[1. Roll Call]
[00:00:12]
>> GOOD AFTERNOON. WE HAVE THE DRAINAGE DISTRICT BOARD OF DIRECTORS TODAY.
WE WILL START WITH THE ROLL CALL.
PRAYER? >> GOOD AFTERNOON. LET US PRAY.
WE SEEK YOUR CLARITY YOUR PEACE WITH ALL GOING ON AND OUR COUNTRY TODAY.
WE SEEK YOUR COUNSEL. WE CONTINUE TO PRAY. WE PRAY FOR OUR MAYORS, SCHOOL BOARD MEMBERS, DISTRICT ATTORNEYS, SHERIFF, JUDGES AND ALL WHO SERVE IN THE COMMUNITIES. STRENGTHEN THEM WITH YOUR GRACE AND MAY THEY MANAGE THEIR TEAMS. KEEP THEIR HEARTS PURE AS THEY WORK IN THE BEST INTERESTS.
WE CONTINUE TO PRAY FOR THEM AND WE ASK THAT YOUR GRACE, LOVE AND WISDOM BE GRANTED TO THE DOCTORS AND NURSES. WE ASK THAT YOU GRANT PEACE AND COMFORT OVER THEM AND THEIR FAMILIES. WE ASK FOR YOUR HEALING HAND OVER THOSE WITH ILLNESSES AND PROVIDE THEIR FAMILIES WITH PEACE. WE PRAISE YOU FOR THE HEALING.
WE PRAY FOR ALL OF THOSE THAT HAVE BEEN AFFECTED BY TROPICAL STORM NICHOLAS AND ALL OTHER INCLEMENT WEATHER THAT'S AFFECTED OUR COUNTRY. THE STRINGS [INDISCERNIBLE] WE PRAY FOR THE FAMILY AS THEY MOURN THE FAMILY -- PASSING INCREASE OUR HUNGER FOR YOU AND SHOW US THE WAY THAT LEADS TO EVERLASTING HAPPINESS AND PEACE AND MAY WE DESIRE YOU ABOVE ALL ELSE. THE SCRIPTURE REMINDS US THE MORE WE SEEK THE MORE WE WILL FIND. WHEN WE WORK FOR YOU. WE ASK THIS IN JESUS NAME,
AMEN. >> DO WE HAVE ANYONE FOR AN OPEN FORUM?
>> NO, SIR. >> ITEM 4A. >> REQUEST [INDISCERNIBLE]
[4. General Fund]
DEVELOP A PROJECT EXAM BY MY OFFICE. FOR THE DRAIN IMPROVEMENTS.INCLUDING THE ADVERTISEMENT OF THE PROJECT. >> MOTION TO APPROVE
>> SECOND >> WE HAVE A MOTION AND A SECOND.
SECTION WATER CODE PAYABLE FROM THE LAVIE OF DIRECT AND CONTINUING UNLIMITED ANNUAL AD VALOREM TAX PURSUANT TO THE PROVISIONS OF CHAPTER 49 AND CHAPTER 56 TEXAS WATER CODE PROVIDING THE TERMS AND FORM THEREOF PROVIDING FOR THE PAYMENT AND THE PRINCIPAL THEREOF AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS AND MATTERS INCIDENT THERETO.
THIS ITEM. >> GOOD AFTERNOON, JUDGE, COMMISSIONERS.
A PLEASURE TO BE HERE. I JUST WANTED TO REPORT THE SUCCESSFUL PRICING YESTERDAY FOR HIDALGO COUNTY DRAINAGE DISTRICT NUMBER 1. I THINK YOU HAVE A HANDOUT IN FRONT OF YOU.
I WILL GO AHEAD AND MOVE TO THE IMPORTANT PART. I THINK YOU SEE ON SLIDE 2 ALL OF THE PARTICIPANTS THAT PARTICIPATED IN THIS FROM OURSELVES TO COUNSEL AND THE LAW FIRM AND THE UNDERWRITERS WERE MORGAN STANLEY FROST BANK AND EVS AND UNDERWRITER COUNSEL WAS A LOCKE LORD. I WILL GO AHEAD AND MOVE TO SLIDE 3. SO JUST TO RECAP, THERE WERE TWO ISSUES THAT WERE PRICED YESTERDAY. THERE WAS ONE THAT WAS TAXABLE AND ONE TAX-EXEMPT. SO IF YOU LOOK AT -- IS CALLED THE PRICING PROGRESSIVE SUMMARY THERE IS SO IF YOU REMEMBER ON JULY 26, APPROXIMATELY A PROJECT FUND OF ABOUT $33.8 MILLION ON THE TAX-EXEMPT PIECE.
