Conroe CIDC reviews finance outlook, approves incentives and updates real‑estate terms; board member resigns

The Conroe Industrial Development Corporation on Feb. 27 heard a detailed presentation on its unaudited finances, accepted a slate of annual performance‑based incentives and approved updated terms for real‑estate transactions after an executive session. Board member Scott Morasco submitted a written resignation dated Feb. 26.

The finance presentation, delivered by Michael, a CIDC finance staff member, showed an unaudited balance sheet as of Jan. 31, 2025 with “cash and cash equivalents of about 4,500,000,” investments listed at “38.4” and total assets near $62.2 million. Michael said sales‑tax receipts for the fiscal year to date were up about 5.5% compared with the prior year and noted a one‑time audit adjustment that affected monthly comparisons: “sales tax for January was down 0.84% with audit adjustments,” he said, and added that the year‑to‑date position was positive.

Why it matters: the CIDC uses 4B sales‑tax revenue to fund debt service, infrastructure in the industrial park and economic incentives. The board’s review focused on projected transfers for several capital items and on long‑term debt tied to land holdings and utility improvements in the parks.

Board members discussed the CIDC’s planned transfers from the fund, including a 2025 estimate of roughly $21.3 million in transfers tied to projects the staff listed in the packet: $903,600 for a hotel third‑lane backstop; roughly $2.2 million for an item labeled “Oscar Johnson”; roughly $6.2 million for “Project I 43” (described as a water plant in the industrial park); about $92,000 for a signal project; and a combined $5.6 million listed for water plant contributions in the current fiscal year. Michael said those transfers, together with principal and interest payments (principal roughly $4.5 million and interest roughly $1.8 million in fiscal 2025), explain the projected dip and recovery in fund balance through the 2045 schedule in the packet.

Directors pressed staff on how land‑sale proceeds have historically been used and whether sales are being applied to pay down land‑related debt. One director said the practice of continually carrying long‑term debt on land “is not good business practice”; staff and other directors discussed past refinancings and noted that proceeds from sales are subject to board decision.

On incentives, the board approved the 2025 annual performance‑based cash incentive payments included in the packet. The staff report said most applicants in the packet had been verified against tax statements; two applicants’ tax statements were incomplete and will be brought back for later action. Staff noted most existing cash incentive agreements run seven years, with one exception (McKesson) written for 10 years.

The meeting went into executive session to discuss financial incentives, real property, personnel and litigation. After the executive session the board approved updated terms and conditions for real‑estate transactions as discussed in executive session.

The agenda included a semiannual cash contribution to replenish the CLGC contract revenue coverage account to $1,500,000. The funding agreement cited in the packet is the amended and restated funding agreement dated Aug. 1, 2021. The board initially tabled that item before executive session “till after executive session” and later took the item off the table; the transcript records a motion to replenish the funds on the advice of counsel but does not record a completed roll call or final voice vote on that specific transfer in the text provided.

The board also accepted the resignation letter from Scott Morasco, dated Feb. 26, 2025. The letter reads in part: “Chairman Harrell and President Scott, I’m writing to formally resign from my position on the Conroe Industrial Development Corporation board of directors, effective immediately.”

Votes at a glance - Approval of Jan. 20, 2025 minutes — motioned and seconded; voice vote recorded “aye” with no opposition on the transcript. (Outcome: approved.) - Approval of January treasurer’s report — motioned and seconded; voice vote recorded “aye.” (Outcome: approved.) - Approval of annual performance‑based incentives (2025) — motioned and seconded; voice vote recorded “aye.” (Outcome: approved.) - Approval of updated terms and conditions for real‑estate transactions (post‑executive session) — motioned, seconded and the motion carried by voice vote. (Outcome: approved.) - Semiannual CLGC contract revenue coverage transfer of $451,800 required before March 1, 2025 under the amended and restated funding agreement (08/01/2021, §2.1(c)(22)) — item was tabled before executive session and taken off the table afterward; a motion to replenish the funds was made “on the advice of counsel,” but the transcript provided does not record a completed vote. (Outcome: not specified in transcript.)

The board adjourned at 4:55 p.m.

Looking ahead: staff said they will refine presentation notes in future reports and continue to update projections as additional sales‑tax collections are recorded; staff also said two pending incentive applicants will be returned to a future agenda once their tax statements are completed.