal Development District Regular Meeting held on July 6, 2023. ]
OF THE MINUTES.UM, FIRST ITEM ONE, A AND B, I WOULD, I WOULD, UH, ENTERTAIN A MOTION FOR APPROVAL, UH, WHICH IS THE MDD REGULAR MEETING HELD ON JUNE 1ST, AND THEN ALSO ON JULY 6TH.
MOTION TO APPROVE ITEMS ONE A AND B.
ANY QUESTIONS, COMMENTS, OR ABSTENTIONS? IF NOT ALL THOSE IN FAVOR OF THE MINUTES IS WRITTEN.
FOR ITEMS ONE A AND B, PLEASE SAY AYE.
[a. Consider a resolution authorizing a budget amendment to reallocate funds from Capital Improvement Projects (CIP) to cover the unforeseen increase in insurance costs for the Hyatt Hotel/Convention Center.]
A TO CONSIDER RESOLUTION AUTHORIZE AND BUDGET AMENDMENT TO REALLOCATE FUNDS FROM CAPITAL IMPROVEMENT PROJECTS TO COVER THE UNFORESEEN INCREASE IN INSURANCE COSTS FOR THE HYATT HOTEL CONVENTION CENTER.UM, BEFORE YOU HAVE THE BUDGET AMENDMENT FOR FY 23 AND THE DETAIL IS IN YOUR PACKET, ESSENTIALLY WHAT WE HAVE MOVED, UM, ARE SOME OF THE PARKS PROJECTS AND ALSO A DEBT SERVICE AMOUNT FOR THE IT AND LIFT STATION.
AND WE'VE INCLUDED, UM, THE 1.78 FOR THE INSURANCE COST FOR THE HOTEL, WHICH ENDS THE, IN THE TOTAL ADJUSTMENT ENDS UP BEING $736,000.
UM, AND SO STAFF RECOMMENDS APPROVAL.
IF YOU DON'T HAVE ANY QUE IF YOU HAVE ANY QUESTIONS, I'LL BE HAPPY TO ANSWER.
UM, I GUESS AT, AT FIRST I CAN GET A MOTION FOR DISCUSSION ITEM TWO A MOTION TO DISCUSS SECOND.
ANY QUESTIONS OR COMMENTS? I THINK, UH, CERTAINLY A MAJORITY OF US, IF NOT ALL OF US, LAST, UH, MDD MEETING, WE'RE CERTAINLY, UM, SURPRISED.
STICKER SHOCK, UM, LIKE MANY INDIVIDUALS EITHER AT HOME OR EVEN THE COMMERCIAL BUSINESSES WITH THE INCREASE IN INSURANCE COVERAGE.
SO, UH, CITY BAYTOWN AND, AND MANY OTHERS ARE NO, NO DIFFERENT.
AND A LOT OF TIMES WE GET, WE GET TOLD OPERATE LIKE, LIKE A BUSINESS AND WE ARE SUSCEPTIBLE TO THE SAME TYPE OF, UM, I GUESS YOU'D SAY, UH, THINGS OF THE MARKETPLACE ITSELF.
SO, UH, IS THERE ANY DISCUSSION, ANY QUESTIONS OR COMMENTS REGARDING ITEM TWO? A MAYOR? I HAVE A QUESTION.
UM, THIS IS CIP IS THAT, IS THAT MONEY, THOSE FUNDS COME FROM SALES TAX OR PROPERTY TAX OR BOTH? UM, FOR A CIP SOMETIMES WE FUND THE CIP WITH THE GENERAL FUND PROPERTY TAX TRANSFER OR DEBT SERVICE.
SO THEY DO COME FROM, SO WE MAY DO A BOND ISSUANCE.
SO THEY DO COVER FROM PROPERTY TAXES, CORRECT.
A MIX, I WOULD ASSUME IT IS A MIX.
LIKE IS ANY, UH, STREET, WE ALSO STREET MAINTENANCE PROJECTS ALSO WOULD, WOULD BE CONSIDERED IN CIP, IS THAT CORRECT OR NOT? IT'S ALSO FUNDED BY SALES TAX, THE MDD SALES TAX AS WELL.
SO SALES TAX AND PROPERTY TAXES IS, IS TYPICALLY IT'S NOT PROPERTY TAX.
LET ME, LEMME JUMP IN REAL QUICK.
I I I DON'T WANT, UH, I DON'T, THIS HAS BEEN DISCUSSED IN MULTIPLE WAYS, UM, THAT ARE BEING USED OUTTA CONTEXT FOR CERTAIN MEANS, AND I DON'T WANT THAT TO CONTINUE TO HAPPEN HERE.
WE CAN PLAY, YOU CAN PLAY MULTIPLE SCENARIOS WHERE, WHERE WE CAN SAY THAT PROP PROJECT A IS PAID FOR OUT OF SALES TAX ONLY PROJECT B IS PAID FOR OUT OF A TRANSFER FROM THE GENERAL FUND, WHICH IS PART OF PROPERTY TAX.
OR WE CAN SAY ONLY THE MONEY TRANSFERRED TO THE MDD FROM THE GENERAL FUND BUDGET IS SALES TAX ONLY.
AND SO I CAN ME AS THE GENERAL MANAGER OR THE CITY MANAGER FOR THE CITY OF BAYTOWN CAN TELL YOU THAT, HEY, THIS IS ONLY SALES TAX MONEY THAT'S COMING TO THE MDD.
RIGHT? WHEN IT ALL COMES DOWN TO IT, IT'S A GIANT POT OF MONEY THAT IS THE SAME POT OF MONEY FOR THE GENERAL FUND, FOR THE, UM, FOR THE CITY BUDGET.
AND THEN THE MDD BUDGET HAS SALES TAX MONEY THAT IS ALLOCATED FOR THE MDD BUDGET.
I CAN'T, WE DON'T HAVE IT BROKEN DOWN TO THE MONEY THAT'S TRANSFERRED FROM THE GENERAL FUND TO THE MDD AS SALES TAX OR PROPERTY TAX MONEY OR FEE MONEY OR WHATEVER THE CASE MAY BE.
I CAN SIT HERE AND TELL YOU THAT IT'S JUST SALES TAX, BUT THERE'S NO MECHANISM THAT BREAKS DOWN WHICH POT OF MONEY THESE ARE,
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ARE, WE KNOW THAT THIS AMOUNT OF MILLIONS COMES IN AS SALES TAX FOR THE GENERAL FUND.26 MILLION COMES IN AS PROPERTY TAX.
9 MILLION COMES IN AND, AND FEES, WHATEVER THE CASE MAY BE, IT'S ALL ONE GIANT POT OF MONEY THAT'S TRANSFERRED OVER.
AND SO THE QUESTION MR. GRIFFITH, IS THAT IT'S, IT WOULD BE TOO AMBIGUOUS TO TELL YOU WHICH POT OF MONEY THAT IT COMES FROM, FROM THE GENERAL FUND TO COME IN TO THE MDD MONEY.
IT'S BECAUSE IT'S ALL FROM ONE POT OF MONEY.
SO, BUT IF THE, THE STORY THAT NEEDS TO GO OUT IS THAT IT'S JUST SELL SEX MONEY.
I CAN CONFIDENTLY SAY THAT IT'S JUST SELL SEX, SELL TAX MONEY THAT COMES FROM THE GENERAL FUND TO THE MD TO THE MDD.
IF THERE NEEDS TO BE PROOF THAT THAT'S HAPPENING, THERE'S NOT GONNA BE PROOF.
SO WITH THE SALES TAX FOR MDD RIGHT NOW, WE HAVE, WHEN THE MONEY COMES IN FROM THE STATE, IF YOU NEED CLARITY THAT WE'RE NOT MIXING MONEY, UM, WHEN THE MONEY COMES IN FROM THE, FROM THE STATE RIGHT NOW WE HAVE IT SET UP WHERE THAT MONEY GOES DIRECTLY TO OUR TAX POOL.
AND THE TAX POOL FOR MDD IS SEPARATE AND APART FROM ALL THE OTHER FUNDS.
SO WHEN THAT MONEY COMES FROM THE STATE, THEY SEND THE MONEY FOR MDD STRAIGHT TO TEXT PULL IN OUR SYSTEM IF YOU NEED THAT CLARITY.
SO, SO SELF SEX, IT'S NOT YES, IT'S CELL SEX MONEY, YES.
SO WERE YOU, MY SANCE WAS THAT, I DIDN'T WANNA SAY THAT WE NEVER POTENTIALLY HAVE EVER TRANSFERRED MONEY FROM GENERAL FUND TO MDD, SO I WAS TRYING TO BE CAUTIOUS IN THAT RESPONSE BECAUSE THAT COULD HAVE HAPPENED IN THE PAST.
AND WHAT UNFOR, I KNOW IT'S HARD TO SAY WHAT UNFORESEEN BECAUSE WE CAN'T SEE THOSE, BUT WHAT IS THE, WHAT DOES OUR FUTURE LOOK LIKE IN TERMS OF THIS INSURANCE BILL? HAVE WE, SINCE WE LAST BROUGHT IT UP, HAVE Y'ALL HAD AN OPPORTUNITY TO RESEARCH AND SEE WHAT WE'RE GONNA BE HIT WITH MOVING FORWARD? WELL, I, I, AS YOU SAY, I DON'T KNOW A CRYSTAL BALL UNFORTUNATELY, SO I CAN'T TELL YOU WHAT IT'LL BE THIS TIME NEXT YEAR, BUT I CAN TELL YOU THAT WE HAVE HAD, UH, PRODUCTIVE CONVERSATIONS WITH HYATT ABOUT THEIR EXPECTATIONS IN TERMS OF INSURANCE.
I BELIEVE THERE ARE OPPORTUNITIES TO REDUCE INSURANCE COSTS, BUT NOT IN THIS YEAR BECAUSE WE'VE HAD TO TAKE INSURANCE COVER AND YOU CAN'T, IF ANYBODY'S TRIED TO CANCEL INSURANCE PARTWAY THROUGH A YEAR, YOU'LL FIND OUT YOU DON'T GET YOUR MONEY BACK.
SO WE'RE STUCK WITH IT RIGHT NOW.
WE HAVE BEEN TALKING TO, SAY WITH HYATT ABOUT MEASURES THAT WE CAN TAKE TO REDUCE THE COSTS OVER TIME.
UH, THE OBVIOUS ONES ARE TO INCREASE THE DEDUCTIBLE.
WE WILL NEED HYATT TO BE OKAY WITH THAT OR TO MOVE TO SOME FORM OF SELF-INSURANCE FOR ELEMENTS OF COVER THAT'S REQUIRED UNDER THE HOTEL SERVICES AGREEMENT.
SO YES, WE WILL BE TAKING MEASURES TO MITIGATE THE EFFECT.
AND IF I CAN JUST MAKE IT CLEAR, UH, THIS OVER THE LONGER TERM WILL BE FUNDED FROM THE REVENUES GENERATED WITHIN THE HOTEL.
WHAT WE ARE DEALING WITH RIGHT NOW IS THE FACT THAT A BUSINESS DOES NOT, UH, MAKE A PROFIT ON DAY ONE.