AND THEN ONLY TAXABLE PEACE, THERE WAS A PROJECT FUND OF ABOUT 50 MILLION.
[00:05:03]
THERE WERE TWO DIFFERENT TRANSACTIONS. ONE TAXABLE AND ONE EXEMPT.AT THE TIME WHERE IT SAYS TI SEE THE TRUE INTEREST COSTS, WE WERE ANTICIPATING ABOUT 2.41 PERCENT ON THE EXEMPT, AND SO IN PRE-MARKETING AS OF LAST FRIDAY, WE WERE LOOKING AT 225, AND IF YOU CONTINUE TO MOVE INTO THE GREEN PATCH, THAT COLUMN THERE, WE PRICED YESTERDAY, WE FOUND THE MARKET WENT IN OUR FAVOR TO ABOUT 2.24 PERCENT.
ROUGHLY FROM THE PLAN OF FINANCE BACK IN JULY FROM 241, WE WENT DOWN ABOUT 17 BASIS POINTS. SO THAT WAS GOOD FOR THE DISTRICT.
ESSENTIALLY, THAT INTEREST COST WE HAD THE PLAN OF FINANCE WAS FOR JUST ABOUT $12 MILLION.
IT CAME DOWN TO ABOUT $10.47 MILLION AND THAT'S ABOUT 1,000,000.6 THEY WILL NOT EXPEND BASED ON THAT PLAN OF FINANCE AND THE TOTAL DEBT SERVICE FOR THIS WILL BE ABOUT 800,000 LESS THAN WE ANTICIPATED. IF YOU GO DOWN TO THE SECOND GRAPH THE TAXABLE SERIES 2020 1A, AGAIN, BACK IN JULY 2021, WE WERE LOOKING AT ATAC -- TI C. YESTERDAY AS OF FRIDAY WE WERE LOOKING AT 2.34 PERCENT AND IT CAME IN A BIT LOWER ABOUT SIX BASIS POINTS IN THE MARKET WENT IN OUR FAVOR.
IT WENT DOWN ABOUT 16 BASIS POINTS FROM JULY UNTIL NOW IN OUR ANALYSIS, AND AGAIN, FOR THAT, IT ALLOWS FOR A NET INTEREST COST, INSTEAD OF SPENDING ABOUT 8.8 MILLION IN THAT FIRST COLUMN AT THE VERY BOTTOM, IT LOOKS LIKE ABOUT 80.6 WAS AS OF FRIDAY AND THEN IT TURNED INTO ABOUT 8.3 INSTEAD AS OF YESTERDAY. HAT'S ABOUT 485 LESS THAN WE WERE ANTICIPATING. IN THE AGGREGATE BETWEEN THE TWO IF YOU LOOK AT THE VERY BOTTOM, TOTAL DEBT SERVICE FROM JULY UNTIL NOW ABOUT 1,000,004 LESS THAN WE WERE ANTICIPATING SO THAT WAS OVERALL GOOD NEWS FOR THE DISTRICT. AND AGAIN, ONE OF THE ISSUES THAT I WANTED TO POINT OUT IS IN PRICING YESTERDAY, THERE WAS ABOUT 11 BILLION AND SUPPLY COMING TO THE MARKET LAST WEEK WAS ALSO A HOLIDAY SO THERE WAS A LOT OF SUPPLY COMING TO THE MARKET. ONE OF THE THINGS HE WANTED TO DO WAS GET IN BEFORE THE HEAVIER DAYS OF TUESDAY AND WEDNESDAY OF WHO WAS SELLING BONDS.
