Park Board of Trustees of the City of Galveston Tuesday, March 8, 2016 at 1:30 P.M

Galveston Park Board of Trustees Regular Meeting 03/08/2016

Park Board of Trustees of the City of Galveston Tuesday, March 8, 2016 at 1:30 p.m. Primary Location: Park Board Plaza, 601 Tremont, Galveston, Texas 77550 Remote Attendance: Trustee Thayer Evans Residence Inn Somerset, 37 Worlds Fair Drive, Somerset New Jersey, 08873

Park Board of Trustees Regular Meeting March 8, 2016 1 Galveston Park Board of Trustees Regular Meeting 03/08/2016

2 Galveston Park Board of Trustees Regular Meeting 03/08/2016

3 GalvestonINDEX Park Board of Trustees Documents Regular Meeting 03/08/2016

Page Agenda Items to be Discussed Documents Presented Nos.

Agenda Items I to V No Documents

Agenda Item VI – CONSENT ITEMS

A. APPROVAL OF MINUTES – PARK BOARD OF TRUSTEES  Meeting Minutes – 02.16.2016 REGULAR MEETING, FEBRUARY 16, 2016 9-18

B. DISCUSS AND CONSIDER THE AWARD OF SEAWALL  Overview WEST AREAS 17-20 AS DESCRIBED IN THE PARK BOARD 19  Concession Agreement CONCESSIONAIRE INFORMATION PACKET TO SNOWIE 20-26

FOR FROZEN NOVELTIES

C. DISCUSS AND CONSIDER THE AWARD OF EAST END  Overview LAGOON AREA AS DESCRIBED IN THE PARK BOARD 27  Concession Agreement CONCESSIONAIRE PACKET TO OCEAN TRIBE FOR STAND- 28-35

UP PADDLE BOARD AND KAYAK RENTALS

 Overview D. DISCUSS AND CONSIDER JANUARY 2016 UNAUDITED 36 FINANCIAL STATEMENTS 37-80  Financial Statements

E. DISCUSS AND CONSIDER CONTRACT WITH COMCAST 81  Overview CABLE COMMUNICATIONS MANAGEMENT, LLC TO 82-85  Contract PROVIDE THE PARK BOARD WITH ETHERNET SERVICES

F. DISCUSS AND CONSIDER THE AWARD OF COASTAL 86  Overview PROJECT REGULATORY AND GRANT WRITING 87-88  Contract ASSISTANCE AND COORDINATION CONTRACT TO COASTAL STRATEGIES GROUP, LLC

Agenda Item VII – ADMINISTRATION A. DISCUSS AND CONSIDER THE 2015 PARK BOARD 90  Overview FINANCIAL AUDIT 91-149  Audit Report

B. DISCUSS AND CONSIDER APPROVAL OF CITY OF  Overview GALVESTON, GALVESTON COUNTY AND PARK BOARD 150 OF TRUSTEES INTERLOCAL FOR MAINTENANCE OF 151-152  Budget Spreadsheets SEAWALL BOULEVARD IMPROVEMENTS AND 153-154  Fort Crockett Photos SUPPORTING ONE YEAR BUDGET  Policy C. DISCUSS AND CONSIDER PROTOCOLS FOR 155  Operational Procedures PARTICIPATION IN PARK BOARD OF TRUSTEES OR 156

COMMITTEE MEETINGS VIA VIDEOCONFERENCING

Park Board of Trustees Regular Meeting March 8, 2016 4 Galveston Park Board of Trustees Regular Meeting 03/08/2016 D. PRESENTATION ON ROBERT’S RULES OF ORDER 157-162  Summary

E. DISCUSS AND CONSIDER AMENDMENT OF THE PARK 163-164  Amended By-laws BOARD OF TRUSTEES BY-LAWS FOR THE PARKS AND AMENITIES COMMITTEE TO REPLACE THE EAST END LAGOON REPRESENTATIVE WITH AN ADDITIONAL CITIZEN AT LARGE MEMBER 165  Overview F. DISCUSS AND CONSIDER AWARD OF HOTEL 166-175  Contract OCCUPANCY TAX AUDIT CONTRACT TO MUNISERVICES 176-178  Related Party Questionnaire

G. UPDATE ON 2016 LEGISLATIVE VISITS 179  Legislative Visit Agenda

Agenda Item VIII – PARKS A. DISCUSS AND CONSIDER APPROVAL OF PURCHASE OF 181  Overview ONE (1) SEGWAY FOR SEAWALL PARKING FROM 182-186  Bid SEGWAY, INC.

B. DISCUSS AND CONSIDER AND INTERLOCAL AGREEMENT  Overview BETWEEN THE PARK BOARD OF GALVESTON COUNTY 187  MOU FOR BEACH POCKET PARKS 1 AND 2 188-199

Agenda Item IX – COMMITTEE UPDATES A. TOURIST DEVELOPMENT ADVISORY COMMITTEE No Documents UPDATE

No Documents B. BEACH MAINTENANCE ADVISORY COMMITTEE UPDATE

Agenda Item X – EXECUTIVE SESSION

A. PURSUANT TO TEXAS GOV. CODE SECTION 551.074 – PERSONNEL DISCUSSION CONCERNING EVALUATION No Documents AND SALARY OF THE EXECUTIVE DIRECTOR AND CONTROLLER

B. PURSUANT TO TEXAS GOV. CODE SECTION 551.071 – CONSULTATION WITH ATTORNEY RE CAUSE NO. CV- No Documents 0000134 IN THE MATTER OF THE COMPLAINT OF KIRBY INLAND MARINE, OWNER OF THE M/V MISS SUSAN, ET AL

Agenda Item XI – ACTION ITEM(S) (RESULTING FROM EXECUTIVE SESSION)  ACTION RESULTING FROM EXECUTIVE SESSION - DISCUSS AND CONSIDER FOR ACTION ANY EXECUTIVE No Documents SESSION ITEM LISTED ON THE REGULAR MEETING AGENDA Agenda Item XII – FUTURE AGENDA ITEMS A. DISCUSS AND CONSIDER AMENDMENT TO CURRENT No Documents

Park Board of Trustees Regular Meeting March 8, 2016 5 CONCESSIONAIRE CONTRACT WITHGalveston PETE Park ALCOCER Board of, Trustees Regular Meeting 03/08/2016 GALVESTON ISLAND HORSE RIDES B. DISCUSS OPTIONS FOR REPAIRS OR SALE OF THE No Documents PARK BOARD WAREHOUSE FACILITIES C. DISCUSS CITY OF GALVESTON ORDINANCE ON UBER No Documents REQUIREMENTS D. DISCUSS AND CONSIDER THE AWARD OF STEWART No Documents BEACH AS DESCRIBED IN THE PARK BOARD CONCESSIONAIRE INFORMATION PACKET TO SKYDIVE GALVESTON E. DISCUSS AND CONSIDER SCHEDULED EXPENDITURES No Documents FOR TOURISM DEVELOPMENT F. DISCUSS AND CONSIDER RECOMMENDATION FOR No Documents 2016 SEASON BEACH USER FEE AS ALLOWED FOR BY THE CITY OF GALVESTON BEACH ACCESS PLAN

Agenda Item XIII – ANNOUNCEMENTS No Documents

Agenda Item XIV – ADJOURNMENT No Documents

Park Board of Trustees Regular Meeting March 8, 2016 6 AgendaGalveston Park Board Items of Trustees Regular I through Meeting 03/08/2016 V

I. Call Meeting to Order

No Documents

II. Pledge of Allegiance

No Documents

III. Roll Call and Declaration of a Quorum

No Documents

IV. Conflict of Interest Declarations

No Documents

V. Requests to Address the Board

No Documents

Park Board of Trustees Regular Meeting March 8, 2016 7 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Agenda Item VI –CONSENT ITEMS

A. APPROVAL OF MINUTES – PARK BOARD OF TRUSTEES REGULAR MEETING, FEBRUARY 16, 2016  Meeting Minutes – 02.16.2016

B. DISCUSS AND CONSIDER THE AWARD OF SEAWALL WEST AREAS 17-20 AS DESCRIBED IN THE PARK BOARD CONCESSIONAIRE INFORMATION PACKET TO SNOWIE FOR FROZEN NOVELTIES (CHRIS SADDLER)  OVERVIEW  CONCESSION AGREEMENT

C. DISCUSS AND CONSIDER THE AWARD OF THE EAST END LAGOON AREA AS DESCRIBED IN THE PARK BOARD CONCESSIONAIRE INFORMATION PACKET TO OCEAN TRIBE FOR STAND-UP PADDLE BOARD AND KAYAK RENTALS (CHRIS SADDLER)  OVERVIEW  CONCESSION AGREEMENT

D. DISCUSS AND CONSIDER THE JANUARY 2016 UNAUDITED FINANCIAL STATEMENTS (MIKE MOSER)  OVERVIEW  FINANCIAL STATEMENTS

E. DISCUSS AND CONSIDER CONTRACT WITH COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC TO PROVIDE THE PARK BOARD WITH ETHERNET SERVICES. (MIKE MOSER)  OVERVIEW  CONTRACT

F. DISCUSS AND CONSIDER THE AWARD OF THE COASTAL PROJECT REGULATORY AND GRANT WRITING ASSISTANCE AND COORDINATION CONTRACT TO COASTAL STRATEGIES GROUP, LLC (KELLY DE SCHAUN)  OVERVIEW  CONTRACT

Park Board of Trustees Regular Meeting March 8, 2016 8 Galveston Park Board of Trustees Regular Meeting 03/08/2016

601 TREMONT STREET, 1ST FLOOR GALVESTON ISLAND, TEXAS 77550 409-797-5000 (PHONE), 409-762-8911 (FAX) WWW.GALVESTONPARKBOARD.ORG

NOTICE OF REGULAR MEETING Park Board of Trustees of the City of Galveston Tuesday, February 16, 2016 at 1:30 p.m. Park Board Plaza 601 Tremont, Galveston, Texas 77550

I. CALL MEETING TO ORDER

THE MEETING WAS CALLED TO ORDER AT 1:35 P.M.

II. PLEDGE OF ALLEGIANCE

THE PLEDGE WAS RECITED BY THOSE PRESENT.

III. ROLL CALL AND DECLARATION OF A QUORUM

ROLL CALL WAS DONE AND A QUORUM DECLARED.

TRUSTEES PRESENT: STEVE KALBAUGH, JOYCE CALVER MCLEAN, JOHN ZENDT, DR. CRAIG BROWN, MIGUEL ALEMAN, CLYDE STEDDUM, (LEFT AT 3:00 P.M. / RETURNED AT 4:35 P.M.), AND THAYER EVANS.

TRUSTEES ABSENT: BUZZ ELTON AND PASTOR KERRY TILLMON

STAFF PRESENT: KELLY DE SCHAUN, MICHAEL MOSER, MEG WINCHESTER, MARY BETH BASSETT, SCHEL HEYDENBURG AND CARLA COTROPIA, LEGAL COUNSEL.

IV. CONFLICT OF INTEREST DECLARATIONS

NO CONFLICTS WERE DECLARED.

V. REQUESTS TO ADDRESS THE BOARD

THE PUBLIC SHALL BE ALLOWED TO ADDRESS THE BOARD REGARDING ONE OR MORE AGENDA OR NON-AGENDA ITEMS. ALL REQUESTS TO ADDRESS THE BOARD MUST BE SUBMITTED IN WRITING TO THE BOARD REPORTER THE DAY OF THE BOARD MEETING. EACH PERSON SHALL BE LIMITED TO THREE (3) MINUTES REGARDLESS OF THE NUMBER OF ITEMS ADDRESSED.

THERE WERE FOUR REQUESTS TO ADDRESS THE BOARD:

BRIAN JARVIS WITH C–SICK SURFING ADDRESSED THE BOARD WITH REGARDS TO THE BIDDING PROCESS. HE HAS BEEN A VENDOR SINCE 1999 AND EXPRESSED CONCERN THAT HE COULD BE OUTBID FOR THE LOCATION HE IS IN DUE TO THE TERM LIMITS FOR CONCESSIONAIRE AGREEMENTS. STEVE KALBAUGH TOLD MR. JARVIS THAT THE STAFF WOULD LOOK INTO THIS AND REACH OUT TO HIM TO DISCUSS.

9 Galveston Park Board of Trustees Regular Meeting 03/08/2016 TAKI KYPREOS WITH ISLAND MAGIC BEACH SERVICE ASKED FOR UPDATED INFORMATION ON THE MACEO PROPERTY. HE HAS NOT HEARD ANYTHING BACK FROM ANYONE. HE ASKED IF MACEO HAD A CONTRACT WITH THE PARK BOARD. STEVE KALBAUGH TOLD MR. KYPREOS THAT THE STAFF WOULD REACH OUT TO HIM TO DISCUSS.

BEVERLY RUDY ADDRESSED THE BOARD ON AGENDA ITEM VII-F – RECOMMENDATION TO NAME WEST END SEAWALL BEACHES AFTER FORMER SENATOR BABE SCHWARTZ. MRS. RUDY SPOKE ABOUT HER HISTORY WITH MR. SCHWARTZ AND HOW MUCH HE HAD DONE FOR GALVESTON AND ITS BEACHES. SHE WAS VERY HAPPY THAT THE BOARD WANTED TO NAME THIS BEACH AREA AFTER HIM.

SCOTT FREUDENBURG ALSO ADDRESSED THE BOARD ON AGENDA ITEM VII-F. HE SPOKE TO THE BOARD ON BEHALF OF MR. SCHWARTZ WHO WAS UNABLE TO ATTEND. MR. SCHWARTZ WANTED TO THANK THE BOARD FOR THIS HONOR. MR. FREUDENBURG ADDED THAT HE BELIEVES THAT THE LEGACY OF BABE SCHWARTZ AND ALL THAT HE HAS DONE FOR THE CITY SHOULD NEVER BE FORGOTTEN.

VI. CONSENT AGENDA A. APPROVAL OF MINUTES PARK BOARD REGULAR MEETING, NOVEMBER 10, 2015 - MEETING MINUTES, 11.10.15 PARK BOARD REGULAR MEETING, DECEMBER 8, 2015 - MEETING MINUTES, 12.08.15 PARK BOARD REGULAR MEETING, JANUARY 19, 2016 - MEETING MINUTES, 01.19.16 PARK BOARD RETREAT MEETING, JANUARY 26, 2016 – MEETING MINUTES, 01.26.16 B. DISCUSS AND CONSIDER PURCHASE OF TEN (10) MOTOROLA HAND HELD RADIOS AND ACCESSORIES AND ONE (1) MOBILE RADIO UNIT FOR COASTAL ZONE MANAGEMENT FROM MOTOROLA SOLUTIONS UNDER HGAC CONTRACT #RA05-12 (JESSE OJEDA) C. DISCUSS AND CONSIDER SCHEDULED EXPENDITURES FOR TOURISM DEVELOPMENT (MELODY SMITH) D. DISCUSS AND CONSIDER SPECIAL EVENT FUNDING FOR 2016 GALVESTON ISLAND BEACH REVUE (BRYAN KUNZ) E. DISCUSS AND CONSIDER SPECIAL EVENT FUNDING FOR 2016 CINCO DE MAYO FIESTA (BRYAN KUNZ) F. DISCUSS AND CONSIDER APPROVAL OF THLA HOTEL MEMBERSHIP FUNDING FROM SPECIAL PROJECTS FUND (MEG WINCHESTER) G. DISCUSS AND CONSIDER THE AWARD OF CONTRACT TO JMC EXPRESS CONSTRUCTORS FOR THE CONSTRUCTION OF ADDITIONAL CHANGING ROOMS AS EAST BEACH PAVILION (SHERYL ROZIER)

CONSENT ITEMS A, B, D, F AND G MOTION: JOHN ZENDT MOTIONED TO APPROVE ITEMS A, B, D, F AND G. SECOND: JOYCE CALVER MCLEAN SECONDED. VOTE: MOTION WAS APPROVED (7-0)

CONSENT ITEM C MOTION: JOYCE CALVER MCLEAN MOTIONED TO APPROVE ITEM C SECOND: MIGUEL ALEMAN SECONDED. VOTE: MOTION WAS APPROVED (7-0)

CONSENT ITEM E MOTION: CLYDE STEDDUM MOTIONED TO APPROVE ITEM E AS RECOMMENDED BY TDAC AND STAFF AND AWARD $4,000 TO THE CINCO DE MAYO FIESTA. SECOND: JOYCE CALVER MCLEAN SECONDED. VOTE: MOTION WAS APPROVED (5-2, JOHN ZENDT AND THAYER EVANS AGAINST)

10 Galveston Park Board of Trustees Regular Meeting 03/08/2016 VII. ADMINISTRATION A. RECAP OF STRATEGIC PLAN DISCUSSIONS AND BOARD PROTOCOL (STEVE KALBAUGH)

STEVE KALBAUGH REVIEWED THE MEETING PROTOCOLS THAT WERE DISCUSSED AT THE BOARD RETREAT MEETING ON JANUARY 26, 2016. THESE PROTOCOLS WERE CREATED AS PART OF THE CONTINUING EFFORT TO MAINTAIN GOOD WORKING RELATIONS AND TO RESPECT THE TIME AND COMMITMENTS OF MEMBERS OF THE BOARD.

IN CONJUNCTION WITH THESE PROTOCOLS, CARLA COTROPIA WILL PUT TOGETHER A SHORT TRAINING FOR THE NEXT MEETING ON ROBERT’S RULES OF ORDER. SHE WILL ALSO REVIEW THE POLICY TO CLARIFY THE STATEMENT ABOUT AGENDA ITEMS THAT HAVE BEEN PREVIOUSLY VOTED ON BY THE BOARD NOT BEING RE-INTRODUCED ON AGENDAS AT A LATER DATE.

JOHN ZENDT REQUESTED THAT THE OVERVIEW SHEETS IN THE BRIEFING PAPERS FOR ITEMS PRESENTED TO THE BOARD FOR APPROVAL OF FUNDING OUR OF THE SPECIAL EVENTS FUND ALSO INCLUDE IF THE ITEM MEETS ESTABLISHED GUIDELINES SET FORTH PREVIOUSLY BY THE BOARD.

THAYER EVANS SUGGESTED ADDING A REQUIREMENT FOR CONSECUTIVE ATTENDANCE AT MEETINGS TO THE BY-LAWS. STEVE KALBAUGH STATED THAT HE, CARLA COTROPIA AND KELLY DE SCHAUN ARE IN THE PROCESS OF REVIEWING ATTENDANCE FOR TRUSTEES AND COMMITTEE MEMBERS AT MEETINGS.

B. DISCUSS AND CONSIDER APPROVAL OF STRATEGIC PLAN (STEVE KALBAUGH)

STEVE KALBAUGH INFORMED THE BOARD THAT THE STRATEGIC PLAN WAS REVISED AS REQUESTED AT THE PARK BOARD RETREAT. THE REVISIONS TO THE PLAN ARE UNDERLINED IN THE STRATEGIC PLAN INCLUDED IN THE BRIEFING PAPERS.

MOTION: STEVE KALBAUGH MOTIONED TO APPROVE THE STRATEGIC PLAN WITH THE REVISIONS MADE. SECOND: JOYCE CALVER MCLEAN SECONDED. VOTE: MOTION WAS APPROVED (6-0, CLYDE STEDDUM WAS NOT PRESENT AT TIME OF VOTE)

C. DISCUSS AND CONSIDER AMENDMENT OF CONCESSION PROTOCOL PRICING FOR EAST BEACH (CHRIS SADDLER)

STEVE KALBAUGH TOLD THE BOARD THAT THE ORIGINAL ANTICIPATION OF REVENUES GROWING AT EAST BEACH HAVE NOT HAPPENED. THERE ARE CURRENTLY ONLY TWO CONCESSIONAIRES AT EAST BEACH DUE TO THE LOW TRAFFIC LEVEL.

CHRIS SADDLER ASKED THE BOARD TO AMEND THE PROTOCOL FOR EAST BEACH BY RECLASSIFYING IT A TIER II AREA UNTIL THE CAR COUNT IS BACK UP TO 85,000. THIS WILL HELP MAINTAIN THE TWO VENDORS CURRENTLY THERE AND HELP ATTRACT ADDITIONAL VENDORS.

MOTION: STEVE KALBAUGH MOTIONED TO APPROVE AMENDING THE CONCESSION PROTOCOL PRICING FOR EAST BEACH. SECOND: MIGUEL ALEMAN SECONDED. VOTE: MOTION WAS APPROVED (6-0, CLYDE STEDDUM WAS NOT PRESENT AT TIME OF VOTE).

11 Galveston Park Board of Trustees Regular Meeting 03/08/2016 D. DISCUSS REQUIREMENTS FOR BOARD MEETING PARTICIPATION VIA SKYPE (CARLA COTROPIA)

CARLA COTROPIA GAVE AN OVERVIEW OF SOME OF THE REQUIREMENTS FOR HOLDING MEETINGS BY VIDEOCONFERENCE UNDER SECTION 551.127 OF THE TEXAS GOVERNMENT CODE. A MEETING HELD BY VIDEOCONFERENCE MUST BE MADE AVAILABLE TO THE PUBLIC AND MUST BE EQUIPPED WITH VIDEOCONFERENCE EQUIPMENT TO ALLOW A MEMBER OF THE PUBLIC TO ACTIVELY PARTICIPATE IN THE MEETING ALONG WITH THE BOARD MEMBER(S) AT THE REMOTE LOCATION. NOTICE OF VIDEOCONFERENCE MUST BE GIVEN AND IT MUST INCLUDE THE INFORMATION ON WHERE THE QUORUM OF BOARD MEMBERS WILL BE PHYSICALLY PRESENT AS WELL AS THE SPECIFIC INFORMATION OF THE REMOTE LOCATION. THE VIDEOCONFERENCE SYSTEM ALSO HAS SPECIFIC EQUIPMENT REQUIREMENTS THAT MUST BE MET.

MS. COTROPIA STATED THAT PROTOCOLS NEED TO BE ESTABLISHED DEFINING THE CRITERIA TO PARTICIPATE VIA VIDEOCONFERENCE AND THE DEADLINE FOR NOTIFICATION SO THAT THE REMOTE LOCATION INFORMATION CAN BE INCLUDED ON THE AGENDA AS REQUIRED. CARLA RECOMMENDED THAT NOTIFICATION BE SUBMITTED BY END OF BUSINESS ON THE WEDNESDAY BEFORE THE SCHEDULED BOARD MEETING.

JOHN ZENDT ASKED IF THE BOARD ROOM IS SET UP FOR VIDEOCONFERENCING. MEG WINCHESTER STATED THAT IT IS HOWEVER SHE IS UNSURE IF IT MEETS THE REQUIREMENTS. STAFF WILL NEED TO REVIEW THE SYSTEM REQUIREMENTS TO DETERMINE IF THE CURRENT SYSTEM IS IN COMPLIANCE AND IF NOT, WHAT IS NEEDED TO COMPLY.

E. DISCUSS AND CONSIDER APPROVAL OF VAN SCOYOC LEGISLATIVE AGENDA (KELLY DE SCHAUN)

MOTION: JOYCE CALVER MCLEAN MOTIONED TO APPROVE THE LEGISLATIVE AGENDA AS PRESENTED BY VAN SCOYOC. SECOND: MIGUEL ALEMAN SECONDED. VOTE: MOTION WAS APPROVED (6-0, CLYDE STEDDUM WAS NOT PRESENT AT TIME OF VOTE).

F. DISCUSS AND CONSIDER RECOMMENDATION TO NAME WEST END SEAWALL BEACHES AFTER FORMER GALVESTON SENATOR BABE SCHWARTZ (KELLY DE SCHAUN)

KELLY DE SCHAUN SPOKE ON THE MANY CONTRIBUTIONS FORMER SENATOR SCHWARTZ HAS MADE TO THE CITY OF GALVESTON INCLUDING HIS DEFENSE OF THE OPEN BEACHES ACT AND THE CREATION OF THE PARK BOARD. MRS. DE SCHAUN IS ASKING FOR BOARD APPROVAL TO TAKE TO CITY COUNCIL THE ST TH RECOMMENDATION TO NAME THE BEACHES FROM 61 WEST TO 77 AFTER BABE SCHWARTZ. THIS RECOMMENDATION WAS UNANIMOUSLY APPROVED BY THE BEACH MAINTENANCE COMMITTEE.

TH DR. BROWN STATED THAT HE HAS ADDED THIS ITEM TO THE FEBRUARY 25 CITY COUNCIL AGENDA. MIGUEL ALEMAN IS SCHEDULED TO ATTEND THE COUNCIL MEETING AND PRESENT THE PARK BOARD RECOMMENDATION.

MOTION: JOYCE CALVER MCLEAN MOTIONED TO RECOMMEND THE NAMING OF THESE BEACHES AFTER FORMER SENATOR BABE SCHWARTZ. SECOND: MIGUEL ALEMAN SECONDED. VOTE: MOTION WAS APPROVED (6-0, CLYDE STEDDUM WAS NOT PRESENT FOR THIS VOTE).

12 Galveston Park Board of Trustees Regular Meeting 03/08/2016 G. DISCUSS POTENTIAL SPONSORSHIP OPPORTUNITIES (JOHN ZENDT)

JOHN ZENDT PRESENTED ON POTENTIAL SPONSORSHIP IDEAS FOR THE LIFE GUARD TOWERS AS AN ADDITIONAL SOURCE OF INCOME FOR MAINTAINING THE BEACHES. MR. ZENDT ACKNOWLEDGED THAT THIS WOULD BE A BIG TASK BUT BELIEVES IT IS SOMETHING THAT THE BOARD SHOULD CONSIDER.

JOYCE CALVER MCLEAN REQUESTED THAT IF THE BOARD DECIDES TO PURSUE THIS THAT IS SHOULD STIPULATE THAT ALCOHOLIC BEVERAGES WOULD NOT BE ADVERTISED. CARLA COTROPIA AGREED. KELLY DE SCHAUN SAID AS A GOVERNMENT ENTITY, THE BOARD WOULD HAVE TO BE VERY CLEAR IN SETTING THE PARAMETERS FOR THESE SPONSORSHIPS.

MRS. DE SCHAUN EXPRESSED CONCERN ABOUT SPONSORSHIPS FOR RELATED ACTIVITIES SINCE THE BOARD IS A TAXING ENTITY. SHE RECOMMENDED THAT IF THIS IS PURSUED, THE PARKS WOULD BE THE AREA BEST SUITED FOR THIS SINCE THEY ARE NOT SUPPORTED BY TAXES. SHE PROPOSED THAT IT BE PLANNED FOR NEXT SUMMER AND SHOULD START WITH THE NAMING RIGHTS IN THE PARKS AND/OR A CLUSTERED CONCEPT SUCH AS A BATHROOM, SOME SHADE AND A MOBILE VENDOR.

STEVE KALBAUGH STATED THAT MANY COLLEGE ATHLETIC DEPARTMENTS HAVE THIRD PARTY ADVERTISING COMPANIES THAT HANDLE THE SPONSORSHIP OPPORTUNITIES AND THE STAFF COULD REACH OUT TO ONE OF THESE COMPANIES TO LOOK AT POTENTIAL OPPORTUNITIES.

MRS. DE SCHAUN SAID THAT THE STAFF WOULD DEFINE A PROGRAM AND REACH OUT TO SOME THIRD PARTY VENDORS FOR PACKAGE IDEAS. THEY WOULD THEN BRING BACK TO THE BOARD FOR CONSIDERATION.

H. DISCUSS AND CONSIDER UNAUDITED OCTOBER-DECEMBER 2015 PARK BOARD FINANCIAL STATEMENTS (JOHN ZENDT AND MICHAEL MOSER)

MICHAEL MOSER GAVE AN OVERVIEW OF THE FINANCIAL STATEMENTS FOR CONSIDERATION.

MOTION: JOHN ZENDT MOTIONED TO APPROVE THE FINANCIAL STATEMENTS. SECOND: DR. CRAIG BROWN SECONDED. VOTE: MOTION WAS APPROVED (6-0, CLYDE STEDDUM WAS NOT PRESENT AT TIME OF VOTE).

I. DISCUSS AND CONSIDER APPROVAL OF HOTEL OCCUPANCY TAX AUDIT PLAN (KAY TERRY)

KAY TERRY PRESENTED THE PLAN FOR THE HOT AUDITS. THE AUDITS WOULD ENCOMPASS THE KNOWN PROPERTIES AND WOULD VERIFY TAX PAYMENTS AND EXEMPTIONS TO PROVIDE INTEGRITY TO THE PROGRAM.

THE STAFF IS RECOMMENDING A BUDGET OF $40,000 PER YEAR TO PERFORM 20 AUDITS A YEAR BE APPROVED. IN ADDITION, THEY ARE REQUESTING THAT THE AUDITS START WITH THE 2016-2017 BUDGET SINCE THERE ARE NO FUNDS IN THE CURRENT BUDGET FOR THE AUDITS AND THAT ALL PENALTIES AND INTEREST BE PUT INTO AN ESCROW ACCOUNT TO OFFSET THE COST OF THE AUDITS AND DISCOVERY.

DR. BROWN QUESTIONED THE DELAY IN THE AUDITS TO THE NEXT BUDGET YEAR. THE AGREEMENT BETWEEN THE CITY AND THE PARK BOARD STIPULATED THAT AN AUDITOR WOULD BE SELECTED BY DECEMBER 31, 2015. DR. BROWN DID NOTE THAT THE ADMINISTRATIVE AGREEMENT FOR THE INTERLOCAL THAT INCLUDED THE HOTEL OCCUPANCY TAX AUDIT PROCESS WAS NOT SIGNED UNTIL 13 Galveston Park Board of Trustees Regular Meeting 03/08/2016 DECEMBER 2015. HE CONCLUDED THAT THE PARK BOARD NEEDS TO GET WITH THE CITY AUDITOR AND WORK TOGETHER TO GET THE AUDITS DONE THIS YEAR. THAYER EVANS INQUIRED ABOUT FINDING THE FUNDS IN THE BUDGET TO GET THIS DONE. MICHAEL MOSER DID NOT BELIEVE THAT $40,000 WAS AVAILABLE TO FUND 20 AUDITS. THE GENERAL FUNDS ARE SUPPLIED BY TRANSFERS AND ARE RESTRICTED. KELLY DE SCHAUN ASKED IF IT WOULD BE POSSIBLE TO FIND $20,000 TO GET THE AUDITS STARTED AS EVERYONE AGREES THE PROCESS NEEDS TO START. MR. MOSER SAID THAT FINANCE WILL NEED TO REVIEW THE FUNDS TO SEE WHAT MONIES ARE AVAILABLE. MRS. DE SCHAUN ASKED THAT THE BOARD TH GIVE THE STAFF INSTRUCTIONS AND THAT THIS ITEM BE BROUGHT BACK TO THE BOARD AT THE MARCH 8 MEETING FOR APPROVAL.