SO OVER TIME REVENUES WILL FLOW INTO THE HOTEL FOR OPERATIONS AND WILL EVENTUALLY FLOW IN TO THE MDD TO REPAY IT FOR THESE COSTS.
PLUS THE SALES TAX DOLLARS THAT ARE USED TO UNDERPIN PART OF THE BONDS THAT FUND IT.
THE HOTEL, ABOUT TWO THIRDS OF THE FUNDING FOR THE HOTEL CAME DIRECTLY FROM SALES TAX.
THE REMAINDER HAS COME FROM HOTEL REVENUE BONDS OVER THE PERIOD OF OPERATION.
ALL OF THAT WILL FLOW BACK TO THE MDD.
THAT WAS THE INTENTION AND THAT'S WHAT UNDERPINS THE BONDS THAT WERE SOLD ON THE PUBLIC MARKET.
SO, UM, AS A FOLLOW UP APPLE, UM, BECAUSE THEY BORROWED FROM THE GENERAL FUND AND WE ENDED UP GETTING THAT BACK OVER A CERTAIN AMOUNT OF TIME, UM, WOULD THERE, WELL HAVEN'T YET, JUST TO BE CLEAR.
UM, SO WOULD WE, BECAUSE WE WERE SUPPOSED TO BE ABLE TO BRING IN THESE REVENUES AND IT WOULD GO, THE SALES TAX FUNDS WOULD BE DISPERSED AS WE NEED IT TO BE.
UM, WOULD THERE BE AN OPPORTUNITY AS THE REVENUES COME BACK IN? BECAUSE I TOTALLY UNDERSTAND, UH, A PROJECT THIS SIZE IS, YOU KNOW, YOU WOULD HOPE THAT IT STARTS BRINGING IN DAY ONE, BUT WE KNEW IT WAS GOING TO TAKE TIME.
SO AS IT TAKES TIME, WILL THERE BE AN OPPORTUNITY TO KIND OF FLUSH MONEY BACK IN TO THIS POOL? LET BE CLEAR, IT'S NOT JUST THAT THERE WILL BE AN OPPORTUNITY, THERE WILL BE AN ABSOLUTE REQUIREMENT FOR THAT TO HAPPEN.
THE PROFITS THAT WILL ACCRUE OVER TIME FROM THE OPERATIONS
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OF THE HOTEL WILL COME BACK TO THE MDD AS THE HOTEL OWNER.THEY WILL NOT GO TO HYATT OR TO ANYBODY ELSE.
THEY WILL COME BACK TO US HYATT GET PAID A MANAGEMENT FEE FOR, FOR OPERATIONS.
WE, THE MDD WILL GET THE BENEFIT OVER THE LONGER TERM OF THE PROFITS GENERATED FROM, UH, FROM THE HOTEL.
AND THE, ON THAT, WE HAD A BUILT-IN MODEL FOR YEARS THAT WE WERE GONNA HAVE TO POSSIBLY PAY INTO ANY KIND OF DEFICIT OR DELTA THAT THERE MAY BE, UH, BASED ON THE MODELING.
IS THAT A TRUE STATEMENT? THAT'S CORRECT.
THAT'S WHY WE, UH, THAT'S WHY THE MDD BUDGETS FOR THE FULL COSTS OF THE, UH, BONDS, AS I SAY, THE SALES TAX BONDS.
BUT OVER TIME THOSE FUNDS WILL COME BACK TO THE MDD.
I KNOW YOU HAVE A COMMENT, BUT, UM, I WOULD SUGGEST MAYBE IF YOU CAN PROVIDE MDD KIND OF AT THE UPDATED MODEL IN A SENSE.
I KNOW IT'S BEEN A WHILE SINCE WE'VE SEEN, 'CAUSE I THINK THE LAST TIME I'VE SEEN WAS SEVEN YEARS WAS, WAS KIND OF, WAS THAT BREAK POINT.
UM, BUT IF YOU CAN PROVIDE AN UPDATED MODEL TO US THAT MAY BE HELPFUL AND, AND MR. PRESIDENT, THE MDD WILL BE RECEIVING SOON.
I HAVE NOT GONE THROUGH IT IN DETAIL WITH THE ASSET MANAGER YET BECAUSE HYATT HAS ONLY MADE IT AVAILABLE, BUT THE REVISED HOTEL BUDGET, UH, FOR THE NEXT YEAR.
SO IN THAT CONTEXT, WE WILL BRING THAT BACK TO THE MDD.
UM, THIS IS JUST DISCUSSION AND TALKING POINTS.
IT'S REALLY NOT GONNA CHANGE ANYTHING
BUT, UM, I KNOW THAT I'VE HAD SOME CONVERSATIONS WITH Y'ALL AND YOU WERE TALKING ABOUT THE MONEY GOING BACK INTO THE, THE POT OR WHATEVER WE'RE GONNA CALL IT BASED OFF OF, UM, DIRECTOR ALVARADO'S.
UM, QUESTION, BUT DIDN'T, WASN'T I TOLD THAT THE HOTELS PROJECTED TO BRING IN REVENUE LONG TERM LIKE 10 TO 15 YEARS? IS THAT THE NUMBER, THE CORRECT NUMBER, THE PROJECTION ON SOME OF THE CHARTS? WE'RE NOT TALKING ABOUT IT REFILLING OUR POD IN FIVE YEARS, CORRECT? UH, NOT FULLY WITHIN FIVE YEARS.
NO, YOU WON'T, WE WON'T GET ALL OF THE MONEY THAT'S BEEN EXPENDED ON THE, UH, THE SALES TAX BONDS WITHIN FIVE YEARS.
I JUST WANTED TO MAKE CLARIFY THAT BECAUSE IT'S A LONG-TERM INVESTMENT.
UM, BECAUSE EVEN FOR MYSELF AND, AND OUT IN THE COMMUNITY, THAT'S A BIG MISCONCEPTION.
THIS IS, THIS IS NOT A, WE MAKE OUR MONEY BACK AND WE REFILL THE POTS IN 1, 2, 3, 4, 5 YEARS LONG TERM.
UM, THE NEXT THING IS, THERE WAS SOME THINGS THAT YOU SAID THAT ACTUALLY JUST WERE RED FLAGS FOR ME.
YOU SAID THAT WHEN YOU WERE HAVING, IT WAS ASKED IF, UM, WHAT THE, WE CAN'T SEE THE UNFORESEEN, YOU'RE NOT A CRYSTAL BALL AS YOU SAID, BUT YOU SAID THE HYATT'S EXPECTATION OF INSURANCE.
THAT IS BEYOND WHAT I UNDERSTOOD A FEW WEEKS AGO.
I THOUGHT THE REASON THAT WE WERE IN THE HOLE FOR THE INSURANCE WAS BECAUSE THAT THE INSURANCE COMPANY BLASTED US WITH, YOU KNOW, THERE'S THIS WHOLE, UM, THE ECONOMY THAT IT'S ON THE WATER, ALL THESE THINGS.
ARE WE, WE WERE OPERATING UNDER AN ASSUMPTION THAT OUR INSURANCE WAS GONNA BE COVERED BY WHAT COVERS ALL OUR OTHER CITY ENTITIES.
WHY? CAN YOU EXPLAIN IN MORE DETAIL WHY THE HYATT'S EXPECTATION OF INSURANCE IS NOW WHAT'S DRIVING US LOOKING INTO OUR CRYSTAL BALL? OKAY.
NO, AND I'M NOT FOR A MOMENT SUGGESTING IT'S DRIVING IT, IT DOES NOT DRIVE THE MARKET.
BUT IT'S ONE OF THE CONSIDERATIONS WE HAVE TO TAKE INTO ACCOUNT BECAUSE WE HAVE AN AGREEMENT WITH HYATT.
UM, THEY OPERATE IT, BUT WE HAVE TO MEET CERTAIN REQUIREMENTS UNDER THAT RELATIONSHIP WE HAVE WITH THEM BECAUSE THEY NEED TO PROTECT THEIR BRAND.
SO THAT INCLUDES US GIVING THEM ASSURANCE THAT HO THE HOTEL IS PROPERLY INSURED, THAT IF SOMETHING WERE TO HAPPEN, LIKE IF A HURRICANE HITS IT AND IT THEY COULDN'T LET ROOMS FOR A MONTH, WHAT HAPPENS REASONABLY, THEY SHOULD HAVE AN EXPECTATION THAT THEY DON'T LOSE MONEY FROM THEIR, UH, THEIR MANAGEMENT FEE, FOR INSTANCE.
THE OTHER IS THAT, UM, THAT THEY HAVE ASSURANCE THAT WE AS THE OWNER WILL ACTUALLY TAKE A RESPONSIBILITY TO FIX SOMETHING THAT HAPPENS AS A RESULT OF DAMAGE QUICKLY AND APPROPRIATELY.
AND USUALLY THAT'S THROUGH SOME INSURANCE.
SO, AND THAT'S WHY THE NEGOTIATION I'M HAVING WITH THEM IS ABOUT, WELL, HOLD ON.
WE DON'T NECESSARILY HAVE TO HAVE AN INSURANCE POLICY.
YOU JUST NEED ASSURANCE FROM THE MD D'S OWNER THAT WE LOOK AFTER THIS INVESTMENT WE'VE MADE.
SO WAS THE BIG SURPRISE WITH THE, WITH THE UPTICK IN THE COST A FEW WEEKS AGO, WAS THIS BECAUSE THE INSURANCE THAT WE WERE LOOKING AT UP TO THE BILL? OR WAS THIS BECAUSE THE HYATT DID NOT APPROVE OF THE INSURANCE THAT WE WERE GOING TO PAY FOR? MM-HMM.
NO, IT WASN'T, IT WASN'T, THEY DIDN'T APPROVE, UH, IT WAS DRIVEN PRIMARILY BY THE MARKET.
BUT I WHAT I'M, WHAT I'M TRYING TO SAY IS OUR ROOM FOR MANEUVER IS CONSTRAINED AND THAT WE CAN'T JUST DO WHAT SUITS US.
QUITE FRANKLY, I WOULD SAY TO YOU, EH, WE DON'T NEED TO INSURE IT FOR FULL VALUE.
LET'S LET'S INSURE IT FOR HALF THE VALUE
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AND WE'LL TAKE THE RISK.WE'RE THE CITY, WE CAN TAKE THE RISK.
IF YOU'RE, IF THE CITY'S OKAY WITH THAT, RIGHT.
THE HYATT, UH, THEY'RE NOT THE POSITION TO SAY, YEAH, JUST DO THAT VICTOR, BECAUSE WE HAVE AN AGREEMENT WITH THEM.
WE HAVE TO GO THROUGH THIS PROCESS OF MAKING SURE THAT THEY HAVE ASSURANCE THAT WHAT WE DO WILL PROTECT THAT ASSET, WHICH IS OUR ASSET.
I, I KNOW I'M, I'VE GOT SEVERAL QUESTION, BUT THE NEXT ONE IS, UH, HOW OFTEN ARE WE ABLE TO RENEGOTIATE OUR CONTRACTS WITH HYATT? OR, OR THESE YEAR, TWO, FIVE YEARS? WHAT IS THE CONTRACT? UH, IT'S A CON, UH, THE CO THE HOTEL SERVICES AGREEMENT LASTS FOR THE LENGTH OF THE BOND.