TEXTILE COST IS A RATHER LARGE ISSUE WE WANTED TO PUT OUR BEST FOOT FORWARD FOR HIDALGO COUNTY. IF YOU GO TO SLIDE 4, THIS WAS THE PROJECTED TAX RATE IMPACT BASED UPON THAT PRELIMINARY JULY ANALYSIS THAT WE HAD. AND IF YOU LOOK TO THE LAST THREE COLUMNS FROM THE RIGHT IN YELLOW, YOU WILL SEE A HIGHLIGHTED AREA ON THE YEAR 2022. AND SO THE ANTICIPATED TAX RATE IMPACT TO THIS ISSUE WAS ABOUT 2.56 CENTS FROM LAST YEAR TO THIS COMING YEAR. AND SO THIS WAS BASED ON THE PLAN OF FINANCE BACK THEN. SO HOWEVER THE DEBT SERVICE PAYMENT WILL COME IN A LITTLE BIT LOWER THAN THAT. YOU WILL SEE THE TOTAL NET PAYMENT WAS 31.161 MILLION.
IF YOU TURN THE PAGE, IT WILL GO DOWN TO ABOUT 31.153. LESS THAN THE VOTERS HAVE ANTICIPATED. IF YOU GO ALL THE WAY TO THE BOTTOM WHERE IT SAYS PROJECTED MAX CHANGE FROM THE INS FROM THE BOTTOM RIGHT CORNER. THE COUNTY WENT TO THE VOTERS AND THE PROJECTION WAS WE WILL GO OFF THE 180 AND WE WILL NOT EXCEED THREE PENNIES.
YOU HAVE NOT EXCEEDED THREE PENNIES WITH THIS. YOU ARE GOING TO HIT 2.92 IN INS CHANGE. ONE THING I WOULD NOTE IS THE TASK AND ONE THING WE NOTED AT THE LAST MEETING AS IF WE COULD STRUCTURE THIS IN THE WAY ON THE TAX-EXEMPT ONES THAT WE HAVE AFFRONTED INCLUDE MAYBE HALF TO 2/3 OF PAYMENTS IN THE FIRST THREE YEARS IN ORDER TO
[00:10:08]
CREATE CAPACITY FOR THE DISTRICT TO ENTERTAIN ANY MORE PROJECTS IN THE NEAR FUTURE.IF YOU NOTICE IN THE HIGHLIGHTED BOX, WHERE IT SAYS .7365, YOU WILL NOTICE IN YEAR 23, IT WILL GO TO 740, 741, AND THEN IN YEAR 2025, IT WILL DROP DOWN TO 456.
THAT'S APPROXIMATELY ALMOST A THREEPENNY DROP. SO ESSENTIALLY, YOU ARE ALMOST GOING BACK TO THE ORIGINAL BASIS. SO THAT'S THE TIME WHERE THE DISTRICT, IF YOU ALSO CHOOSE TO LOOK AT ADDITIONAL PROJECTS ONCE THESE PROJECTS ARE
EXECUTED AND PUT INTO GROUND OR DOUG SO TO SPEAK. >> WHAT YEAR IS THAT?
>> YEAR 2025. YOU WILL SEE THE DROP FROM 24 TO 26.
IT WILL BE THE THIRD, FROM RIGHT TO LEFT >> I SEE IT.
I JUST NEEDED TO GET THE YARD >> I NEED TO TAKE MY GLASSES OFF.
YOU WILL SEE 741 IN 2024 AND THEN 456 IN 2025. THAT WAS -- YOU HAD A TRUE INTEREST COST ON THE TAX-EXEMPT OF ABOUT 2 TO 4, AND THEN ON THE TAXABLE IS ABOUT 227.
SO IT WASN'T A BIG DIFFERENCE, BUT SINCE YOU WERE PUSHING A LOT OF THE PRINCIPAL PAYMENTS UPFRONT, IT HELPED WITH THE OVERALL INTEREST YOU WERE PAYING SINCE YOU ARE PUSHING IT UPFRONT. AND THAT STRUCTURING ALLOW -- IS ALLOWING YOU NOW -- LIKE I SAID, IF YOU NEED TO LOOK FORWARD A FEW YEARS FROM NOW, IF YOU NEED TO DO ANYTHING EXTRA. BUT I GUESS WITH THAT, IF THERE'S ANY QUESTIONS.