MOTION: DR. CRAIG BROWN MOTIONED THAT MICHAEL MOSER, KELLY DE SCHAUN AND APPROPRIATE PARK BOARD STAFF MEET WITH THE CITY AUDITOR AND APPROPRIATE CITY STAFF AS SOON AS POSSIBLE TO WORK OUT A METHOD TO FOLLOW THE GUIDELINES SET FORTH IN THE OPERATIONS AGREEMENT TO GET THE AUDIT PROCESS STARTED. SECOND: THAYER EVANS SECONDED. VOTE: MOTION WAS APPROVED (7-0).

J. DISCUSS AND CONSIDER RECOMMENDATIONS TO CITY COUNCIL TO SUPPORT ENFORCEMENT OF HOTEL OCCUPANCY TAX (KAY TERRY)

KAY TERRY PRESENTED THE PLAN FOR THE ENFORCEMENT OF HOT. THE GOAL IS TO DISCOVER NON- COMPLIANT PROPERTIES, ALSO KNOWN AS “INVISIBLES”. THE STAFF IS RECOMMENDING ESTABLISHING A HOTLINE FOR THE ANONYMOUS REPORTING OF NON-COMPLIANT PROPERTIES OR A FINDER’S FEE TO THOSE WHO REPORT NON-COMPLIANT PROPERTIES. INDEPENDENT RESOURCES WOULD ALSO BE USED TO HELP IDENTIFY PROPERTIES BY USING REVERSE GEO-CODING AND BY PROVIDING HISTORICAL CALENDAR ACTIVITY.

DR. CRAIG BROWN THANKED KAY TERRY FOR ALL THAT SHE HAS DONE WITH THE MANAGEMENT OF THE HOT FUNDS. HE HAS RECEIVED A LOT EMAILS PRAISING KAY AND THE PARK BOARD.

DR. BROWN BELIEVES THIS IS AN ADMINISTRATIVE ISSUE TO BE WORKED OUT BETWEEN THE PARK BOARD STAFF AND THE CITY STAFF. KELLY DE SCHAUN STATED THAT THE RECOMMENDATIONS THE STAFF IS PROPOSING COULD REQUIRE THE CITY COUNCIL TO AMEND THE ORDINANCE.

MOTION: DR. CRAIG BROWN MOTIONED THAT MICHAEL MOSER, KELLY DE SCHAUN AND APPROPRIATE PARK BOARD STAFF MEET WITH THE CITY STAFF ON A PLAN FOR THE ENFORCEMENT OF HOT THAT IS COGNIZANT OF THE GUIDELINES SET FORTH IN THE INTERLOCAL. SECOND: THAYER EVANS SECONDED. VOTE: MOTION WAS APPROVED (7-0).

VIII. PARKS A. DISCUSS AND CONSIDER ACTIVATION OF PARKS COMMITTEE (KELLY DE SCHAUN)

STEVE KALBAUGH GAVE AN OVERVIEW TO THE BOARD ON THE PARKS AND AMENITIES COMMITTEE. THAYER EVANS WOULD BE THE CHAIR OF THE COMMITTEE WITH MIGUEL ALEMAN BEING THE VICE-CHAIR ST AS PREVIOUSLY APPROVED BY THE BOARD. THE MEETINGS WILL BE HELD THE 1 THURSDAY OF THE RD MONTH AND WILL START MARCH 3 .

14 Galveston Park Board of Trustees Regular Meeting 03/08/2016 THAYER EVANS STATED THAT AFTER HAVING CONVERSATIONS WITH STEVE KALBAUGH, HE WOULD LIKE TO CHANGE THE PROPOSED EELAC COMMITTEE MEMBER TO AN ADDITIONAL CITIZEN AT LARGE MEMBER. THE BY-LAWS WILL NEED TO BE CHANGED TO REFLECT THIS.

THE LIST OF THOSE NOMINATED FOR COMMITTEE MEMBERSHIP WAS REVIEWED: MELVIN WILLIAMS, FORMER PARK BOARD CHAIRMAN, WANDA BUTTNER, MARSHA CANWRIGHT, MARDI MITCHELL, MARLEE WILLIAMS AND LIZ TORRES.

THE BOARD MADE THE DECISION THAT THE FOUNDING MEMBERS OF THE COMMITTEE WILL BE AS FOLLOWS: CHAIR – THAYER EVANS VICE CHAIR – MIGUEL ALEMAN CONCESSIONAIRE – JASON WORTHEM CITY OF GALVESTON REPRESENTATIVE – THAYER EVANS WILL FOLLOW-UP WITH THE CITY TO CONFIRM REPRESENTATIVE. CITIZEN AT LARGE 1 – WANDA BUTTNER CITIZEN AT LARGE 2 – LIZ TORRES CITIZEN AT LARGE 3 (AFTER THE BY-LAWS HAVE BEEN CHANGED AND APPROVED) – MELVIN WILLIAMS

MOTION: STEVE KALBAUGH MADE A MOTION TO ACTIVATE THE PARKS AND AMENITIES COMMITTEE RD AND TO HAVE THE FIRST MEETING ON THURSDAY, MARCH 3 . SECOND: DR. CRAIG BROWN SECONDED. VOTE: MOTION WAS APPROVED (6-0, CLYDE STEDDUM WAS NOT PRESENT AT TIME OF VOTE).

B. DISCUSS AND CONSIDER APPROVAL OF THE PURCHASE OF THREE (3) CHEVY COLORADO TRUCKS FOR EAST BEACH AND STEWART BEACH (CHRIS SADDLER)

CHRIS SADDLER STATED THAT THIS REQUEST WAS PRESENTED TO THE FINANCE COMMITTEE. THE COMMITTEE ASKED STAFF TO INCLUDE PRICING FOR USED VEHICLES IN ADDITION TO NEW. ONLY 1 VENDOR REPLIED TO THE REQUEST FOR BIDS AND THERE WERE NO BIDS SUBMITTED FOR USED VEHICLES.

MOTION: STEVE KALBAUGH MOTIONED TO APPROVE THE PURCHASE OF THE THREE CHEVY COLORADO TRUCKS. SECOND: MIGUEL ALEMAN SECONDED. VOTE: MOTION WAS APPROVED (6-0, CLYDE STEDDUM WAS NOT PRESENT AT TIME OF VOTE).

C. DISCUSS AND CONSIDER APPROVAL OF AGREEMENT WITH CAMPGROUND SYSTEM FOR DELLANERA RV PARK AND WEDDING RENTALS SOFTWARE (CHRIS SADDLER)

CHRIS SADDLER PRESENTED AN OVERVIEW OF THE SYSTEM FROM CAMPGROUND AUTOMATION SYSTEMS. CURRENTLY DELLANERA DOES NOT HAVE THE ABILITY TO DO ANY ONLINE RESERVATIONS WITH EVERYTHING DONE IN PERSON. THE SYSTEM WILL ALLOW FOR DYNAMIC RATE CHANGES AND ALLOW FOR PAYMENT UP FRONT. IT WILL ALSO PICK THE SPOT FOR THE CAMPER BASED ON STAY AND AMENITIES REQUESTED MAXIMIZING THE REVENUE. THE SYSTEM CAN ALSO MANAGE THE BEACH WEDDING BOOKINGS.

JOYCE CALVER MCLEAN ASKED IF THE SYSTEM PROVIDED A SPOT FOR THE USER TO ACKNOWLEDGE THE TERMS OF THE SITE AND CHRIS RESPONDED THAT YES THE SYSTEM DOES ALLOW FOR THAT.

15 Galveston Park Board of Trustees Regular Meeting 03/08/2016 CARLA COTROPIA REVIEWED THE CONTRACT AND MADE RECOMMENDATIONS FOR CHANGES THAT WERE ALL ACCEPTED HOWEVER THE VENDOR ADDED A LITIGATION PAYMENT. CARLA RECOMMENDED ACCEPTING THE CONTRACT WITHOUT THIS LITIGATION PAYMENT INCLUDED.

MIGUEL ALEMAN INQUIRED ON HOW MUCH REVENUE WAS EARNED FROM BEACH WEDDINGS LAST YEAR. THE AMOUNT WAS APPROXIMATELY $30,000.

MOTION: STEVE KALBAUGH MOTIONED TO APPROVE THE CONTRACT WITH THE LITIGATION PAYMENT REMOVED. SECOND: JOYCE CALVER MCLEAN SECONDED. VOTE: MOTION WAS APPROVED (7-0).

D. DISCUSS AND CONSIDER THE PARK BOARD ENTERING INTO A NEW INTERLOCAL AGREEMENT WITH GALVESTON COUNTY PERTAINING TO THE OPERATION OF BEACH POCKET PARKS 1 AND 2 (WESS ROWLAND AND SHERYL ROZIER)

KELLY DE SCHAUN STATED THAT THE PREVIOUS INTERLOCAL WITH THE COUNTY FOR THE OPERATION OF THE POCKET PARKS HAS EXPIRED. THE PARK BOARD STAFF HAVE BEEN WORKING WITH COUNTY COMMISSIONER GIUSTI AND HIS STAFF TO BRING FORWARD A RECOMMENDATION. THE STAFF IS LOOKING FOR APPROVAL TO WORK ON THE INTERLOCAL WITH THE COUNTY WITH GUIDANCE PROVIDED BY THE BOARD.

WESS ROWLAND GAVE AN OVERVIEW OF THE OPPORTUNITIES AND CONCERNS AS WELL AS REVENUE EXPECTATIONS FOR 2016 FOR THE POCKET PARKS.

SHERYL ROZIER REVIEWED THE FEMA PROJECTS RELATED TO THE POCKET PARKS AND THEIR CURRENT STATUS.

SHERYL EXPLAINED THAT POCKET PARK 3 IS NOT BEING DISCUSSED AT THIS TIME DUE TO THE CURRENT CONDITION OF THE PARK WHICH IS IN DISREPAIR SINCE HURRICANE IKE. THE COUNTY IS COMMITTED TO DEMOLISHING THE PAVILION AND REESTABLISHING THE PARK WITH AMENITIES BUT THIS MAY TAKE SEVERAL YEARS TO COMPLETE. THE HOPE IS THAT THE PARK BOARD WILL CONTINUE CONVERSATIONS WITH THE COUNTY ON THE DEVELOPMENT OF POCKET PARK 3 AND INCLUDE IT IN A FUTURE INTERLOCAL OR AN ADDENDUM TO THE INTERLOCAL FOR POCKET PARKS 1 AND 2.

MOTION: JOYCE CALVER MCLEAN MOTIONED FOR THE PARK BOARD STAFF TO ENTER INTO NEGOTIATIONS ON A NEW INTERLOCAL AGREEMENT FOR POCKET PARKS 1 AND 2 TO INCLUDE THE STAFF RECOMMENDATIONS OF CONTINUING THE MANAGEMENT OF POCKET PARKS 1 AND 2, THE PARK BOARD CONTINUING TO PAY THE FEMA 10% LOCAL MATCH TO THE COUNTY, BUT REQUEST THAT THE VENDOR INVOICES BE PAID BY THE COUNTY AND NOT “FRONTED” BY THE PARK BOARD AND TO DISCUSS PARK BOARD OWNERSHIP OF POCKET PARKS 1 AND 2 AFTER FEMA WORKSHEETS HAVE BEEN COMPLETED. SECOND: STEVE KALBAUGH SECONDED. VOTE: MOTION WAS APPROVED (6-0, CLYDE STEDDUM WAS NOT PRESENT AT TIME OF VOTE)

IX. EXECUTIVE DIRECTOR UPDATE

KELLY DE SCHAUN REPORTED ON THE FOLLOWING:

16 Galveston Park Board of Trustees Regular Meeting 03/08/2016  FOR THE FIRST WEEK OF MARDI GRAS, REVENUE WAS UP FOR BOTH HOTEL AND GATE ATTENDANCE. FOR THE SECOND WEEK, REVENUE WAS UP FOR GATE ATTENDANCE BUT DOWN FOR HOTEL. THE SUPER BOWL WAS ON SUNDAY WHICH MAY HAVE IMPACTED THE HOTEL REVENUE. THE BEACH MAINTENANCE DEPARTMENT PUT IN OVER 350 HOURS CLEANING THE SEAWALL. MRS. DE SCHAUN STATED THAT BETTER COORDINATION NEEDS TO BE DONE WITH THE CITY FOR EVENTS LIKE THIS SO THAT THE TWO ENTITIES ARE NOT WORKING THE SAME AREA. FOR EXAMPLE, THE CITY PICKED UP THE BAGGED TRASH ALONG THE SEAWALL AND THE PARK BOARD PICKED UP THE TRASH CANS. THE PARK BOARD ALSO HAD THE EXPENSE OF ADDITIONAL SECURITY AT THE PARKS TO PREVENT OVERNIGHT CAMPING.  ROBERT BOOTH WITH MILLS SHIRLEY HAS BEEN WORKING WITH KIRBY REGARDING THE TEXAS CITY WYE OIL SPILL AND BELIEVES A SETTLEMENT WILL BE READY TO PRESENT TO THE BOARD AT THE NEXT MEETING. CARLA COTROPIA STATED THAT THIS WILL HELP WITH THE LEGAL FEES FOR THE YEAR AS THIS SETTLEMENT WILL COMPENSATE FOR THOSE COSTS.  CTA PROGRAM – AS OF THE END OF 2015, THERE ARE 529 CERTIFIED TOURISM AMBASSADORS WITH A RENEWAL RATE OF 45%. THERE WERE 9 TRAINING SESSIONS HELD AT THE PARK BOARD IN 2015 AND THERE ARE CURRENTLY 7 SCHEDULED FOR 2016. DR. BROWN INQUIRED IF THE BOARD PAID FOR THE TRUSTEES. THE INITIAL CTA WAS PAID BUT THEY NEED TO RENEW. RENEWALS ARE REQUIRED EACH YEAR. KELLY DE SCHAUN ASKED MEG WINCHESTER TO PUT TOGETHER A LIST OF THE TRUSTEES ON WHERE THEY STAND WITH THEIR RENEWALS AND GIVE TO SCHEL HEYDENBURG SO THAT SHE CAN DISSEMINATE THE INFORMATION TO THEM.  THE CONCERN FROM THE ANGLERS CLUB ABOUT THE LIGHTING AT SEAWOLF PARK HAS BEEN ADDRESSED AND IS IN THE PROCESS OF BEING REPAIRED. TH  THE TEXAS RECREATION AND PARK SOCIETY CONFERENCE IS BEING HELD THE WEEK OF FEBRUARY 29 AND IS IN GALVESTON THIS YEAR. SCHEL HEYDENBURG WILL SEND THE AGENDA TO THAYER EVANS AND MIGUEL ALEMAN TO SEE IF THEY WOULD LIKE TO ATTEND.  CEPRA AWARDS WERE ANNOUNCED. APPROVED REQUESTS FROM THE PARK BOARD INCLUDE THE FEASIBILITY STUDY OF HAVING A PERMANENT PIPELINE OR PURCHASING DREDGING EQUIPMENT FOR THE BEACH NOURISHMENT PROJECT, AMENDING THE PERMITS WITH THE ARMY CORPS OF ENGINEERS AND A JOINT APPLICATION WITH TEXAS A&M TO BALE THE SEAWEED TO USE FOR THE DUNES. THE REQUEST TO PLACE SAND ON A TWO-YEAR ROTATION IN FRONT OF DELLANERA WAS DENIED AS THEY CONSIDER THIS PRIVATE PROPERTY EVEN THOUGH THE CITY HAS AN EASEMENT. A LETTER HAS BEEN DRAFTED TO ASK FOR RECONSIDERATION.

X. CITY COUNCIL LIAISON UPDATE

DR. CRAIG BROWN GAVE THE PARK BOARD AN UPDATE FOR THE CITY.

THE COUNCIL WILL BE DISCUSSING A COMPREHENSIVE TRANSPORTATION PLAN AT THE NEXT CITY COUNCIL WORKSHOP SCHEDULED FOR FEBRUARY 25, 2016.

THE CITY IS READY TO MOVE AHEAD ON THE SEAWALL IMPROVEMENT PLAN. THEY ARE WAITING ON THE AGREEMENT BETWEEN THE PARK BOARD, THE COUNTY AND THE CITY.

JOHN ZENDT ASKED FOR AN UPDATE ON UBER. DR. BROWN STATED THAT UBER WANTS TO OPERATE IN THE CITY BUT THEY DO NOT WANT TO COMPLY WITH THE REGULATIONS SET FORTH FOR THEM. THE CITY IS ASKING FOR THE SAME REGULATIONS AS HOUSTON AND AUSTIN WHERE UBER IS CURRENTLY OPERATING. THE DISPUTE IS OVER THE TYPE OF BACKGROUND CHECK BEING REQUIRED.

17 Galveston Park Board of Trustees Regular Meeting 03/08/2016 (4:37 P.M. – MEETING WENT INTO EXECUTIVE SESSION)

XI. EXECUTIVE SESSION  PURSUANT TO TEXAS GOVERNMENT CODE SECTION 551.071 - CONSULTATION WITH ATTORNEY REGARDING POTENTIAL LITIGATION CONCERNING REAL ESTATE ON THE BEACHFRONT  (5:26 P.M. – MEETING WAS RECONVENED)

XII. ACTION ITEM(S) (RESULTING FROM EXECUTIVE SESSION)  ACTION RESULTING FROM EXECUTIVE SESSION - DISCUSS AND CONSIDER FOR ACTION ANY EXECUTIVE SESSION ITEM LISTED ON THE REGULAR MEETING AGENDA

THERE WERE NO ACTION ITEMS RESULTING FROM THE EXECUTIVE SESSION.

XIII. FUTURE AGENDA ITEMS

DR. CRAIG BROWN REQUESTED MONTHLY COMMITTEE UPDATES.

XIV. ANNOUNCEMENTS

JOYCE CALVER MCLEAN ANNOUNCED THAT THE HARRISON KEELER EVENT AT THE OPERA HOUSE HAS SOLD OUT TH SO ANOTHER SHOW HAS BEEN ADDED. TICKETS GO ON SALE THURSDAY, FEBRUARY 18 .

XV. ADJOURNMENT

THE MEETING WAS ADJOURNED AT 5:45 P.M.

18 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Date- March 2, 2016

Agenda Item:

Discuss and Consider the Award of Area 17 through 20 as described in the Park Board Concessionaire Information packet to Snowies Snow cones for Frozen Novelties.

Background: Staff posted a Legal notice on November 8th and 15th in the Galveston Daily News and on the Galveston Park Board website, all bids were opened on November 19, 2015 at 10:15am. Staff received no bids on this area for Frozen Novelties. Jay and Nick from Snowies Snow cones approached staff with a proposal to provide a frozen novelty service in Area 17 – 20. At this current time this vendor has a contract with us for the following location, Pocket Park 1 and 2, and Seawolf Park.

Staff Recommendation: Staff is recommending to award Area 17 – 20 (61sh up to 69th) to Snowies Snowcones in agreement for a two-year contract with an optional one two-year renewal. Snowies Snowcones would pay $11,001.00.

Funding Source (if a budgetary item):

19 Galveston Park Board of Trustees Regular Meeting 03/08/2016

CONCESSION AGREEMENT WITH NIRANJAN POKHAREL D/B/A JAY PATHIBHARA AT AREAS 17 – 20 (61st UP TO 69TH)

THE STATE OF TEXAS § § COUNTY OF GALVESTON §

THIS AGREEMENT made and entered into effective March 12, 2016, by and between the Park Board of Trustees of the City of Galveston ("Park Board") and Niranjan Pokharel d/b/a Jay Pathibhara (Concessionaire").

WHEREAS, the Park Board has leased a portion of the beach south of the Seawall between 61st Street and 103rdth Street ("West Beach") from the State of Texas under a surface lease ("Surface Lease"); and

WHEREAS, the Surface Lease expires on October 31, 2035.

NOW THEREFORE, Park Board does agree as follows:

1. Term. The term of this agreement is two years and it will terminate on March 12, 2018, unless sooner terminated as set out below.

2. Concession Fee. The concession fee is $11,001 a year, payable in three installments of $3,667 each on March 1, June 1 and August 1 of 2016 and 2017.

3. Laws & Restrictions. The Concessionaire shall, in connection with any current or future improvements, use or maintenance of the premises and all activities associated therewith, strictly comply with all applicable laws, rules, ordinances, restrictions, and regulations. Concessionaire shall secure and maintain all permits and licenses required for its activities at its own expense, including, without limitation, a vendor permit from the City, if applicable. No non-moveable structure may be constructed or allowed on the premises.

4. Scope and Use. The only activities which Concessionaire shall be permitted to engage in is the sale of frozen novelties, chips or packaged snacks, soft drinks and water. No glass containers will be allowed on or about the premises. All city codes must be complied with and all needed permits obtained prior to the sale or lease. This is non-exclusive use.

5. Taxes. Any and all taxes which may be lawfully imposed upon the property or business of the Concessionaire on the premises shall be paid promptly by the Concessionaire. On a quarterly basis, Concessionaire shall provide Park Board and the City with proof of payment of all applicable sales taxes. Concessionaire shall furnish Park Board and the City with receipts and any other verification requested by Park Board showing compliance herewith prior to delinquency.

20 Galveston Park Board of Trustees Regular Meeting 03/08/2016

6. No Assignment. The Concessionaire shall not mortgage, pledge, transfer or assign this Agreement or any privileges hereunder.

7. Park Board Rules. The use and occupation of the premises shall be subject to any and all rules and regulations as may be prescribed by Park Board from time to time. Violation of any rule or regulation of the Park Board, after a notice and a ten-day (10) opportunity to cure, is grounds for termination.

8. Right of Re-Entry. The right is hereby reserved to Park Board, the City, Texas, and to the state of Texas, their officers, agents, and employees to enter upon the said premises at any time for inspection or for any governmental purpose, to remove therefrom persons, equipment, fixtures, goods, debris, improvements, or other material required or necessary for any official purpose, and Concessionaire shall have no claim for damages of any character on account thereof against Park Board, the City, or the state of Texas, or any officer, agent, or employee thereof.

9. Exoneration. Park Board and the City, and their officers, agents, and employees shall not be responsible to Concessionaire or any other person for: (1) damages to property or injuries to persons which may arise from the incident to the use or occupation of the said premises by Concessionaire; (2) damages to the property of the Concessionaire; (3) injuries to the person of the Concessionaire's officers, agents, servants, or employees, or any other persons who may be on said premises at their invitation or the invitation of any one of them, and the Concessionaire shall hold Park Board and the City harmless from any and all such claims, even though such claims may be caused or alleged to be caused in whole or in part by the negligence of Park Board, the City, or its respective officers, agents, or employees.

10. Notice. Any notice hereunder shall be deemed to have been duly given if and when enclosed in a properly sealed envelope, or wrapper, addressed and deposited postage prepaid in a post office or branch post office regularly maintained by the United States Government, to the following addresses:

Concessionaire: Niranjan Pokharel Address: 1620 Bay Area Blvd. Houston, Texas 7058 Telephone: ______Cell: 832.454.6812 Email: [email protected] [email protected]

21 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Park Board: Park Board of Trustees of City of Galveston, Texas Attention: Kelly de Shaun Executive Director Address: 601 Tremont Galveston, Texas 77550 Telephone: 409.797.5141 Telefax: 409.762.8911 Email: [email protected]

Either party may notify the other of any change of address by written notice.

11. Termination.

A. This Agreement may be terminated by Park Board upon the happening of any of the following events:

(1) Lapse in required insurance coverage by Concessionaire or failure by Concessionaire to strictly comply with any provisions in this Agreement relating to insurance coverage, allowing any unsafe or dangerous equipment or condition to exist, or by violation of any applicable law, ordinance, rule, or regulation, which termination may be immediate and without advance notice;

(2) The commission by Concessionaire of any act of insolvency, the filing of any voluntary or involuntary actions concerning Concessionaire under any state or federal bankruptcy or other laws for the protection of debtors, an assignment by Concessionaire for the benefit of creditors, or the appointment of a Receiver for Concessionaire or the business of Concessionaire conducted on the premises.

(3) A breach by the Concessionaire of any other terms or conditions of this Agreement, provided that Concessionaire, subject to any express provision in this Agreement to the contrary, shall first be entitled to ten (10) days written notice with the opportunity to cure the default of any other such term or condition within such period, but provided further that Concessionaire will be entitled to notice of default and an opportunity to cure only twice during the term of this Agreement. Any such termination shall be without waiver of any cause of action which may have theretofore accrued. Any waiver by Park Board shall not operate to modify this Agreement, nor shall it in any manner prejudice any rights of Park Board regarding any future violation of any term of this Agreement by Concessionaire, nor shall it constitute a waiver by Park Board of its right to enforce all provisions of this Agreement.

(4) Concessionaire is convicted of a felony or crime involving a moral turpitude.

(5) In the event that Park Board should lose the right to possession of the premises for any reason, including but not limited to, easement, lease, condemnation, exercise of power of eminent domain, failure to extend a license to use, reversion to prior owners, loss of title or loss of license; or

22 Galveston Park Board of Trustees Regular Meeting 03/08/2016

(6) In the event that a storm or other natural force causes erosion of the beach on the premises to the extent that it is no longer practical for Concessionaire to conduct the activities permitted herein on the premises.

(7) The violation of any Park Board rule, after being given ten (10) days to cure the violation.

(8) Ninety (90) days’ written notice.

12. Insurance. Throughout the term of this Agreement or any extensions thereof, Concessionaire shall maintain insurance against public liability for injury to persons (including death) or damage to property resulting from or arising out of, or alleged to have arisen from or resulted from, the operations of the Concessionaire in or about the premises. Such insurance policy shall be in an amount not less than $1,000,000, combined single limit coverage, or such greater amount as shall be from time to time required by Park Board, and shall name Park Board and the City as an additional named under said policy, and said policy shall provide for thirty (30) days notice to Park Board prior to any cancellation or revision of said policy. Such policy shall be in form and with an insurance carrier acceptable to the Executive Director or Park Board. Concessionaire agrees that it will make no claim nor authorize any claim to be made against and will provide waivers of subrogation from its insurers as to Park Board, its employees, servants, or agents in connection with or as a result of fire, explosion, or other casualty injuring persons or damaging the contents, equipment, furniture, or fixtures in or about the premises. Concessionaire shall at all times provide Park Board with a current copy of all such insurance policies, and with a current copy of certificates of insurance providing for thirty (30) days notice prior to cancellation or revision as above provided.

13. INDEMNITY. CONCESSIONAIRE HEREUNDER AGREES TO FULLY INDEMNIFY, DEFEND, AND HOLD HARMLESS PARK BOARD, THE CITY, AND THEIR INDIVIDUAL TRUSTEES, COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES FROM ANY AND ALL EXPENSES, DAMAGES, CLAIMS OR CAUSES OF ACTION THAT MAY ARISE IN CONNECTION WITH (A) CONCESSIONAIRE'S FAILURE TO PERFORM ITS OBLIGATIONS HEREIN OR (B) CONCESSIONAIRE'S USE AND OPERATION OF THE PREMISES, INCLUDING WITHOUT LIMITATION, ATTORNEYS' FEES AND COSTS OF DEFENSE. THIS INDEMNITY AGREEMENT IS INTENDED TO ENCOMPASS ANY AND ALL MANNER OF CLAIMS (WHETHER FOR BODILY INJURY, DEATH, PROPERTY DAMAGE, FINES, OR CITATIONS FOR VIOLATIONS OF ANY LAW, STATUTE, ORDER, OR REGULATION, OR OTHERWISE), ARISING OUT OF ANY ACTIVITIES WHATSOEVER, INCLUDING BUT NOT LIMITED TO, CLAIMS CAUSED BY THE NEGLIGENCE OF PARK BOARD, THE CITY, AND THEIR INDIVIDUAL TRUSTEES, COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH IS INTENDED BY CONCESSIONAIRE TO INDEMNIFY AND PROTECT PARK BOARD, THE CITY, AND THEIR INDIVIDUAL TRUSTEES, COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES FROM THE

23 Galveston Park Board of Trustees Regular Meeting 03/08/2016

CONSEQUENCES OF PARK BOARD, THE CITY, AND THEIR INDIVIDUAL TRUSTEES, COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES, WRONGFUL ACTS AND NEGLIGENCE, WHETHER OR NOT THE NEGLIGENCE IS THE SOLE CAUSE OR CONCURRING CAUSE IN THE INJURY, DEATH, OR DAMAGE. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE THE TERMINATION OF THIS CONCESSION AGREEMENT FOR ANY REASON.

14. Limits of Liability. Concessionaire agrees to look solely to Park Board for the performance of its obligations under this Concession Agreement, and agrees that in no event is the City or the individual members of Park Board liable or responsible in any manner for this Concession Agreement, nor for any breach thereof.

15. Access and Signage. Concessionaire shall have reasonable access to the premises over the property of Park Board by virtue of such avenues of ingress and egress, and at such time as Park Board shall direct. Concessionaire shall have no rights, express or implied, in any property belonging to or subject to the management of Park Board, other than the premises. Concessionaire shall not in any manner restrict the public from free access to and use of the beach and to the waters of the Gulf of Mexico, as required by the Texas Open Beaches Act. Concessionaire, and its agents, employees, and vendors shall, in no way, interfere with, impede or adversely affect any property, business or patrons of Park Board. All signage on the premises or advertising the premises shall be subject to prior approval of the Executive Director of Park Board. All signage must include the Park Board logo, name, and telephone number, and shall request that any problems be reported. All signage must comply with the City's Sign Ordinance.

16. No Obstruction. Concessionaire shall not keep or display anything or otherwise obstruct the beaches, roads, driveways, walkways, or area ways adjacent to the premises.

17. Fire Protection. Concessionaire shall install and maintain fire extinguishers and other fire protection and safety devices as may be required from time to time by any governmental or other agency having jurisdiction.

18. Miscellaneous.

A. Concessionaire agrees that all its employees in and about the premises will wear neat and attractive uniforms which are compatible with those worn by Park Board employees or as Park Board shall otherwise direct, and all employees of Concessionaire will at all times maintain a neat and attractive appearance, a professional demeanor and be polite and courteous at all times.

B. Concessionaire will pay the cost of trash and garbage removal, except for routine removal of trash from barrels.

C. During the entire time during which this Agreement shall be in effect, Concessionaire will be responsible for all expenses in any manner arising from its duties and activities hereunder.