IT'S A LONG, THIS IS A LONG TERM RELATIONSHIP.
LEGALLY, IS THERE EVER ANY RECOURSE FOR THE CITY TO RENEGOTIATE? YES.
AND, AND I'M NOT EVEN SAYING THAT THERE IS, BUT JUST BECAUSE I KNOW EVERYTHING'S NEW.
WE GOT, WE GOT A NEW HOUSE, AS I SAY, AND SO WE'RE WORKING IT ALL OUT.
BUT IF SOMETHING ELSE COMES UP, WE CAN TAKE A COMPANY TO THE TABLE AND AT LEAST ASK FOR A RENEGOTIATION.
AND THEN LAST THING, THE 736, UM, THOUSAND DOLLARS THAT WE'RE MOVING, IS THAT JUST THE DIFFERENCE FROM WHAT WAS LEFT IN MDD, UH, TO GO INTO CIP? 'CAUSE I DIDN'T, THAT NUMBER YOU MENTIONED $736,000 MM-HMM
UM, THE REASON THAT NUMBER IS NOT THE EXACT 1.78, UH, FROM THE INSURANCE IS BECAUSE I TOOK SOME FROM CONTINGENCY.
SO TO GIVE US A LITTLE BUFFER FOR OUR FUND BALANCE.
AND SO THAT'S WHY IT'S A LITTLE LESS THAN THAT BECAUSE THE COST WAS THERE, BUT I TOOK AWAY MORE THAN WHAT WE NEEDED.
I, AND I APPRECIATE YOU ANSWERING ALL THOSE, BOTH OF YOU.
MS. UH, MS. GRAHAM DID, UM, WAS THE INSURANCE QUESTION CLEAR, UM, ON THE MULTIPLE SIDES? BECAUSE I, I WANNA MAKE SURE THAT FOR THE BOARD IT WAS CLEAR AS WELL THAT THERE'S STILL A DRIVER WITH, UH, THE WIND STORM AND JUST THE LOCATION.
SO THOSE ARE STILL FACTORS IN WHERE THE COST IS, BUT THEN WE ALSO HAD THE ASSURANCE PIECE FROM HYATT.
I CAN TELL YOU, I, I CAN'T ANSWER FOR EVERYONE THAT'S UP HERE.
SO WHEN YOU'RE ASKING IF IT'S CLEAR, I CAN TELL YOU WHAT I HEARD AND WHAT, WHAT MY CLARITY WAS.
I I THINK THAT MY CLARITY WAS WE HAVE TO, WE HAVE TO ADHERE TO THINGS THAT WERE IN A CONTRACT THAT I HAVEN'T READ IN DETAIL AND THAT I, I SHOULDN'T HAVE USED THE WORD DRIVE, BUT THE CLARITY FOR ME IS THAT THE HYATT WAS PART OF ONE OF THE REASONS WE HAD TO INCREASE OUR COVERAGE.
THANK YOU FOR ANY ADDITIONAL QUESTIONS OR COMMENTS REGARDING THAT.
I DON'T HAVE A QUESTION, BUT I'VE GOT A COMMENT I WANNA MAKE ALSO.
UM, AS, AS WE VOTE ON THIS ADJUSTMENT TO THE BUDGET BUDGET, I'VE BEEN GETTING A LOT OF FEEDBACK FROM THE CITIZENS OF BAYTOWN ON THAT, ON THAT VERY CONFUSING ISSUE OF WHAT HAPPENED.
AND I HAVEN'T BEEN ABLE TO GIVE THEM A GOOD ANSWER AS TO WHO'S RESPONSIBLE, WHAT HAPPENED AND WHY WE HAVE TO PAY THIS BIG INSURANCE BILL.
AND, AND I DON'T HAVE A LOT OF CONFIDENCE TO SAY IT'S NOT GONNA COME UP NEXT YEAR, AND WE'RE GONNA GET BLINDSIDED AGAIN.
THIS HAS HAPPENED NUMEROUS TIMES AS, AS WE'VE DEALT, UH, WITH THIS HOTEL OVER THE LAST 12 MONTHS.
UH, SO I'M JUST, I I JUST WANNA MAKE IT CLEAR THAT I'M NOT JUST DISAPPOINTED, BUT, BUT PRETTY DISGUSTED WITH THE WHOLE SITUATION THAT WE HAVE TO MAKE THIS $700,000 ADJUSTMENT TO PAY THAT ALMOST $1.8 MILLION INSURANCE BILL.
AND, AND NOBODY FEELS GOOD ABOUT IT.
AND, AND THERE'S A LOT OF CONFUSION OUT THERE AS AS TO WHAT HAPPENED.
WOULD YOU LIKE US TO CLARIFY BEFORE, AFTER, AFTER MRS. WINFREY'S CON COMMENT? WOULD, WOULD YOU LIKE US TO CLARIFY? I, I, YES, I WOULD.
BUT I'D ALSO LIKE TO KNOW WHEN, WHEN YOU TRY TO CLARIFY THE QUESTION OF WHAT HAPPENED MM-HMM
IT'S NOT JUST POINTING TO A PHILOSOPHICAL SITUATION, IT'S POINTING TO A DEPARTMENT, IT'S POINTING TO A PERSON.
IT'S POINTING TO WHO MADE OUT THE BUDGET, WHO APPROVED IT IN THE FIRST PLACE, AND, AND WHY DID WE JUST FIND OUT ABOUT IT LAST MONTH? OKAY.
THAT THOSE, THOSE ARE SOME PRETTY SPECIFIC THINGS ALL THAT PEOPLE HAVE BEEN ASKING ME.
MY, MY QUESTION IS, UM, SO THE 7 36 IS COMING FROM THE 1, 2, 3, 4, 5 ODD PROGRAMS. ARE THEY GOING TO HAVE TO WAIT UNTIL THE SEVEN PLUS OR MINUS YEARS REPAYMENT TO BE FUNDED? OR IS THERE ANOTHER SOURCE TO FUND THOSE PROGRAMS? UM, THOSE PROJECTS ARE BEING MOVED TO THE GENERAL FUND, CIP AND, UM, THE COUNCIL WILL GET THAT ON THE AUGUST 10TH COUNCIL MEETING.
ANY QUESTIONS OR COMMENTS? ALRIGHT, MR. GENERAL MANAGER.
SO WITH THE PROCESS OF THE INSURANCE, I WANNA FIRST STATE, WHEN THIS WAS DISCUSSED LAST MONTH, WHAT WAS TAKEN OUT OF CONTEXT ON SOCIAL MEDIA IN THE NEWSPAPER,
[00:20:01]
JUST IN DISCUSSION IN GENERAL.IT SAYS THAT WE BUDGETED $139,000 AND THE BILL CAME IN AT 1.8.
THAT IS THE BIG MISCONCEPTION, RIGHT? THE THING THAT WAS BEFORE THE MDD BOARD LAST MONTH WAS A DRAFT PROPOSED BUDGET.
IT IS NOT A NECESSARILY, WE ADOPTED A BUDGET OF $139,000 AND THEN ALL OF A SUDDEN THIS BIG EXPENSE CAME IN AT $1.8 MILLION.
SO WHAT WAS BEFORE THE BOARD WAS JUST A, HERE'S WHAT WE ARE PROPOSING AND WHAT WAS TURNED INTO THE CITY CLERK TO BE TURNED INTO THE BOARD IN TIME, UH, WHEN THE DRAFT BUDGET WAS BEING BUILT.
OKAY? ONCE THAT CAME IN, WE DID NOT, UM, MAKE ANY CHANGES TO THAT DRAFT PROPOSED BUDGET AT THAT POINT, BECAUSE WE WERE, AS A STAFF, WE'RE STILL WORKING TO FIGURE OUT WHAT IN THE WORLD HAPPENED FOR THIS TO COME IN AT $1.8 MILLION.
RIGHT? AND SO WHEN MS. TERESA AND HER FINANCE TEAM WERE WORKING ON THE NUMBERS, IT STAYED IN THE DRAFT BUDGET AT ONE THIRTY NINE, I MADE THE CALL TO BRING IT TO THIS BOARD AND SAY, HEY, THIS IS THE DRAFT PROPOSED BUDGET.
HERE IS THE ACTUAL BILL OF $1.8 MILLION.
SO THAT, THAT, I HOPE THAT CLEARS UP ON THE SIDE OF, THERE WAS ACTUALLY NO ADOPTED BUDGET OF $139,000.
IT WAS A PLACEMAKER IN TEXT AT A DRAFT BUDGET FOR THE BOARD TO CONSIDER.
THE ONLY TIME THAT THE $1.8 MILLION WILL ACTUALLY BE CONSIDERED IS RIGHT NOW WHEN YOU VOTE ON THIS BUDGET AMENDMENT FOR THIS, BECAUSE THERE WAS ACTUAL NO, AM I SAYING NO BUDGET IN THE 22 RIGHT.
AND I, I, YEAH, AGAIN, AGAIN, FOR CLARITY, I, I BELIEVE THAT FIGURE THE 139 WAS A FIGURE THAT HYATT HAD INCLUDED IN THEIR DRAFT A DRAFT OPERATING BUDGET.
IT IS NOT THEIR ACTUAL FINAL OPERATING BUDGET.
AS I SAID TO YOU EARLIER, I'M BRINGING THAT BACK TO YOU.
THAT WAS A FIGURE THAT THEY PLUGGED IN.
I THINK, AS I INDICATED TO YOU, WHEN WE DID THE, UH, FINANCIAL MODEL FOR THE WHOLE PROJECT, WHICH IS WHAT UNDERPINS THE BONDS THAT WERE SOLD, AS I SAY ON THE PUBLIC MARKET, INCLUDED AROUND FROM MEMORY, IT'S AROUND 600,000.
I THINK THAT WAS THE FIGURE I TOLD YOU LAST TIME, AND I HAVEN'T GOT THAT PRECISELY, BUT IT WAS AROUND 600,000 WAS WHAT THE ASSUMPTION WAS ABOUT INURING COSTS FOR THE HOTEL.
THAT'S WHY, AS I SAID TO YOU, NOT THREEFOLD FOLD, I HAVEN'T AN ANSWER, UH, IN TERMS OF THE INSURANCE MARKET.
UM, I GUESS WE ALL HAVE HOUSE INSURANCE, WE ALL HAVE CAR INSURANCE.
UH, IT'S NOT GETTING CHEAPER FOR ANY, UM, THE INDICATIONS ARE THAT PARTICULARLY IN THE GULF COAST, UH, INSURANCE IS GONNA CONTINUE TO INCREASE.
OKAY, SO LET ME MAKE SURE I UNDERSTAND WHAT YOU'RE TELLING US.
THAT HYATT SUBMITTED A $139,000 ESTIMATE ON THE INSURANCE.
WE JUST TOOK IT, PUT IT IN OUR NUMBERS, AND THEN WHEN WE GOT THE BILL, WE FOUND OUT IT WAS A $1.8 MILLION BILL.
UH, WE DIDN'T PUT IT IN OUR NUMBERS.
YEAH, WE DIDN'T PERSONALLY HAVE IT IN THE MDD BUDGET NUMBERS.