>> I WOULD LIKE TO MAKE A COUPLE OF COMMENTS. I WOULD LIKE TO THANK ALL OF THE STAFF, LAURA AND OBVIOUSLY, BOBBY AND ALL OF THE TEAM RIGHT ON POINT. MORGAN STANLEY WAS VERY ACTIVE IN TRYING TO GET THIS THING REALLY CLOSE OUT AT THE END, SO THEY PUSHED IT AND OUR BOND COUNSEL AND TRYING TO DO HERE AND ISSUING THIS LAST BIT OF MONEY AT THE PERFECT TIMING, WE WERE ABLE TO CAPITALIZE ON LOWER INTEREST AND LIKE BOBBY WAS REFERRING TO IN 2024/25, WE CAN START CONSIDERING DOING ANOTHER ROUND OF BOND PROJECTS AT NO TAX IMPACT TO THE TAXPAYER, AT LEAST KEEPING IT FLAT. SO POTENTIALLY, WE COULD DO A 241 ISSUANCE WHERE WE DID $188 MILLION IN THE TAX INCREASE TO LESS THAN THREE CENTS. WHEN THAT TAX RATE AFFORDS US THE OPPORTUNITY TO KEEP IT AT THE SAME LEVEL AND MAYBE DO ANOTHER ROUND OF BOND PROJECTS, YOU KNOW, WE ALL KNOW THIS ROUND OF BONDS IN 2018 ARE GOING TO BE IMPACTFUL TO ALL OF THE COMMUNITIES AND PRECINCTS AND TO ALL OF THE COUNTY IN GENERAL.
TO BE ABLE TO DO SOMETHING LIKE THAT AGAIN AND KEEPING THE TAX RATE THE SAME AS WHAT IS GOING TO BE RIGHT NOW, I THINK WE HAVE CAPITALIZED AND CREATED AN OPPORTUNITY FOR US TO BE ABLE TO SAVE -- WE ARE HERE TO CREATE THAT INFRASTRUCTURE. SO BY DOING EVERYTHING THAT WE DID, I THINK WE DID A PRETTY PHENOMENAL JOB FROM START TO FINISH THAT WE ISSUED ALL OF THESE BONDS MUCH LOWER THAN WE ANTICIPATED. WE SAVED WHEN WE DID THAT ZERO PERCENT INTEREST $10 MILLION GRANT AND THEN THE OTHER MARKET ISSUANCES WHERE WE WERE ABLE TO CAPITALIZE. THERE WAS A LOT TO CELEBRATE WITH US ISSUING THIS 80 SOME ODD DOLLARS AND A REMINDER AS WE DID SOME TAX-EXEMPT AND WHY WE DID TAXABLE IS BECAUSE SOME OF THIS TIES INTO THE MAIN DRAIN WILL HAVE AN IMPACT ON US AT A FISCAL LEVEL IF WE START SELLING WATER. WE HAVE TO BE CAREFUL AND STAY WITH THE RULES OF THE BONDS.
WE ALSO HAVE A TIME COMPLIANCE ISSUE WE KNOW SOME OF THESE JOBS ARE GOING TO EXTEND PAST THE THREE YEARS THAT WE WOULD NORMALLY HAVE SO THAT'S WHY WE DIVVIED THIS UP.
A LOT OF THIS IS BECAUSE THE DISTRICT IS NOT DIRECTION OR FINANCIAL ADVISORS AND OBVIOUSLY THE BOND COUNSEL. TO ALL OF THAT TEAM CONGRATULATIONS ON A SUCCESSFUL
ISSUANCE OF BONDS. >> I WANT TO THANK THEM AS WELL.
IT WAS A GREAT EXPERIENCE I HAVE NEVER SEEN AND BEEN INVOLVED IN THAT IT WAS A GREAT EXPERIENCE WITH THAT. THANK YOU FOR WHAT YOU DID AND THE STAFF THAT WAS THERE AND AT
[00:15:01]
THE END OF THE DAY THE SAVINGS. >> TO HAVE A MOTION TO APPROVE? >> YES.
[5. General Operations]
>> ITEM 582, I WILL READ IT AND YOU CAN VOTE ON IT AS WELL. IT'S THE ACTUAL TAXABLE SERIES.