24 Galveston Park Board of Trustees Regular Meeting 03/08/2016

D. All equipment or other physical objects in or about the premises shall be safe, clean, in good working order, and aesthetically appealing in the opinion of the Park Board. Employees are required to park in the employee parking area as directed by the park manager.

E. Concessionaire understands and agrees that the Park Board is not responsible for 1) code enforcement, 2) policing the area, 3) maintaining the parking lot, and 4) sweeping sand off the parking lot.

19. Attorneys' Fees. Concessionaire agrees to pay all attorneys' fees incurred by the Park Board in any manner in connection with the preparation of this Concession Agreement, any negotiations associated therewith, securing all necessary approvals therefore, enforcing any provisions hereof, and any disputes or questions regarding this Agreement.

20. Concessionaire agrees to pay $250.00 for fees associated with the drafting of this Agreement.

21. Concessionaire's Acknowledgement.

A. Concessionaire acknowledges it will comply with all beach patrol rules, Coast Guard rules, and any and all city ordinances. The Galveston Beach Patrol shall have full authority to shut down Concessionaire's operation if they believe, in their sole discretion, there is a safety issue. Concessionaire acknowledges that there may be other concessionaires in the same area.

B. There may be third parties having rights or claims of rights to the New Beach, including, without limitation, the premises. Concessionaire acknowledges that it takes any concession rights subject to the rights, if any, of those third parties. The development and activities to be conducted on the premises may be subject to considerable restrictions, including, without limitation, the Texas Open Beaches Act and the Texas Dune Protection Act. The Park Board will have the right but not the obligation to prevent others from establishing concessions upon certain areas of the premises, to the extent that third parties may have rights in those areas. Concessionaire recognizes that the concession to be granted is not an exclusive right to operate the desired concession, and that other persons may attempt to operate competing concessions. Concessionaire's rights with respect to the premises are granted by Park Board and accepted by Concessionaire in "AS IS" condition and "WITH ALL FAULTS" and without any representation or warranty of any nature whatsoever by Park Board. Concessionaire by acceptance of this concession represents that Concessionaire has made such inspection and investigation relating to the premises as Concessionaire deems necessary or appropriate for its purposes.

C. Concessionaire may not restrain or prevent the use of the premises by any person. All persons shall have the right to use their own personal property and equipment in or about the premises. Concessionaire may not interfere with any person's right to use the beach.

D. Concessionaire acknowledges the Park Board cannot assure Concessionaire that the beach will maintain its current configuration and that the beach is subject to erosion. Concessionaire acknowledges that the Park Board is not making any promise or warranty that it

25 Galveston Park Board of Trustees Regular Meeting 03/08/2016

will add sand to the premises or otherwise nourish the premises in the future. Concessionaire acknowledges that the Park Board may add sand or nourish certain portions of the beach and not add sand or nourish the premises leased by Concessionaire.

22. Environmental Stewardship. The Park Board of Trustees of the City of Galveston recognizes a shared responsibility between it and its concessionaires to act as a positive force for the protection and enhancement of our Island’s natural resources. In this important effort Park Board reaches out and partners with its concessionaires in the implementation of environmental stewardship and sustainability practices that can be applied to daily business operations. Concessionaires operating under the jurisdiction of Park Board are expected to participate in this effort and incorporate sound environmental practices that achieve the overarching goal of protection, sustainability and enhancement of our natural resources.

IN TESTIMONY WHEREOF, the parties hereto have each caused this instrument to be executed in duplicate originals, on this the ______day of ______, 2015.

Park Board of Trustees of the City of Galveston

______By: Kelly de Shaun Title: Executive Director

Niranjan Pokharel d/b/a Jay Pathibhara LLC

______By: Niranjan Pokharel

______Niranjan Pokharel, Individually

26 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Date- March 2, 2016

Agenda Item:

Discuss and Consider the Award of Area East End Lagoon as described in the Park Board Concessionaire Information packet to Ocean Tribe.

Background: Staff posted a Legal notice on November 8th and 15th in the Galveston Daily News and on the Galveston Park Board website, all bids were opened on November 19, 2015 at 10:15am. Staff received no bids on this area, staff was approached by Ocean Tribe to offer Stand up Paddle Board and Kayak rentals. Currently at this time we don’t have any vending in the East End Lagoon.

Staff Recommendation: Staff is recommending to award Area East End Lagoon to Ocean Tribe for in amount of $800.00 per year with an optional two-year renewal.

Funding Source (if a budgetary item):

27 Galveston Park Board of Trustees Regular Meeting 03/08/2016

CONCESSION AGREEMENT AT EAST END LAGOON WITH OCEAN TRIBE

THE STATE OF TEXAS § § COUNTY OF GALVESTON §

THIS AGREEMENT made and entered into effective March 12, 2016, by and between the Park Board of Trustees of the City of Galveston (hereinafter referred to as "Park Board") and Joseph Manuel Cerdas and Blanca Nina Medellin Ortiz d/b/a Ocean Tribe (hereinafter referred to as "Concessionaire").

WHEREAS, the City of Galveston ("City") has certain property located at the end of the eastern part of Galveston Island known as the East End Lagoon; and

WHEREAS, the City has turned over the management and control of the East End Lagoon to the Park Board; and

WHEREAS, Concessionaire desires to enter into a Concession Agreement with Park Board at the East End Lagoon;

NOW, THEREFORE, for and in consideration for the premises hereinafter set forth, and in accordance with the above quoted authority, Park Board hereby grants to Concessionaire authority to use a portion of East End Lagoon (hereinafter "the Premises"), for a term as hereinafter provided.

This Agreement is granted subject to the following conditions:

1. Concession Fee. Concessionaire agrees to pay Park Board an annual fee of $800, which is due on March 12, 2016 and March 12, 2017.

2. Term. The term of this Agreement shall commence on March 12, 2016 and terminate on March 11, 2018.

3. Scope and Use. Concessionaire has a non-exclusive right to rent paddle boards, canoes and kayaks. Concessionaire is also permitted to engage in training, lessons and classes relating to the use of the rented paddle boards, canoes, and kayaks. In addition, Concessionaire will be permitted to sell apparel, koozies, hats and stickers relating to its business, Ocean Tribe. All city codes must be complied with and all needed permits obtained prior to the lease.

4. Laws and Restrictions. Concessionaire shall, in connection with any current or future improvement, use or maintenance of the premises and all activities associated therewith, strictly comply with all applicable laws, rules, ordinances, restrictions and regulations. Concessionaire shall secure and maintain all permits and licenses required for its activities at its own expense, including, without limitation, a vendor permit from the City. No non-moveable structure may be constructed or allowed on the premises.

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5. Taxes. Any and all taxes which may be lawfully imposed upon the property or business of Concessionaire on the premises shall be paid promptly by Concessionaire. On a quarterly basis, Concessionaire shall provide Park Board with proof of payment of all applicable sales taxes. Concessionaire shall furnish Park Board with receipts and any other verification requested by Park Board showing compliance herewith prior to delinquency.

6. No Assignment. Concessionaire shall not mortgage, pledge, hypothecate, transfer or assign this Agreement or any privileges hereunder, or any interest whatsoever in connection with this Agreement without permission in writing from Park Board. In the event Concessionaire is a legal entity other than an individual, any change in ownership of said entity shall be considered a transfer for the purposes of this Agreement. No assignment shall relieve Concessionaire or any guarantors of their obligations hereunder.

7. Park Board Rules. The use and occupation of the premises shall be subject to any and all rules and regulations as may be prescribed by Park Board from time to time. Violation of any rule or regulation of Park Board, after a notice and a ten-day (10) opportunity to cure, is grounds for termination.

8. Right of Reentry. The right is hereby reserved to Park Board, the County, and to the state of Texas, their officers, agents and employees to enter upon the Premises at any time for inspection or for any governmental purpose, to remove therefrom persons, equipment, fixtures, goods, debris, improvements or other material required or necessary for any official purpose, and Concessionaire shall have no claim for damages of any character on account thereof against Park Board, the County or the state of Texas, or any officer, agent or employee thereof.

9. Exoneration. Park Board, City and the County, and their officers, agents and employees, shall not be responsible to Concessionaire or any other person for: (1) damages to property or injuries to persons which may arise from or be incident to the use or occupation of the Premises by Concessionaire; (2) damages to the property of the Concessionaire; (3) injuries to the person of the Concessionaire's officers, agents, servants, or employees or any other persons who may be on Premises at their invitation or the invitation of any one of them, and the CONCESSIONAIRE SHALL HOLD PARK BOARD, COUNTY AND THE CITY OF GALVESTON, HARMLESS FROM ANY AND ALL SUCH CLAIMS, EVEN THOUGH SUCH CLAIMS MAY BE CAUSED OR ALLEGED TO BE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF PARK BOARD, THE COUNTY, THE CITY, OR ITS RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES.

10. Insurance. Throughout the term of this Agreement or any extensions thereof, Concessionaire shall maintain insurance against public liability for injury to persons (including death) or damage to property resulting from or arising out of, or alleged to have arisen from or resulted from, the operations of the Concessionaire in or about the premises. Such insurance policy shall be in an amount not less than $1,000,000, combined single limit coverage, or such greater amount as shall be from time to time required by Park Board, and shall name Park Board and the City as an additional named under said policy, and said policy shall provide for thirty (30) days' notice to the Park Board and the City prior to any cancellation or revision of the

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policy. Such policy shall be in form and with an insurance carrier acceptable to the Executive Director of Park Board. Concessionaire agrees that it will make no claim nor authorize any claim to be made against and will provide waivers of subrogation from its insurers as to Park Board, its employees, servants or agents in connection with or as a result of fire, explosion or other casualty injuring persons or damaging the contents, equipment, furniture or fixtures in or about the premises. Concessionaire shall at all times provide Park Board and the City with a current copy of all such insurance policies, and with a current copy of certificates of insurance providing for thirty (30) days' notice prior to cancellation or revision as above provided.

11. Termination.

A. This Agreement may be terminated by Park Board upon the happening of any of the following events:

(4) Concessionaire is convicted of a felony or crime involving a moral turpitude.

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(7) The violation of any Park Board rule, after being given ten (10) days to cure the violation.

(8) Ninety (90) days’ written notice.

12. Notice. Any notice required or permitted between the parties under this Agreement must be in writing and shall be delivered in person or mailed, return receipt requested, or may be transmitted by fax as follows:

Concessionaire: Joseph Manuel Cerdas d/b/a Ocean Tribe Mailing Address: 2023 103rd Lot A Galveston, Texas 77554 Telephone: 409-457-9044 Email: [email protected]

Park Board: Park Board of Trustees of City of Galveston, Texas Attention: Kelly de Schaun Executive Director Address: 601 Tremont Galveston, Texas 77550 Telephone: 409-797-5106 Telefax: 409-762-8911 Email: [email protected]

13. INDEMNITY. CONCESSIONAIRE HEREUNDER AGREES TO FULLY INDEMNIFY AND HOLD HARMLESS PARK BOARD AND THE CITY, THEIR INDIVIDUAL TRUSTEES, COMMISSIONERS, COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES, FROM ANY AND ALL EXPENSES, DAMAGES, CLAIMS OR CAUSES OF ACTION THAT MAY ARISE IN CONNECTION WITH THE PREMISES OR CONCESSIONAIRE'S ACTIVITIES THEREON, INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES AND COSTS OF DEFENSE. THIS INDEMNITY AGREEMENT IS INTENDED TO ENCOMPASS ANY AND ALL MANNER OF CLAIMS (WHETHER FOR BODILY INJURY, DEATH, PROPERTY DAMAGE, FINES, OR CITATIONS FOR VIOLATIONS OF ANY LAW, STATUTE, ORDER OR REGULATION, OR OTHERWISE), ARISING OUT OF ANY ACTIVITIES WHATSOEVER, INCLUDING BUT NOT LIMITED TO, CLAIMS CAUSED OR ALLEGED TO BE CAUSED BY THE NEGLIGENCE OF PARK BOARD OR THE CITY, THEIR INDIVIDUAL TRUSTEES, COMMISSIONERS, COUNCIL MEMBERS, OFFICERS, AGENTS AND EMPLOYEES. IT IS THE EXPRESS INTENTION OF THE

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PARTIES HERETO, BOTH CONCESSIONAIRE AND PARK BOARD, THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH INDEMNIFY AND PROTECT PARK BOARD AND THE CITY FROM THE CONSEQUENCES OF PARK BOARD'S OR THE CITY'S OWN NEGLIGENCE OR WRONGFUL ACTS, OR THE NEGLIGENCE OR WRONGFUL ACTS OF ITS TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES, WHERE THAT NEGLIGENCE IS THE CONCURRING CAUSE IN THE INJURY, DEATH OR DAMAGE. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE THE TERMINATION OF THIS CONCESSION AGREEMENT FOR ANY REASON.

14. Limitation of Liability. Concessionaire agrees to look solely to Park Board for the performance of its obligations under this Concession Agreement, and agrees that in no event are the individual members of Park Board or City Council Members liable or responsible in any manner for this Concession Agreement, nor for any breach thereof.

15. Access and Signage. Concessionaire shall have reasonable access to the Premises over the property of Park Board by virtue of such avenues of ingress and egress, and at such times as Park Board shall direct. Concessionaire shall have no rights, express or implied, in any property belonging to or subject to the management of Park Board, other than the Premises. Concessionaire shall not in any manner restrict the public from free access to and use of the beach and to the waters of the Gulf of Mexico, as required by the Texas Open Beaches Act. Concessionaire, and its agents, employees and vendors shall, in no way, interfere with, impede or adversely affect any property, business or patrons of Park Board. All signage on the Premises or advertising for the Premises shall be subject to prior approval of the Executive Director of Park Board. All signage must include the Park Board logo, name and telephone number, and shall request that any problems be reported.

16. No Obstruction. Concessionaire shall not keep or display anything or otherwise obstruct the beaches, roads, driveways, walkways, or area ways adjacent to the Premises.

18. Miscellaneous.

A. Concessionaire agrees that all its employees in and about the Premises will wear neat and attractive uniforms which are compatible with those worn by Park Board employees or as Park Board shall otherwise direct, and all employees of Concessionaire will at all times maintain a neat and attractive appearance, a professional demeanor and be polite and courteous at all times.

B. Concessionaire will pay the cost of trash and garbage removal except for routine removal of trash from barrels.

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C. During the entire time during which this Agreement shall be in effect, Concessionaire will be responsible for all expenses in any manner arising from its duties and activities hereunder.

D. All equipment or other physical objects in or about the Premises shall be safe, clean, in good working order, and aesthetically appealing in the opinion of Park Board. No motor vehicles shall be permitted to remain on the Premises except for such limited period of time as may be necessary for loading or unloading equipment without the prior written approval of Park Board.

E. All customer parking will be in areas as designated by the Park Board.

19. Attorney's Fees. Concessionaire agrees to pay all attorneys' fees incurred by Park Board in any manner in connection with the preparation of this Concession Agreement, any negotiations associated therewith, securing all necessary approvals therefor, enforcing any provisions hereof, and any disputes or questions regarding this Agreement.

20. Employees of Concessionaire. Concessionaire shall at all times employ only those persons of good moral character, and Concessionaire shall not retain any employee that Park Board considers to be unfit for such employment or otherwise objectionable. All employees of Concessionaire shall be neatly dressed at all times and shall conduct themselves courteously in their relations with the public.

21. Independent Contractor. This Agreement is not a contract of employment. No relationship of employer and employee exists between Park Board and Concessionaire or between Park Board and any employee or agent of Concessionaire. Concessionaire shall at all times be deemed to be an Independent Contractor. Concessionaire is not authorized to bind Park Board to any agreements or obligations. Park Board shall not be liable for any acts or omissions of Concessionaire, its employees, or its agents in performing the duties prescribed herein.

22. Non-Discrimination. Concessionaire agrees that in the use and occupancy of the Premises, no discrimination of any kind shall be practiced by any party which is based upon a person's race, sex, color, religion, ancestry, national origin, disability, age, military status, or sexual orientation, whether in employment or in the provision of goods and services.

23. Americans with Disabilities Act. Concessionaire agrees to comply with the Americans with Disabilities Act, which requires access to the Premises for handicapped, disabled, or differently abled persons.

24. Waiver of Default. Any waiver by Park Board of any default or breach of this Agreement shall not be construed to be a continuing waiver of such default or breach nor as a waiver of permission, express or implied, or any other or subsequent default or breach.

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25. Concessionaire's Acknowledgment.

A. Concessionaire acknowledges and understands that there may be third parties having rights or claims of rights to East End Lagoon, including, without limitation, the Premises. Concessionaire acknowledges that it takes any concession rights subject to the rights, if any, of those third parties. The development and activities to be conducted on the premises may be subject to considerable restrictions, including, without limitation, the Texas Open Beaches Act and the Texas Dune Protection Act. Park Board will have the right, but not the obligation, to prevent others from establishing concessions upon certain areas of the Premises, to the extent that third parties may have rights in those areas. Concessionaire recognizes that the concession to be granted may not be an exclusive right to operate the desired concession, and that other persons may attempt to operate competing concessions. Concessionaire's rights with respect to the Premises are granted by Park Board and accepted by Concessionaire in "AS IS" condition and "WITH ALL FAULTS" and without any representation or warranty of any nature whatsoever by Park Board. Concessionaire, by acceptance of this concession, represents that Concessionaire has made such inspection and investigation relating to the Premises as Concessionaire deems necessary or appropriate for its purposes.

26. Environmental Stewardship. The Park Board of Trustees of the City of Galveston recognizes a shared responsibility between it and its concessionaires to act as a positive force for the protection and enhancement of our Island’s natural resources. In this important effort Park Board reaches out and partners with its concessionaires in the implementation of environmental stewardship and sustainability practices that can be applied to daily business operations. Concessionaires operating under the jurisdiction of Park Board are expected to participate in this effort and incorporate sound environmental practices that achieve the overarching goal of protection, sustainability and enhancement of our natural resources.

27. Entire Agreement. This constitutes the entire Agreement between the parties, and all previous agreements are either merged herein or rescinded. This Agreement may only be amended by written agreement duly executed by both parties.

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IN TESTIMONY WHEREOF, the parties hereto have each caused this instrument to be executed in duplicate originals, on this ______day of ______, 2016.

Park Board of Trustees of the City of Galveston

By: ______Kelly de Schaun Executive Director

Concessionaire

Ocean Tribe

By: ______Joseph Manuel Cerdas Its: Owner

______Joseph Manuel Cerdas, Individually

______Blanca Nina Medellin Ortiz, Individually

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Agenda Item: Discuss and Consider January 2016 Unaudited Financial Statements.

Staff Recommendation:

The January 2016 Unaudited Financial Statements will be presented to the Finance Committee for discussion and review on Monday, March 7, 2016. It is staff’s recommendation the audit be accepted and approved.

Funding Source (if a budgetary item):

Not applicable.

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Agenda Item: Discuss and Consider contract with Comcast Cable Communications Management, LLC for Park Board Ethernet services.

Staff Recommendation:

Comcast is the Park Board’s current provider; however, it is on a month to month renewal. Due to the Park Board’s growth, additional bandwidth is needed to sufficiently meet all current and future demands. This contract increases the Park Board’s bandwidth from 20 Mbps to 100 Mbps with a reduction in price of approximately $9,500 per annum.

This is a 60 month contract in the amount of $3,815 per month. Legal has reviewed the contract and recommended the following changes: the automatic renewal be deleted and the ability to terminate the contract on 30 days notice with no penalty other than paying what is owed.

It is staff’s recommendation to accept the contract with Comcast Cable Communications Management, LLC to provide the Park Board’s Ethernet services, with revisions to the contract as recommended by Park Board Legal.

Funding Source (if a budgetary item):

This is a budgeted line item in the 2015/2016 Park Board Operating Budget.

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Agenda Item: Discuss and Consider the Award of the Coastal Project Regulatory and Grant Writing Assistance and Coordination Contract to Coastal Strategies Group, LLC

Background: 1.02 SERVICES TO BE PROVIDED

The Park Board solicited competitive sealed proposals from experienced individuals and firms responsive to the items identified below in the Scope of Services.

Potential Scope of Services

1. Permitting and Regulatory Assistance  City of Galveston/General Land Office Beachfront Construction Permit Applications  City of Galveston/General Land Office Beach Maintenance Permit Applications  City of Galveston /General Land Office Beach User Fee Increase Application Process  Coordination of Galveston Park Board Best Practices for Beach Maintenance  US Army Corp of Engineer Sec. 408 Coordination  Galveston Island, Texas Sand Management Strategies Coordination  General Land Office Coastal / Submerged Land Lease Application Process  US Army Corp of Engineers Sec. 10/404 permitting process  Environmental coordination in support of FEMA project worksheet implementation 2. General Grant Writing / Assistance  Coastal Erosion Planning Response Act Application Development / Support  Coastal Management Program Application Development / Support  Outer-Continental Shelf (OCS) Revenue Sharing Projects  US Army Corp of Engineers Planning Assistance to the States Program / Support  Restore Act (if needed)  General Grant writing and research 3. General Coastal Administrative Assistance  Correspondence composition with regulatory entities  Development of award nominations ex.- *Best Restored Beach Nominations/* Individual ASBPA Award Nominations

The bids were announced under the stipulated guidelines in the Galveston Daily News, as well as through announcements in GEDP, Texas Chapter of the American Beach and Preservation Association, and Chamber of Commerce.

One bid was received from John Lee of Coastal Strategies Group. John Lee has undertaken this work previously for the Park Board, successfully garnering 6 of 7 submitted grants, obtaining within stipulated time frames the required annual beach maintenance permits and beach building permits and writing the submission for the recently awarded “Best Restored Beaches” application.

Staff Recommendation: Staff recommends the award of one contract for the services requested under the solicitation for a base two (2) year term, with three (3) additional one (1) year optional extensions. Optional one year extensions are not guaranteed, shall be approved in writing in advance of the expiration of the base contract. Annual allocation is not to exceed $50,000.

Funding Source: East End Lagoon, EL-70: $8,000 Dellanera, DP-52, $6,000 Nourished Beach, NB-70, $25,000 Beach Cleaning, BC-70, $6,000 Stewart Beach, SB-51, $5,000

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88 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Agenda Item VII – Administration

A. DISCUSS AND CONSIDER THE 2015 PARK BOARD FINANCIAL AUDIT (MIKE MOSER)  OVERVIEW  AUDIT REPORT

B. DISCUSS AND CONSIDER APPROVAL OF CITY OF GALVESTON, GALVESTON COUNTY AND PARK BOARD OF TRUSTEES INTERLOCAL FOR MAINTENANCE OF THE SEAWALL BOULEVARD IMPROVEMENTS AND SUPPORTING YEAR ONE BUDGET (KELLY DE SCHAUN)

C. DISCUSS AND CONSIDER PROTCOLS FOR PARTICIPATION IN PARK BOARD OF TRUSTEES OR COMMITTEE MEETINGS VIA VIDEOCONFERENCING (STEVE KALBAUGH/KELLY DE SCHAUN)  POLICY  OPERATIONAL PROCEDURES

D. PRESENTATION OF ROBERTS RULES OF ORDER (CARLA COTROPIA)  SUMMARY

E. DISCUSS AND CONSIDER AMENDMENT OF THE PARK BOARD OF TRUSTEES BY-LAWS FOR THE PARKS AND AMENITIES COMMITTEE TO REPLACE THE EAST END LAGOON REPRESENTATIVE WITH AN ADDITIONAL CITIZEN AT LARGE MEMBER (CARLA COTROPIA)  AMENDED BY-LAW

F. DISCUSS AND CONSIDER AWARD OF HOTEL OCCUPANCY TAX AUDIT CONTRACT TO MUNISERVICES (CARLA COTROPIA)  OVERVIEW  CONTRACT  RELATED PARTY QUESTIONNAIRE

G. UPDATE ON 2016 LEGISLATIVE VISITS (CLYDE STEDDUM)  LEGISLATIVE VISIT AGENDA

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Agenda Item: Discuss and Consider 2015 Park Board Financial Audit

Staff Recommendation:

The 2015 Park Board Financial Audit will be presented to the Finance Committee for discussion and review on Monday, March 7, 2016. It is staff’s recommendation the audit be accepted and approved.

Funding Source (if a budgetary item):

Not applicable.

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PARK BOARD OF TRUSTEES OF THE CITY OF GALVESTON

A COMPONENT UNIT OF THE CITY OF GALVESTON

FINANCIAL STATEMENTS

YEAR ENDED SEPTEMBER 30, 2015

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Table of Contents

Page FINANCIAL SECTION

Independent Auditor's Report on Financial Statements and Supplementary Information ...... 1

Management’s Discussion and Analysis ...... 3

Basic Financial Statements

Government-wide Financial Statements: Statement of Net Assets ...... 7 Statement of Activities ...... 8

Fund Financial Statements: Governmental Funds Balance Sheet ...... 9 Reconciliation of the Balance Sheet to the Statement of Net Assets ...... 10 Statement of Revenues, Expenditures and Changes in Fund Balances ...... 11 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...... 12 Proprietary Funds Statement of Net Assets ...... 13 Statement of Revenues, Expenses and Changes in Fund Net Assets ...... 14 Statement of Cash Flows ...... 15

Notes to Financial Statements ...... 16

SUPPLEMENTARY FINANCIAL SCHEDULES AND INFORMATION

Summary Budgetary Comparison Schedules General Government Fund ...... 31 Tourist Development ...... 32 Beach Cleaning ...... 33 Beach Patrol ...... 34 Nourished Beach ...... 35 Sand Replenishment ...... 36

Notes to Summary Budgetary Comparison Schedules ...... 37

OMB CIRCULAR A-133 - FEDERAL AWARDS SECTION

Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...... 38

Independent Auditor’s Report on Compliance with Requirements Applicable to each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 ...... 40

Schedule of Findings and Questioned Costs ...... 42

Schedule of Expenditures of Federal Awards...... 44

Notes to Schedule of Expenditures of Federal Awards ...... 45

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FINANCIAL SECTION

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INDEPENDENT AUDITOR’S REPORT

Park Board of Trustees of the City of Galveston Galveston, Texas

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Park Board of Trustees of the City of Galveston, Texas (the “Park Board”), a component unit of the City of Galveston, Texas, as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Park Board as of September 30, 2015, and the respective changes in financial position, and, where applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 3-6 and 31–37 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Park Board’s basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements.

The schedule of expenditures of federal awards is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. The schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our reports dated February 29, 2016, on our consideration of the Park Board’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of those reports is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards in considering the Park Board’s internal control over financial reporting and compliance.

Ham, Langston, & Brezina, LLP Ham, Langston & Brezina, LLP Certified Public Accountants Galveston, Texas February 29, 2016

97 Galveston Park Board of Trustees Regular Meeting 03/08/2016 The Park Board of Trustees of the City of Galveston, Texas Management’s Discussion and Analysis September 30, 2015

The management of The Park Board of Trustees provides the following information as an introduction, overview and analysis of the Park Board’s financial statements for the fiscal year ended September 30, 2015.

Please read this analysis in conjunction with the Park Board’s basic financial statements which begins on page 7. The first two financial statements are government-wide statements that account for all activities of the Park Board. The fund financial statements that follow report activities of the Park Board’s major funds in more detail.

Government-Wide statements

These statements report on the Park Board as a whole. They are on the accrual basis of accounting, much the same as private industry.

• The Statement of Net Assets: This statement reports all assets and liabilities of the Park Board as of September 30, 2015. The difference between total assets and total liabilities is reported as “Net Assets”. Increases in the net assets generally indicate an improvement in financial position while decreases may indicate a deterioration of financial position.

• The Statement of Activities: This statement serves the purpose of the traditional income statement. It provides consolidated reporting of the results of all activities of the Park Board for the fiscal year ended September 30, 2015. Changes in net assets are recorded in the period in which the underlying event takes place, which includes the expenses of the Park Board’s various programs net of related revenues, as well as separate presentation of the revenue available from general sources.

Fund Financial Statements

These statements provide financial position and results of the Park Board’s major funds. A fund is an accounting entity created to account for a specific activity or purpose. Major funds of the Park Board are the General Government Fund, Tourist Development, Beach Cleaning, Beach Patrol, Nourished Beach, Debt Service, Sand Replenishment Fund, Dellanera RV Park, Beach Pocket Parks I, II, and III, R.A. Apffel Beach Park, Stewart Beach Park, Seawolf Park, and Urban Park. The creation of some funds is mandated by law and others are created by management to demonstrate financial compliance with budgetary or legal requirements. Funds are classified into three broad categories: governmental funds, proprietary funds and fiduciary funds.

• Governmental Funds: Governmental Funds are used to account for “governmental-type activities”. Unlike the government-wide financial statements, governmental fund statements use a “flow of financial resources: measurement focus”. That is to say, the operating statement of a governmental fund attempts to answer the question “Are there more or less resources that can be spent in the near future as a result of events and transactions of the period?” Increases in spendable resources are reported in the operating statement as “revenues” or “other financing sources.” Decreases in the spendable resources are reported as “expenditures” or “other financing uses.” We describe the difference between governmental funds and city-wide governmental activities in the reconciliation of the statements presented beside the governmental fund financial statements.

The Park Board of Trustees maintains seven (7) separate governmental funds. The governmental funds financial statements display the governmental funds considered to be major funds. For the year ended September 30, 2015, all governmental funds were considered to be major funds.

98 Galveston Park Board of Trustees Regular Meeting 03/08/2016 The Park Board of Trustees of the City of Galveston, Texas Management’s Discussion and Analysis September 30, 2015

• Proprietary Funds: The Park Board utilizes one type of proprietary fund; enterprise fund. Proprietary funds provide similar information as is provided in the government-wide statement, only in more detail. Enterprise funds are used to account for the operations financed and operated in a manner similar to private business enterprises for which 1) the intent is that the costs (expenses, including depreciation) be recovered primarily through user charges, or 2) determination of net income is appropriate for management control, accountability or other purposes. Stewart Beach Park Fund, Seawolf Park Fund, R. A. Apffel Park Fund, Beach Pocket Parks I, II, and III, Dellanera R.V. Park Fund, and Urban Park Fund are considered to be major funds and are displayed separately in the proprietary fund statement. For the year ended September 30, 2015, all proprietary funds of the Park Board were considered to be major funds.

• Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the Park Board’s government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Park Board’s own programs. The accounting used for the fiduciary funds is much like that for the proprietary funds. For the year ended September 30, 2015 the Park Board had no Fiduciary Funds.

• Notes to the basic financial statements: The notes provide additional and explanatory data. They are an integral part of the basic financial statements.

• Required supplementary information: In addition to the basic financial statements, this report also contains required supplementary information (RSI).

Government-wide summary and analysis

The amount by which the Park Board’s assets exceed its liabilities is called net assets. At year-end, the Park Board’s combined net assets were $343,813,505. Of that amount, approximately $335,398,329 was invested capital assets, net of the debt related to those assets.