THE, THE NUMBER IS A WORKING NUMBER THAT WE ARE FINANCIALLY PREPARING FOR WHEN WE'RE BUILDING THESE BUDGETS.
I'M NOT WALKING AROUND THE QUESTION.
I'M GONNA ANSWER YOUR QUESTION DIRECTLY.
THE, FOR THE CITY, FOR THE CITY OF BAYTOWN TO ENSURE ALL OF OUR STRUCTURES THAT WE OWN, AND BELIEVE ME WE OWN A LOT.
THE TOTAL BILL FOR INSURANCE FOR THE ENTIRE CITY IS $500,000 FOR EVERY SINGLE BUILDING THAT WE OWN, FOR EVERY BUILDING, $500,000 TOTAL.
WE THOUGHT WHEN THIS WAS SET UP THAT THIS HOTEL WOULD BE COVERED UNDER TMLS INSURANCE.
THE RISK POOL THAT WE HAVE OR THE T L'S INSURANCE, WE THOUGHT IT WOULD BE COVERED UNDER THERE.
THEREFORE NOT BEING ASTRONOMICAL, BECAUSE FOR THE ENTIRE CITY IT'S $500,000.
THAT, I MEAN, LITERALLY FOR THE POLICE DEPARTMENTS, CITY HALLS, UH, ALL THE SUBSTATIONS, WE HAVE PARKS, BUILDINGS, EVERY ASSET THAT YOU CAN THINK, AND OUR ENTIRE BILL, AND PLEASE CORRECT ME IF I'M WRONG, OUR ENTIRE, OUR ENTIRE BILL FOR ALL INSURANCE THROUGHOUT THE ENTIRE CITY, INCLUDING GENERAL LIABILITY FOR IN CASE SOMETHING GOES BAD IS AROUND 1.67 MILLION OR SOMETHING LIKE THAT OFF THE TOP OF MY HEAD.
SO IT'S REASONABLE TO THINK WHERE WE WERE BUDGETING AT 139 TO $600,000 THAT IT FALLS WITHIN THE REALMS OF THAT.
AND SO THIS COMING BACK AT 1.8 WAS NOTHING THAT ANYBODY, THAT ANYBODY COULD IMAGINE OF THE BILL COMING BACK.
[00:25:01]
UMBRELLA POLICY RIGHT, YOU WOULD THINK IT WOULD FALL ONTO THERE AND YOU GET SOME KIND OF ECONOMIES OF SCALE.THAT'S WHY MY QUESTION WAS ABOUT HYATT BEING THE ONE THAT PURSUED THIS, BECAUSE I MEAN, WE INSURE AN ENTIRE WATER PARK.
I THAT'S A HEAVY LIABILITY AREA.
UM, SO I, I GUESS I JUST, I'M, I DON'T KNOW.
I DO, BUT I JUST, IT, I STILL FEEL LIKE THERE'S SOME MISSING COMPONENT THAT I HAVEN'T BEEN ABLE TO DIG OUT OF THE STORY ABOUT THE PRICE.
AND LET ME JUST AGAIN, MAKE SURE I'M HEARING WHAT YOU'RE SAYING HERE.
SO WITH EVERYTHING THAT WE'VE INSURED SO FAR WITH THE CITY, IT'S BEEN A WHOLE BUNCH OF BUILDINGS FOR $500,000 EVERY ASSET WE HAVE FOR THE CITY FOR A MILLION SOMETHING.
WELL, THE GENERAL LIABILITY, WELL, HE'S SAYING OTHER LIABILITY.
SO WHEN WE LOOK AT $139,000 INSURANCE POLICY FOR THIS $30 MILLION HOTEL THAT WE HAVE, WE THOUGHT THAT WAS OKAY.
NOBODY SAW ANY RED FLAGS THERE.
AND WHAT YOU'RE SAYING IS IT'S NOBODY'S FAULT.
I DON'T THINK I SAID THOSE WORDS AT ALL.
I I DON'T THINK YOU SAID THAT, BUT THAT'S WHAT I'M HEARING.
AGAIN, I DON'T, I DON'T HEAR WHO MADE THE MISTAKE IN ANSWERING THE QUESTION THAT I'M GETTING OF WHAT HAPPENED.
IF I GO BACK AND TELL THE CITIZENS OF BAYTOWN THAT HAD BEEN CALLING ME AND WANTING TO FIND OUT ABOUT THIS, I'M TELLING THEM, OKAY, IT CAME IN, HYATT SUBMITTED 139,000 LOOKED OKAY TO US.
WE DIDN'T KNOW THE INSURANCE POLICY IS GONNA COME IN AT 1.8.
THAT, THAT'S, I'M JUST SAYING THAT I'M, THAT'S NOT A VERY GOOD ANSWER THAT WE'RE GIVEN THE, THE CITIZENS OF BAYTOWN.
SO FIRST I WOULD LIKE FOR YOU TO CLARIFY WHY IT'S A MISTAKE IN, FROM YOUR POINT OF VIEW,
LIKE, EXPLAIN TO ME, PLEASE, THE MISTAKE THAT WAS MADE.
THE MISTAKE WAS WE GOTTA PAY A $1.8 MILLION INSURANCE BILL AND NOBODY SAW IT COMING.
ARE ARE WE, ARE WE THIRD GRADE MATH STUDENTS IN, IN THE CITY AND AND ALL OF A SUDDEN WE JUST HIT GET HIT WITH A, A BIG NO, I DON WITH A BIG BILL.
NO, I DON'T ACCEPT THAT FOR A MOMENT.
I DON'T ACCEPT, ACCEPT THAT FOR A MOMENT.
UH, AND NO PERSON WITHIN THE CITY IS AN EXPERT WHEN IT COMES TO HOTEL INSURANCE.
WE DID NOT ANTICIPATE THAT OUR OWN UMBRELLA INSURANCE POLICY WOULD REJECT THIS INSURANCE FOR A START.
SECONDLY, WE WERE RELYING ON PEOPLE WHO ARE EXPERTS IN RUNNING, OPERATING, AND UNDERSTANDING THE HOTEL MARKET.
AND WHO WAS, WHO'S THE EXPERT WE'RE RELYING ON YEAH.
THE HILTON, THE, OR THE HYATT THEMSELVES AND OUR DEVELOPMENT PARTNERS WHO HAVE DONE THIS IN MANY OTHER COMMUNITIES.
AND I'M NOT ACCEPTING FOR A MOMENT THAT ANYBODY MADE A MISTAKE WITHIN THE CITY.
SO AGAIN, NOBODY MADE A MISTAKE.
I, I, I DON'T WANNA SAY THAT IT JUST HAPPENED.
I THINK THAT'S, I THINK THAT'S A MISCHARACTERIZATION OF EVERYTHING THAT WENT INTO IT.
UH, WHEN YOU LOOK AT, WHEN YOU LOOK AT WHAT THE ENTIRE CITY PAYS, THIS INSURANCE BILL BEING EQUIVALENT TO THE ENTIRE CITY'S INSURANCE BILL IS SOMETHING THAT IS, UM, THAT IS UNEXPLAINABLE, PERIOD.
AND I DON'T HAVE A A GREAT ANSWER FOR YOU OR TO, TO COMFORT ANYBODY HERE AT THIS POINT.
THE ONLY THING THAT I CAN TRY TO PROVIDE COMFORT AT NOW IS THAT WE ARE WORKING TO FIND A DIFFERENT WAY TO ADDRESS THE INSURANCE NEEDS FOR THIS BUILDING.
IT, ONCE THE INSURANCE WAS NOT, WAS REJECTED BY TML, WE HAD A VERY SHORT PERIOD, I THINK IT WAS A 35 OR 45 DAY PERIOD TO FIND INSURANCE ON THIS PROPERTY.
I DON'T EVEN KNOW IF IT WAS 30 DAYS.
COULD THAT HAVE PLAYED A FACTOR INTO A, AN INCREASED COST ON FINDING A SHORT TERM ANSWER, UH, FOR A HOTEL THAT WAS ALREADY OPEN? YES.
IT COULD HAVE PLAYED AN ANSWER.
IT VERY WELL COULD HAVE PLAYED AN ANSWER OR, UH, PLAYED A, A, A PIECE IN WHY THE COST WAS THERE.
I'M SURE THERE ARE A MULTITUDE OF THINGS THAT WERE NOT LOOKED AT.
UH, BUT RIGHT NOW I DON'T HAVE ANY OF THAT FOR YOU BECAUSE THE BROKER THAT WENT OUT FOR THIS IS, CAME BACK WITH THIS ANSWER, WHICH IS THE SAME WAY THAT WE DO ALL INSURANCE, UH, FOR STUFF THAT IS NOT COVERED BY THE TMO UMBRELLA.
UM, I KNOW IT FEELS LIKE WE'RE GOING IN CIRCLES.
I PERSONALLY DON'T NEED A NAME OR ANYTHING LIKE THAT OF WHO'S, I DON'T FEEL LIKE IT'S A CITY MISTAKE.
I DON'T, UM, AND I COULD BE WRONG ABOUT THAT.
[00:30:01]
I DON'T WANNA OPEN MYSELF UP TO ANY LEGAL TROUBLE, BUT I JUST, WHAT, WHAT I THINK HAPPENED IS IT ALMOST FEELS LIKE, UM, THE EXPERT, I DON'T WANNA SAY IT FEELS LIKE THERE ARE A LOT OF FINGERS AND A LOT OF, UH, FACTS TO THIS THAT POINT THAT LOOK LIKE WE PAID A COMPANY TO SELL US AN IDEA AND WE BOUGHT IT AND IT'S COSTING MORE.AND THEY TOLD US WHAT WE WANTED TO HEAR AND LET US PUT SOME NUMBERS IN A LINE TO MAKE IT WORK.
UM, THE HOTEL'S $30 MILLION PROPERTY, CORRECT? NO.
WHAT IS IT? 60 60, UH, RIGHT NOW.
UH, 80 MILLION IF WE WANT TO BUILD IT TOMORROW.
SO I, AND I KNOW THIS IS REALLY GOING OUT IN LEFT FIELD HERE, BUT LIKE, I HAVE TO ASSUME THAT OUR ENTIRE CITY, 'CAUSE WE KEEP GOING BACK TO THE COMPARISON OF THE INSURANCE, I'M GONNA ASSUME OUR ENTIRE CITY'S WORTH MORE THAN $80 MILLION.
SO WHEN WE, WE KEEP COMPARING THE HOUSING MARKET AND THE CAR MARKET AND ALL OF THAT, YOU KNOW, IF YOU HAVE AN 80 MILLION HOTEL, EVEN IF IT'S ON THE WATER AND YOU HAVE $80 MILLION WORTH OF OTHER PROPERTIES, UM, AND I KNOW IT'S NOT THAT CUT AND DRY, IT JUST, IT REALLY FEELS LIKE WE WERE SOLD A DEAD HORSE.
AND I HOPE THAT THE DEAD HORSE COMES BACK TO LIFE AND PAYS US BACK IN ALL OUR POTS IN THE NEXT, YOU KNOW, 30 YEARS.
I DON'T THINK THERE IS A NAME.