THE FIRST ONE IS WERE NONTAXABLE AUTHORIZE ISSUANCE SALE AND DELIVERY OF A COUNTY DRAINAGE DISTRICT NUMBER ONE UNLIMITED TAX AND PERMIT BONDS TAXABLE SERIES 2020 1A UNDER THE PROVISIONS OF CHAPTER 56. TEXAS WATER CODE, PAYABLE FROM THE LEVY OF A DIRECT AND CONTINUING UNLIMITED ANNUAL AD VALOREM TAX PURSUANT TO THE PROVISIONS OF CHAPTER 49 AND CHAPTER 56 TEXAS WATER CODE PRESCRIBING THE TERMS AND FORMS THEREOF PROVIDING FOR THE PAYMENT AND PRINCIPAL THEREOF AND MAKING OTHER POSITIONS REGARDING SUCH BONDS THE MATTERS INCIDENT THERETO.
DRAINAGE DISTRICT MEETING AND OPEN UP THE COMMISSIONERS COURT WORKSHOP AND THEN RECESS THE
WORKSHOP, SO WE ARE COMPLYING >> ARMY DONE? >> WE ARE NOT DUMB BUT WE HAD A
1:45 SO I WANT TO BE IN COMPLIANCE. >> I HAVE A MOTION TO RECESS --
>> SECOND] >> I HAVE A MOTION TO RECESS OUR WORKSHOP.
>> SO MOVED >> ALL IN FAVOR SAY I >> WE RECESS.
HAVE A MOTION TO RECONVENE OVER DRAINAGE DISTRICT >> SECOND
>> MOTION CARRIES >> THANK YOU AND THANK YOU MR.
>> THANK YOU COMMISSIONERS. WE WANTED TO KIND OF GIVE AN OVERVIEW OF OUR 2020 DUE BUDGET WE ARE PROPOSING THROUGH THE BUDGET PROCESS. LAURA, DID YOU HINT EVERYTHING
SO BASICALLY IT LAYS OUT THE GENERAL FUND AMENDMENTS AND THE BASE BUDGET POSITIONS
>> YOU HAVE MUTED YOURSELF. >> UNDER THE FIRST PART THERE [INDISCERNIBLE] WE HAD CARRYOVERS ISSUING THE COST FOR THE BOND SALE. SO WE DID 14 276 A AND WE HAD EXPENDED TO THE TUNE OF 2.4 MILLION. WE ARE REJECTING ANY BALANCE, 6.6. JUST TO PUT IT IN PERSPECTIVE, THE OPERATING BUDGET IS 22.8 SO WE HAVE ABOUT 72 PERCENT IN THE OPERATING BUDGET THEY ARE. IT'S BASICALLY THE AMENDMENTS THAT WERE DONE. AND THAT'S WHAT WE HAVE THERE. ON PAGE 3, WE HAVE -- ANY QUESTIONS SO FAR OR NO? PAGE 3 WE HAVE OUR PROJECTED REVENUES FOR 2022.
THE 23, 277, 750. IN 2020 WHEN WE ADOPTED THE BUDGET [INDISCERNIBLE].
SO WE HAVE SOME PERSONAL ACTION THERE WHICH WILL BE THE RESTORE ACT AND PERSONAL ACTIONS WE ARE WORKING ON AND THOSE WILL BE REIMBURSED TO THE DISTRICT AS THAT PROJECT KICKS OFF, THOSE ARE ON A REIMBURSABLE BASIS UP TO $7 MILLION WORTH FOR PERSONNEL AND EQUIPMENT ON THE RESTORE ACT. INSURANCE, FIVE PERCENT INCREASE AND THE RETIREMENT AS WELL AND LONGEVITY AS WELL. THE COMPENSATION PAY PLAN, WE HAVE RECLASSIFICATIONS AND WE ARE LOOKING AT ONE OF OUR ENGINEERS THAT'S LICENSED, WE HAVE AN ENGINEER THAT'S A SURVEYOR NOW AND GOT HIS LICENSE AS WELL SO WE WANT TO CLASSIFY THAT TYPE OF WORK THIS GOING TO BE DONE. WE HAVE THE ADMINISTRATION, ATTORNEY FEES, APPRAISAL FEES THAT WE ARE ADDING TO BUDGET. THE NUMBER THERE REFLECTS THE PRIMARY INCREASE AND OTHER LINE
[00:20:06]
ITEMS IT'S THE FUEL THAT WE SEE THERE BECAUSE NOT ONLY COST BUT WE HAVE A BIGGER FLEET AS WE CONTINUE TO GROW AND COVER MORE AREA. WE HAVE THAT INCREASE IN THERE.WE HAVE A NEW POSITION THAT'S ON THE NEXT PAGE AND WE ARE LOOKING AT THREE POSITIONS WHICH WILL BE 2 AND THAT THERE SHOULD BE A MECHANIC AND THERE. I BELIEVE IT WAS MAINTENANCE.