Governmental Business-type Activities 2015 Activities 2015 Total 2015 Total 2014 Assets: Current and Other $ 15,862,393 $ 384,274 $ 16,246,667 $ 15,330,352 Capital Assets 333,601,591 7,590,117 341,191,708 339,203,377 Total Assets $ 349,463,984 $ 7,974,391 $ 357,438,375 $ 354,533,729

Liabilities: Long-term liabilities $ 4,637,103 $ 120,167 $ 4,757,270 $ 7,228,990 Other liabilities 3,520,071 5,347,529 8,867,600 2,570,640 Total Liabilities $ 8,157,174 $ 5,467,696 $ 13,624,870 $ 9,799,630 Net Assets Invested in capital assets net of related debt $ 328,229,450 $ 7,168,879 $ 335,398,329 $ 336,059,232 Restricted for debt service 752,704 - 752,704 136,702 Restricted for replenishment - - - - Unrestricted (deficit) 12,324,656 (4,662,184) 7,662,472 8,538,164

Total Net Assets $ 341,306,810 $ 2,506,695 $ 343,813,505 $ 344,734,098

4 99 Galveston Park Board of Trustees Regular Meeting 03/08/2016 The Park Board of Trustees of the City of Galveston, Texas Management’s Discussion and Analysis September 30, 2015

Governmental Business-type Activities 2015 Activities 2015 Total 2015 Total 2014 Revenues Program Revenues: Charges for services $ 4,791,679 $ 4,087,020 $ 8,878,699 $ 4,568,039 Operating grants 599,776 859,618 1,459,394 2,570,887 Total Program Revenue 5,391,455 4,946,638 10,338,093 7,138,926

General Revenues: Taxes 9,916,863 - 9,916,863 8,826,339 Investment earnings 4,721 - 4,721 27,917 Capital assets contributions 16,432,776 - 16,432,776 16,092,355 Transfers 396,076 (803,521) (407,445) - Total General Revenues 26,750,436 (803,521) 25,946,915 24,946,611

Total Revenue 32,141,891 4,143,117 36,285,008 32,085,537

Expenses Governmental Funds 32,522,433 - 32,522,433 24,709,360 Proprietary Funds - 4,683,168 4,683,168 4,669,900 Total Expenses 32,522,433 4,683,168 37,205,601 29,379,260

Change In Net Assets (380,542) (540,051) (920,593) 2,706,277

Net Assets Beginning $ 341,687,352 $ 3,046,746 $ 344,734,098 $ 342,027,821

Net Assets Ending $ 341,306,810 $ 2,506,695 $ 343,813,505 $ 344,734,098

Governmental Activities Governmental net assets decreased by $380,542. Of the total net assets, $12,324,656 was unrestricted and available for use as directed by the Board.

The Statement of Activities reports the expenses of each governmental activities programs and the related program revenue that offsets the cost of each program. The amount by which the costs of a program exceed its program revenues represents the extent to which that program must be subsidized by the general revenues.

Business-type Activities Business-type activities net assets decreased $540,051. Admission fees collected at the beach parks in 2015 were 10% less than budget; this was due adverse weather conditions in the spring of 2015. The Park Board of Trustees transfers one dollar from each eight dollar vehicle admission fee to the Sand Replenishment Fund to be used for future beach re-nourishment programs. In 2015 $159,540 was transferred to the Sand Replenishment Fund; this fund had a cash reserve balance of $664,915 as of September 30, 2015.

5 100 Galveston Park Board of Trustees Regular Meeting 03/08/2016 The Park Board of Trustees of the City of Galveston, Texas Management’s Discussion and Analysis September 30, 2015

Budgetary Highlights

The goal of the Park Board of Trustees’ operating budget is that current budgeted revenues will equal or exceed current budgeted expenditures. Only unforeseen or emergency circumstances will be considered justification for utilizing contingency or fund balances during the annual budget process.

Governmental Funds: Revenues were budgeted at $9,590,797 exclusive of inter-fund transfers, FEMA reimbursement, and use of reserves. FEMA reimbursement was budgeted at $1,333,429. The Park Board did receive $30,326 FEMA Funds. City hotel tax collections exceeded the budget by 22%. Governmental fund expenditures were under budget.

Enterprise Funds: Budgeted revenue was set at $4,717,786 exclusive of FEMA and use of reserves. FEMA reimbursement or advances were budgeted in the amount of $3,490,470. Of this amount, $1,043,336 in actual funds was received. The remaining portion of the FEMA reimbursement/advances budget deficit was due to delays in the payment of advances and projects. Expenditures for the enterprise funds were under budget.

Capital Asset Activity

Significant capital activity for the year included:

• Equipment Purchases $ 726,042 • Vehicle Purchases $ 429,730 • Playground Equipment $ 79,902 • Buildings and Improvements $ 246,960 $1,482,634

Maintenance Facility: The construction of this facility was completed in 2008. The mortgage principal balance as of September 30, 2015 was $628,353.

Open Credit Line: This was used for capital and equipment purchases. The line of credit is collateralized by Park Board funds held on deposit. The loan principal balance was $162,468 as of September 30, 2015.

Park Board Plaza: Renovations were financed using a municipal lease program in 2010. The balance of the lease as of September 30, 2015 was $1,586,608. Municipal Equipment & Vehicle Leases: Equipment and Vehicles were purchased in 2015 using municipal lease financing. The balance of all equipment and vehicle leases aggregated a balance of $782,232 as of September 30, 2015.

Beach Nourishment: The Park Board’s participation in the beach renourishment project from 61st street to 103rd street was financed with a loan secured by Seawolf Park Admissions and 85% of all restricted revenue from beach park admissions. The loan had a balance of $2,447,006 as of September 30, 2015.

Contacting the Park Board of Trustees Management

This financial report is designed to provide the citizens of the City of Galveston, customers, investors, and creditors with an overview of the Park Board of Trustees finances. If you have any questions or need additional financial information, please contact The Park Board of Trustees; 601 Tremont, Suite 200; Galveston, Texas 77550.

6 101 Galveston Park Board of Trustees Regular Meeting 03/08/2016

GOVERNMENT- WIDE FINANCIAL STATEMENTS

102 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Statement of Net Assets September 30, 2015

Governmental Business-Type Activities Activities Total Assets Petty cash $ 350 $ 3,200 $ 3,550 Pooled cash and cash equivalents 7,525,187 - 7,525,187 Non-pooled cash and cash equivalents 1,353,895 - 1,353,895 Investment Securities 2,003,000 - 2,003,000 Investment in gold 15,596 - 15,596 Due from business-type activities 3,331,109 - 3,331,109 Accounts receivable 1,517,995 205,117 1,723,112 Inventory 4,119 12,778 16,897 Prepaid insurance 111,142 163,179 274,321 Capital assets, net 333,601,591 7,590,117 341,191,708

Total Assets 349,463,984 7,974,391 357,438,375

Liabilities Accounts payable and accrued liabilities 2,333,076 1,676,517 4,009,593 Due to governmental activities - 3,331,109 3,331,109 Due to Arts and Historic Preservation 247,922 - 247,922 Due to downtown parking 204,035 - 204,035 Deferred income - 13,500 - Long-term liabilities Due within one year: Accrued interest payable 19,417 3,623 23,040 Notes payable 424,330 126,852 551,182 Capital lease obligations 291,291 195,928 487,219 Due in more than one year: Accrued interest payable - - - Accrued vacation and sick pay 166,605 21,709 188,314 Notes payable 4,273,944 - 4,273,944 Capital lease obligations 196,554 98,458 295,012

Total Liabilities 8,157,174 5,467,696 13,624,870

Net Assets Invested in capital assets, net of related debt 328,229,450 7,168,879 335,398,329 Restricted for debt service 752,704 - 752,704 Unrestricted (deficit) 12,324,656 (4,662,184) 7,662,472

Total Net Assets $ 341,306,810 $ 2,506,695 $ 343,813,505

See Notes to Financial Statements. 7

103 Park Board of Trustees of the City of Galveston Statement of Activities For the Year Ended September 30, 2015

Program Revenues Net (Expenses) Revenues and Changes in Net Assets Capital Charges for Grants & Governmental Business-Type Functions/Programs Expenses Services Contributions Activities Activities Total

Governmental Activities General Government $ 16,810,078 $ 1,533,163 $ - $ (15,276,915) $ - $ (15,276,915) Tourist Development 5,506,077 5,316 100,014 (5,400,747) - (5,400,747)

Beach Cleaning 3,318,892 22,301 499,762 (2,796,829) - (2,796,829) Meeting 03/08/2016 Galveston Park Board of Trustees Regular Beach Patrol 2,839,514 52,404 - (2,787,110) - (2,787,110) Nourished Beach 4,047,236 2,562,015 - (1,485,221) - (1,485,221) Sand Replenishment 158 - - (158) - (158.00) Debt Service 478 616,480 - 616,002 - 616,002 Total Governmental Activities 32,522,433 4,791,679 599,776 (27,130,978) - (27,130,978)

Business-Type Activities Stewart Beach 751,335 956,724 - 205,389 205,389 104 Seawolf Park 1,201,361 1,090,609 3,633 - (107,119) (107,119) R. A. Apffel Park 611,396 454,932 - - (156,464) (156,464) Dellanera Park 1,396,542 620,437 855,985 - 79,880 79,880 Urban Park 529,704 580,363 - - 50,659 50,659 Pocket Parks 192,830 383,955 - - 191,125 191,125 Total Business-Type Activities 4,683,168 4,087,020 859,618 - 263,470 263,470

Total Government $ 37,205,601 $ 8,878,699 $ 1,459,394 $ (27,130,978) $ 263,470 $ (26,867,508)

General revenues Taxes Hotel Tax 9,916,863 - 9,916,863 Investment earnings 4,721 - 4,721 Capital asset contributions 16,432,776 - 16,432,776 Transfers 396,076 (803,521) (407,445) Total General Revenues and Transfers 26,750,436 (803,521) 25,946,915 Change in net assets (380,542) (540,051) (920,593) Net assets, beginning 341,687,352 3,046,746 344,734,098 Net assets, ending $ 341,306,810 $ 2,506,695 $ 343,813,505

See Notes to Financial Statement. 8 Galveston Park Board of Trustees Regular Meeting 03/08/2016

FUND FINANCIAL STATEMENTS

105 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Balance Sheet Governmental Funds September 30, 2015

General Tourist Beach Government Development Cleaning Assets Petty cash $ 200 $ 50 $ - Pooled cash and cash equivalents 7,525,187 - - Non-pooled cash and cash equivalents - - - Investment securities 2,003,000 - - Investment in gold - 15,596 - Accounts receivable 7,315 93,686 593,046 Due from other funds - 8,629,703 3,012,871 Inventory 4,119 - Prepaid insurance 74,099 3,008 33,986

Total Assets $ 9,609,801 $ 8,746,162 $ 3,639,903

Liabilities and Fund Balance Liabilities Accounts payable and accrued liabilities $ 719,758 $ 996,368 $ 325,589 Due to other funds 9,792,229 - - Due to City of Galveston 104,035 - - Due to Downtown Parking - 100,000 - Due to Arts and Historic Preservation - 247,922 -

Total Liabilities 10,616,022 1,344,290 325,589

Fund Balances Nonspendable Prepaid assets 74,099 3,008 33,986 Investment in gold - 15,596 - Restricted Debt Service - - - Committed Sand Replenishment - - - Assigned Tourist Development - 7,383,268 - Beach Cleaning - - 3,280,328 Beach Patrol - - - Unreserved fund balance (1,080,320) - -

Total Fund Balance (1,006,221) 7,401,872 3,314,314

Total Liabilities and Fund Balance $ 9,609,801 $ 8,746,162 $ 3,639,903

106 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Beach Nourished Sand Debt Patrol Beach Replenishment Service Total

$ 100 $ - $ - $ - $ 350 - - - - 7,525,187 - - 579,165 774,730 1,353,895 - - - - 2,003,000 - - - - 15,596 441,615 382,333 - - 1,517,995 1,871,337 - 85,750 - 13,599,661 - - - - 4,119 49 - - - 111,142

$ 2,313,101 $ 382,333 $ 664,915 $ 774,730 $ 26,130,945

$ 191,067 $ 100,294 $ - $ - $ 2,333,076 - 454,297 - 22,026 10,268,552 - - - - 104,035 - - - - 100,000 - - - - 247,922

191,067 554,591 - 22,026 13,053,585

49 - - - 111,142 - - - - 15,596

- - - 752,704 752,704

- - 664,915 - 664,915

- - - - 7,383,268 - - - - 3,280,328 2,121,985 - - - 2,121,985 - (172,258) - - (1,252,578)

2,122,034 (172,258) 664,915 752,704 13,077,360

$ 2,313,101 $ 382,333 $ 664,915 $ 774,730 $ 26,130,945

See Notes to Financial Statements. 9 107 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Reconciliation of the Balance Sheet To the Statement of Net Assets Governmental Funds September 30, 2015

Total Fund Balance $ 13,077,360

Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 333,601,591

Accrued interest payable (19,417)

Accrued vacation and sick pay (166,605)

Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds (5,186,119)

Net assets of governmental activities $ 341,306,810

See Notes to Financial Statements. 10 108 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2015

General Tourist Beach Fund Development Cleaning Revenues Hotel taxes $ - $ 5,022,324 $ 2,071,458 State and local funds - 100,014 499,762 Administrative expense reimbursement 1,428,697 - - Interest income 4,721 - - Other 104,466 5,316 22,301

Total Revenues 1,537,884 5,127,654 2,593,521

Expenditures Payroll and benefits 894,189 1,296,931 1,410,822 Advertising and publicity - 1,858,785 - Sales expense - 46,166 - Special Projects - 692,509 - Visitor's Center - - - Administrative expense reimbursement - 411,950 330,046 Other operating costs 699,378 710,709 855,887 Capital outlay 17,655 21,892 6,230

Total Expenditures 1,611,222 5,038,942 2,602,985

Excess of revenues over (under) expenditures (73,338) 88,712 (9,464)

Other Financing Source Loan Proceeds - - 503,887 Loan Payments (128,987) - (426,168) Transfer from (to) other funds (5,927) - 348,465

Total Other Financing Source (134,914) - 426,184

Excess of revenues and other sources over (under) expenditures (208,252) 88,712 416,720

Fund balance, beginning of year (797,969) 7,313,160 2,897,594

Fund balance, end of year $ (1,006,221) $ 7,401,872 $ 3,314,314

109 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Beach Nourished Sand Debt Patrol Beach Replenishment Service Total

$ 1,910,764 $ 912,317 $ - $ - $ 9,916,863 - - - - 599,776 - - - - 1,428,697 - - - - 4,721 52,404 2,562,015 - 616,480 3,362,982

1,963,168 3,474,332 - 616,480 15,313,039

1,521,514 - - - 5,123,456 - - - - 1,858,785 - - - - 46,166 - - - - 692,509 - - - - - 220,131 58,489 158 478 1,021,252 375,095 3,966,446 - - 6,607,515 109,686 22,301 - - 177,764

2,226,426 4,047,236 158 478 15,527,447

(263,258) (572,904) (158) 616,002 (214,408)

103,731 - - - 607,618 (92,960) (52,994) - - (701,109) 393,998 573,474 (913,934) - 396,076

404,769 520,480 (913,934) - 302,585

141,511 (52,424) (914,092) 616,002 88,177

1,980,523 (119,834) 1,579,007 136,702 12,989,183

$ 2,122,034 $ (172,258) $ 664,915 $ 752,704 $ 13,077,360

See Notes to Financial Statements. 11 110 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended September 30, 2015

Net changes in fund balances-total governmental funds $ 88,177

Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those asset is depreciated over their estimated useful lives.

Expenditures for capital assets 674,535 Capital assets contributed 16,432,776 Less current year depreciation (15,131,870) 1,975,441

Increase in accrued interest (11,659)

Increase in vacation and sick pay (10,216)

Loan proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of notes and bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets.

Notes payable additions (2,515,777) Capital lease additions (607,618) Principal payments - leases 453,058 Principal payments - notes 248,052 (2,422,285)

Change in net assets of governmental activities $ (380,542)

See Notes to Financial Statements. 12 111 Park Board of Trustees the City of Galveston Statement of Net Assets Proprietary Funds September 30, 2015

Business-Type Activities - Enterprise Funds Stewart Seawolf R.A. Apffel Dellanera Urban Pocket Beach Park Park Park Park Park Parks Total Assets Current Assets: Petty Cash $ - $ 700 $ 1,500 $ 600 $ - $ 400 $ 3,200 Accounts receivable - 358 19,605 - - 185,154 205,117 Inventory at cost - - - 12,778 - - 12,778

Prepaid insurance 69,962 27,039 46,899 19,131 - 148 163,179 Meeting 03/08/2016 Galveston Park Board of Trustees Regular Due from other funds 754,384 340,317 - 284,447 106,494 - 1,485,642 Total Current Assets 824,346 368,414 68,004 316,956 106,494 185,702 1,869,916 Property, Plant and Equipment 5,055,692 4,354,107 2,741,999 2,860,975 73,901 49,754 15,136,428 Less: Accumulated Depreciation 3,872,097 1,314,273 402,871 1,929,930 4,306 22,834 7,546,311 Total Property, Plant and Equipment (Net) 1,183,595 3,039,834 2,339,128 931,045 69,595 26,920 7,590,117 Total Assets 2,007,941 3,408,248 2,407,132 1,248,001 176,089 212,622 9,460,033

112 Liabilities Current Liabilities: Accounts payable and accrued liabilities 79,734 162,490 53,719 1,202,662 158,025 19,887 1,676,517 Accrued interest payable - - 3,623 - - - 3,623 Capital lease obligations 69,974 - 80,174 37,274 8,506 - 195,928 Notes payable 54,700 9,856 61,408 444 - 444 126,852 Deferred income 13,500 - - - - - 13,500 Due to other funds - - 3,051,574 1,107,190 - 657,987 4,816,751 217,908 172,346 3,250,498 2,347,570 166,531 678,318 6,833,171 Noncurrent Liabilities Accrued vacation and sick pay 6,069 6,786 4,341 3,481 1,032 - 21,709 Capital lease obligations 56,514 - 16,890 16,528 8,526 - 98,458 Notes payable ------Total Noncurrent Liabilities 62,583 6,786 21,231 20,009 9,558 - 120,167 Total Liabilities 280,491 179,132 3,271,729 2,367,579 176,089 678,318 6,953,338

Net Assets Invested in capital assets, net 1,002,407 3,029,978 2,180,656 876,799 52,563 26,476 7,168,879 Unrestricted, (deficit) 725,041 199,138 (3,045,251) (1,996,377) (52,563) (492,172) (4,662,184) Total Net Assets $ 1,727,448 $ 3,229,116 $ (864,595) $ (1,119,578) $ - $ (465,696) $ 2,506,695

See Notes to Financial Statements. 13 Park Board of Trustees of the City of Galveston Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Year Ended September 30, 2015

Stewart Seawolf R.A. Apffel Dellanera Urban Pocket Beach Park Park Park Park Park Parks Total

Operating Revenue Sales and services $ 956,724 $ 1,090,609 $ 454,932 $ 620,437 580,363 $ 383,955 $ 4,087,020

Operating Expenses Meeting 03/08/2016 Galveston Park Board of Trustees Regular Costs of sales and services 574,270 869,563 448,525 458,051 525,398 160,189 3,035,996 Depreciation and amortization 171,751 295,224 162,401 155,464 4,306 5,967 795,113 Total Operating Expenses 746,021 1,164,787 610,926 613,515 529,704 166,156 3,831,109

Operating income (loss) 210,703 (74,178) (155,994) 6,922 50,659 217,799 255,911

Non-operating revenues (expenses)

113 FEMA reimbursement - 3,633 - 855,985 - - 859,618 Storm repairs (5,314) (36,574) (470) (783,027) - (26,674) (852,059) Total Non-operating revenues (expenses) (5,314) (32,941) (470) 72,958 - (26,674) 7,559

Income (loss) before transfers 205,389 (107,119) (156,464) 79,880 50,659 191,125 263,470

Transfers out (in) (248,717) (114,729) (179,445) (155,612) (50,659) (54,359) (803,521)

Change in net assets (43,328) (221,848) (335,909) (75,732) - 136,766 (540,051)

Total net assets, beginning of year 1,770,776 3,450,964 (528,686) (1,043,846) - (602,462) 3,046,746

Total net assets, end of year $ 1,727,448 $ 3,229,116 $ (864,595) $ (1,119,578) $ - $ (465,696) $ 2,506,695

See Notes to Financial Statements. 14 Park Board of Trustees of the City of Galveston Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2015

Business-Type Activities - Enterprise Funds Stewart Seawolf R.A. Apffel Dellanera Urban Pocket Beach Park Park Park Park Park Parks Total Cash flows from operating activities: Cash received from customers $ 944,306 $ 1,090,430 $ 443,993 $ 1,090,590 $ 580,363 $ 198,801 $ 4,348,483

Cash paid to suppliers and employees 517,381 925,447 437,676 1,140,638 683,423 (32,155) 3,672,410Meeting 03/08/2016 Galveston Park Board of Trustees Regular Net cash provided (used) by operating activities 426,925 164,983 6,317 (50,048) (103,060) 230,956 676,073 Cash flows from noncapital financing activities: Increase (decrease) in accrued vacation (2,664) (2,367) (2,309) 2,273 (1,032) - (6,099) Increase (decrease) in due (from) or to General Fund (72,560) 82,835 (402,966) 1,096,615 106,494 (242,120) 568,298 Non-operating income (expense) 7,578 (35,011) 769,439 (783,027) 96,320 - 55,299 114 Transfers to other funds (248,717) (114,729) (179,445) (155,612) (50,659) (54,359) (803,521) Net cash provided (used) by noncapital financing activities (316,363) (69,272) 184,719 160,249 151,123 (296,479) (186,023) Cash flows from capital and related financing activities: Non-operating income (expense) 27,930 (39,767) 3,874 (10,728) - 72,864 54,173 Capital lease proceeds 149,466 - 104,015 23,600 25,838 - 302,919 Principal payments (7,200) (17,155) (11,307) (1,840) - (1,840) (39,342) Net cash provided (used) by financing activities 170,196 (56,922) 96,582 11,032 25,838 71,024 317,750 Cash flows from investing activities: Purchase of fixed assets net of sales (281,858) (38,789) (287,218) (121,233) (73,901) (5,101) (808,100) Net cash provided (used) by investment activities (281,858) (38,789) (287,218) (121,233) (73,901) (5,101) (808,100)

Net increase (decrease) in cash (1,100) - 400 - - 400 (300)

Cash at beginning of year 1,100 700 1,100 600 - - 3,500

Cash at end of year $ - $ 700 $ 1,500 $ 600 $ - $ 400 $ 3,200

Business-Type Activities - Enterprise Funds Stewart Seawolf R.A. Apffel Dellanera Urban Pocket Beach Park Park Park Park Park Parks Total Reconciliation of net income to net cash provided by operating activities Operating Income (loss) $ 210,703 $ (74,178) $ (155,994) $ 6,922 $ 50,659 $ 217,799 $ 255,911 Adjustments to reconcile operating Galveston Park Board of Trustees Regular Meeting 03/08/2016 Galveston Park Board of Trustees Regular income to net cash provided by operating activities: Depreciation and Amortization 171,751 295,224 162,401 155,464 4,306 5,967 795,113 (Increase) decrease in accounts receivable 1,082 (179) (10,939) 470,153 - (185,154) 274,963 (Increase) decrease in inventories - - - (854) - - (854) (Increase) decrease in prepaid expenses (3,306) 3,319 (5,528) (1,425) - (9) (6,949) Increase (decrease) in deferred income (13,500) - - - - - (13,500)

115 Increase (decrease) in accounts payable and accrued liabilities 60,195 (59,203) 16,377 (680,308) (158,025) 192,353 (628,611) $ 426,925 $ 164,983 $ 6,317 $ (50,048) $ (103,060) $ 230,956 $ 676,073

See Notes to Financial Statements. 15 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTES TO FINANCIAL STATEMENTS

116 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Reporting Entity

The Park Board of Trustees of the City of Galveston (the “Park Board”) was established by an ordinance of the City of Galveston (the “City”) on August 22, 1963, pursuant to Vernon's Ann. Civ. St. Art. 6081g-1 (the "Act"), which authorizes any Texas Home Rule city having a population in excess of 60,000, bordering on the Gulf of Mexico, and having within its boundaries islands or parts of islands suitable for park purposes, to create an entity designated as a "Park Board of Trustees". The powers of the Board are specified in the Act, and include the operation, maintenance, equipping and financing of any and all existing parks placed under its jurisdiction by the City, as well as additional parks acquired by gift, but not by the exercise of the power of eminent domain. The Park Board does not have the power of taxation. The Park Board is governed by a nine-member Board of Trustees appointed by the City for a staggered two-year term. At least one member of the Board should be a member of the City Council of the City of Galveston.

In accordance with Governmental Accounting Standards Board (GASB) Statement No. 14 – The Financial Reporting Entity, the Park Board of Trustees of the City of Galveston has been reported as a component unit of the City of Galveston, Texas, for the year ended September 30, 2015.

The Park Board complies with generally accepted accounting principles. The entity applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. Proprietary Funds apply Financial Accounting Standards Board pronouncements and Accounting Principles Board opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails.

Financial Statement Presentation

These financial statements are presented in accordance with Governmental Accounting Standards Board (GASB) Statement No. 34 – Basic Financial Statements – and Management’s Discussion and Analysis-for State and Local Governments. Accordingly the Statements include the following:

• A Management’s Discussion and Analysis (MD&A) section providing management’s analysis of the Park Board’s overall financial position and changes in financial position.

• Government-wide financial statements prepared using the accrual basis of accounting for the Board’s governmental and business-type activities.

• Fund financial statements focusing on the major funds.

Government-wide and Proprietary Fund Net Assets

GASB Statement 34 established standards for external financial reporting for all state and local government entities including a statement of net assets and a statement of activities. It requires the classification of net assets of enterprise funds into three components - invested in capital assets, net of related debt; restricted; and unrestricted. These classifications are defined as follows:

• Invested in capital assets, net of related debt – This component of net assets consists of capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Government-wide and Proprietary Fund Net Assets (Continued)

• Restricted – Restricted net assets are net assets upon which constraints have been externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulation of other governments or constraints imposed by law through constitutional provisions or enabling legislation.

• Unrestricted net assets – Unrestricted net assets consists of net assets that do not meet the definition of “restricted” or “invested in capital assets, net of related debt.”

Governmental Fund Balances

The Park Board of Trustees has implemented the provisions of GASB Statement No. 54, Fund Balance Reporting and Government Fund Type Definitions.

In the fund financial statements, governmental funds report aggregate amounts for five classifications of fund balances based on the constraints imposed on the use of these resources.

The nonspendable fund balance classification includes amounts that cannot be spent because they are either (a) not in spendable form—prepaid items or inventories; or (b) legally or contractually required to be maintained intact.

The spendable portion of the fund balance comprises the remaining four classifications: restricted, committed, assigned, and unassigned.

• Restricted – This classification reflects the constraints imposed on resources either (a) externally by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.

• Committed – These amounts can only be used for specific purposes pursuant to constraints imposed by formal resolutions or ordinances of the City of Galveston—the government’s highest level of decision making authority. Those committed amounts cannot be used for any other purpose unless the City of Galveston modifies the specified use by taking the same type of action imposing the commitment. This classification also includes contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.

• Assigned – This classification reflects the amounts constrained by the Park Board’s “intent” to be used for specific purposes, but are neither restricted nor committed. The Park Board of Trustees and Park Board Director have the authority to assign amounts to be used for specific purposes. Assigned fund balances include all remaining amounts (except negative balances) that are reported in governmental funds, other than the General Fund, that are not classified as nonspendable and are neither restricted nor committed.

• Unassigned – This fund balance is the residual classification for the General Fund. It is also used to report negative fund balances in other governmental funds.

When both restricted and unrestricted resources are available for use, it is the Park Board’s policy to use externally restricted resources first, then unrestricted resources—committed, assigned, and unassigned— in order as needed.

118 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Government-Wide Financial Statements

The government-wide statement of net assets and statement of activities display information about the Park Board as a whole. These statements include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business-type activities. Governmental activities are generally financed through intergovernmental revenues and reimbursements from participants. Business- type activities are financed by fees charged for goods or services.

In the government-wide statement of net assets, both the governmental and business-type activities columns are presented on a consolidated basis and are reported on a full accrual, economic resource basis, which recognizes all long-term assets, and receivables as well as long-term debt and obligations.

The statement of activities presents a comparison between direct expenses and program revenues for each function of the Park Board’s governmental and business-type activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include amounts charged for goods or services and grant awards that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, such as investment earnings, are presented as general revenues.

Fund Financial Statements

Financial statements of the Park Board are organized into funds, each of which is considered to be a separate accounting entity. Funds are accounted for in separate sets of self-balancing accounts reflecting their respective assets, liabilities, fund equity, revenues, and expenditures/expenses. Funds are organized into three major categories; governmental, proprietary, and fiduciary. Emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the Park Board or meets both the following criteria:

(a) Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least 10% percent of the corresponding total for all funds of that category or type; and

(b) The element that met the 10% criteria above is at least 5% of the total for the corresponding element for all funds of the Park Board.

The government may choose to report the fund as a major fund whether or not it meets the criteria in both (a) and (b) above.

Non-major funds are presented in the aggregate in the proprietary fund financial statements as Pocket Parks.

119 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Governmental Funds

The Park Board reports the major governmental funds as follows:

General Fund - Accounts for all financial resources except those required to be accounted for in another fund. Resources include revenues from management, administration, accounting, and computer fees; technical assistance and services fees; and earnings on investments. The General Fund is the general operating fund.

Tourist Development - Accounts for all promotion and advertising.

Beach Cleaning - Accounts for beach maintenance.

Beach Patrol - Accounts for lifeguard and rescue services.

Nourished Beach - Accounts for seawall maintenance, sand replenishment, and capital improvements of the beaches from 10th to 61st Street.

Sand Replenishment - Accounts for sand replenishment of the beaches.

Debt Service - Accounts for annual bond principal and interest and beach monitoring services.

Proprietary Fund Types

The Park Board reports the following major enterprise funds as follows:

Stewart Beach, R. A. Apffel Park, Dellanera Park, Urban Park and Seawolf Park – All four proprietary funds account for beach user fees, admissions and sales revenues and associated operating expenses at their respective parks.

Minor enterprise funds consist of Pocket Parks 1, 2 and 3, and are combined in the basic financials statements.