WELL, AND, AND I'M NOT NECESSARILY LOOKING FOR A NAME, BUT, BUT ALSO WHAT'S GOING ON IN MY MIND IS, IS WE NOT ONLY BOUGHT A DEAD HORSE IS, THIS IS THE FIRST HOTEL WE'VE EVER BUILT.
WE'VE BEEN TALKING ABOUT DOING THIS FOR 20 YEARS.
I DON'T WANNA SAY WE DON'T KNOW WHAT WE'RE DOING, BUT A LOT OF THIS IS NEW.
AND IN THIS LEARNING CURVE, THIS LEARNING CURVE COST US $1.8 MILLION ON INSURANCE.
AND I HOPE WE DON'T FIND ANYTHING ELSE.
WELL, I, THAT JUMPS UP AND, AND STINGS US, MR. GERALDS, I, I WILL BE THE FIRST ONE TO TELL YOU THAT WHEN IT COMES TO BUILDING AND PLANNING AND RUNNING A HOTEL, WE DON'T KNOW WHAT WE'RE DOING.
WELL, LET'S, LET'S NOT PUT IT THAT WAY, BUT THAT'S WHY WE HIRE THE CONSULTANTS TO DO ALL THAT.
BUT I THINK THEY, THEY LET US IN THE WRONG DIRECTION THERE.
SO THAT'S GETTING CLOSER TO THE ANSWER OF, OF WHEN, WHEN THIS IS OUR FIRST HOTEL AND WE LOOK AT $139,000 INSURANCE POLICY AND LOOKS RIGHT IN LINE WITH EVERYTHING ELSE WE'VE DONE.
AND IT TURNS OUT IT'S NOT OUR, OUR CONSULTANTS, OUR ADVISORS, OUR BUILDERS ARE THE PEOPLE WE'RE PAYING LET US DOWN.
THEY, THEY DIDN'T WARN US ABOUT THIS.
IS THERE ANY WAY, UH, WE, I I DON'T KNOW WHAT THE REJECTION TML GAVE.
IS THERE ANY WAY THEY WILL REVISIT IT IN THE FUTURE OR, I DON'T THINK THEY WERE ABLE TO UNDERWRITE THE, UM, THE ASSURANCES FROM THE HYATT ASPECT.
AND THEN ALSO JUST BEING ON THE, ON THE BAY IS A, A CONSIDERATION FACTOR AS WELL.
UM, MAY I ASK, HOLD ON, MAY I ASK A QUESTION WITH THAT, WITH THAT THOUGHT IN MIND? IS THAT, COULD IT, COULD YOU HAVE MULTIPLE INSURANCE FOR MULTIPLE COMPONENTS OF WHAT IT IT IS NOW? OKAY.
IT'S LADDERED HEAVILY RIGHT NOW.
THERE WAS ANOTHER COMMENT HERE.
OH, YES, YOU ANSWERED MY QUESTION.
SO MOVING FORWARD, THERE IS A POSSIBILITY TO OPEN UP THE MARKET FOR OTHER INSURANCE COMPANIES.
IS THAT WHAT I HEARD? YES, SIR.
UM, ARE THERE NOT UNTIL THIS FIRST CONTRACT GOES THROUGH, IF WE CANCEL IT NOW, I THINK IT'S 1.4 MILLION THAT IS A SUNK COST ALREADY INTO THIS.
OUR, OUR, OUR ADVISORS ADVISING Y'ALL THAT OF ANY POSSIBLE COSTS COMING UP THAT WE SHOULD KNOW ABOUT.
SO, UM, AS I SAID TO YOU, UH, THEY, THE HYATT THROUGH OUR ASSET MANAGER ARE REQUIRED TO BRING US A BUDGET.
I HAVE NOT GONE THROUGH THAT WITH THEM YET.
I ANTICIPATE TO DO THAT NEXT WEEK.
UH, ONE OF THE SENIOR MANAGERS FROM HYATT WAS DOWN HERE YESTERDAY AND IS IN CONROE TODAY, UH, FINALIZING THE, UH, THE OPERATING BUDGETS FOR BOTH.
SO ONCE I'VE GONE THROUGH THAT, THEN I WILL ASK THE ASSET MANAGER TO BRING IT TO THE BOARD HERE FOR DISCUSSION.
I, I, I'LL BE BLUNT WITH YOU, I CANNOT STAND HERE AND GIVE YOU ASSURANCES, UH, RIGHT NOW ABOUT THE ONGOING OPERATIONS OF THE HOTEL, UM, TODAY, TOMORROW, OR NEXT WEEK.
THIS WAS ALWAYS BUILT ON THE ASSUMPTION THAT IT WAS A LONG-TERM INVESTMENT AND THAT OVER THE LONGER TERM, THAT INVESTMENT WOULD PAY BACK.
AND THAT WAS ACCEPTED AND UNDERSTOOD.
AND BONDS WERE SOLD IN THE PUBLIC MARKET THAT UNDERPINNED THAT.
AND WE HAD ADVISORS FROM A NUMBER OF DIFFERENT AGENCIES, ORGANIZATIONS, AND INSTITUTIONS INVOLVED IN THIS.
AND NO ONE WAS RINGING THE BELL SPECIFICALLY ABOUT INSURANCE.
I JUST WANNA BE CLEAR ABOUT THAT.
UM, THE BULL WAS NOT DROPPED INTERNALLY BY CITY STAFF ON THIS.
I REFUTE THE SUGGESTION THAT IT WAS, IT WAS NOT BECAUSE THE SAME THING HAPPENED
[00:35:01]
IN CONROE.LIKE THE SAME EXACT THING WITH INSURANCE HAPPENED IN CONROE.
WELL, WELL LET ME ASK ON THE CONROE ISSUE, I MEAN, I UNDERSTAND WE'RE ON THE WATER THERE.
I THINK IT'S A DIFFERENT ANIMAL.
IS IT DIFFERENT SCALE OR WHAT, WHAT WOULD BE THE IN SENSE THE COMPONENT THERE? I I, I'VE BEEN TOLD THAT I CAN'T, UH, TALK ABOUT THAT AT THIS POINT.
SO, SO LEMME JUST WRAP THIS UP UNLESS THERE'S ANY PERTINENT QUESTIONS OR COMMENTS.
QUESTION, UM, IS THE EXPECTATION THAT HYATT WANTS FROM YEAH.
ASSURANCE, IS IT THE NORM? IS THAT WHAT THEY USUALLY ASK FOR FROM OTHER BUILDINGS THAT HAVE, SO I, I, I THINK WE'VE ALREADY ESTABLISHED, WE DON'T HAVE ANY OTHER HOTELS.
SO I HAVE NO OTHER FRAME OF REFERENCE.
I HAVE BEEN TOLD THIS IS NORMAL, UH, FOR THEM TO HAVE EXPECTATIONS IN TERMS OF THE ASSURANCE LEVEL.
MY QUESTION BACK TO THEM IS, YES, BUT DO WE HAVE TO PROVIDE YOU WITH THAT ASSURANCE BY HAVING AN INSURANCE POLICY? AND THEY'RE WILLING TO DISCUSS WITH US A WAY OF THEM HAVING ASSURANCE THAT DOES NOT EQUATE TO A COSTLY INSURANCE POLICY.
BUT THAT, JUST TO BE CLEAR, THAT DOES EQUATE TO RE TO ALLOCATING MONEY INTO THE, INTO LIKE A SAFETY NET, SO TO SPEAK, IF WE, IF WE GO THAT ROUTE.
UM, ANY ADDITIONAL QUESTIONS, COMMENTS? SO, YOU KNOW, THERE'S NO DOUBT THAT, UM, YOU KNOW, WE, WE WERE, THIS WAS UNFORESEEN.
THERE'S, THERE'S NO DOUBT THE MARKET, UH, I THINK, I THINK STAFF TRIED TO EXPLAIN TO YOU KIND OF THE PATH THAT'S THERE.
AND I THINK IT'S HUMAN NATURE IN A LOT OF CASES SAY, ASK WHY CITIZENS THAT WANT THAT WANT TO KNOW.
AND, AND MAYBE WELL TRY TO PROVIDE A WRITTEN EXPLANATION IN SOME FORM OR FASHION.
UH, BUT AT THE END OF THE DAY, IT'S THE REALITY OF THE MARKET FOR WHATEVER REASONS.
AND, AND I KNOW A LOT OF US MAY SAY WE WANT A SMOKING GUN, WE WANT TO KNOW WHO OR WHY SPECIFICALLY.
AND I THINK THERE'S NOT A STRAIGHT ANSWER.
I THINK IT'S A MULTITUDE OF REASONS.
UM, I'M HOPING THAT WE CAN FIND A BETTER SOLUTION, UH, TO, TO THE INSURANCE, I GUESS ITSELF, BECAUSE I THINK AS IT WAS EXPLAINED, THE, UH, THE COST OF AT LEAST OUR ASSETS ITSELF IS $500,000.
AND JUST FOR ONE, UM, THAT IT'S 60 OR $80 MILLION IS 1.8.
UM, I THINK, LET ME SEE, WITH THAT IN MIND, I WANT TO TAKE CARE OF THIS ITEM, OR DO I NEED TO KEEP THIS ITEM OPEN? YES.
THEN I WILL GO AHEAD AND, UM, LET ME MAKE SURE THAT THERE IS LANGUAGE HERE.
SO I WILL EXERCISE OUR, UM, LANGUAGE THAT'S IN THE POSTED AGENDA MEETING THAT WE COULD GO TO AN EXECUTIVE SESSION AT ANY TIME ON ANY ITEM THAT'S POSTED, I WILL EXERCISE THAT.
I DON'T THINK I NEED TO VOTE IN ANY WAY FOR THAT.
UH, NO SIR, YOU DON'T NEED TO VOTE.
HOWEVER, I WOULD, UH, JUST FOR THE RECORD, UH, TO SAY THAT YOU CAN GO INTO EXECUTIVE SESSION TO SEEK THE ADVICE OF THE GENERAL COUNSEL ON THIS ISSUE.
IS THAT 5 5 1 0 7 1? THAT WOULD BE IT, SIR.
SO I WOULD SAY THAT WE'LL GO AHEAD AND THAT WE WILL, UH, WE WILL RECESS INTO AN EXECUTIVE SESSION PURSUANT TO, I THINK TEXAS GOVERNMENT CODE SECTION 5 5 1 0.071 TO SEEK THE LEGAL ADVICE OF OUR CITY ATTORNEY REGARDING THIS ITEM.
SO WE'RE GOING TO THIS SESSION.
SO I NOW RECONVENE OUR OPEN MEETING IN THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT AND ANNOUNCE THAT IN ACCORDANCE WITH SECTION 5 5 1 0.102 OF THE TEXAS GOVERNMENT CODE, NO ACTION WAS TAKEN IN EXECUTIVE SESSION.
SO, UH, WE STILL HAVE AN ITEM, UM, THAT WE HAVE BEEN DISCUSSING.
ITEM TWO A, UH, THERE WAS A MOTION A SECOND FOR DISCUSSION.
UH, FIRST OFF, IS THERE ANY ADDITIONAL QUESTIONS ON ITEM 2 84? I ENTERTAIN A MOTION FOR APPROVAL.