AND THEN WE HAVE -- THIS WAS THE PART WE HAD ALLOCATED BUT WE KNOW LONGER HAVE TO PAY IT AND WE HAVE SETTLED THAT DEBT WITH THE COUNTY. IN ESSENCE WE ARE LOOKING AT A PROJECTED SHORTFALL OF 97,008 54. HOW DOES THAT COMPARE TO THE PREVIOUS YEAR LAST YEAR? I THINK WE HAD A PROJECTED SHORTFALL OF 540 OR HALF A MILLION. OBVIOUSLY, TO THE BUDGETING PROCESS, THROUGH MANAGING THE DISTRICT WE WERE ABLE TO COVER THAT SHORTFALL AND END UP IN A POSITIVE OR BALANCED BUDGET.
THE PAGE 5 SHOWS THE HEAVY EQUIPMENT THAT WE HAVE ALLOCATED AND TRADITIONALLY IN THE LAST SIX YEARS WE'VE ALLOCATED FUNDING FOR THE HAZY EQUIPMENT NEEDED TO CONTINUE WITH THE GROWTH OF THE DISTRICT AND EQUIPMENT AS WELL AS VEHICLES.
THIS IS WHAT WE HAVE ALLOCATED AS WELL THAT WE'VE BEEN ABLE TO DO IN THE LAST SIX YEARS AND WE ARE PROPOSING THAT AGAIN. AND THEN WE HAVE THE ACTUAL BUDGET AND IT'S THIS FIVE YEAR HISTORY. YOU CAN SEE THERE THE HISTORY OF HOW EVERYTHING HAS BEEN POSITIONED THAT HAS TAKEN PLACE. YOU KNOW, LAURA IS THERE, THE CFO, TO GO OVER ANY QUESTIONS YOU MIGHT HAVE ABOUT THESE NUMBERS.
AND THEN OUR PRINCIPAL INTEREST PAYMENTS, WE HAVE THE BOND SERIES AND THE REFUNDING THAT WE HAVE DONE ON THE PREVIOUS BONDS, WHERE WE ARE IN THE FIVE YEAR HISTORY OF THAT.
SO WE HAVE, AS MENTIONED BY CENTS THAT WILL INCREASE. I THINK WE ESTIMATED 2.87 CENTS WHICH IS WELL WITHIN THE THREE CENTS THAT THE BOARD PERMITTED TO THE PUBLIC TO GET THIS HUNDRED $90 MILLION BOND ISSUANCE OUT, AND WE HAVE COMMITTED THAT AND DONE THAT. SO THAT'S KIND OF AN OVERVIEW OF WHAT WE ARE PROPOSING. THE DISTRICT IS LOOKING HEALTHY.
WE WILL CONTINUE TO INVEST IN EQUIPMENT AND IN SOME MANPOWER WE WILL CONTINUE TO MAINTAIN AND ALSO DEVELOP PROJECTS THAT WE HAVE DISTRICT WIDE. GENERAL OVERVIEW AND JUDGE AND COMMISSIONERS, I DON'T IF YOU HAVE ANY QUESTIONS NOW OR IF WE CAN ENTERTAIN THEM NOW OR THE NEXT MEETING WILL DEFINITELY BE ENTERTAINED OR ANY OTHER QUESTIONS YOU MAY HAVE ON THIS.
>> IS THERE ANY QUESTIONS WHY ANYONE? >> I DON'T HAVE ANY.
>> THANK YOU FOR THAT PRESENTATION. IT WAS VERY EASY TO FOLLOW.
>> IN THE ACCOUNTING DEPARTMENT WE WILL LET EXCELLENT JOB AS ALWAYS.
THAT'S ALL WE HAVE. WE DON'T HAVE ANYTHING FOR THE EXECUTIVE SESSION TODAY >>
* This transcript was compiled from uncorrected Closed Captioning.