Measurement Focus

Measurement focus is a term used to describe which transactions are recognized within the various financial statements. In the government-wide statement of net assets and statement of activities, both governmental and business-like activities are presented using the economic resources measurement focus as defined in item (b) below. In the fund financial statements, the current financial resources measurement focus or the economic resources measurement focus is used as appropriate.

(a) Governmental funds utilize the current financial resources measurement focus. Only current financial assets and liabilities are generally included on the balance sheets. The operating statements present sources and uses of available, spendable financial resources during a given period. These funds use fund balance as the measure of available spendable financial resources at the end of the period.

(b) The proprietary and fiduciary funds utilize the economic resources measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net assets, financial position and cash flows. All assets and liabilities (whether current or noncurrent) associated with the activities are reported. Fund equity is classified as net assets.

120 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Accounting

All governmental funds use the modified accrual basis of accounting. Under this basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). “Measurable” means the amount of the transaction can be determined and “available” means collected within the current period or soon enough thereafter (normally within thirty days thereafter) to be used to pay liabilities of the current period.

Expenditures and liabilities are recognized when the related fund obligations are incurred as a result of receipt of goods and services.

All proprietary funds use the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized at the time liabilities are incurred.

Cash and Cash Equivalents

For financial statement purposes, cash and cash equivalents consist of petty cash and all cash in the money market checking accounts and certificates of deposit with maturities of less than three months at inception.

Inventories

Inventories consist of expendable gift shop items held for sale by the Park Board and are carried at cost using first-in, first-out method.

Interfund Receivables/Payables

In the ordinary course of operations, transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” and “due to other funds” on the balance sheet and statement of net assets. Residual balances between the governmental activities and business-type activities are reported in the government-wide financial statements as “due from business-type activities” and “due to government activities”. Amounts due to or from funds within the same fund type have been eliminated.

Use of Estimates

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements.

121 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Capital Assets

The accounting treatment of property, plant and equipment (capital assets) depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements.

Capital assets of proprietary funds are reported in both the government-wide and fund financial statements. All other capital assets of the governmental unit are general capital assets. They are not reported as assets in governmental funds but are reported in the governmental activities column in the government-wide statement of net assets.

Capital assets are recorded at historical cost and depreciated over their estimated useful lives unless they are inexhaustible, such as land. Depreciation expense is reported in the government-wide statement of activities and the proprietary fund statement of revenues, expenses and changes in fund net assets.

Depreciation is recorded using the straight-line method over estimated service lives as follows:

Buildings 20-40 years Improvements 5-15 years Equipment 2-20 years

Capital assets are defined as items of property that:

1. Are tangible in nature

2. Have economic useful life of two years or longer

3. Maintain their identities throughout their useful lives, either as separate entities or as identifiable components, and

4. Original cost is $5,000 or more.

Compensated Absences

Full-time, permanent employees are granted vacation and sick leave benefits in varying amounts to specified maximums depending on tenure with the Park Board. Accrued vacations may lapse if vacations are not taken within certain time constraints. In accordance with Governmental Accounting Standards Board Statement No. 16, Accounting for Compensated Absences, the Park Board accrues its liability for such pay.

Restricted Resources

The Park Board applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available.

122 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 2 - CASH AND CASH EQUIVALENTS

Custodial Credit Risk – Deposits: Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. At September 30, 2015, the Park Board’s deposits with financial institutions were $8,879,082 and are categorized as follows:

Amount insured by the F.D.I.C. $ 500,000

Amount collateralized with securitIes held by the pledging financial institution's trust department in the Park Board's name 8,379,082

Total Bank Balance $ 8,879,082

Deposits are categorized as follows: Pooled Deposits Pooled cash and cash equivalents $ 7,525,187

Non-Pooled Deposits Non-pooled cash and cash equivalents Sand replenishment 579,165 Debt Service 774,730 Total Deposits $ 8,879,082

NOTE 3 - INVESTMENTS

The Park Board’s funds are required to be deposited and invested under the terms of an enabling statute.

The Public Funds Investment Act requires an annual audit of investment practices. Audit procedures in this area conducted as part of the general-purpose financial statements disclosed that in the areas of investment practices, management reports, and establishment of appropriate policies, the Park Board adhered to the requirements of the Act.

In accordance with GASB - 31, certificates of deposit are reported at cost. Participating interest-earning investment contracts (repurchase agreements) that mature within one year of the acquisition date are reported at fair value; those that mature within one year or less at date of acquisition are reported at amortized cost. Debt securities (U.S. Treasury securities, U.S. government agency securities) are reported at fair value, except those maturing in less than one year, which are recorded at amortized cost.

Fair value is determined using quoted market prices. Unrealized gains and losses are included as a component of investment income.

Statutes authorize the Park Board to invest in obligations of the U.S. Treasury, certain U.S. agencies, certificates of deposit, money market savings accounts, certain municipal securities, repurchase agreements, and common trust funds. Similar to cash deposits, investments held at a financial institution can be categorized according to three levels of risk. These three levels of risk are:

Category 1: Investments that are insured, registered, or held by the Park Board or by its agent in the Authority's name.

Category 2: Investments that are uninsured and unregistered held by the counter party’s trust department or agent in the Park Board's name.

123 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 3 - INVESTMENTS (Continued)

Category 3: Uninsured and unregistered investments held by the counter party, its trust department, or its agent, but not in the Park Board's name.

Investments that are not represented by specific identifiable investment securities such as mutual fund investment pools are not classified as to credit risk.

The Park Board's investments at September 30, 2015 are shown below:

Name Carrying Amount Market Value Category

U.S. Treasury Portfolio Fund $2,003,000 $2,003,000 Category 1 Gold $15,596 $15,596 Category 1

NOTE 4 - ACCOUNTS RECEIVABLE

Accounts receivable recorded in the funds as of September 30, 2015 consists of the following:

City of Galveston State of Texas GLO Other Total

Governmental Activities $ 87,161 $ 1,307,318 $ 86,196 $ 37,320 $ 1,517,995

Business-Type Activities 185,154 - - 19,963 205,117

Totals $ 272,315 $ 1,307,318 $ 86,196 $ 57,283 $ 1,723,112

NOTE 5 - DUE TO/FROM OTHER FUNDS

These balances represent amounts owed by one fund to another. Increases to the interfund payables and receivables accounts generally represent amounts deposited to or paid from the general government pooled cash account on behalf of another fund.

The detail of due to/due from balances reflected in the government-wide statement of net assets is as follows: Receivable Fund Payable Fund Amount Governmental Activities General Government R. A. Apffel Park $ 3,051,574 Dellanera Park 1,107,190 Pocket Parks 657,987 Due from Business-Type Activities 4,816,751

Business-Type Activities Stewart Beach General Government 754,384 Dellanera Park General Government 284,447 Urban Park General Government 106,494 Seawolf Park General Government 340,317 Due from Governmental Activities 1,485,642 Net Uneliminated Due To/From $ 3,331,109

124 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 6 - CAPITAL ASSETS

Capital asset activity for the year ended September 30, 2015, is as follows:

Beginning Ending Balance Additions Deletions Balance Governmental Activities: Land $ 799,457 $ - $ - $ 799,457 Contributed assets 510,594,588 16,432,776 - 527,027,364 Buildings and improvements 7,522,782 - - 7,522,782 Equipment 1,396,786 433,056 341,018 1,488,824 Autos 1,071,475 241,479 199,421 1,113,533 Construction in process 9,540 - - 9,540 Other improvements 398,656 - - 398,656 Totals at cost 521,793,284 17,107,311 540,439 538,360,156 Less accumulated depreciation Contributed assets 185,138,603 14,388,400 - 199,527,003 Building and improvements 3,245,396 389,244 - 3,634,640 Equipment 979,580 191,910 341,018 830,472 Autos 714,119 143,174 199,421 657,872 Other improvements 89,436 19,142 - 108,578 Total accumulated depreciation 190,167,134 15,131,870 540,439 204,758,565 Governmental activities capital assets, net $ 331,626,150 $ 1,975,441 $ - $ 333,601,591

Business-Type Activities Land $ 592,517 $ - $ - $ 592,517 Building and improvements 9,201,576 157,082 - 9,358,658 Equipment 501,523 279,334 17,799 763,058 Autos 338,194 201,904 91,625 448,473 Furniture and fixtures 43,101 69,888 - 112,989 Other improvements 3,585,808 190,674 - 3,776,482 Construction in process 175,033 - 90,782.00 84,251 Totals at cost 14,437,752 898,882 200,206 15,136,428 Less accumulated depreciation Building and improvements 5,428,220 451,603 - 5,879,823 Equipment 561,749 180,145 17,799 724,095 Autos 338,635 25,224 91,625 272,234 Furniture and fixtures 61,963 2,083 - 64,046 Other improvements 469,958 136,155 - 606,113 Total accumulated depreciation 6,860,525 795,210 109,424 7,546,311 Business-type activities capital assets, net $ 7,577,227 $ 103,672 $ 90,782 $ 7,590,117 Depreciation expense was charged to governmental activities as follows: General Government $ 14,733,077 Beach Cleaning 250,128 Beach Patrol 147,309 Tourist Development 1,356 Total Depreciation $ 15,131,870

125 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 6 - CAPITAL ASSETS (Continued)

Contributed Capital Assets

General Government

City of Galveston Ordinance No. 71-29 dated June 3, 1971 through amendment of Section 15-22 of Chapter 15 of the Code of the City of Galveston, as amended, transferred the management and control of certain lots with improvements thereupon, and certain personal property known as Ashton Villa to the Park Board of Trustees. The total of $125,000 includes the cost of land, buildings and personal property acquired.

The Park Board of Trustees and the Galveston Historical Foundation, Inc., executed a twenty (20) year lease agreement dated October 27, 1972, whereby the Galveston Historical Foundation, Inc., leases Ashton Villa for an annual lease payment of $10. The Galveston Historical Foundation will operate the entire premises as a civic and cultural attraction. The lease has been renewed for twenty (20) years with another twenty (20) year option available to the Galveston Historical Foundation, Inc.

Seawolf Park Enterprise Fund

City of Galveston Ordinance No. 71-29, dated April 6, 1972, transferred the management and control of real estate known as Pelican Island Park to the Park Board of Trustees. The land value of the 44.9828 acres transferred is estimated based on the cost of 5.386 acres purchased by the City of Galveston from the Federal government. This amount does not necessarily reflect the fair market value of the real estate.

On March 7, 1976, the Park Board of Trustees of the City of Galveston, Texas, entered into an agreement with Submarine Veterans of World War II -Texas, Inc., whereby the Park Board obtained the right to use certain exhibits and displays, including the submarine "USS Cavalla" and the destroyer escort "USS Stewart", for a period of twenty (20) years beginning March 5, 1976, with an option to renew for an additional twenty (20) years. The lease has been renewed for twenty (20) years with another twenty (20) year option available. On June 30, 2003 the portion of the agreement pertaining to the “USS Cavalla” was terminated and a new agreement was executed whereby the U. S. Department of the Navy donated the vessel to the Park Board and The Cavalla Historical Foundation.

Capital Asset Contributions

In accordance with certain contractual agreements between the Park Board of Trustees of the City of Galveston, The Moody Foundation, Inc., Moody Gardens, Inc., and The Colonel Museum, Inc., the Park Board of Trustees of the City of Galveston has taken conveyance and assumed ownership of various facilities constructed or purchased by The Moody Foundation. Furthermore, it is agreed that these facilities will be operated by Moody Gardens, Inc., and the Colonel Museum, Inc.

The agreements include restrictions regarding the use and disposition of items and facilities contributed.

Capital Asset Contributions totaled $16,432,776 for the year ended September 30, 2015.

126 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 7 - INTERFUND TRANSFERS

Interfund transfers represent transfers from proprietary funds to governmental funds to supplement costs of operations and from the general government to proprietary funds to meet contractual obligations. Amounts transferred during the year ended September 30, 2015, were as follows:

Transfer In Fund Transfer Out Fund Amount

Governmental Activities Beach Cleaning Seawolf Park $ 14,930 Dellanera Park 27,606 Beach Patrol Stewart Beach 84,000 R.A. Apffel Park 57,000 Dellanera Park 33,000 Pocket Parks 20,000 Sand Replenishment Stewart Beach 90,250 R.A. Apffel Park 48,561 Dellanera Park 2,811 Pocket Parks 17,918

Total Transfers into Governmental Activities $ 396,076

NOTE 8 - FUND NET ASSET DEFICITS

The General Government fund, Nourished Beach fund, R. A. Apffel Park fund, Dellanera Park fund and the Pocket Parks funds reflect deficits in total net assets of $1,006,221, $172,258, $864,595, $1,119,578 and $465,695 respectively, at September 30, 2015.

The Park Board is in the process of repairing damage to the various parks caused by Hurricane Ike. Much of the cost of repairs is expected to be reimbursed by FEMA. Management believes, once repairs are completed and the parks are restored to full operations, these funds will recover from their deficit positions in the long-term.

As of September 30, 2015, the Park Board has incurred $9,600,039 (net of third party insurance proceeds) on FEMA restoration projects that have been obligated (total allowed) by FEMA in the amount of $8,644,037, which represents approximately ninety percent of the FEMA allowable reimbursement. The remaining ten percent is the Park Board’s responsibility. Of the FEMA funds obligated on restoration projects, $7,290,072 have been received and $1,361,636 are still pending approval.

As of September 30, 2015, the Park Board has incurred $6,511,212 (net of third party insurance proceeds) on FEMA projects that are currently in progress. The total amount obligated (total allowed) by FEMA on projects in progress total $5,935,595, which represents approximately ninety percent of the FEMA allowable reimbursement. Of the FEMA funds obligated on projects in progress, $2,825,420 have been received and $3,110,175 are expected to be recovered upon project completion.

127 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 9 - LONG-TERM LIABILITIES

Long-term liability activity for the year ended September 30, 2015 is as follows:

Amounts Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities Notes payable Capital lease obligations $ 333,286 $ 607,618 $ 453,058 $ 487,846 $ 291,291 Notes payable 2,430,549 2,515,777 248,052 4,698,274 424,330 Total bonds and notes payable 2,763,835 3,123,395 701,110 5,186,120 715,621

Other liabilities: Accrued interest payable 7,758 19,417 7,758 19,417 19,417 Compensated absences 156,388 14,333 4,116 166,605 - Total other liabilities 164,146 33,750 11,874 186,022 19,417 Governmental Activities long-term liabilities $ 2,927,981 $ 3,157,145 $ 712,984 $ 5,372,142 $ 735,038

Business-Type Activities Notes payable Capital lease obligations $ 180,738 $ 302,918 $ 189,270 $ 294,386 $ 195,928 Notes payable 35,426 130,768 39,342 126,852 126,852 Total notes payable 216,164 433,686 228,612 421,238 322,780

Other liabilities Accrued interest payable 2,928 3,623 2,928 3,623 3,623 Compensated absences 15,610 6,360 261 21,709 - Total other liabilities 18,538 9,983 3,189 25,332 3,623 Business-type activities long-term liabilities $ 234,702 $ 443,669 $ 231,801 $ 446,570 $ 326,403

Notes Payable

Line of credit

Park Board has a $540,000 line of credit with Moody National Bank, secured by a Certificate of Deposit, to finance capital improvements and automobile purchases. The interest rate is 1.60% due monthly. Principle is due on demand or November 30, 2016. The balance of the line of credit at September 30, 2015 was $162,468.

Park Board has a $3,000,000 line of credit with Moody National Bank, secured by a blanket UCC on all personal property, to fund completion of FEMA-approved infrastructure projects. The interest rate is 5.25% due monthly. Principle will be due as FEMA collections are made, however, as of September 30, 2015 the line has not been drawn upon.

128 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 9 - LONG-TERM LIABILITIES (Continued)

Construction Loans

Park Board entered into an $800,000 construction loan agreement with Moody National Bank to build a new maintenance facility. The loan is secured by real estate. Accrued interest only was due from March 2008 until February 2009 and then monthly principal and interest payments of $5,968 will be due until maturity on February 2023 when all remaining principal will be due and payable. The balance of the construction loan at September 30, 2015 is $628,353. Maturities for the next five years are as follows:

September 30 2016 $ 34,996 2017 37,105 2018 39,387 2019 41,808 Thereafter 475,057 Total $ 628,353

Park Board entered into a $2,232,041 Equipment Lease-Purchase agreement with All American Investment for improvement work completed for new headquarters offices. The loan is secured by real estate. Quarterly principle and interest payments of $54,761.70 will be due until maturity on December 15, 2024 when all remaining principle will be due and payable. The balance of the agreement at September 30, 2015 is $1,586,608.

September 30 2016 $ 136,096 2017 143,594 2018 150,506 2019 159,555 Thereafter 996,857 Total $ 1,586,608

Beach Nourishment

The Park Board participation in the beach renourishment project from 61st street to 103rd street was financed with a loan secured by Seawolf Park Admissions and 85% of all restricted revenue from beach park admissions. The interest rate is 3.25% due monthly. The loan had a balance of $2,447,006 as of September 30, 2015.

September 30 2016 $ 216,930 2017 224,067 2018 231,438 2019 239,052 Thereafter 1,535,519 Total $ 2,447,006

Interest Included as Direct Expense

Interest expense of $162,456 on long-term debt has been included in the direct expenses of individual functions on the government-wide statement of activities. Authorization for general long-term debt is specific to a particular purpose; thus, an objective connection can be made to a specific program. All interest on long-term debt is reported as a direct expense of the program for which borrowing is related.

129 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 10 - DEFINED CONTRIBUTION PENSION PLAN

The Park Board contributes to the Galveston Park Board Defined Contribution Plan (PBDCP), which is a defined contribution pension plan. A defined contribution pension plan provides pension benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's account are to be determined instead of specifying the amount of benefits the individual is to receive. Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant's account, the returns earned on investments of those contributions, and forfeitures are applied to administrative costs charged by the administrator. Any employee of the Galveston Park Board is eligible to participate in the plan upon attaining the age of twenty and one-half (20½) years and six (6) months employment. Mandatory employee contributions vest immediately while contributions made by the Park Board vest upon a graduating scale from twenty percent (20%) after two years of service to 100% after seven (7) years of service.

An employee who leaves the employment of the Park Board is entitled to his or her accumulated contributions and the Park Board's accumulated contributions to the extent that vesting right's have been attained. Employees participating in the plan must contribute three percent (3%) of covered compensation while the Park Board is required to contribute five percent (5%) of each eligible employee’s covered compensation up to $30,000 or twenty-five percent (25%) of total salary, whichever is less. If in any year the Park Board makes a contribution that is less than five percent (5%) the employees may reduce their contributions proportionately. If the Park Board makes no contribution, the employees do not have to contribute.

During the year ended September 30, 2015, the Park Board's required and actual contributions amounted to $124,634, which was five percent (5%) of $2,492,685, its current-year covered payroll. Employees' required and actual contributions amounted to $100,894. For year end September 30, 2015, total payroll was $4,784,047.

No pension provision changes occurred during the year that affected the required contributions to be made by the Galveston Park Board or its employees.

The PBDCP held no securities of the Park Board or other related parties at September 30, 2015 or during the year then ended.

NOTE 11 - DEFERRED COMPENSATION PLAN

The Park Board offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan is available to all employees to contribute a portion of their salary, before federal taxes, to a retirement account. The Park Board's aim in establishing this tax-favored plan was to encourage employees to build their own financial security. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency.

As a result of amendments to Section 457 of the Internal Revenue Code effective January 15, 1997, The Plan assets are protected by a trust arrangement from claims on the employer and from any use by the employer other than paying benefits to employees and their beneficiaries in accordance with The Plan. Consequently, pursuant to Government Accounting Standards Board Statement No. 32, The Plan assets are no longer reflected as assets of the Park Board.

Investments for Park Board employees are managed by Nationwide Retirement Solutions. The participants make a choice of several investment options or a combination thereof.

130 Galveston Park Board of Trustees Regular Meeting 03/08/2016

NOTE 12 - CONTINGENCIES AND UNCERTAINTIES

Taxing Authorities and Federal and State Agencies

State and federal agencies and taxing authorities reserve the right to perform certain audit work or other procedures in addition to the work performed by the Board's independent auditors. Funds received and administered under the jurisdiction of the Texas General Land Office and the Federal Emergency Management Act are particularly susceptible to additional procedures performed by the respective agencies. The significance or probability of assessments or costs resulting from additional procedures performed by those agencies or any other agencies, other than amounts included in the financial statements, is not determinable.

Texas General Land Office – During the year ending September 30, 2015, the Park Board received $90,139 in state funds from the General Land Office for the purpose of beach nourishment under a Coastal Erosion Planning and Response Act grant contract.

Federal Emergency Management Agency – During the year ending September 30, 2015, the Park Board recognized $1,073,663 in federal reimbursements. There were no outstanding receivables at year end representing federal reimbursements.

NOTE 13 - RELATED PARTY TRANSACTIONS

The Park Board of Trustees of the City of Galveston is comprised of individuals employed by or active in various businesses and other interests located in the Galveston Island community, some of which provide goods and services to the Park Board. It is the Park Board’s policy for individual Board members to abstain from voting on issues or contracts to which they may be perceived as a related party or with which they may have a conflict of interest.

A member of the Park Board of Trustees is a Galveston City Council member and as such, abstains from city related board discussions.

NOTE 14 - DATE OF MANAGEMENT’S REVIEW

Management has evaluated subsequent events through February 29, 2016, the date the financial statements were available to be issued.

131 Galveston Park Board of Trustees Regular Meeting 03/08/2016

SUPPLEMENTARY FINANCIAL SCHEDULES AND INFORMATION

132 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Summary Budgetary Comparison Schedule General Government Fund For the Year Ended September 30, 2015

Actual Amounts Variance (Budgetary with Final Budgeted Amounts Ba sis) Budget Original Final (See Note A) Over (Under) Revenues Administrative expense reimbursement $ 1,428,697 $ 1,428,697 $ 1,428,697 $ - Interest income 10,000 10,000 4,721 (5,279) Other 294,641 294,641 104,466 (190,175) Total Revenues 1,733,338 1,733,338 1,537,884 (195,454) Expenditures Payroll and benefits 836,954 885,663 894,189 8,526 Contract services 62,022 56,142 56,319 177 Copy lease 26,040 31,706 31,091 (615) Data process/software maintenance 41,756 39,037 39,312 275 Legal and professional 88,009 162,112 161,807 (305) Insurance 102,065 81,070 81,070 - Repairs and maintenance 30,000 28,310 9,275 (19,035) Communication 31,956 29,499 32,470 2,971 Utilities 38,400 39,284 30,907 (8,377) Supplies 29,400 27,866 27,777 (89) Improvements and equipment 81,100 20,170 14,813 (5,357) Meetings and seminars 22,505 19,399 19,358 (41) Interest expense 93,074 93,751 93,751 - Bank charges 25,200 15,097 15,097 - Storm repairs 34,805 23,771 4,825 (18,946) Other 158,545 156,895 99,161 (57,734) Total Expenditures 1,701,831 1,709,772 1,611,222 (98,550) Revenues over (under) expenditures 31,507 23,566 (73,338) (96,904) Other financing sources (uses) FEMA reimbursement - - - - Loan proceeds 67,000 67,000 - (67,000) Loan payments (137,320) (138,931) (128,987) 9,944 Transfer from (to) other funds (5,927) (5,927) (5,927) - Total other financing sources (uses) (76,247) (77,858) (134,914) (57,056) Excess of revenues and other sources over (under) expenditures $ (44,740) $ (54,292) $ (208,252) $ (153,960)

133 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Summary Budgetary Comparison Schedule Tourist Development For the Year Ended September 30, 2015

Actual Amounts Variance (Budgetary with Final Budgeted Amounts Ba sis) Budget Original Final (See Note A) Over (Under) Revenues Hotel taxes $ 4,121,640 $ 4,121,640 $ 5,022,324 $ 900,684 State and local funds 300,000 300,000 100,014 (199,986) Other 984,983 984,983 5,316 (979,667) Total Revenues 5,406,623 5,406,623 5,127,654 (278,969) Expenditures Payroll and benefits 1,350,634 1,350,634 1,296,931 (53,703) Contract services 50,217 51,790 44,232 (7,558) Copy Lease 17,400 24,473 23,858 (615) Data process/software maintenance 28,852 28,416 28,481 65 Legal and professional 60,738 52,303 32,859 (19,444) Insurance 34,909 30,314 29,944 (370) Repairs and maintenance 4,950 4,913 3,987 (926) Communication 49,061 51,846 44,631 (7,215) Supplies 18,060 16,207 13,816 (2,391) Improvements and equipment 18,310 22,548 17,905 (4,643) Office rent 96,116 96,116 93,717 (2,399) Marketing and advertising 1,994,073 1,980,690 2,071,671 90,981 Contingency-advertising 200,000 200,000 - (200,000) Contingency-downtown oversight 100,000 100,000 101,064 1,064 Administrative expense reimbursement 385,000 385,000 411,950 26,950 Special projects 668,140 692,185 692,509 324 Other 321,521 310,549 131,387 (179,162) Total Expenditures 5,397,981 5,397,984 5,038,942 (359,042) Revenues over (under) expenditures 8,642 8,639 88,712 80,073 Other financing sources (uses) Transfer from (to) other funds - - - - Total other financing sources (uses) - - - - Excess of revenues and other sources over (under) expenditures $ 8,642 $ 8,639 $ 88,712 $ 80,073

32 134 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Summary Budgetary Comparison Schedule Beach Cleaning For the Year Ended September 30, 2015

Actual Amounts Variance (Budgetary with Final Budgeted Amounts Ba sis) Budget Original Final (See Note A) Over (Under) Revenues Hotel taxes $ 1,740,156 $ 1,740,156 $ 2,071,458 $ 331,302 State and local funds 428,667 428,667 499,762 71,095 Other 4,300 4,300 22,301 18,001 Total Revenues 2,173,123 2,173,123 2,593,521 420,398 Expenditures Payroll and benefits 1,401,029 1,512,407 1,410,822 (101,585) Legal and professional 13,862 22,979 20,651 (2,328) Contract labor 100,000 98,350 - (98,350) Contract services 28,885 28,885 18,304 (10,581) Insurance 74,353 74,353 49,036 (25,317) Repairs and maintenance 60,000 60,003 47,203 (12,800) Communication 20,172 20,172 21,208 1,036 Utilities 19,500 19,500 19,823 323 Supplies 13,500 13,857 6,497 (7,360) Improvement and equipment 7,000 287 2,001 1,714 Leased equipment 312,401 374,279 374,279 - Gasoline 150,000 120,715 51,592 (69,123) Dumping fee 50,000 50,000 29,223 (20,777) Interest expense 41,148 41,148 39,835 (1,313) Storm Repairs 15,000 25,818 26,700 882 Capital asset replace reserve 15,503 15,503 15,503 - Contingency-Board approval required 370,000 258,815 1,723 (257,092) Administrative expense reimbursement 330,046 330,046 330,046 - Other 85,903 74,363 138,539 64,176 Total Expenditures 3,108,302 3,141,480 2,602,985 (538,495) Revenues over (under) expenditures (935,179) (968,357) (9,464) 958,893 Other financing sources (uses) Loan proceeds 40,000 40,000 503,887 463,887 Loan payments (142,211) (95,834) (426,168) (330,334) Transfer from (to) other funds 348,465 348,465 348,465 - Total other financing sources (uses) 246,254 292,631 426,184 133,553 Excess of revenues and other sources over (under) expenditures $ (688,925) $ (675,726) $ 416,720 $ 1,092,446

33 135 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Summary Budgetary Comparison Schedule Beach Patrol For the Year Ended September 30, 2015

Actual Amounts Variance (Budgetary with Final Budgeted Amounts Basis) Budget Original Final (See Note A) Over (Under) Revenues Hotel taxes $ 1,603,043 $ 1,603,043 $ 1,910,764 $ 307,721 State and local funds - - - - Other 58,507 58,507 52,404 (6,103) Total Revenues 1,661,550 1,661,550 1,963,168 301,618 Expenditures Payroll and benefits 1,700,563 1,700,564 1,521,514 (179,050) Contract services 5,544 7,084 5,313 (1,771) Legal and professional 7,362 9,223 6,554 (2,669) Insurance 17,300 17,300 10,711 (6,589) Repairs and maintenance 34,388 47,772 48,664 892 Communication 29,567 34,443 35,019 576 Memberships and seminars 27,400 27,400 15,808 (11,592) Supplies 58,966 58,966 39,132 (19,834) Gasoline 35,000 35,000 34,220 (780) Improvements and equipment 54,227 54,227 42,128 (12,099) Leased equipment 99,935 79,418 62,824 (16,594) Office rent 21,500 21,500 21,500 - Interest expense 1,980 1,980 44 (1,936) Contingency 326,228 326,228 20,701 (305,527) Administrative expense reimbursement 220,131 220,131 220,131 - Other 173,627 172,483 142,163 (30,320) Total Expenditures 2,813,718 2,813,719 2,226,426 (587,293) Revenues over (under) expenditures (1,152,168) (1,152,169) (263,258) 888,911 Other financing sources (uses) Loan proceeds 26,500 26,500 103,731 77,231 Loan payments (41,559) (41,559) (92,960) (51,401) Transfer from (to) other funds 394,000 394,000 393,998 (2) Total other financing sources (uses) 378,941 378,941 404,769 25,828 Excess of revenues and other sources over (under) expenditures $ (773,227) $ (773,228) $ 141,511 $ 914,739

34 136 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Summary Budgetary Comparison Schedule Nourished Beach For the Year Ended September 30, 2015

Actual Amounts Variance (Budgetary with Final Budgeted Amounts Basis) Budget Original Final (See Note A) Over (Under) Revenues Hotel taxes $ 778,440 $ 778,440 $ 912,317 $ 133,877 State and local funds - - - - Other 1,727,240 1,727,240 2,562,015 834,775 Total Revenues 2,505,680 2,505,680 3,474,332 968,652 Expenditures Contract labor 10,000 - - - Licenses/Permits 100,400 79,500 79,500 - Contract services 8,100 5,700 5,700 - Legal and professional 158,870 252,005 239,596 (12,409) Repairs and maintenance 40,000 19,706 19,759 53 Equipment rental 40,000 151 - (151.00) Supplies 5,000 375 375 - Improvements and equipment 3,000 1,176 1,176 - Contingency-Board approval required 205,625 190,000 - (190,000) Administrative expense reimbursement 58,489 58,489 58,489 - Seawall Port-O-Lets 33,000 38,323 35,023 (3,300) Grant - - 3,500,000 3,500,000 Other 72,781 69,447 107,618 38,171 Total Expenditures 735,265 714,872 4,047,236 3,332,364 Revenues over (under) expenditures 1,770,415 1,790,808 (572,904) (2,363,712) Other financing sources (uses) FEMA reimbursement - - - - Loan payments (5,120) (5,120) (52,994) (47,874) Transfer from (to) other funds 558,489 558,489 573,474 14,985 Total other financing sources (uses) 553,369 553,369 520,480 (32,889) Excess of revenues and other sources over (under) expenditures $ 2,323,784 $ 2,344,177 $ (52,424) $ (2,396,601)

35 137 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Summary Budgetary Comparison Schedule Sand Replenishment For the Year Ended September 30, 2015

Actual Amounts Variance (Budgetary with Final Budgeted Amounts Basis) Budget Original Final (See Note A) Over (Under) Revenues Interest income $ 10,000 $ 10,000 $ - $ (10,000) Total Revenues 10,000 10,000 - (10,000) Expenditures Administrative expense reimbursement - - 158 158 Total Expenditures - - 158 158 Revenues over (under) expenditures 10,000 10,000 (158) (10,158) Other financing sources (uses) Transfer from (to) other funds (1,245,601) (1,245,601) (913,934) 331,667 Total other financing sources (uses) (1,245,601) (1,245,601) (913,934) 331,667 Excess of revenues and other sources over (under) expenditures $ (1,235,601) $ (1,235,601) $ (914,092) $ 321,509

138 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Notes to Summary Budgetary Comparison Schedules September 30, 2015

NOTE A – BUDGETS AND BUDGETARY ACCOUNTING

Effective October 1, 1980, the Board adopted the following budgetary process:

At least thirty days prior to October 1, the executive committee is to submit to the Board a proposed operating and capital projects budget for the fiscal year commencing October 1. The proposed budget is to include proposed expenditures and the means of financing them. A statement of capital projects planned for the next succeeding year, with estimates of their costs, is also required to be submitted at that time. One or more official open meetings are held by the Board to obtain citizen comments. Prior to October 1, the budget is required to be enacted by the Board. During the fiscal year the Board may transfer any unencumbered appropriation balance or portion thereof from one fund to another at any time. Formal budgetary integration is employed as a management control device during the year for the General Fund, Special Revenue Funds, and Enterprise Funds.