IF NOT, I WOULD ENTERTAIN A MOTION FOR APPROVAL ITEM TWO A AS PRESENTED.
MOTION TO APPROVE SECOND MOTION.
ANY ADDITIONAL QUESTIONS OR COMMENTS? OKAY.
ALL THOSE IN FAVOR? TWO A AS AS WRITTEN PLEASE SAY AYE.
ALL THOSE OPPOSED, ITEM CARRIES WILL GO ON TWO BS.
[b. Consider a resolution adopting the Baytown Municipal Development District Fiscal Year 2023-24 Budget.]
ADOPTED AT BAYTOWN MD'S FISCAL YEAR 2324 BUDGET, UM, BEFORE YOU IS THE THIRD ITERATION, THE THIRD ITERATION OF THE BUDGET, OH, SORRY.UM, BEFORE YOU AS THE THIRD ITERATION OF THE BUDGET FOR FY 2324.
UM, THE CHANGES INCLUDE THE BUDGET AMENDMENT THAT YOU JUST APPROVED, AND IT ALSO INCLUDES THE REMOVAL OF PARKS PROJECTS THAT WILL BE
[00:40:01]
MOVED TO THE GENERAL FUND, CIP EXCEPT FOR PIRATES BAY DEBT SERVICE PAYMENTS.UM, ALSO INCLUDED IN THIS BUDGET IS $1.888 MILLION FOR THE INSURANCE COST, IN CASE WE NEED IT FOR 24.
IF YOU HAVE ANY QUESTIONS, I'LL BE HAPPY TO ANSWER.
MAYOR, I HAVE A FEW COMMENTS TO ADD BEFORE.
UH, BOARD, UH, MEMBERS, I WOULD LIKE TO PRESENT TO YOU JUST A FEW ITEMS, UM, BEFORE YOU ADOPT THE BUDGET.
UH, THE LAST, AT THE LAST MEETING, UH, THERE WAS A, UH, PRESENTATION ON SELLING THE VACANT PROPERTIES.
AND THE BOARD ASKED THAT, UH, WE PRIORITIZE THAT AND, UH, LOOK FOR ACTION.
UH, THERE ARE MULTIPLE PROPOSALS, UM, FROM THE, UM, FROM THE STAFF.
AT THIS POINT, WE HAVE FOUR DIFFERENT OPTIONS FOR CONSIDERATION.
ONE OF THEM DOES NOT DEAL WITH ACTUALLY HAVING A PASS THROUGH OF MONEY FOR IMPLEMENTING THE PROGRAM, BUT THE OTHER THREE OPTIONS DO.
AND SO IF WE WANT TO CONSIDER THOSE OPTIONS, IS THERE, UM, IS THERE AN APPETITE FOR FUNDING, UM, FUNDING THAT IN THIS BUDGET? AND IF SO, THEN WE WOULD HAVE TO LOOK AT POSSIBLY, UM, ALTERING WHAT THE BUDGET IS BEFORE THIS WERE TO BE PASSED.
AND SO THAT'S SOMETHING OF CONSIDERATION POINT, OR WOULD YOU SOLELY LIKE US TO WORK WITH IT THROUGH THE CITY AT THIS POINT WITH THE ONLY OPTION THAT WE HAVE THAT DOES NOT INVOLVE A MONEY TRANSFER FROM A BUDGETED EXPENSE LINE AT THIS POINT? AND THAT I KNOW THAT'S SUPER HIGH LEVEL AND YOU DON'T HAVE ANY DETAILS.
AND I, AND I'M SORRY THAT WE, I JUST WANTED TO, BEFORE WE ADOPT THE BUDGET, KNOW THAT THERE IS A POSSIBILITY THAT WE WOULD HAVE TO LOOK AT WAYS TO ACTUALLY REDUCE SOME EXPENSES OUT OF THE MDD BEFORE.
AND IF WE DON'T WANT TO ADOPT IT TODAY, WE CAN LOOK AT THOSE OPTIONS.
WE, UM, UH, BUT I JUST KNOW THAT THERE IS AN ASPECT OF HAVING AN EXPENSE, AN ADDITIONAL EXPENSE IN THIS BUDGET.
SO, SO WITH THAT SAID, LET ME ASK, UH, A TIMELINE QUESTION.
OUR NEXT MEETING FOR THE MDD IS LOOKS LIKE SEPTEMBER 7TH ADOPTION OF THE ENTIRE CITY BUDGET IS EXPECTED TO TAKE PLACE WHEN, UM, FIRST MEETING IN SEPTEMBER? YES, SIR.
I, I, I SHOULD WE, I WOULD ASSUME SO.
BASED OFF OF OUR WORK SESSIONS OR OUR WORK, OUR WORK, AUGUST 21ST, FOURTH IS THE FIRST, UH, OPPORTUNITY TO ADOPT A BUDGET.
SO AUGUST 24TH IS THE FIRST OPPORTUNITY TO ADOPT, I THINK AUGUST 20 IS AUGUST 24TH.
UH, WHAT DAY IS OUR PUBLIC HEARING OF THE BUDGET ITSELF? IT'S THE 24TH.
SO AS I'M SURE MYSELF AND OTHERS, I'M NOT GONNA ADOPT THE BUDGET ON THE SAME NIGHT WE HEAR PUBLIC COMMENT.
SO I'M ASSUMING THE FIRST OPPORTUNITY BAYTOWN CITY COUNCIL WILL HAVE TO ADOPT A BUDGET WILL BE THE FIRST MEETING IN SEPTEMBER.
I'M ASKING THESE QUESTIONS ONLY BECAUSE THEN WE WOULD HAVE THE SEPTEMBER 7TH MEETING TO ADOPT A FINALIZED WITH MORE ACCURATE NUMBERS OR WHATEVER IS FORESEEN OR UNFORESEEN AT MDD? WELL, YES AND YES.
TO ANSWER YOUR QUESTION, THE BIGGER QUESTION IS, IS BECAUSE THEY BELONG TO THE CITY, WE BELIEVE WE HAVE A ROUTE TO ADDRESS THIS WITH THE CITY, UM, THROUGH OTHER ORGANIZATIONS, NOT THE MDD.
WOULD YOU PREFER US TO MOVE FORWARD WITH THAT INSTEAD OF IT BEING AN MDD PROJECT? IT'S BASICALLY THE, THE REAL QUESTION AT THIS POINT, BECAUSE THEY'RE CITY PROPERTIES AND WE HAVE, WE BELIEVE WE HAVE A ROUTE TO TAKE CARE OF THAT WITHOUT INVOLVING THE MDD.
WOULD Y'ALL PREFER INSTEAD OF MESSING WITH THE BUDGET TO PURSUE THAT ROUTE INSTEAD OF THIS, THE ONLY CAVEAT TO THAT IS THAT AT THE LAST ONE WE ADOPTED THE FY 23 BUDGET, THERE WAS MONEY IN HERE FOR ECONOMIC DEVELOPMENT POSITIONS, UM, ASKING, CAN WE MOVE FORWARD WITH THE THIRD PROPERTY ON HERE, OR THE THIRD POSITION FOR THE ECONOMIC DEVELOPMENT TO HELP OVERSEE SELLING THESE VACANT PROPERTIES ALONG WITH OTHER SMALL BUSINESS ASPECTS, UM, UH, FOR THE THIRD POSITION, AND THEN ACTUALLY IMPLEMENTING THAT, UH, NOW QUESTION.
YEAH, I, I WANT TO, I WANT TO HEAR KIND OF MDD AS FAR AS TIMELINE FOR US IS IF YOU'RE TELLING US, DEPENDING ON THE, ON THE ROUTE ON ONE PARTICULAR PROJECT OR PROGRAM, IF IT'S NOT GONNA MAKE A DIFFERENCE, THEN WE COULD VOTE TODAY ON THE MBD BUDGET.
IF YOU THINK THERE COULD BE ANY LEVEL OF ANY CHANGE, THEN I WOULD SUGGEST WE WAIT TILL
I, I, I WOULD, I WOULD PROPOSE EVERYBODY TO WAIT ANYWAYS.
'CAUSE THE OTHER PIECE OF THE PIE IS THAT, UM, I KNOW TOWN SQUARE HAS BEEN A FOCUS, UH, FOR THE CITY AND FOR THIS BOARD.
UM, YOU KNOW, THERE ARE VACANT BUILDINGS THAT ARE FOR PURCHASE IN THE TOWN SQUARE AREA.
DOES THIS BOARD WANT TO USE RESOURCES TO START ACQUIRING LAND IN THE TOWN SQUARE AND ADD THAT TO THIS BUDGET AS WELL? AND SO, SO THOSE ARE THE CONSIDERATION POINTS THAT WE HAVE TO, TO BRING INTO THIS CONVERSATION.
I MEAN, WE HAVE UNTIL, I'M ASSUMING SEPTEMBER 30TH TO ADOPT A BUDGET.
[00:45:01]
UM, AT LEAST, UH, BAYTOWN CITY COUNCIL WILL, SO, UM, I KNOW YOU HAVE A COMMENT, BUT I WOULD SAY THAT WE GO, WE WAIT, ADOPT A BUDGET ON THE SEVENTH.HOPEFULLY ADOPT A BUDGET, AT LEAST HAVE IT FOR CONSIDERATION.
UM, AND THEN BAYTOWN CITY COUNCIL AT ITS FIRST MEETING, I GUESS I'M ASSUMING THE 14TH WOULD BE, UH, IT'S OPPORTUNITY TO ADOPT A BUDGET OR NOT.
AND WE CAN ALWAYS HOLD A SPECIAL MEETING.
AND I, I KNOW THIS IS ALWAYS AWKWARD.
IT'S LIKE, WELL, HOW COME WE DON'T KNOW? WELL, WE ONLY MEET WITH Y'ALL ONCE A MONTH, SO THE ONLY TIME THAT WE CAN BRING ANYTHING DIFFERENT IS AT THE, AT THE NEXT MEETING.
SO IT'S SOMETIMES AWKWARD WITHOUT THE TIMING PLAYS OUT.
AND I KNOW IT'S NOT A FACTOR HERE, BUT THEN BY THEN WE WOULD HAVE MORE TAX RATE, OTHER INFORMATION ANYWAY, SO YES, SIR.
ANYWAY, THAT'S WHY I THINK SEPTEMBER 14TH WILL BE THE DATE.
AND, UM, AT THE LAST MDD MEETING, WE JUST ASKED FOR A PATHWAY TO BE ABLE TO SELL OR GET RID OF THE PROP TO, TO TRANSFER PROPERTIES TO DIFFERENT SITUATIONS.
WHAT, WHAT WOULD POSSIBLY COST, YOU SAID THERE'S FOUR DIFFERENT OPTIONS, PROPOSALS, OR OPTIONS.
CAN YOU GIVE ME AN EXAMPLE OF THE ONE THAT WOULD COST MONEY? UM, 'CAUSE I COULDN'T THINK OF ANY, SO, SO, UM, MARTIN SCRIBNER, UM, PLANNING AND DEVELOPMENT.
UM, THE, SO AGAIN, WE, WE HAVE SOME DIFFERENT OPTIONS GOING.