The basis of accounting for budgetary purposes differs from the basis of accounting (GAAP) used for the financial statements. Encumbrances are included in the budgets of the Governmental Funds which constitute a departure from generally accepted accounting principles.

37 139 Galveston Park Board of Trustees Regular Meeting 03/08/2016

OMB CIRCULAR A-133 – FEDERAL AWARDS SECTION

140 Galveston Park Board of Trustees Regular Meeting 03/08/2016

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of Directors Park Board of Trustees of the City of Galveston Galveston, Texas

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United State, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Park Board of Trustees of the City of Galveston, as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the Park Board’s basic financial statements and have issued our report thereon dated February 29, 2016. Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Park Board of Trustees of the City of Galveston’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Park Board of Trustees of the City of Galveston’s internal control. Accordingly, we do not express an opinion on the effectiveness of Park Board of Trustees of the City of Galveston’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

141 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Park Board’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Ham, Langston, & Brezina, LLP

Ham, Langston & Brezina, LLP Certified Public Accountants Galveston, Texas February 29, 2016

142 Galveston Park Board of Trustees Regular Meeting 03/08/2016

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133

Park Board of Trustees Of the City of Galveston Galveston, Texas

Report on Compliance for Each Major Federal Program We have audited the Park Board of Trustees of the City of Galveston’s (the “Park Board) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the Park Board of Trustees of the City of Galveston’s major federal programs for the year ended September 30, 2015. The Park Board of Trustees of the City of Galveston’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the Park Board of Trustees of the City of Galveston’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Park Board of Trustees of the City of Galveston’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Park Board of Trustees of the City of Galveston’s compliance. Opinion on Each Major Federal Program In our opinion, the Park Board of Trustees of the City of Galveston complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2015.

143 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Report on Internal Control over Compliance Management of the Park Board of Trustees of the City of Galveston is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Park Board of Trustees of the City of Galveston’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Park Board of Trustees of the City of Galveston’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.

Ham, Langston, & Brezina, LLP

Ham, Langston & Brezina, LLP Certified Public Accountants Galveston, Texas February 29, 2016

41 144 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustees of the City of Galveston Schedule of Findings and Questioned Costs For the Year Ended September 30, 2015

SECTION I – Summary of Auditor’s Results

FINANCIAL STATEMENTS

Type of auditor's report issued: Unmodified

Internal control over financial reporting:

• Material weakness identified? Yes X No

• Significant deficiency identified that is not considered to be a material weakness? Yes X No

Noncompliance material to financial statements noted? Yes X No

FEDERAL AWARDS

Internal control over major programs:

• Material weakness identified? Yes X No

• Significant deficiency identified that is not considered to be a material weakness? Yes X No

Type of auditor's report issued on compliance for major programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular OMB A-133? Yes X No

Identification of major program:

Name of Federal Program Federal Contract Number Disaster Grant-Public Assistance (Presidentially Declared Disaster) 97.036

Dollar threshold used to distinguish between type A and type B programs: $300,000

Auditee qualified as low-risk auditee? X Yes No

42 145 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Park Board of Trustee of the City of Galveston Schedule of Findings and Questioned Costs For the Year Ended September 30, 2015

SECTION II – Financial Statement Findings

None

SECTION III – Federal Award Findings and Questioned Costs

None

SECTION IV – Schedule of Prior Year Findings

None

43 146 Park Board of Trustees of the City of Galveston Schedule of Expenditures of Federal Awards For the Year Ended September 30, 2015

Federal CFDA Grantor's Federal Federal Grantor/Pass-Through Grantor/Program Title Number Number Expenditures

Pass-Through Program from:

Federal Grantor: U. S. Department of Homeland Security/ Meeting 03/08/2016 Galveston Park Board of Trustees Regular Federal Emergency Management 97.036 $ 981,217 Pass-Through Grantor: Texas Department of Public Safety's Division DR-1791-TX of Emergency Management Program Title: Disaster Grant - Public Assistance (Presidentially Declared Disaster)

Total Federal Expenditures $ 981,217 147

See accompanying notes to schedule of expenditures of federal awards. 44 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Note 1 - Basis of Presentation

The accompanying schedule of expenditures of federal awards includes the federal grant activity for each major program, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the financial statements.

148 Galveston Park Board of Trustees Regular Meeting 03/08/2016

149 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Agenda Item: Discuss and Consider Recommendations for Seawall Improvements Maintenance Budget

Background: The City has successfully awarded a contract for the installation of new services and amenities along Seawall Boulevard. These improvements include bus shelters, bathrooms, showers, landscaping, lighting and other hard structures. The attached Memorandum from the Goodman Corporation details the improvements to be made.

The Park Board is currently responsible for litter control, graffiti control and rodent abatement for the Seawall through a previous interlocal agreement.

The Park Board is not currently responsible for Fort Crockett improvements (hard structures, landscaping) beyond the items already listed. Currently the City incurs costs for landscaping and minor servicing at Fort Crockett. No attention has been given to the maintenance of the hard structures (shade, tables, planters) and after 5 years, the improvements are beginning to show wear and tear.

The Goodman Corporation generated the attached “Galveston Seawall Boulevard, Phase 2 Transit Pedestrian Access & Beautification Program, Annual Maintenance Cost Estimate” for $121,200, which $21,760 being irrigation costs that the City of Galveston will cover.

The Park Board staff generated the following Seawall Improvement Budget for $101,802.

To cover costs, the interlocal proposes that revenues generated by Seawall Parking be repatriated to the Park Board for these items. Despite projected, available revenues from Seawall Parking ($100,000), these expenses were not contemplated in the 2015-2016 budget.

Staff is seeking guidance from the Finance Committee regarding;

1. Review and approval of recommended budget for routine maintenance, 2. Discussion regarding how incorporation of non-budgeted items into 2015-2016 annual budget.

Staff Recommendation:

150 Galveston Park Board of Trustees Regular Meeting 03/08/2016

151 Seawall Improvement Budget

Labor Quantity Units Units Unit Cost Season Annual Total ($12/hour) 7 days/week 2 30 weeks $576.00 High $34,560.00 7 days/week 1 22 weeks $408.00 Low $8,976.00 Relief Supervisor 1 1 season $14,300.00 (Seasonal) $14,300.00

Total: $57,836.00 Meeting 03/08/2016 Galveston Park Board of Trustees Regular

Supplies and Services Weekly Quantity Units Unit Cost Weeks Season Annual Total Toilet Tissue 280 rolls $1 30 High $8,400.00 Toilet Tissue 90 rolls $1 20 Low $1,800.00 Tree Trimming

152 Total: $10,200.00

Equipment Quantity Units Cost Total 3 Year Depreciation Total Year 4 Wheel Drive Gator 2 $12,000.00 $24,000.00 3 $8,000.00 Electric Vehicle with a Flatbed 1 $16,000.00 $16,000.00 3 $5,333.33 4-Door 4x4 Pickup Truck 1 $28,000.00 $28,000.00 3 $9,333.33 Aluminum Trailers for Trash 3 $2,600.00 $7,800.00 3 $2,600.00 Pressure Washer 1 $1,000.00 $1,000.00 $1,000.00 Radios 3 $2,500.00 $7,500.00 $7,500.00 Total: $33,766.67

Grand Total: $101,802.67 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Galveston Park Board of Trustees Regular 153

Galveston Park Board of Trustees Regular Meeting 03/08/2016 Galveston Park Board of Trustees Regular 154

Galveston Park Board of Trustees Regular Meeting 03/08/2016

Park Board of Trustees of the City of Galveston

Remote Participation via Videoconferencing For Meetings of the Park Board of Trustees of the City of Galveston (PBTG) and For Meetings of PBTG’s Committees

Purpose: This policy for Participation in Board Meetings via Videoconferencing is to ensure compliance with Title 5. Open Government; Ethics, Subtitle A. Open Government, Chapter 551. Open Meetings, Sec. 551.127. Videoconference Call.

Specific to this policy are the following requirements: 1. A member of the governmental body may remotely participate in a meeting of the governmental body via videoconference call if the video and audio feed of the participant is broadcast live at the meeting and complies with the stated provisions of this section. 2. A member of the governmental body who participates in a meeting via videoconference is counted as present at the meeting. 3. A meeting may be held by videoconference call only if a quorum of the governmental body is physically present at one location of the meeting. 4. The governmental body makes available to the public a suitable space that is equipped with videoconference equipment that provides an audio and video display as well as a camera and microphone by which a member of the public can provide testimony or otherwise actively participate in the meeting at the location where the member of the governmental body is remotely participating. 5. A meeting held by videoconference is subject to the notice requirements of other meetings and must specify the location of the remote location in addition to the location of where the quorum of the governmental body is meeting. 6. Each portion of the meeting held by conference call that is required to be open to the public shall be visible and audible to the public at the remote location. 7. If a problem occurs that causes a meeting to longer be visible and audible to the public at the remote location, the meeting must be recessed until the problem is resolved. 8. The audio and video signals for videoconferencing must meet or exceed the standards established by the Department of Information Resources and must be of sufficient quality so that members of the public at each location can observe the demeanor and hear the voice of each participant in the open portion of the meeting.

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Operational Procedures for remote participation in meetings via videoconference.

1. Trustee(s) will inform the Chair and Executive Director of their remote participation 96 Hours prior to the meeting, (or 120 Hours in the case of a weekend). 2. Remote requests received after this timeframe will not be permitted. 3. The request must include the exact physical location the Trustee(s) will be remotely participating from. 4. The Board Meeting Agenda will reflect the location of the regularly scheduled meeting and the remote location of the member(s) participating via videoconference. 5. Audio of meeting must be captured.

156 Galveston Park Board of Trustees Regular Meeting 03/08/2016

MEMO ON ROBERTS RULES OF ORDER

In General

Robert’s Rules of Order are the most commonly used parliamentary authority in the world. They emphasize two basic ideas: (1) one topic at a time, and (2) one speaker at a time. The purpose of using Robert’s Rules is to have a fair, well-run, efficient, and orderly meeting. Thus, an organization who follows Roberts Rules will promote courtesy, justice, and impartiality.

Presiding Officer:

There is a “moderator” (presiding officer or chair) who conducts and runs the meeting. The presiding officer is a role, not a position, and facilitates the meeting to maintain order and prevent individuals from making motions out of turn, controlling the debate, or otherwise acting improperly. The general duties of the presiding officer are as follows:

 Call the meeting to order at the scheduled time;  Announce the business that is to come before the body;  Recognize members who wish to speak;  State and put to vote all questions that come before the body;  Protect the assembly from frivolous and dilatory motions by refusing to recognize them;  Enforce the Rules relating to the debate;  Expedite business in an orderly fashion;  Decide all questions of order; and  Declare the meeting adjourned.

Members:

All members have a right to attend meeting, bring up ideas, discuss them, and vote. Members should come to an agreement/conclusion about the proper course of action to take. Members must remember that the majority rules, but the basic rights of the minority are always protected by assuring the minority the right to speak and to vote.

In order to promote courtesy and justice, the members should be recognized by the presiding officer and refer to each other in a cordial and courteous manner. Importantly, all remarks are made through and to the presiding chair rather than among and directly between the members to discourage bickering.

Order of Business:

The Order of Business to be conducted at a meeting is commonly referred to as the “agenda”, and is the sequence of general business items to be addressed. A quorum must be

157 Galveston Park Board of Trustees Regular Meeting 03/08/2016

present to transact business, and if a quorum is not present the only business that can be conducted is to set the next meeting; adjourn the present meeting; or recess the present meeting. The Order of Business must be adopted by the body prior to addressing business. The standard Order of Business is as follows, but may be changed by the organization’s by-laws:

 Call to Order  Roll Call  Approval of Agenda  Reading and Approval of Minutes  Officer Reports  Committee Reports  Special Orders  Unfinished Business  New Business  Adjournment

The Rules

 Point of Privilege: Pertains to noise, personal comfort, etc. - may interrupt only if necessary!  Parliamentary Inquiry: Inquire as to the correct motion - to accomplish a desired result, or raise a point of order.  Point of Information: Generally applies to information desired from the speaker: "I should like to ask the (speaker) a question."  Orders of the Day (Agenda): A call to adhere to the agenda (a deviation from the agenda requires Suspending the Rules).  Point of Order: Infraction of the rules, or improper decorum in speaking. Must be raised immediately after the error is made.  Main Motion: Brings new business (the next item on the agenda) before the assembly.  Divide the Question: Divides a motion into two or more separate motions (must be able to stand on their own).  Consider by Paragraph: Adoption of paper is held until all paragraphs are debated and amended and entire paper is satisfactory; after all paragraphs are considered, the entire paper is then open to amendment, and paragraphs may be further amended. Any Preamble cannot be considered until debate on the body of the paper has ceased.  Amend: Inserting or striking out words or paragraphs, or substituting whole paragraphs or resolutions.  Withdraw/Modify Motion: Applies only after question is stated; mover can accept an amendment without obtaining the floor.  Commit /Refer/Recommit to Committee: State the committee to receive the question or resolution; if no committee exists include size of committee desired and method of selecting the members (election or appointment).  Extend Debate: Applies only to the immediately pending question; extends until a certain time or for a certain period of time.

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 Limit Debate: Closing debate at a certain time, or limiting to a certain period of time.  Postpone to a Certain Time: State the time the motion or agenda item will be resumed.  Object to Consideration: Objection must be stated before discussion or another motion is stated.  Lay on the Table: Temporarily suspends further consideration/action on pending question; may be made after motion to close debate has carried or is pending.  Take from the Table: Resumes consideration of item previously "laid on the table" - state the motion to take from the table.  Reconsider: Can be made only by one on the prevailing side who has changed position or view.  Postpone Indefinitely: Kills the question/resolution for this session - exception: the motion to reconsider can be made this session.  Previous Question: Closes debate if successful - may be moved to "Close Debate" if preferred.  Informal Consideration: Move that the assembly go into "Committee of the Whole" - informal debate as if in committee; this committee may limit number or length of speeches or close debate by other means by a 2/3 vote. All votes, however, are formal.  Appeal Decision of the Chair: Appeal for the assembly to decide - must be made before other business is resumed; NOT debatable if relates to decorum, violation of rules or order of business.  Suspend the Rules: Allows a violation of the assembly's own rules (except Constitution); the object of the suspension must be specified.

Motions:

Motions are an important aspect of any meeting, and a motion is a formal proposal made by a member that recommends a certain course of action that the body should take. In order to make a Motion, it must be placed before the body prior to the Motion’s merits being discussed. A Motion contains three (3) basic pieces of information:

 Who: It references the maker of the Motion;  What: It references the action to be taken; and  When: It references the timeframe in which the action is to be taken.

Types of Motions:

 Main Motion  Subsidiary Motion  Privileged Motion  Incidental Motion  Motion that Bring a Question Back Before the Assembly  Note: Subsidiary, Privileged, and Incidental Motions are Secondary Motions.

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A Main Motion brings a specific recommendation for action before the body. Only one (1) Main Motion can be considered at a time. Once a Main Motion has been made, it may be seconded by another member in order for the Motion to be considered by the body. If another member seconds a Motion, it does not necessarily mean that the member supports the Motion itself, but merely agrees that the Motion should be considered and discussed. Once a Main Motion has been seconded, it must be acted upon before the body can consider another Main Motion. Main Motions take precedence to nothing -- that is, they cannot be made when any other question is before the assembly; and Main Motions yield to all Privileged, Incidental, and Subsidiary Motions (i.e. any of these other Motions can be made while a Main Motion is pending). Examples of Main Motions are as follows:

 Accept or Adopt a Report upon a subject referred to a Committee;  Adjourn at or to a future time;  Adjourn with the effect to dissolve the assembly;  Appoint the time and place for the next meeting;  Amend the by-laws, rules, or resolutions of the organization;  Ratify or confirm action taken; and  Rescind or repeal action taken.

An Incidental Motion arises out of another question which is pending, and therefore an Incidental Motion takes precedence and must be decided before the question out of which it arises is answered. Incidental Motions yield to Privileged Motions, and generally to the Motion to “lay on the table” (discussed below). Incidental Motions are generally undebatable and cannot be amended. Examples of Incidental Motions are as follows:

 Questions or Order and Appeal;  Suspension of the Rules;  Objection to the Consideration of a Question;  Division of a Question, and Consideration by Paragraph or Seriatim;  Division of the Assembly, and Motions relating to Methods of Voting, or to Closing or Reopening the Polls;  Motions relating to Methods of Making or to Closing or to Reopening Nominations; and  Requests growing out of Business Pending.

A Subsidiary Motion modifies or dispenses of the Main Motion under current consideration. Thus, the Main (original) Motion may be modified, or the action postponed, or it may be referred to a committee to investigate and report. Subsidiary Motions may be applied to any Main Motion, and when made, they supersede the Main Motion and must be decided before the Main Motion can be acted upon. Examples of Subsidiary Motions are as follows:

 Lay on the Table;  The Previous Question;  Limit or Extend Limits of Debate;  Postpone Definitely or to a Certain Time;

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 Commit or Refer, or Recommit;  Amend; and  Postpone Indefinitely.

Note: Sometimes, a Motion may be “laid on the table”, which means that the Motion is reconsidered during the same meeting. When this happens, the Motion is temporarily deferred in favor of a more pressing matter(s) of business. Importantly, a motion that is “laid on the table” cannot be seconded; is not debatable; is not amendable; and requires a majority vote.

A Privileged Motion has no connection with the Main Motion but demands immediate consideration. They are of so great importance as to require them to take precedence over all other questions, and, on account of this high privilege, they are undebatable. Examples of Privileged Motions are as follows, being arranged in order of precedence:

 Fix the Time to which to Adjourn (if made while another question is pending);  Adjourn (if unqualified and if it has not the effect to dissolve the assembly);  Take a Recess (if made when another question is pending);  Raise a Question of Privilege; and  Call for Orders of the Day.

Making and Debating a Motion:

In general, in order to make a Motion, the maker should say “I move that . . .” or “I move to . . .”. The maker should never say “I make a motion to . . .”. Once a Motion is made and properly seconded, the chair restates the Motion and places it before the body for consideration and debate. The chair says as follows to place the Motion before the body: “It is moved and seconded that . . . . Are there any questions?” This restatement of the Motion by the chair places the Motion before the assembly, and the Motion now belongs to the assembly rather than to the maker of the Motion. However, the maker of the Motion has the first right to speak on the Motion. In order to discuss and debate the Motion, a member must first be recognized by the chair before he may speak and present his arguments for or against the Motion. It is important to remember that only one person may speak at a time during the debate of a Motion.

Voting on a Motion:

After the debate is complete, the chair puts the Motion to a vote by asking for all those in favor of the Motion and then asking for all those who are opposed. Members may abstain if there is a distinct conflict of interest. After the vote is tallied, the chair rules on which side won the vote.

Amending a Motion:

Amending a Motion means modifying a pending Motion in some manner prior to voting on it. An amendment must relate to the pending Motion and have a relevant bearing on the pending Motion’s meaning. The basic requirements to amend a Motion are as follows:

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 The amendment requires a second;  The amendment can be applied to any Main Motion;  The amendment is debatable;  The amendment requires a majority to adopt; and  The amendment can be reconsidered.

To amend a Motion, the maker may (1) insert or add words to the Motion; (2) strikeout words from the Motion; or (3) strikeout and insert words to the Motion.

Reconsideration of a Motion

A fundamental rule is that that the same or substantially the same question cannot be brought up a second time during the same session. This is to prevent manipulation. It can be brought up at subsequent meetings.

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Members' terms on the Downtown Oversight Committee (DOC) shall be distributed as follows:

Terms expire in odd numbered years

 1 member of the Park Board of Trustees  1 member which is the Downtown Representative from the TDAC Committee  1 member which is the Downtown Business/Building Owner or Resident from the Historic Downtown Strand Seaport Partnership

Terms expire in even numbered years

 1 member which is the Downtown Business/Building Owner or Resident from the Strand  1 member which is the representative from Mitchell Historic Properties

6. Park and Amenities Committee - The Park and Amenities Committee reviews policy and makes recommendations for the vision, planning, resource allocations, organization and overall operations of Park Board operated recreational facilities. The underlying purpose of the committee is to enhance the utilization of Park Board recreational assets for both visitors and residents alike, while creating economic opportunities and maintaining the Parks and Amenities as fiscally sustainable.

This Committee is compromised of 7 voting members elected by the Park Board of Trustees as follows:

 2 members of the Park Board of Trustees  1 Park Board concessionaire  1 member of the EELAC Committee  23 citizens at large  1 City of Galveston representative as named by the City Manager

Terms expire in odd number years (beginning in 2015):  1 member of the Park Board of Trustees  1 Park Board concessionaire  1 member of the EELAC Committee  12 citizens at large

Terms expire in even number years (2016)

 1 member of the Park board of Trustees  1 citizen at large  1 City of Galveston representtative as named by the City Manager

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The Park and Amenities Committee may add additional non-voting resource members at the discretion of the Chair of the Park Board of Trustees.

Ad Hoc Advisory Committees

An Ad Hoc Advisory Committee may be formed by one of two ways: (1) The Park Board of Trustees, upon a majority vote, approves an Ad Hoc Advisory Committee; or (2)(a) A Standing Committee, by majority vote, requests the Park Board to form an Ad Hoc Advisory Committee stating the purpose of the Ad Hoc Advisory Committee and proposed number of members; and (2(b) The Park Board establishes, upon a majority vote of the Trustees, the Ad Hoc Advisory Committee.

The Park Board Chair appoints the membership of all Ad Hoc Advisory Committees. All Ad Hoc Committees must have at least two Park Board Trustees as members.

All Ad Hoc Advisory Committees may be terminated by a majority vote of the Park Board of Trustees. At the end of each fiscal year, the Park Board will review potential sunset dates for the Ad Hoc Advisory Committees.

All Ad Hoc Advisory Committees are advisory only.

ARTICLE XII.

VOTING

Voting on all matters shall be done in person. However, an absent Park Board or committee member may make views known to the Park Board or committee.

The Park Board of Trustees

The like vote of at least five Trustees shall constitute an act of the Park Board.

Park Board Committees

The like vote of a majority of a quorum of the committee members present and voting shall constitute an act of the committee to make a recommendation to the Board.

ARTICLE XIII.

CONFLICT OF INTERESTS AND ETHICAL REQUIREMENTS

“Conflict of Interests and Ethical Requirements and Standards” as the terms apply to the Park Board of Trustees and its committees, are defined by Article XIV, Section 11 of the Galveston City Charter, the Code of Ethics of the City of Galveston Municipal Code and Texas Local Government Code Chapter 171 and 176.

10 4850-8878-36554825-1459-4862 164 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Agenda Item: VII. Discuss and Consider HOT Tax Audit Proposal and Contract

Background:

The Galveston Park Board took responsibility of the Hotel Occupancy Tax (HOT) program in February 2015. The Management Agreement on implementation of the Interlocal Agreement requires the Park Board to pursue audits of HOT tax partners with input from the City of Galveston Auditor.

Assessment of Duties and Responsibilities:

The Management Agreement requires the following: 1. City Auditor shall be consulted about selection of an outside audit firm. 2. Galveston Park Board shall be responsible for selecting the audit firm. 3. City Auditor shall develop an audit calendar. 4. City Auditor shall outline the selection criteria for identifying entities to be audited. 5. City Auditor shall select entities to be audited. 6. City Auditor shall oversee the audit firm’s work product.

The City Auditor and the Park Board have accomplished items 1 – 4. The other items are in process.

The final report for each audit will be shared between the City Auditor and the Galveston Park Board and disseminated appropriately to interested parties. Results of audits will be posted on the City’s and Park Board’s respective websites.

According to the City Auditor, the first step is to administer the “Related Party Questionnaire”. (See attached) This questionnaire is to be distributed to all members of the Galveston Park Board of Trustees and all policy-making personnel.

Staff Recommendation:

Staff has been instructed to conduct 10 commercial audits prior to the end of the fiscal year which is 9/30/2016. Staff has researched possible audit firms and after consulting with various resources, staff has identified MuniServices as the best outside audit firm who produces a good audit of HOT taxpayers at a reasonable price.

MuniServices has submitted a contract for conducting commercial audits for the cost of approximately $2,600.00 each. (See attached) To conduct 10 audits by the end of the fiscal year, the budget is estimated to be $26,000.00. Part of the audit cost is travel expenses for the auditor(s) which may fluctuate.

Funding Source:

The proposed funding source for the 10 HOT audits to be completed by 9/30/2016 is from four budget line items: 1. BC-70-5240 M&R-Buildings $4,350.00 2. BC-70-5242 M&R-Equipment $4,350.00 3. BP-70-5605 Buoys $8,650.00 4. TD-70-7000 Special Projects $8,650.00 Total Funding $26,000.00

165 Galveston Park Board of Trustees Regular Meeting 03/08/2016 MuniServices, LLC Consultant Services Agreement

This Consultant Services Agreement (the “Agreement”) is made as of the ______day of ______, 2016 (“Effective Date”) by and between MuniServices, LLC, a Delaware limited liability company (“MUNISERVICES”) and The Park Board of Trustees of the City of Galveston, a municipal corporation of the State of Texas ("PARK BOARD"). In consideration of the mutual promises herein contained and other good and valuable consideration, the adequacy and receipt of which is hereby acknowledged, the parties agree as follows:

A. Services

1. MUNISERVICES will provide PARK BOARD with the services described in EXHIBIT A which is attached hereto and incorporated by reference. MUNISERVICES shall provide said services at the time, place, and in the manner specified in EXHIBIT A.

2. MUNISERVICES shall furnish at its own expense all labor, materials, equipment and other items necessary to carry out the terms of this Agreement.

B. Compensation

1. Upon execution of this Agreement, PARK BOARD will pay MUNISERVICES as outlined in EXHIBIT B, incorporated and included herein.

C. General Provisions

1. Term of the Agreement: The initial term of this Agreement shall be for a period of one (1) year following the date of execution, and automatically renew for three subsequent one year terms if neither party has cancelled (the “Term”). Either party shall have the right to terminate this Agreement in the event of a material breach by the other party. Any such termination may be made only by providing sixty (60) days written notice to the other party, specifically identifying the breach or breaches on which termination is based. Following receipt of such notice, the party in breach shall have thirty (30) days to cure such breach or breaches. In the event that such cure is not made, this Agreement shall terminate in accordance with the initial sixty (60) days notice. Notwithstanding the foregoing, either party may terminate the Agreement at any time and for any reason by providing thirty-days (30) written notice to the other party; provided however, that if MUNISERVICES has not breached the Agreement and has commenced services identified in EXHIBIT A prior to the date of termination, MUNISERVICES shall be entitled to payment as described in EXHIBIT B.

2. Effect of Termination: Notwithstanding non-renewal or termination of this Agreement, PARK BOARD shall be obligated to pay MUNISERVICES for services performed through the effective date of termination for which MUNISERVICES has not been previously paid. In addition, because the services performed by MUNISERVICES prior to termination or non-renewal of this Agreement may result in the PARK BOARD’s receipt of revenue after termination which are subject to MUNISERVICES’ fee, the PARK BOARD shall remain obligated after termination or non-renewal to provide to MUNISERVICES such information as is necessary for MUNISERVICES to calculate compensation due as a result of the receipt of revenue by the PARK BOARD.

3. Independent Contractor: It is understood that MUNISERVICES and its subcontractors, if any, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and shall not act as an agent or employee of the PARK BOARD. PARK BOARD understands that MUNISERVICES may perform similar services for others during the term of this Agreement and agrees that

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166 Galveston Park Board of Trustees Regular Meeting 03/08/2016 MUNISERVICES representation of other government sector clients is not a conflict of interest. MUNISERVICES shall obtain no rights to retirement benefits or other benefits which accrue to PARK BOARD's employees, and MUNISERVICES hereby expressly waives any claim it may have to any such rights.

4. Subcontractors: MUNISERVICES shall have the right to hire subcontractors to provide the services described herein. MUNISERVICES, in rendering performance under this Agreement shall be deemed an independent contractor and nothing contained herein shall constitute this arrangement to be employment, a joint venture, or a partnership. MUNISERVICES shall be solely responsible for and shall hold PARK BOARD harmless from any and all claims for any employee related fees and costs including without limitation employee insurance, employment taxes, workman’s compensation, withholding taxes or income taxes.

5. Notice: Any notice required to be given under this Agreement shall be in writing and either served personally, sent prepaid first class mail, or by express mail courier (i.e. FedEx, UPS, etc.). Any such notice shall be addressed to the other party at the address set forth below. All notices, including notices of address changes, provided under this Agreement are deemed received on the third day after mailing if sent by regular mail, or the next day if sent overnight delivery.