THE, I THINK THE IMPORTANT THING TO REMEMBER IS THAT WHAT WE HEARD LAST MONTH WAS REALLY ABOUT ONE PROPERTY, AND WE NEEDED TO REALLY INVESTIGATE THAT MORE TO SAY, THIS IS GOING TO BE A PROGRAM, THIS IS GONNA AFFECT ANYBODY WHO WANTS TO LOOK AT SOME PROPERTY LIKE THAT.
SO I'M, I'M, I DON'T MEAN TO INTERRUPT YOU, BUT FOR ME IT WASN'T ABOUT THE ONE PROPERTY.
UM, THE CONVERSATION ABOUT PROPERTIES FOR ME HAVE COME FROM SEVERAL PEOPLE.
IT JUST SO HAPPENS THAT THAT PARTICULAR, UH, MR. PRESLEY WHO CAME AND SPOKE, HE HAS BEEN THE ONE THAT HAS CONTINUED THE CONVERSATIONS WITH SEVERAL PEOPLE.
BUT, UM, I WOULD SAY HE'S THE ONE THAT'S MADE IT CLEAR THAT HE'S READY TO MOVE FORWARD THE QUICKEST.
BUT I'VE HAD SEVERAL PEOPLE ASK ME, SO HIGH LEVEL THINGS TO KEEP IN MIND.
NUMBER ONE, WHAT WHAT WE DID HERE WAS YOU CAN DO THIS BASICALLY FOR FREE AND JUST GIVE AWAY PROPERTY, WHICH WE CAN'T DO.
WE HAVE, THERE ARE RULES THAT WE HAVE TO FOLLOW WITH THAT, BUT WE HAD A, A COUPLE OF DIFFERENT ONES.
UM, WE COULD BE USING A BROKER AND PUTTING THESE ON THE MARKET IN THAT FASHION.
UM, WE COULD BE, UH, IS THAT THE ONE THAT COSTS MONEY? IS THAT, YEAH, BECAUSE YOU SAID ONE WAS MONEY AND THREE DID NOT IMPACT THE BUDGET.
BECAUSE THEY, THEY INVOLVE MULTIPLE ASPECTS.
SO, UM, I DON'T WANT TO OVERSPEAK.
UH, MR. UH, SCRIBNER, AND I MAY BE MISSPOKEN ON HOW MANY TOTAL PROJECTS FROM MY POINT OF VIEW, THERE IS ONE THAT COSTS MONEY AND THE OTHER THREE ARE INVOLVED WITH, UH, DIFFERENT ENTITIES.
I MEAN, IT JUST, IT, IT REALLY ALL DEPENDS ON, SO TO, TO BE CLEAR, WHETHER IT COSTS THIS, THIS BOARD OR THE CITY MONEY VERSUS WHETHER IT COSTS THE PURCHASER REAL MONEY, THERE ARE SOME DIFFERENT WAYS TO GO ABOUT IT.
WE COULD SWAP LAND IF THAT WAS, UH, SOMETHING THAT WAS DOABLE.
THERE IS, UH, WE COULD USE THE TURS AS A, UM, AS A METHOD TO, TO GET IT DONE.
WE COULD OFFER THE PROPERTIES AGAIN FOR SALE UNDER THAT SORT OF CONVENTIONAL AND NOTICING AND BIDDING PROCESS OR EVEN USE A BROKER.
UM, THE ONE THAT WE'RE SORT OF LEANING TOWARDS, AND THE THING THAT WE, WE HAVEN'T WORKED ALL THE DETAILS YET, BUT WE DO HAVE PRETTY GOOD FEELINGS ABOUT IS USING, UH, EDF AS THEY HAVE A, UM, A NON-PROFIT ARM.
AND WE WOULD MORE OR LESS USE THAT AS A PASS THROUGH TO, WHAT IS EDF? UH, THE ECONOMIC DEVELOPMENT FOUNDATION? OH, BAYTOWN WEST, UH, CHAMBERS COUNTY.
UM, SO WE CURRENTLY HAVE A CONTRACT WITH THEM, AND THIS WOULD SORT OF INCREASE OUR USAGE OF THEM.
WE HAVE NEW CONTRACT COMING UP IN OCTOBER WHERE WE WOULD KIND OF WORK THAT IN, BUT THEY HAVE THE ABILITY TO, TO, UM, DO DISPOSITION OF PROPERTIES IN A DIFFERENT MANNER THAN WE WOULD SINCE THAT IS A NON-PROFIT ARM OF THEIR FOUNDATION.
THIS WOULD ALLOW US TO AGAIN, SORT OF USE THEM TO, UM, TO DO THAT WORKFORCE.
THE, THE REAL, THE, THE REALLY BIG PIECE OF THAT ONE IS THAT, AGAIN, NUMBER ONE, WE DON'T HAVE TO HANDLE THE MONEY AT THAT AT THAT POINT.
AND ALSO, UM, I THINK THEY HAVE MORE RESOURCES THAN WE DO IN THAT PARTICULAR ARENA.
IF THE BOARD CHOSE, UM, TO GO THE PATH OF EDF, AND I CAN SEE FROM THE CITY STANDPOINT WHY THAT ONE WOULD MAKE MORE SENSE, UM, EVEN STAFF WISE, BECAUSE HAVING A NON-PROFIT, THEY'LL HAVE SOME PEOPLE DEDICATED TO THAT SORT OF STUFF.
BUT I, ONE OF THE, THE BIG RED FLAGS THAT STICKS OUT TO ME IS IF WE TRANSFER KIND OF THAT JOB TO THE EDF, UM, WHAT KIND OF TIMELINES WILL CITIZENS BE ON WHEN THEY'RE TR YOU KNOW, FOR EXAMPLE, MR. PRESLEY, YOU KNOW, HE SAID HE IS BEEN TRYING TO GET THIS BUSINESS GOING.
I THINK IT WAS THE GREEN APPLE SALON SINCE JANUARY OR WHATEVER.
UM, I MEAN, IF WE TRANSFER IT OVER, WILL THAT, DO YOU THINK LETTING ANOTHER ENTITY KIND OF CONTROL
[00:50:01]
THE NARRATIVE WITH THAT? IS THAT GONNA SLOW DOWN THE PROCESS FOR CITIZENS THAT ARE INQUIRING? DOES ANYBODY MOVE SLOWER THAN GOVERNMENT? UM,IF I HAD TO GUESS, IF I HAD, SO AGAIN, WE'RE, WE'RE, WE'RE AT THE VERY FRONT END OF THESE CONVERSATIONS.
SO WE DID HAVE A CONVERSATION WITH BJ SIMON THIS MORNING ABOUT THE POSSIBILITY OF DOING THIS.
SO IT WOULD TAKE WORKING OUT SOME DETAILS.
HE JUST SAID THEY'RE OPEN TO IT.
IT IS SOMETHING THAT COULD WORK.
UM, AND SO IF I HAD TO GUESS, I WOULD SAY THEY CAN PROBABLY DO IT FASTER THAN WE COULD IF WE WERE DOING IT IN HOUSE.
IF WE WERE USING, UH, IF WE WERE DOING THAT SORT OF CONVENTIONAL BIDDING, THIS WOULD CUT OUT A BIG CHUNK OF THAT TIMELINE.
I WOULD, I WOULD GUESS THAT THEY CAN DO IT FASTER THAN WE CAN.
THE ONLY THING I'M WORRIED ABOUT IS YOU TELLING ME THAT Y'ALL AREN'T EVEN MEETING UNTIL OCTOBER, YOU SAID.
AND SO, NO, NO, THAT'S THE CON THAT'S WHEN THE CONTRACT IS, IS RENEWED WITH THE EDF.
AND SO LIKE THE, THE BIGGEST QUESTION THOUGH IS DOES THE MDD WANT TO HANDLE THIS? OR DO YOU, DO Y'ALL WANT THE CITY TO HANDLE THIS? BECAUSE IF WE'RE TRANSFERRING TO THE MDD, UH, IF WE'RE TRANSFERRING THE PROPERTIES TO THE MDD AND TO MANAGE THE, TO MANAGE ALL OF IT AS WEARING TWO HATS IN THIS CHAIR RIGHT NOW, AS THE CITY MANAGER, I WOULD WANT THE MDD TO PAY FOR THE UPKEEP OF THE PROPERTIES THAT ARE TRANSFERRED OVER TO THE MDD, WHICH WOULD BE A COST GOING FORWARD.
AS THE GENERAL MANAGER OF THE MDDI DON'T WANT ABSORB THE COSTS FROM THE CITY, UH, AT THE SAME TIME.
AND SO THAT'S WHERE SOME COST ASPECTS COME INTO PLAY.
AND SO IF THIS BOARD DOESN'T WANT TO EVEN PLAY WITH THAT IDEA AND LEAVE IT TO THE CITY TO TAKE CARE OF, THEN THE CITY TAKES CARE OF IT AT THIS POINT.
AND THIS BOARD KIND OF WASHES ITS HAND WASHES ITS HANDS OF THE, UH, OF THE VACANT PROPERTY PIECE.
SO YOU ESSENTIALLY BROUGHT THIS UP ONLY BECAUSE WE HAD A SPEAKER AND THE TOPIC CAME UP AT MDD.
BUT REALLY THERE'S, IF, IF WE, IF THE BOARD AGREES THAT WE LIKE THE IDEA, THEN THERE'S REALLY NOTHING ELSE TO THAT'S CORRECT.
IT JUST STAYS LIKE IT IS, IT SAY, LET THE CITY HANDLE IT FROM, FROM THIS POINT FORWARD.
AND IT, AND THE, THE MDD NO LONGER DEALS WITH IT AT THIS POINT.
HAPPY TO GIVE PERIODIC, UH, RIGHT.
UPDATES AND REPORTS TO MAKE SURE THAT YOU ALL ARE STILL IN THE LOOP.
BUT THE ACTUAL, I THINK, HANDLING OF THE PROGRAM WOULD BE DONE THROUGH THE CITY, THROUGH THE CITY BUDGET INSTEAD.
I HAVE A QUESTION, MR. PRESIDENT.
SO IF WE HAND THIS OVER TO EDF OR LET THE CITY ARRANGE THAT, DO WE STILL NEED THAT ADDITIONAL PERSONNEL OR ECONOMIC DEVELOPMENT? IF THAT'S ESSENTIALLY WHAT THEY WOULD'VE BEEN DOING? IT'S NOT THE ONE THING I, I'LL LET MR. SCRIBNER, UH, UH, SPEAK MORE ON THIS.
IT IS NOT THE ONE THING, IT, IT'S ONE THING THAT THEY WOULD BE DOING, BUT NOT THE ONLY THING THAT THEY WOULD BE DOING.
BUT, UH, MR. SCRIBNER'S GROUP IS REALLY TRYING TO FOCUS ON SMALL BUSINESS DEVELOPMENT THROUGHOUT THE CITY AND REBUILDING CERTAIN AREAS OF THE CITY.
AND, UH, EMILIO IS NOT HAVE ENOUGH CAPACITY TO HANDLE JUST, UH, ALL OF THAT AT THIS POINT IN TIME.
BUT I, I WOULD AGREE WITH THAT STATEMENT.
I THINK THAT HAVING ONE PERSON RIGHT NOW, HE'S, WE, WE ARE STILL AT, AT CAPACITY AT THAT POINT, IN ORDER TO TAKE ON ANY KIND OF PROGRAM, EVEN JUST MANAGING EDF THROUGH THIS PROCESS IS GONNA TAKE ANOTHER PERSON JUST TO GET WHERE WE NEED TO GO.
IF THIS WAS GOING TO BE HANDLED SOLELY BY CITY STAFF, WE, I DON'T, I DON'T EVEN KNOW THAT THAT ONE PERSON WOULD BE ENOUGH.
ANY, ANY ADDITIONAL QUESTIONS? I HAVE ONE MORE BECAUSE I, I DIDN'T, UM, WHAT WAS THE COMPONENT PIECE ABOUT, UM, TOWN SQUARE AND THOSE PROPERTIES? I DIDN'T SO QUITE UNDERSTAND HOW THAT TIED IN.
SO, UM, IT'S MY UNDERSTANDING, UH, UH, CLIFF HAS BEEN A VERY BIG PROPONENT FOR, UH, CONTINUING TO GROW TOWN SQUARE.
UH, HE HAS BROUGHT TO MY ATTENTION THAT THERE IS, UM, UH, AN OPPORTUNITY TO EXPAND THE CITY'S, UH, PRESENCE IN THE TOWN SQUARE.
UM, UM, AND REALLY CONTINUE ON WHAT THE MDD AND THE CITY HAD BEEN TRYING TO DO, WHICH WAS TO REVITALIZE THE TOWN SQUARE.
UM, MY INITIAL RESPONSE TO CLIFF AT THE TIME WAS, NO, IT'S NOT SOMETHING THAT WE CAN PURSUE AT THIS TIME.
UM, THROUGH FURTHER EXPLORATION, THROUGH ADDITIONAL CONVERSATIONS, FINDING SOME OF THE HISTORIC NATURE WITH BAYTOWN ON WHAT WE WERE TRYING TO DO WITH THE TOWN SQUARE, IT BECOMES AN OPPORTUNITY IN FRONT OF US, UM, THAT WE MAY BE ABLE TO CAPITALIZE ON IF WE WERE TO PURSUE THAT.
AT THIS POINT IN TIME, I JUST DIDN'T KNOW IF THE MDD BOARD WANTED TO PUT SOME OF THEIR FINANCIAL RESOURCES TO, UH, PROPERTY WITHIN THE TOWN SQUARE OR NOT.
AND SO IS THAT SOMETHING THAT NEEDS TO BE DECIDED? SO WE WOULD JUST NEED TO PUT A FUNDING, WE WOULD NEED TO PUT A FUNDING AMOUNT INTO THE MDD AND THEN IT WOULD BE AN OPEN DISCUSSION AT THE TIME WHEN WE MADE AN OFFER OR DIDN'T MAKE AN OFFER ON THE PROPERTY, UH, AT A LATER TIME FOR THE, FOR THE BOARD.
UM, UM, JUST FOR THE OTHER DIRECTORS AND THE PRESIDENT THAT ARE UP HERE.
UM, I, I KNOW THAT A LOT OF WHAT HE JUST SAID RIGHT NOW IS VERY VAGUE AND, UM, WITH MY DIRECTORS HAT ON, I JUST WANNA SAY THAT I'M VERY, VERY INTERESTED, UM, IN WHAT HE'S TALKING ABOUT BECAUSE
[00:55:01]
THE PARKS DEPARTMENT, THEY'RE ALREADY HAVING TO MOVE OBVIOUSLY SOME OF THE, THE FUNDS INTO THE GENERAL, SOME OF THEIR PROJECTS INTO THE GENERAL FUND.BUT NOT ONLY THAT, UM, YOU KNOW, TIMING CAN BE AN ISSUE WITH PROJECTS AND, UM, BECAUSE THE PARKS DEPARTMENT DID LOSE SOME OF THEIR STORAGE AND OTHER THINGS OVER AT THE EVERGREEN GOLF COURSE AREA, UM, I WOULD LIKE TO SEE MDD HELP WITH GETTING THAT SOME OF THE THINGS YOU'RE TALKING ABOUT IN A VAGUE SENSE, AND I DON'T SEE THAT SPECIFICALLY ON HERE, SO I DON'T WANNA GO ANY FARTHER, BUT I JUST WANT THE BOARD TO KNOW THAT I'M VERY INTERESTED IN THAT.
SO, AND WE HAVE TALKED ABOUT THAT BEFORE, THAT PARTICULAR INSTANCE, UM, WHEN WE FIRST WENT INTO T 36.
UM, SO I WOULD BE SUPPORTIVE OF THAT BECAUSE WE, WE RECOGNIZED THAT THEY WERE LOSING, UM, STORAGE FROM THAT AREA.
SO WE STILL, WE'RE, WE'RE AT RIGHT NOW IS ON ITEM TWO B, IS TO CONSIDER THE MD'S, UM, BUDGET.
IT SOUNDS LIKE WE, WE ARE GOING TO POSTPONE THAT CONSIDERATION.
SO I DON'T KNOW IF WE NEED TO DIS TABLE THE ITEM.
WAS THERE DIRECTION TO LOOK AT RESOURCES FOR THE TOWN SQUARE THOUGH? I, BECAUSE IT WOULD MAKE A DIFFERENCE FOR, UH, MS. TERESA TO, I THINK IT'S KINDA HARD FOR US TO DO IT WITHOUT KNOWING MORE DETAIL.
CAN HE SHARE THAT NOW? OR HAS, I WOULD SAY YOU SUGGESTED YOU DON'T NOT SHARE THIS, SHARE THAT NOW AT THEAS.
YEAH, SO, BUT, UM, I GUESS THROUGH COMMUNICATION BETWEEN NOW AND SEPTEMBER 7TH, IF THERE'S AN OPPORTUNITY, COULD YOU, COULD YOU GET THAT INFORMATION OUT TO MBD BOARD MEMBERS SO THAT THEY'LL BE PREPARED IF THAT IS INCLUDED IN THE SEPTEMBER 7TH PROPOSED BUDGET, THEN, THEN, THEN WE WOULD KNOW.
SO WE'RE JUST GONNA HOLD OFF ON THIS BUDGET RIGHT.
AND ALLOW HIM TO COME BACK LATER WITH MORE INFORMATION FOR EVERYONE, RIGHT.
RIGHT? THAT'S, DOES, DOES THAT, DO THOSE DATES IN ANY WAY YOU THINK HINDER ANY PROGRESS? UM, OFF THE TOP OF MY HEAD, NO MA'AM.
ALRIGHT, LET'S GO TO, I GUESS, ENTERTAIN A MOTION FOR APPROVAL OF, I'M ASSUMING MEAN FOR POSTPONEMENT OF, UH, ITEM TWO B.
UM, AND I'LL SAY FOR, UM, WE'LL, WE'LL SAY AT LEAST TILL SEPTEMBER 7TH.
SO THREE B OR TWO UH, TWO B, SORRY.
SO ENTERTAIN A MOTION FOR UH, TO TABLE TO TABLE THE ITEM TILL TWO B.
UH, TWO B TO UH, SEPTEMBER 7TH.
MOTION TO TABLE ITEM TWO B UNTIL SEPTEMBER 7TH.
ANY QUESTIONS OR COMMENTS? ALL THOSE IN FAVOR OF TABLING THE ITEM, PLEASE SAY AYE.
OPPOSED? WE'LL MOVE ON TO ITEM THREE A'S
[a. Receive the Baytown Municipal Development District’s Quarterly Financial and Investment Reports for the Quarter Ending June 30, 2023.]
RECEIVE A MONTHLY MBD DISTRICT'S QUARTERLY FINANCIAL INVESTMENT REPORT FOR QUARTER ENDING JUNE 30TH OF 23.UM, YOU HAVE THE THIRD QUARTER FINANCIAL REPORT IN FRONT OF YOU FOR PERIOD ENDING JUNE 30TH, 2023.
UM, THE REVENUE THAT WE'VE RECEIVED IS $6.5 MILLION AND THAT'S ABOUT AT 78% FOR THE YEAR.
IN REGARDS TO THE BUDGET, OUR EXPENDITURES IS 5.7, WHICH IS ABOUT 55% OF OUR BUDGET SPENT LEAVING US A FUND BALANCE OF $3.2 MILLION.
UM, IN ADDITION, OUR INVESTMENT BOOK VALUE VALUE FOR TAX POOL IS THREE POINT, UH, $1 MILLION.
AND SO FAR WE'VE RECEIVED INVESTMENT EARNINGS OF $115,000.
IF YOU HAVE ANY QUESTIONS, I'LL BE HAPPY TO ANSWER.
IS THERE ANY QUESTIONS ON REGARD TO ITEM THREE A? IF NOT, WE WOULD CONSIDER THAT REPORT RECEIVED.
WE'LL MOVE ON TO ITEM THREE B, RECEIVE THE MONTHLY
[b. Receive the Monthly Construction Status Report for the Baytown Hotel and Convention Center Project.]
CONSTRUCTION STATUS REPORT FOR THE BAYTOWN HOTEL AND CONVENTION CENTER PROJECT.UM, I'M NOT SURE WHAT ELSE YOU WANT AT.
I HAVE NOTHING TO ADD, MR. PRESIDENT.
I MEAN, IS THIS LIKE A LEFTOVER, I THOUGHT WE WERE LIKE NOT GONNA DO THIS ANYMORE.
WE NEED TO SEE IT THROUGH TO, WE CLOSE THE PROJECT OUTSOURCE, SO THERE'LL BE, UM, AT LEAST ANOTHER ONE OF THESE, POSSIBLY TWO.
AND IF YOU, IF YOU WANT MR. PRESIDENT GOING FORWARD, IF THE BOARD IS CONTENT WITH IT, WE CAN JUST MAKE THE REPORTS AVAILABLE BY EMAIL.
I MEAN, I THINK, I THINK AT THIS POINT IT WAS FINE.
I THINK THE, THE, THE INTENT WAS DURING CONSTRUCTION WHEN THERE WAS A MULTITUDE OF A LOT OF MOVING PARTS.
UM, IN FACT I THINK IT WAS EVEN WHEN WE HAD TO PUT IT ON HOLD FOR SIX MONTHS.
SO THAT'S WHERE THIS ORIGINATED FROM.
SO WE WOULD CONSIDER THAT RECEIVED ANY INFORMATION YOU CAN JUST PASS THROUGH TO MDD BOARD MEMBERS.
AND SO WITH THAT WE HAVE A MANAGED REPORT.
NEXT MEETING IS, UH, SEPTEMBER 7TH AT FOUR 30.
UM, THEN ONCE AGAIN, UH, THANK YOU FOR ALL FOR ATTENDING.
UH, LITTLE BIT LONGER MEETING THAN NORMAL, BUT I THINK THERE WAS A LOT OF INFORMATION THAT THAT WAS COMMUNICATED AND I DO APPRECIATE THAT.
I HOPE THERE'S A BETTER UNDERSTANDING AND CERTAINLY THANK YOU FOR YOUR TIME.
AND SO WITH THAT, THIS MEETING IS NOW ADJOURNED.