If to PARK BOARD: If to MuniServices: The Park Board of Trustees of the City MuniServices, LLC of Galveston Attn: Contract Department Attn: Michael Moser, Comptroller 7625 N. Palm Ave., Ste. 108 601 Tremont Fresno, CA 93711 Galveston, TX 77550 Phone: 559.271.6852 Phone: 409.797.5000 Facsimile: 559.312.2852 Facsimile: 409.762.8911 Email: [email protected] Email: [email protected]

6. Representative or designees: MUNISERVICES Primary Representative/Project Manager shall be:

Ted Kamel, Client Services Manager 12301Kurland Drive, Suite 150, Houston, TX 77034 Phone: 877.898.6039/Email: [email protected]

For the convenience of the PARK BOARD, a short list of helpful contacts is attached and incorporated herein as EXHIBIT C.

7. Indemnity: MUNISERVICES shall indemnify, defend, and hold harmless the PARK BOARD, its officers, agents, and employees, from and against any and all claims, liabilities, and losses whatsoever (including damages to property and injuries to or death of persons, court costs, and reasonable attorneys’ fees) to extent occurring or resulting from MUNISERVICES’ negligent or unlawful performance of its obligations under or breach of the terms of this Agreement, unless such claims, liabilities, or losses arise out of, or are caused at least in part by the sole negligence or willful misconduct of the PARK BOARD. “MUNISERVICES’ performance” includes MUNISERVICES’ action or inaction and the action or inaction of MUNISERVICES’ officers, employees, agents and subcontractors.

8. Limitation of Liability: In no event shall MUNISERVICES, its employees, contractors, directors, affiliates and/or agents be liable for any special, incidental, or consequential damages, such as, but not limited to, delay, lost data, disruption, and loss of anticipated profits or revenue arising from or related to the services, whether liability is asserted in contract or tort, and whether or not MUNISERVICES has been advised of the possibility of any such loss or damage. In addition, MUNISERVICES’ total liability hereunder, including reasonable attorneys fees and costs, shall in no event exceed an amount equal to the fees described in

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167 Galveston Park Board of Trustees Regular Meeting 03/08/2016 EXHIBIT B. The foregoing sets forth the PARK BOARD’S exclusive remedy for claims arising from or out of this Agreement. The provisions of this section allocate the risks between MUNISERVICES and the PARK BOARD and MUNISERVICES’ pricing reflects the allocation of risk and limitation of liability specified herein.

9. Insurance: MUNISERVICES shall keep in full force and effect insurance coverage during the term of this Agreement, including without limitation statutory workers’ compensation insurance; employer’s liability and commercial general liability insurance; comprehensive automobile liability insurance; professional liability and fidelity insurance. The insurance certificate shall name the PARK BOARD, its agents, officers, servants and employees as additional insureds under the CGL and Automobile policies with respect to the operations and work performed by the named insured as required by written contract. The General Liability policy is Primary & Non-Contributory. Waiver of Subrogation applies under the General Liability and Workers’ Compensation policies. The CGL insurance minimum coverage shall be at least $1,000,000 per incident, claim or occurrence and $2,000,000 aggregate. The Automobile Liability insurance minimum coverage shall be at least $1,000,000 covering all owned, non-owned, and hired vehicles. The certificate shall provide that there will be no cancellation, termination, or non-renewal of the insurance coverage without a minimum 30-day written notice to the PARK BOARD, except in the case of cancellation for non- payment of premium which shall be at least 10-days written notice.

10. Equal Opportunity to Draft: The parties have participated and had an equal opportunity to participate in the drafting of this Agreement. No ambiguity shall be construed against any party upon a claim that that party drafted the ambiguous language.

11. Assignment: This Agreement shall be binding upon and inure to the benefit of the parties, their successors, representatives and assigns. MUNISERVICES shall not assign this Agreement, or delegate its duties or obligations under this Agreement, without the prior written consent of PARK BOARD, which consent shall not be unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing, MUNISERVICES may assign this Agreement, in whole or in part, without the consent of PARK BOARD to any corporation or entity into which or with which MUNISERVICES has merged or consolidated; any parent, subsidiary, successor or affiliated corporation of MUNISERVICES; or any corporation or entity which acquires all or substantially all of the assets of MUNISERVICES. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties and their successors or assigns.

12. Ownership of Documents: Except for MUNISERVICES preexisting proprietary information and processes, any and all documents, including draft documents where completed documents are unavailable, or materials prepared or caused to be prepared by MUNISERVICES pursuant to this agreement shall be the property of the PARK BOARD at the moment of their completed preparation.

13. Intellectual Property Rights: The entire right, title and interest in and to MUNISERVICES’s database and all copyrights, patents, trade secrets, trademarks, trade names, and all other intellectual property rights associated with any and all ideas, concepts, techniques, inventions, processes, or works of authorship including, but not limited to, all materials in written or other tangible form developed or created in the course of this Agreement (collectively, the "Work Product") shall vest exclusively in MUNISERVICES or its subcontractors. The foregoing notwithstanding, in no event shall any PARK BOARD-owned data provided to MUNISERVICES be deemed included within the Work Product.

14. Public Release and Statements: Neither party or its representatives or agents shall disseminate any oral or written advertisement, endorsement or other marketing material relating to each other’s activities under this Agreement without the prior written approval of the other party. Neither party shall make any public release or statement concerning the subject matter of this Agreement without the express written consent and approval of the other party. No party or its agent will use the name, mark or logo of the other party in any advertisement or printed solicitation without first having prior written approval of the other party. The parties shall take reasonable efforts to ensure that its subcontractors shall not disseminate any oral or written advertisement, endorsement or other marketing materials referencing or relating to the other

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168 Galveston Park Board of Trustees Regular Meeting 03/08/2016 party without that party’s prior written approval. In addition, the parties agree that their contracts with all subcontractors will include appropriate provisions to ensure compliance with the restrictions of this Section.

15. Force Majeure: MUNISERVICES shall not be in default of its obligations hereunder to the extent that its performance is delayed or prevented by causes beyond its control, including but not limited to acts of God, government, weather, fire, power or telecommunications failures, inability to obtain supplies, breakdown of equipment or interruption in vendor services or communications.

16. Entire Agreement: This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior understandings or written or oral agreements between the parties respecting the subject matter contained herein. Said Agreement shall not be amended, altered, or changed, except by a written amendment signed by both parties.

17. Counterparts: This Agreement may be signed in separate counterparts including facsimile copies. Each counterpart (including facsimile copies) is deemed an original and all counterparts are deemed on and the same instrument and legally binding on the parties.

18. Invalidity: If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision thereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

19. Implementation: Implementation should begin as soon as possible from the signing of this Agreement (the “Effective Date”) for the performance of services under the terms of this Agreement.

[SIGNATURES ON FOLLOWING PAGE]

Galveston Park Board, TX HOT Audit 02-25-16 4

169 Galveston Park Board of Trustees Regular Meeting 03/08/2016

IN WITNESS HEREOF, the parties have caused this Agreement to be executed on the date first written above.

“PARK BOARD” “MUNISERVICES” The Park Board of Trustees of MuniServices, LLC, The City of Galveston, a Municipal Corporation a Delaware limited liability company

By: ______By: ______Lisa Broussard, CTE, CPA Name: ______Vice President Central Operations

Title: ______

ATTEST:

______

Name: ______

Title: ______

APPROVED AS TO FORM:

______

Name: ______

Title:______

Galveston Park Board, TX HOT Audit 02-25-16 5

170 Galveston Park Board of Trustees Regular Meeting 03/08/2016 EXHIBIT A Local Hotel Occupancy Tax Program Audit Services

Objectives and Methods

MuniServices’ Local Hotel Occupancy Tax Audit service is intended to assist the PARK BOARD in maximizing lodging tax revenue it is entitled to through an on-site examination of records and education of the lodging providers to ensure the appropriate collection and remittance of the lodging tax.

Scope of Work

1. Audit Services

a. Perform on-site examinations of the records of those providers requested by PARK BOARD to warrant further investigation; b. Provide PARK BOARD staff with a detailed list of all records required to be made available by lodging providers for the further reviews, together with a draft engagement announcement letter to be sent to each lodging provider requiring examination; c. In coordination with PARK BOARD staff, schedule and conduct reviews at the property locations of those providers identified and authorized for examination; d. Verify accuracy of filed lodging tax returns with daily and monthly activity summaries; e. Review a random sample of the daily and monthly summaries to determine if the daily summaries reconcile to the monthly summaries; f. Review bank statements to verify that deposits reconcile with the reported revenue on the lodging tax returns’; g. Review exempted revenue for proper qualifying documentation; h. Review a random sample of exempted guest revenue and trace registration and/or other source documents to verify compliance with the PARK BOARD ordinance; i. Where possible, compare the State lodging tax filings with PARK BOARD’s tax returns; j. For each error/omission identified and confirmed, submit substantiating documentation to designated PARK BOARD staff in order to facilitate collection of revenue due from lodging providers for prior periods; k. Coordinate with designated PARK BOARD official(s) as necessary to review findings and recommendations; l. Prepare draft Notices of Deficiency Determination, and commendation, warning and credit letters, as applicable, for PARK BOARD to advise lodging providers of examination results m. Provide assistance to PARK BOARD in reviewing any matters submitted in extenuation and mitigation by lodging providers in contesting a deficiency determination; and n. Prepare and document any changes to the review findings and provide revised tax, interest or penalty amounts due the PARK BOARD.

2. Mandatory Reporting to the State of Texas – Required Compliance

The Bill requires that if, as a result of an audit conducted, a PARK BOARD obtains documentation or other information showing a failure to collect or pay local and state occupancy taxes when due, the PARK BOARD shall notify and submit the relevant information to the Texas Comptroller. The PARK BOARD will receive a 20% finder’s fee from the State of Texas upon receipt of payment from the lodging provider. During MuniServices meetings with the Texas Comptroller regarding HB 2048 and it’s administration,, the report submitted to the State must have these additional specifications, but is not limited to:

a. Summary of all hotels with local and state deficiencies discovered during our audit. b. Detailed Audit Support for findings over $2,000 (qualifying audits) due to the state. c. Audit report should include audit period. d. Separate documentation that breaks down the findings in each area by month. e. Separate documentation that itemizes the state only exemption details. f. Audit Communication executed by the hotel. g. Audit Report based on State Auditing Procedures.

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171 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Article 3-Deliverables

1. Audit Services

a. Provide PARK BOARD staff with a draft Audit Announcement Letter to be sent to each lodging provider to be examined. b. For each error/omission identified and confirmed, submit a written report substantiating documentation to designated PARK BOARD staff in order to facilitate collection of revenue due from lodging providers for prior periods together with draft Notices of Deficiency Determination, and/or credit, warning or commendation letters as applicable; c. Prepare and document any changes to the review findings and provide revised tax, interest or penalty amounts due the PARK BOARD. d. Review any extenuation or mitigation proffered to deficiency determinations and prepare draft response to PARK BOARD staff; and e. Provide other collections advice upon request.

2. Mandatory Reporting to the State of Texas

Should the PARK BOARD authorize MuniServices to provide the additional services as required, MuniServices shall:

a. Provide a complete report, with supporting documentation, to the Texas State Comptroller (and the PARK BOARD) based on the requirements outline in HB 2048 for each applicable local audit performed on behalf of the PARK BOARD. The report will be provided to the Comptroller within 30 days of the completion of the audit and will include all substantiation of the issues and findings reported. b. Provide a monthly status to the PARK BOARD that tracks the submissions to the Comptroller’s Office. This tracking tool’s purpose is to provide the PARK BOARD with necessary information to ensure proper administration and follow up for the 20% finder’s fee. c. Act as the PARK BOARD’s advocate and representative in all communications with the Texas State Comptroller in regards to the local hotel occupancy tax audit sharing program, including Notifying the Comptroller’s office if they should expect disputes or protest of an audit.

Should the PARK BOARD elect to have MuniServices provide the services necessary to comply with HB 2048, the PARK BOARD will be required to provide a Letter of Authorization to the State Comptroller’s Office designating MuniServices as an authorized agent of the PARK BOARD for the purposes of administration of this local hotel occupancy tax audit sharing program.

Article 5 – PARK BOARD Obligations

1. Audit

The PARK BOARD shall assist MuniServices by providing necessary information and assistance to include, but not be limited to, the following:

a. Send Audit Announcement Letter to each lodging provider to be examined with a copy to MuniServices. b. Inform MuniServices of any circumstances concerning existing payees. c. Inform MuniServices of the development of new lodging properties no later than a Certificate of Occupancy being granted.

2. Mandatory Reporting to the State of Texas

Please choose one of the two options below. If the PARK BOARD desires for MuniServices to perform the new Mandatory Reporting to the State of Texas, and this letter agreement correctly reflects the terms agreed to by MuniServices and the PARK BOARD, please counter-sign this letter agreement in the space provided below.

Galveston Park Board, TX HOT Audit 02-25-16 7

172 Galveston Park Board of Trustees Regular Meeting 03/08/2016 If the PARK BOARD acknowledges its obligations under House Bill 2048 and hereby elects to “OPT OUT” of MuniServices optional service to provide services required to perform the Mandatory Reporting to the State of Texas on its behalf, please counter-sign this letter agreement in the space provided below.

a. PARK BOARD will need to enter in to an agreement with the Comptroller to insure that they make reasonable efforts to collect on each submission and reimburse the PARK BOARD for any hourly fees and expenses incurred on behalf of the state. b. PARK BOARD can expect payment of the finder’s fee no sooner than 6 month’s from the date of submission to the Comptroller, as the finder’s fee is not due until the assessment is Administratively Final. c. PARK BOARD has an obligation to submit all findings to the Comptroller whether or not they contract with MuniServices. As such, MuniServices will require an “opt out” document be signed by the PARK BOARD if they chose not to have our assistance in fulfilling this requirement.

(Actual bill located at: http://www.sos.state.tx.us/statdoc/bills/82nd/hb/HB2048.pdf)

YES - By signing in the space provided here, I hereby authorize MuniServices to perform the Mandatory Reporting to the State of Texas as required by House Bill 2048 that was adopted on September 2, 2011, and agree to compensate MuniServices as outlined above.

By: ______

Name: ______

Title: ______

Date: ______

NO - By signing in the space provided here, the PARK BOARD declines MuniServices additional services option and acknowledges that MuniServices will have no responsibility or liability related to the Mandatory Reporting to the State of Texas as required by House Bill 2048 that was adopted on September 2, 2011.

By: ______

Name: ______

Title: ______

Date: ______

Galveston Park Board, TX HOT Audit 02-25-16 8

173 Galveston Park Board of Trustees Regular Meeting 03/08/2016 EXHIBIT B Local Hotel Occupancy Tax Program Audit Services

Article 4-Compensation

What the PARK BOARD will pay MuniServices Provided that the Effective Date is on or before March 22, 2016, in exchange for MuniServices performing the work indicated above, the PARK BOARD will pay MuniServices as follows:

Audit The Audit Services shall be provided for a fixed fee of $2,000 for each lodging property audited with 50% due at the time of audit approval and 50% upon completion of the audit. A minimum of 2 audits must be performed at any one time.

Mandatory Reporting to the State of Texas Should the PARK BOARD authorize MuniServices to provide the additional services (Mandatory Reporting to the State), the PARK BOARD agrees to pay MuniServices as follows:

a. Cost per Audit: A flat fee of $400.00 per qualifying audit will be charged for each audit submitted to the State Comptroller under the program and includes all the services outlined in the above “Proposal for Additional Services” section. b. The $400 flat fee will be billed on a monthly basis for each report submitted to the Comptroller during that month. c. If, in order for the state to collect on an audit and/or the PARK BOARD to receive their finder’s fee, additional or non- standard work is required outside of the above listed services, MuniServices will bill the PARK BOARD an hourly rate plus additional expenses incurred. Examples of additional or non-standard work includes, but is not limited to, additional field visits after an audit has been submitted as final, , testifying at hearings or court proceedings to support the work performed by our auditors, and any other activities requested by either the PARK BOARD or the Comptroller in regards to collection on an audit, etc. d. Any work required outside of $400 flat fee will only be performed with prior written approval from the PARK BOARD. The hourly services will be billed at the rate of $100 per hour, plus actual expenses. These additional hours will be invoiced at the time the case is resolved to the Comptroller’s satisfaction.

Travel and Out-of-Pocket PARK BOARD shall reimburse MuniServices for reasonable travel and other out-of-pocket expenses associated with the performance of the field audits including but not limited to lodging, parking, mileage, per diem, etc. (Mileage and per diem shall be according to IRS regulations). Such reimbursement shall be billed incrementally.

Additional Consulting PARK BOARD may request that MuniServices provide additional consulting services at any time during the term of this Agreement. If MuniServices and PARK BOARD agree on the scope of the additional consulting services requested, then MuniServices shall provide the additional consulting on a Time and Materials basis. Depending on the personnel assigned to perform the work, standard hourly rates range from $75 per hour to $200 per hour.

These additional consulting services will be invoiced at least monthly based on actual time and expenses incurred.

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174 Galveston Park Board of Trustees Regular Meeting 03/08/2016

EXHIBIT C

MuniServices Helpful Contacts

Contact Project Role Phone Email Ted Kamel, MBA Client Services Manager 903.952.9794 [email protected] Lisa Broussard VP Client Services 713.459.5079 [email protected] Kandi Brem TOT Production Manager 817.905.7027 [email protected] Billing Department 757.321.2517 [email protected] Francesco Mancia, MBA VP Government Relations 559.288.7296 [email protected] Patricia A. Dunn, MSHR Contracts Manager 559.271.6852 [email protected]

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175 Galveston Park Board of Trustees Regular Meeting 03/08/2016

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177 Galveston Park Board of Trustees Regular Meeting 03/08/2016

178 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Itinerary for the Galveston Park Board of Trustees February 25, 2016

8:30 am Prep meeting at VSA’s offices 101 Constitution Avenue NW, Suite 600 West

9:30 am Meeting with the Office of Rep. Filemon Vela Staff: Luke Theriot, Legislative Assistant 437 Cannon House Office Building

10:00 am Meeting with the Office of Rep. Blake Farenthold Staff: Jeffrey Wilson, Senior Legislative Assistant 1027 Longworth House Office Building

11:00 am Meeting with the Office of Senator John Cornyn Staff: Laura Atcheson, Counsel 517 Hart Senate Office Building

11:30 am Lunch Dirksen Senate Cafeteria

1:00 pm Meeting with the Office of Senator Ted Cruz Staff: Elliott Mulkin, Legislative Correspondent 404 Russell Senate Office Building

2:30 pm Meeting with Army Corps of Engineers Headquarters Staff: Sandy Gore, SW Division, Regional Integration Team Leader 441 G Street NW

5:30 pm Meeting with Rep. Randy Weber 510 Cannon House Office Building

6:30 pm Dinner with Greg Burns and Sarah Hanson The Oval Room 800 Connecticut Ave NW

Phone Numbers Greg Burns: 202-737-8162 (office) 202-390-3204 (cell) Sarah Hanson: 202-737-7397 (office) 202-641-5665 (cell)

179 AgendaGalveston Park Board Item of Trustees RegularVIII Meeting – 03/08/2016 Parks

A. DISCUSS AND CONSIDER APPROVAL OF PURCHASE OF ONE (1) SEGWAY FOR SEAWALL PARKING FROM SEGWAY, INC. (CHRIS SADDLER)  OVERVIEW  BID

B. DISCUSS AND CONSIDER AN INTERLOCAL AGREEMENT BETWEEN THE PARK BOARD AND GALVESTON COUNTY FOR BEACH POCKET PARKS 1 AND 2 (SHERYL ROZIER)  OVERVIEW  MOU

Park Board of Trustees Regular Meeting March 8, 2016 180 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Date: Feb. 17, 2016

Agenda Item:

Discuss and Consider Purchase of one New Segway SE-3 Patroller (and Accessories) from Segway, Inc. (sole source vendor) FOR $16,067.00 for Seawall Paid-Parking Program.

Background:

The Park Board has recently been tasked with the management of the Seawall paid-parking program. Staff wishes to procure eco-friendly equipment as to assist in the core operations of the parking program as well as to provide means of transportation for the Seawall Parking Ambassadors. Staff is of the opinion that the electric three-wheeled SE-3 Patroller from Segway, Inc. meets the needs of the new responsibility. After running the program for a year, staff has learned that the need for one more segway will be helpful covering the entire Seawall. This will allow Seawall Urban Park to have a total of four segways on the Seawall during busy weeks and holidays. It will also give us backup if one of the segways are in need of repair.

Staff Recommendation:

Staff is recommending the purchase of One (1) NEW SEGWAY SE-3 PATROLLER plus accessories from Segway, Inc. (sole source) . The cost per unit is $12,999.00. Units come with a one-year warranty. In addition, Staff wishes to purchase One (1) additional battery cost per unit $2,672.00 respectively as to ensure continual operations of the units. Total price for the unit with, extra battery, will be $15,671.00; combined shipping fees for the units and accessories will be an additional $396.00; logo and lettering decals $50.00. TOTAL PURCHASE AMOUNT OF $16,117.00.

Funding Source (if a budgetary item):

For FY-2015/2016 Seawall Urban Park was budgeted $16,800 for one (1) new Segway

2015/2016 Capital Outlay

Estimated delivery for the unit is thirty days from date of purchase.

181 Seawall Urban Park Page: 1 of 1

Vendor #1 Vendor #2 Vendor #3 Meeting 03/08/2016 Galveston Park Board of Trustees Regular

Site: Seawall Urban Park Vendor Segway Inc. Vendor Vendor

Client: Seawall Urban Park Address 14 Technology Drive Address Address

Project: SE-3 Patroller Segway and battery City, State Bedford, New Hampshire City, State City, State

Date: 17-Feb-16 Contact Gerald White Contact Contact

Requested By: Phone No. 949-910-5928 Phone No. Phone No.

Fax No. Fax No. Fax No. Item Description Price Total Cost Price Total Cost Price Total Cost SE-3 Patroller SE-3 Patroller Segway $12,999.00 $12,999.00 182 Battery Lithium ion Battery Modeul kit $2,672.00 $2,672.00 - - Shipping $396.00 $396.00

TOTAL $16,067.00 TOTAL $0.00 $0.00

Staff recommends

Notes and Comments: Segway Sole Source Bids Attached: Yes Notes and Comments: Authorized GPB Approval:______Manager Review:______Approved By:______Awarded Date:______Galveston Park Board of Trustees Regular Meeting 03/08/2016

183 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Segway Inc. Quote is valid for 30 days Dec 31, 2014 Patroller_Sales_Agreement

The Customer identified below (“Customer”) submits this Segway Inc. Sales Agreement to Segway Inc., a Delaware corporation of 14 Technology Salesperson Gerry White Drive, Bedford, NH 03110 USA (“Segway Inc.”). This Sales Agreement is valid only if the Segway® Personal Transporters, Patrollers, Accessories, and Services - Terms and Conditions of Sale are attached hereto. Customer hereby offers and agrees to purchase from Segway Inc. the products E-mail [email protected] and services described below on the terms stated in this Sales Agreement and the Terms and Conditions of Sale attached below. If Segway Inc. accepts this offer, an agreement shall exist between Customer and Segway Inc. on the terms stated herein. Please fax the Sales Agreement and Phone 949-910-5928 signed Terms and Conditions of Sale to 1-603-222-6001. Fax 603-222-6001

Customer Name Galveston Park Board

Contact Name Larry Jackson Quote Summary Contact Title Manager Contact e-mail Beach [email protected] Contact Phone 409 939 3160 Submitted Date 17-Feb-16 Patrollers $ 12,999.00

Requested Ship Date Ship within 30 days Patroller Shipping $ 336.00

Bill to Address 2902 Church Street Parts & Accessories $ 2,672.00 Galveston, Tx 77550 Accessory Shipping $ 60.00 Ship to Address same as above

Quote # 1779-020316-1 Tax $ -

Dealer of Record Segway of Houston Order Total $ 16,067.00 Payment Method PO / Wire Transfer / Credit Card / Check

STEP 1 - Select Models Segway PT i2 Patroller Models Shield Color Quantity Price Total i2 Patroller Model Includes: Upper and Lower Shields, Patroller Bag, WHITE 23444-00002 i2 SE Patroller Reflective Labels, Word Labels (specify $ - $ - below), Front Bumper, Lights, Comfort Mats, LED Taillight, Lower Cargo Frames, Mounting Hardware, InfoKey Wrist Strap 23444-00002 i2 SE Patroller YELLOW $ - $ -

Segway PT x2 Patroller Models 0 Quantity Price Total x2 Patroller Model Includes: 23580-00002 x2 SE Patroller Upper and Lower Shields, Patroller Bag, WHITE $ - $ - Reflective Labels, Word Labels (specify below), Front Bumper, Lights, Comfort Mats, LED Taillight, Mounting Hardware, InfoKey Wrist Strap 23580-00002 x2 SE Patroller YELLOW $ - $ -

Segway PT x2T Patroller Models 0 Quantity Price Total x2T Patroller Model Includes: 23580-00004 x2T SE Patroller Upper and Lower Shields, Patroller Bag, WHITE $ - $ - Reflective Labels, Word Labels (specify below), Front Bumper, Lights, Comfort Mats, LED Taillight, Mounting Hardware, InfoKey Wrist Strap, Turf Tires 23580-00004 x2T SE Patroller YELLOW $ - $ -

Segway SE-3 Patroller Models 0 Quantity Price Total SE-3 Patroller 23879-00001 POLICE (Red/Blue) $ - (Police)

SE-3 Patroller 23879-00002 SECURITY (Amber/Amber) $ 12,999.00 $ 12,999.00 (Security) 1

1 1

STEP 2 - Select Lights (PT models only. Not needed for SE-3 Patrollers) Integrated Flashing Light Kits (Select One per Patroller Model Ordered) Quantity 22200-00001 RED/BLUE NO CHARGE 22200-00002 AMBER/ WHITE NO CHARGE 21707-00006 RED/RED NO CHARGE 21707-00007 BLUE/BLUE NO CHARGE

0 0

STEP 3 - Select Language Labels (PT models only. Not needed for SE-3 Patrollers) 3 Individual language Sticker Kits (Select One per Patroller Model Ordered) Quantity 22272-00001 Police - English/French NO CHARGE 22272-00002 Police - Spanish NO CHARGE 22272-00003 Police - Italian NO CHARGE 22272-00004 Police - German NO CHARGE 22272-00005 Security - English NO CHARGE

0 0 Comments or Special Instructions Volume discounts start at 6 units for i2 and x2 models. I2 and x2 orders shipped to local dealer for assembly and test prior to delivery.

Parts and Accessories

Category Subcategory Part # Name Price Order Qty Line Total Accessory Patroller Replace. Kit 22200-00001 Patroller Light System, Red/Blue $423.00 $ - Accessory Patroller Replace. Kit 22200-00002 Patroller Light System, Amber/White $423.00 $ - Accessory Patroller Replace. Kit 21707-00006 Patroller Light System, Red/Red $423.00 $ - Accessory Patroller Replace. Kit 21707-00007 Patroller Light System, Blue/Blue $423.00 $ - Accessory Patroller Replace. Kit 22201-00001 Patroller Bag Replacement Kit $194.00 $ - Accessory Patroller Replace. Kit 22199-00001 Patroller Bumper and Bracket Replacement Kit $109.00 $ - Accessory Patroller Replace. Kit 22202-00001 Upper and Lower Shield Replacement Kit, White $242.00 $ - Accessory Patroller Replace. Kit 22202-00002 Upper and Lower Shield Replacement Kit, Yellow $242.00 $ - Accessory Patroller Replace. Kit 22517-00001 Upper Shield Replacement Kit, White $99.00 $ - Accessory Patroller Replace. Kit 22517-00002 Upper Shield Replacement Kit, Yellow $99.00 $ - 184 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Accessory Patroller Replace. Kit 22228-00001 Label Replacement Kit (3), Police, English/French $121.00 $ - Accessory Patroller Replace. Kit 22228-00004 Label Replacement Kit (3), Police, Spanish $121.00 $ - Accessory Patroller Replace. Kit 22228-00005 Label Replacement Kit (3), Police, Italian $121.00 $ - Accessory Patroller Replace. Kit 22228-00006 Label Replacement Kit (3), Police, German $121.00 $ - Accessory Patroller Replace. Kit 22228-00003 Label Replacement Kit (3), Security, English $121.00 $ - Accessory Patroller Replace. Kit 22461-00001 Wristband Kit, InfoKey, Segway Branded, Black (10 pack) $181.00 $ - Accessory Patroller Replace. Kit 21710-00001 Reflective Decal, Lower Shield, Left Side, White $20.00 $ - Accessory Patroller Replace. Kit 21710-00002 Reflective Decal, Lower Shield, Right Side, White $20.00 $ - Accessory Patroller Replace. Kit 21711-00001 Reflective Decal, Upper Shield, White $17.00 $ - Accessory Patroller Replace. Kit 21710-00003 Reflective Decal, Lower Shield, Left Side, Yellow $20.00 $ - Accessory Patroller Replace. Kit 21710-00004 Reflective Decal, Lower Shield, Right Side, Yellow $20.00 $ - Accessory Patroller Replace. Kit 21711-00002 Reflective Decal, Upper Shield, Yellow $17.00 $ - Accessory Patroller Replace. Kit 23639-00001 Kit, Patroller Handlebar & Clamp $57.00 $ - Accessory Cargo 22237-00001 Patroller Accessory Bar Kit $85.00 $ - Accessory Cargo 20412-00001 i2 Lower Cargo Frame Kit (2) $175.00 $ - Accessory Cargo 20413-00001 Universal Cargo Plate Kit (2) $175.00 $ - Accessory Cargo 20419-00001 Segway Hard Side Case & Structure (2) $325.00 $ - Accessory Cargo 21649-00001 Single Side Cargo Kit $343.00 $ - Accessory Cargo 22334-00001 Universal Cargo Plate Kit Fastener Kit (incl. 8) $11.00 $ - Accessory SE Cargo 24167-00001 Cargo Rack $259.00 $ - Accessory SE Cargo 24168-00001 Quick Release Universal Case Mount $185.00 $ - Accessory SE Cargo 24169-00001 Waterproof Cargo Case Set $579.00 $ - Accessory SE Cargo 24170-00001 Open Top Storage Bin Set $135.00 $ - Accessory InfoKey 22027-00001 Segway InfoKey Protector Kit - 10 Pack $164.00 $ - Accessory InfoKey 21523-00001 Segway InfoKey Protector Kit (1) $16.00 $ - Accessory InfoKey 22295-00001 Segway InfoKey Holder with Zipper and Belt Clip - 10 Pack $164.00 $ - Accessory InfoKey 20717-00001 Segway InfoKey Holder with Zipper and Belt Clip (1) $16.00 $ - Accessory Light 22327-00001 Light Kit, LED, 200L AA Chrome $164.00 $ - Accessory Light 22327-00002 Light Kit, LED, 200L AA Black $164.00 $ - Accessory Mat 20659-00001 Comfort Mat (2) $120.00 $ - Accessory Misc 20417-00001 Segway Ramp Kit $325.00 $ - Accessory Parking Stand 22309-00003 Segway Modular Parking Stand Kit - i2 SE $66.00 $ - Accessory Parking Stand 22309-00004 Segway Modular Parking Stand Kit - x2 SE $66.00 $ - Part Battery 20878-00001 Lithium ion Battery Kit (1) $943.00 $ - Part Battery 24380-00001 Lithium ion Battery Modeul Kit, SE-3 Patroller (1) $2,672.00 1 $ 2,672.00 Accessory Charging 23322-00001 Off-Board Charger, PT $919.00 $ - Accessory Charging 24518-00001 Off-Board Charger, SE-3 $790.00 Part Charging 17298-00001 French/German/Italian Power Cord $20.00 $ - Part Charging 16965-00001 Power Cord Kit $22.00 $ - Part Fender 20945-00001 i2 Fender Kit (1) $44.00 $ - Part Fender 20959-00001 x2 Fender Frame Kit (Left) (1) $95.00 $ - Part Fender 20960-00001 x2 Fender Frame Kit (Right) (1) $95.00 $ - Part Fender 20961-00001 x2 Fender Kit (Left) (1) $55.00 $ - Part Fender 20962-00001 x2 Fender Kit (Right) (1) $55.00 $ - Part Handlebar 20955-00001 i2 / x2 Handlebar w/ Grips Kit (1) $57.00 $ - Part InfoKey 21064-00001 InfoKey Kit, Programmed (1) $236.00 $ - Part Shipping Box 20907-00001 i2 Box Kit $57.00 $ - Part Shipping Box 21449-00001 x2 Box Kit $69.00 $ - Part Tire/Wheel 22214-00001 i2 Wheel Cap Kit - Quantity 10 $125.00 $ - Part Tire/Wheel 20942-00001 i2 Wheel Kit (1) $153.00 $ - Part Tire/Wheel 23684-00001 New x2 Tire & Wheel Kit with Hubcap (1) $295.00 $ - Part Tire/Wheel 23909-00001 Replacement x2 Hubcap $20.00 $ - Part Tire/Wheel 21162-00001 x2 Turf Tire / Wheel & Spacer Kit (1) $295.00 $ - Part Tire/Wheel 20963-00001 x2 Wheel Hub Adapter (1) $142.00 $ - Part Tire/Wheel 20965-00001 x2 Wheel Trim Kit (1) $83.00 $ - Part Trim 20944-00001 i2 / x2 Gearbox Cover Kit (1) $30.00 $ - Service Warranty 17218-00005 1-Year Warranty Extension, PT $595.00 $ - Service Warranty 17218-00007 2-Year Warranty Extension, PT $895.00 $ -

Customer Signature: Harry Green Date: 12/8/2014

185 Galveston Park Board of Trustees Regular Meeting 03/08/2016

SEGWAY® PERSONAL TRANSPORTERS, PATROLLERS, ACCESSORIES, AND SERVICES - TERMS AND CONDITIONS OF SALE

This Segway® Personal Transporters, Patrollers, Accessories, and Services – Terms and Conditions of Sale applies to the sales of Segway® Personal Transporter models i2 SE Patroller, x2 SE Patroller (collectively referred to herein as “Segway PT”) and SE-3 Patroller, to the sales of accessories, and to the sales of services provided by Segway Inc. Hereinafter, the Segway Products, and Segway accessories may be referred to as (“Product or Products”) and the services shall be referred to as (“Services”).

Risk of Injury; Product Orientation and Training. Customer (“Customer”) understands that use of the Segway Products involves risk of injury. Customer understands that, before attempting to use any Segway Product, Customer should read the Segway “User Manual" delivered with the Product and watch the "Safety Video" available at www.segway.com/support/manuals- guides.php or www.segwaysafety.com and Customer should, at a minimum, complete Segway Product Orientation (see below). The instructions and warnings set forth in the “Safety Video” and in the “User Manual” apply to each of the Segway Products listed above. Customer understands that complying with the instructions and warnings contained in the “Safety Video” and “User Manual” and completing Product Orientation reduces the risk of injury, but does not eliminate the risk. Product Orientation consists of introducing the Customer to the Segway Product's features and operation and assisting Customer with Customer’s first ride. Product Orientation is included in the purchase price of the Segway Product and is performed by a Segway Inc. representative, authorized dealer, or other person acting with authority from Segway Inc. To schedule Product Orientation, Customer should contact Customer Operations at 1-866-4SEGWAY or by email to [email protected]. Upon receipt of Customer’s request Segway Inc. will arrange for Customer’s Product Orientation at an authorized dealer’s retail location or other reasonable location as determined by Segway Inc. Customer may be required to assemble the Segway Product and charge the Segway Product battery packs (in accordance with the instructions delivered with the Segway Product) before Segway Product Orientation and may be required to make the Segway Product available to the Segway Inc. representative, an authorized dealer, or other person acting with authority from Segway Inc. for Product Orientation. Segway Inc. recommends that Customer complete Segway Product Orientation.

Shipping; Title; Risk of Loss. Unless Customer has selected “Customer Pickup”, Segway Inc. shall arrange to ship Products to Customer by the method stated on the Sales Agreement to which these Terms and Conditions are attached. Customer shall pay Segway Inc.’s charges for shipping and handling as stated on the Sales Agreement. Title to Products and risk of loss or damage to Products passes from Segway Inc. to Customer upon Segway Inc. transferring possession of the Products to the carrier (or to Customer) at Segway Inc.’s facility for shipment to Customer. Unless Segway Inc. and Customer agree upon a separate delivery schedule, Segway Inc. will ship Products within forty five (45) days after this Sales Agreement is accepted.

Payment. Customer shall pay Segway Inc. for Products, shipping and handling charges, and applicable sales taxes before shipment and shall pay for Services before the Services are rendered unless otherwise agreed in writing by Customer and Segway Inc. Customer shall pay by wire transfer to be delivered to Segway Inc. before shipment unless otherwise agreed in writing by Customer and Segway Inc. If Customer fails to make payment when due to Segway Inc., Customer shall also pay to Segway Inc. interest on the unpaid amount from the date due until the date paid at the rate of one and one-half per cent per month (or, if less, the highest rate allowed by law), and Customer shall reimburse Segway Inc. for all costs of collection including reasonable attorney’s fees.

Non-delivery. If, for any reason, Segway Inc. is unable to deliver Products or Services to Customer as provided in this Agreement, Segway Inc. shall, upon Customer’s written request, refund to Customer any portion of the price which Customer may have paid to Segway Inc. for the undelivered Products and/or Services, and each of Segway Inc. and Customer shall be Discharged from any further obligation relating to the undelivered Products and/or Services. Customer shall have no other remedy against Segway Inc. for such undelivered Products and/or Services.

Limited Warranty for Products. THE STANDARD LIMITED WARRANTY APPLICABLE TO SEGWAY INC. PRODUCTS IS THE “SEGWAY® PERSONAL TRANSPORTER LIMITED WARRANTY” or "SEGWAY SE-3 PATROLLER LIMITED WARRANTY (copy available at http://www.segway.com/support/warranty.php or Segway Inc. will send a copy to Customer on request). SEGWAY INC. MAKES NO OTHER EXPRESS OR IMPLIED WARRANTY. SEGWAY INC. DOES NOT WARRANT SERVICES. SEGWAY INC. EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.

Returns. Segway Inc. will only accept return of unused and undamaged Product that is returned in the original packaging. Customer must follow this return procedure. Within ten days after receipt of the Product, Customer must contact Segway Customer Operations at 866-4SEGWAY and request a Return Material Authorization (RMA) number. Customer must return the Product to Segway Inc. in an unused, undamaged condition and in the original packaging. Customer is responsible for the cost of shipping the Product back to Segway Inc. (at the address specified when the RMA was issued) and Customer bears the risk of loss during shipment. The Product must be delivered back to Segway Inc. not later than ten days after the RMA is issued. Customer, as a condition of returning the Product, must pay Segway Inc. a re-stocking fee equal to 10% of the purchase price for the returned Product. Payment of this fee is due at the time Customer obtains the RMA, subject to actual return of the Product in accordance with the terms of this procedure. Upon receipt of the returned Product, Segway Inc. shall inspect the returned Product to confirm that it is unused and undamaged and in the original packaging. Upon such confirmation, and provided the Customer has followed the procedure set forth in this section, Segway Inc. shall credit Customer for the purchase price less the 10% restocking fee. If Customer returns Product that is used, damaged, not in the original packaging, or otherwise not in accord with this procedure, then Segway Inc. shall not issue any credit to Customer and Customer shall pay all costs for return shipment of the Product to Customer.

Not a Medical Device. Segway Products have not been designed, tested, or approved for use as a medical device. The rider must be able to step on and off the Product, which requires physical abilities similar to climbing and descending stairs without assistance and without using a handrail. When using the Segway PT models identified above, the rider's weight and all payload must not exceed 260 pounds (117 kg). When using an SE-3 Patroller, the rider's weight and all payload must not exceed 350 lbs (159kg). For all Segway Products, the rider must weigh at least 100 pounds (45 kg).

Disputes. Any controversy or claim arising out of or relating to this Agreement or the breach thereof, or in any other way relating to Segway Inc.’s Products or Services, shall be brought in the Hillsborough County Superior Court in the State of New Hampshire, USA or, if it has or can acquire jurisdiction, in the United States District Court for the District of New Hampshire, USA and Customer consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein.

State Laws. Use of Segway Products on public roads or sidewalks is regulated by many states and municipalities (and prohibited by some). Segway Inc. has advised Customer to consult local and state authorities to identify and become familiar with all current laws and regulations. (Many of these laws use the term “Electric Personal Assistive Mobility Device” or “Personal Motorized Mobility Device”, which are generally defined so as to include Segway PTs.) In addition to other requirements, these laws and regulations may specify minimum ages for Segway PT riders on public roads and/or sidewalks and may mandate protective gear for riders. If Customer is purchasing i2 SE Patroller, x2 SE Patroller or SE-3 Patroller Products, Customer warrants and represents that Customer is a public safety entity authorized to purchase public safety products under current laws and regulations.

Entire Agreement; Governing Law. By signing below and upon Segway Inc.’s acceptance, Customer agrees that the Sales Agreement attached and these Terms and Conditions (collectively this “Agreement”) set forth the entire agreement between Segway Inc. and Customer. Segway Inc. has made no representation or warranty regarding Segway Inc. Products or Services other than as stated in this Agreement. Any terms or conditions that may be stated on Customer’s purchase order (or other document previously or hereafter issued by Customer to Segway Inc.) are not part of the agreement between Segway Inc. and Customer. The only terms and conditions of the sales of Products and Services by Segway Inc. to Customer are those stated on the Sales Agreement and in these Terms and Conditions as accepted by Segway Inc. This Agreement supersedes any contrary terms and conditions provided in or on Customer’s purchase order (or other document previously or hereafter issued by Customer to Segway Inc.) This Agreement may only be amended by a document signed by authorized representatives of Segway Inc. and Customer. If any provision of this Agreement shall be held to be void, unlawful or unenforceable, such provision shall be deemed stricken from this Agreement, but the remaining provisions of this Agreement shall continue in full force and effect, modified only as necessary to accomplish, as nearly as possible, the purposes of the stricken provision. New Hampshire, USA law governs this Agreement without regard to conflicts of law principles. The UN Convention on Contracts for the International Sale of Goods does not apply to this Agreement. This Agreement is made in the English language. A signature received electronically or by fax is as valid as an original signature.

Date: ______Customer Signature: ______

Rev. 7.30.14

186 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Agenda Item: DISCUSS AND CONSIDER AN INTERLOCAL AGREEMENT BETWEEN THE PARK BOARD AND GALVESTON COUNTY FOR BEACH POCKET PARKS 1 & 2

Overview:

At the February 16, 2016 Trustee’s meeting a presentation was made by staff regarding the Pocket Parks, historical data, their monetary viability and FEMA obligations. At that time the Trustees were reminded that the Interlocal agreement between the Park Board and the County had expired. At that time the legal department of the County was in process of redrafting a current agreement for Pocket Parks 1 & 2 based on previous meetings with staff.

Staff Recommendation:

At the February meeting staff recommended that we move forward with a new Interlocal agreement with the County for Pocket Parks 1 & 2 and relinquish Pocket Park 3 back to the County, until such time as the park pavilion and ancillary structures have been demolished and future plans are visualized. Staff also felt that the Park Board should continue its relationship with the County to develop, improve and implement repairs, FEMA or otherwise, and discuss the inclusion of Pocket Park 3 in an addendum to the Interlocal at a later date.

The Trustees voted to open Pocket Park 1 & 2 in good faith for the 2016 season while working out the logistics of the Interlocal agreement. They also indicated that once there is a draft of the agreement that they would like that to be on the Board’s agenda.

Funding Source (if a budgetary item):

This item does not require a funding source at this time.

187 Galveston Park Board of Trustees Regular Meeting 03/08/2016

INTERLOCAL AGREEMENT BETWEEN GALVESTON COUNTY AND THE CITY OF GALVESTON PARK BOARD FOR SERVICES RELATED TO GALVESTON COUNTY BEACH POCKET PARKS 1 AND 2

This Interlocal Agreement is between the County of Galveston (“County”) and the Park

Board of Trustees of the City of Galveston (“Park Board”) for services to be rendered for

Galveston County Beach Pocket Parks 1 and 2 (“Pocket Parks”).

The Park Board will provide services at these Pocket Parks. In exchange for providing these services the Park Board will be permitted to operate and receive revenue from the

County’s Beach Pocket Parks. This Agreement consolidates the prior Agreements entered into between the parties.

Preamble

The County owns the following described tracts of land commonly known as Beach Park

No. 1.

Warranty Deed from Janes N. Letsos, Jr. and Vincent Rinando and John Rinando to the County of Galveston recorded in Volume 2879, Page 798 et seq of the Deed Records of Galveston County, Texas The County also owns the following described tracts of land commonly known as Beach

Pocket Park No. 2.

Warranty Deed from Mark D. Chambers, et al. to the County of Galveston recorded in Volume 2833 page 783 et seq of the Deed Records of Galveston County, Texas as modified by that one certain document called “Transfer of Land and Granting of an Easement in Exchange for Other Land” found of record in 019-66-1854 of the Microfilm Records of the Office of the County Clerk of Galveston County, Texas Warranty Deed from Eugenia D. Bassi, et al to the County of Galveston recorded in Volume 2853 page 378 et seq of the Deed Records of Galveston County, Texas as modified by that one certain document called “Transfer of Land and granting of an Easement in Exchange for Other Land” found of record in 019-66-1854 of the Microfilm Records of the Office of the County Clerk of Galveston County, Texas The County desires that the operation, management, maintenance and control of these

188 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Parks be transferred to the Park Board.

The Park Board desires to enter into this Agreement with the County for such purposes pursuant to the terms and conditions more fully described below.

1. Term

For and in consideration for the premises hereinafter set forth, the County, acting by and through its Commissioners' Court hereby Grants to the Park Board the authority to use and manage the Pocket Parks, for a term of ten years commencing January 1, 2016, and ending on a date which is ten (10) years after such commencement date, subject to termination as set out in Paragraphs 7 and 8. The Park Board shall use the Pocket Parks for public recreational uses only. During this term, the parties shall meet annually every January.

2. Rental and Fees

In consideration for operating, managing, maintaining, controlling and improving the

Pocket Parks, the County shall charge no rent to Park Board. The County also agrees that the Park Board may charge the public for parking at each facility and may either operate its own concession stands or contract with a third party for the operation of such concession stands. All revenues generated from Park Board and/or third party operated concessions and from parking fees or from any other source shall be controlled by the Park Board and shall be devoted to maintenance, upkeep, and operational expenses of the Pocket Parks, and for lifeguard services at the Pocket Parks (if applicable). In addition, if revenues exist after these expenses, up to $15,000 may be used annually for new capital improvements at Pocket Park

1 and for additional capital improvements at Pocket Park 2. No other use of such revenues will be permitted.

3. Laws and Restrictions

189 Galveston Park Board of Trustees Regular Meeting 03/08/2016

The Park Board shall comply with all applicable laws, ordinances, restrictions, and regulations as may be required. The Park Board shall also comply with all General Land

Office beach user requirements.

4. Condition of Premises

The Park Board shall be responsible for maintaining the Pocket Parks during the term of this Agreement in their current or better condition.

5. FEMA Authorized Agent

The parties agree that the Park Board is authorized to act on behalf of the County and to apply for any and all FEMA funds and to execute any FEMA Project Work Sheets or other documents necessary that might be available to address storm or hurricane damages. Park Board will periodically advise County of the status of its efforts with FEMA on behalf of County and the final financial outcome of its applications.

6. Capital Improvements

The parties desire and hope that revenues generated from Beach Pocket Park Nos. 1 and 2 are sufficient to construct new capital improvements at Pocket Park 1 and additional capital improvements at Pocket Park 2. In addition, the parties are optimistic that other Park

Board facilities will become available for such purposes. But, despite such desires, Park

Board is under no obligation to construct such improvements.

Any and all new capital improvements shall be ADA compliant and made pursuant to the prior approval of the County and subject to negotiations concerning the payment thereof.

But, despite its willingness to negotiate in the future County does not wish to indicate that it will commit any funds to any future capital improvement projects. Likewise, Park Board does not wish to indicate that it will commit any funds to any further capital improvement

190 Galveston Park Board of Trustees Regular Meeting 03/08/2016

projects.

Although new capital improvements may be made either solely by Park Board, or solely by County, or jointly with County, the parties understand that while the Park Board may participate in decisions related to new capital improvements, any and all permanent improvements belong to the County, as the owner.

County will furnish Park Board with legal descriptions and surveys of the Pocket

Parks that it has in its possession upon request.

Park Board also agrees to remove seaweed, clean and maintain the public beaches located at the parks and to provide other services in accordance with the schedules provided at the annual meeting. Schedules will be posted on the County’s and Parks Board’s websites.

7. Termination by County

This Agreement may be terminated by the County, at its election, upon the happening of any of the following events.

a) lapse in required insurance coverage by the Park Board or failure by the Park Board to strictly comply with any provisions m this Agreement related to insurance coverage,

b) the commission by the Park Board of any act of insolvency, the filing of any voluntary or involuntary actions concerning the Park Board under any state or federal bankruptcy or other laws for the protection of debtors, an assignment by the Park Board for the benefit of creditors or the appointment of a receiver for the Park Board, or

c) upon six (6) months’ prior written notice given to the Park Board no later than December 31st of the year in which the County decides to terminate.

Any concession agreements entered into between the Park Board and any third party will contain a provision that the concession agreement will terminate upon termination of this

Agreement with County for any reason.

191 Galveston Park Board of Trustees Regular Meeting 03/08/2016

8. Termination by Park Board

The Park Board shall also have the right to terminate this Agreement by giving six

(6) months written notice to the County no later than December 31st of the year in which the

Park Board decides to terminate.

At the expiration or early termination of this Agreement the management and control of the Pocket Parks will be returned to County in a well maintained condition and free of any indebtedness, liens, or third party concession agreements.

9. Insurance

Throughout the term of this Agreement, the Park Board shall maintain statutory workers' compensation coverage on its employees, and shall carry additional insurance against public liability for injury to persons (including death) or damage to property resulting from or arising out of, or alleged to have arisen from or resulted from, the operations of the

Park Board or the County in or about the Pocket Parks. Such insurance policy shall be in an amount not less than the maximum amount of liability exposure to which the Parks Board and the County are exposed by virtue of Chapter 101 of the Texas Civil Practice and

Remedies Code as it currently exists or to which it may be amended.

In addition, beginning January 1, 2016 and continuing for as long as this portion of this

Agreement is in effect, the Park Board will maintain fire and extended coverage, wind and hail coverage and flood insurance coverage on all buildings and other improvements located at the Pocket Park. The amount of such coverage shall be at least 80% of replacement value of the buildings and improvements.

The Park Board shall name the County as an additional insured under all insurance policies, with the exception of workers' compensation, and said policies shall provide for

192 Galveston Park Board of Trustees Regular Meeting 03/08/2016

thirty (30) days' notice to County prior to any cancellation or revision of said policies. Such policies shall be in a form and with an insurance carrier acceptable to the County. The Park

Board shall provide the County with a copy of all such insurance policies at the annual meeting. The insurance policies provided to the County shall include current copies of certificates of insurance providing for thirty (30) days' notice prior to cancellation.

10. Use of Proceeds of Insurance

Any insurance proceeds received by the parties from any insurance on buildings and other improvements located at the Pocket Parks will, to the greatest extent practicable, be committed to rebuilding and repairing such damaged buildings and improvements. If such damaged buildings or improvements are incapable of being repaired or reconstructed, such proceeds will be used in constructing new buildings and improvements at the Pocket Parks. If such new construction is not viable (due to erosion or other factors beyond the control of the parties), the proceeds will be divided as mutually agreed.

11. Liens

The Park Board shall keep the Pocket Parks and all property of the County free from any and all liens arising out of any work performed, materials furnished, or obligations incurred by or for the Park Board and agrees to bond against or discharge any mechanic's or materialmen's liens or other claims within ten (10) days after written request therefore by

County.

12. Cost to County

Other than capital expenditures that may be negotiated by and between the parties, the

County shall not be responsible for expenses related to the maintenance and operation of the

Pocket Parks.

193 Galveston Park Board of Trustees Regular Meeting 03/08/2016

13. Park Board Rules

The use and occupation of the premises shall be subject to any and all rules and regulations as may be described by the Park Board from time to time. A copy of the rules will be provided to the County at the annual meeting for informational purposes.

14. Signs

Signs will be posted at the entrance to each Pocket Park advising the public that the park is owned by Galveston County and operated by the Park Board.

15. Repairs and Maintenance

The Park Board covenants and agrees, at the Park Board's sole cost and expense, to keep the operations and all improvements in good and clean condition. The Park Board also agrees to make, at the Park Board's sole cost and expense, all repairs and replacements necessary (other than capital improvements) to keep the improvements and operations in good and clean condition. In the event any improvements at the Pocket Parks are damaged or destroyed by storm, hurricane, fire, wind, or other natural or man-made disaster, County, as owner of the Pocket Parks, will work with Parks Board in submitting insurance claims or requests to FEMA for disaster fund relief.

16. Right of Entry

County reserves the unfettered right of entry to the Pocket Parks and any improvements located thereon during normal business hours for any reason or no reason.

17. Bookkeeping/Inspection of Records

Park Board will keep full, complete and proper books, records and accounts of all gross receipts and expenditures on each Pocket Park. These books, records, and accounts shall be open to inspection by County or its authorized representatives or agents during

194 Galveston Park Board of Trustees Regular Meeting 03/08/2016

normal business hours. In addition, the Park Board will report to the County at the annual meeting, the amount of revenues received by each park and the amount and purpose of each expenditure of such revenues.

18. Non-Discrimination/ADA Compliant

The Park Board agrees that in the operation, management, maintenance, control, use and occupancy of the Pocket Parks no discrimination of any kind shall be practiced by any party, which is based upon a person's race, sex, color, religion, ancestry, national origin, disability, age, military status, or sexual orientation whether in employment or in the provisions of goods and services.

19. Access by Persons With Disabilities

The Park Board agrees to comply with the Americans With Disabilities Act and any other applicable federal or state law or regulations concerning accessibility by persons who may desire to access the Pocket Parks who are handicapped, disabled, or differently abled.

General Provisions

1. Independent Contractor

This Agreement is not a contract of employment. No relationship of employer and employee exists between the County and the Park Board. The Park Board shall at all times be deemed to be an independent contractor. The County shall not be liable for any acts or omissions of the Park Board, its employees, or its agents in performing the duties prescribed herein.

2. Force Majeure

The County and the Park Board shall be excused from performing any of their respective duties, obligations, or undertakings provided for in this Agreement in the event and

195 Galveston Park Board of Trustees Regular Meeting 03/08/2016

so long as performance of such duty, obligation, or undertaking is prevented, delayed, or hindered by an Act of God, epidemic, fire, earthquake, flood, explosion, action of civil commotion, sabotage, malicious mischief, stake, lockout, action of labor unions, condemnation, governmental restriction, order of civil or military or naval authorities, embargo, impossibility of obtaining materials, or any other cause, whether similar or dissimilar to the foregoing, not within the reasonable control of the party in question. Either party entitled to such extension hereunder shall give prompt written notice to the other party as soon as possible after the occurrence causing such delay asserting its claim of right to such extension and the reasons therefore.

3. Mediation

Any disputes between the parties relating to this portion of the Agreement may be submitted to mediation in Galveston, Texas. The cost of the mediation proceedings and the cost of the mediator will be split between the parties.

4. No Assignment

This Agreement shall not be assigned in whole or in part. The only exception that is permitted is that Park Board may enter into concession agreements with third parties for the operation of the concession stands located at the Pocket Parks.

5. Notice

Any notice required to be given shall be deemed to have been duly given if and when enclosed in a properly sealed envelope, or wrapper, addressed and deposited postage prepaid in a post office or branch post office regularly maintained by the United States Government, to the following addresses, or by hand delivery.

County:

196 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Hon. Mark Henry, County Judge 722 Moody County Courthouse, 2nd Floor Galveston, Texas 77550 Phone: (409) 766-2244 Fax: (409) 766-4591

with a copy to:

Julie Diaz Director Galveston County Parks & Cultural Services Department 4102 Main (FM 519) La Marque, Texas 77568 Phone: (409) 934-8114 Fax: (409) 621-7986

with a second copy to:

Robert Boemer Director Galveston County Legal Department 722 Moody Galveston County Courthouse, 5th Floor Galveston, TX 77550 Phone: (409) 770-5562 Fax: (409) 770-5560

Park Board:

Executive Director Park Board of Trustees of City of Galveston, Texas 2504 Church Street Galveston, Texas 77550 Phone: (409) 763-6564 Fax: (409) 762-8911

6. Successors.

That all of the covenants, conditions and provisions in this Agreement shall extend to and bind both successor Commissioners' Court of County and successor Board of Trustees of Park Board.

7. Venue

197 Galveston Park Board of Trustees Regular Meeting 03/08/2016

This Agreement shall be construed under the laws of the State of Texas and venue shall be in Galveston County, Texas.

8. Severability

Any covenant, condition or provision herein contained that is held to be invalid by any

Court of competent jurisdiction shall be deleted from this Agreement but such deletion shall in no way effect any other covenant, condition or provision herein contained.

9. Non-Liability.

The parties hereto agree that in no event shall any members of the Commissioners'

Court of the County or the Board of Trustees of the Park Board or their officers, agents, and employees ever be held individually liable for this agreement, any activities associated herewith, or any breach hereof.

10. Amendment

Any and all provisions and claims in this Agreement can be amended or deleted by

County and Parks Board only by mutual agreement and any such change shall be in writing and attached to this Agreement as an addendum.

11. Execution of Agreement

This Agreement is executed to be effective as of the commencement date.

Park Board of Trustees Of the City of Galveston

By:______Date: ______

Executive Director

Attest:

______Date: ______

198 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Secretary

______Date: ______

Director Park Board

County of Galveston

By:______Date: ______Mark Henry County Judge

Attest:

______Date: ______Dwight Sullivan County Clerk

______Date: ______Julie Diaz Director Galveston County Parks & Cultural Services

199 Agenda ItemGalveston Park BoardIX of –Trustees Committee Regular Meeting 03/08/2016 Updates

A. TOURIST DEVELOPMENT ADVISORY COMMITTEE UPDATE (JOYCE CALVER MCLEAN)

No Documents

B. BEACH MAINTENANCE ADVISORY COMMITTEE UPDATE (CLYDE STEDDUM)

No Documents

Park Board of Trustees Regular Meeting March 8, 2016 200 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Agenda Item X – Executive Session

A. PURSUANT TO TEXAS GOV. CODE SECTION 551.074-PERSONNEL DISCUSSION CONCERNING THE EVALUATION AND SALARY OF THE EXECUTIVE DIRECTOR AND THE CONTROLLER

No Documents

B. PURSUANT TO TEXAS GOV. CODE SECTION 551.071-CONSULTATION WITH ATTORNEY RE CAUSE NO. CV- 0000134 IN THE MATTER OF THE COMPLAINT OF KIRBY INLAND MARINE, OWNER OF THE M/V MISS SUSAN, ET AL

No Documents

Park Board of Trustees Regular Meeting March 8, 2016 201 Galveston Park Board of Trustees Regular Meeting 03/08/2016 Agenda Item XI – Action Item(s) (Resulting from Executive Session)

 ACTION RESULTING FROM EXECUTIVE SESSION - DISCUSS AND CONSIDER FOR ACTION ANY EXECUTIVE SESSION ITEM LISTED ON THE REGULAR MEETING AGENDA

No Documents

Park Board of Trustees Regular Meeting March 8, 2016 202 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Agenda Item XII – Future Agenda Items

A. DISCUSS AND CONSIDER AMENDMENT TO CURRENT CONCESSIONAIRE CONTRACT WITH PETE ALCOCER, GALVESTON ISLAND HORSE RIDES B. DISCUSS OPTIONS FOR REPAIRS OR SALE OF PARK BOARD WAREHOUSE FACILITIES C. DISCUSS CITY OF GALVESTON ORDINANCE ON UBER REQUIREMENTS D. DISCUSS AND CONSIDER THE AWARD OF STEWART BEACH AS DESCRIBED IN THE PARK BOARD CONCESSIONAIRE INFORMATION PACKET TO SKYDIVE GALVESTON (CHRIS SADDLER) E. DISCUSS AND CONSIDER SCHEDULED EXPENDITURES FOR TOURISM DEVELOPMENT (MELODY SMITH) F. DISCUSS AND CONSIDER RECOMMENDATION FOR 2016 SEASON BEACH USER FEE AS ALLOWED FOR BY THE CITY OF GALVESTON BEACH ACCESS PLAN (KELLY DE SCHAUN)

Park Board of Trustees Regular Meeting March 8, 2016 203 Galveston Park Board of Trustees Regular Meeting 03/08/2016

Agenda Items XIII & XIV

XIII. Announcements

No Documents

XIV. Adjournment

No Documents

Park Board of Trustees Regular Meeting March 8, 2016 204