Board of Directors Regular Meeting Agenda


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Meeting Date: 09/24/2014  

SUBJECT MATTER:
Receive, consider and act upon a recommendation from the Audit Committee regarding acceptance of the Convention Center Replacement Reserve Agreed-Upon Procedures Report for the year ended December 31, 2012;
FISCAL IMPACT:
not applicable
BACKGROUND:
Section 15.1 of the Project Lease Agreement between The Woodlands Township and the tenant of The Woodlands Waterway Hotel and Convention Center (executed in 2001) outlines reserve requirements for the periodic refurbishment, remodel and replacement of certain facility amenities and equipment. The agreement requires the tenant to maintain a reserve as follows: (i) during the first lease year, two percent (2%) of gross revenues; (ii) during the second, third and fourth lease years, three percent (3%) of gross revenues; and (iii) during the fifth lease year and for each lease year thereafter, four percent (4%) of gross revenues.

The compliance review for the year ended December 31, 2012 was conducted by the accounting firm of Karlins Ramey & Tompkins, LLC. Representatives from the firm presented the results of the compliance review to the Audit Committee on September 16, 2014.

The required amount to be reserved for 2012 was $626,396, which is based on 4% of Convention Center gross revenues totaling $15.6 million. The actual amount of reserve deposits was $627,207, creating an overage of $811 and a reserve ratio of 100.13%.

The Convention Center Replacement Reserve Agreed-Upon Procedures Report is attached for your reference.
RECOMMENDATION:
Approve a recommendation from the Audit Committee to accept the Convention Center Replacement Reserve Agreed-Upon Procedures Report for the year ended December 31, 2012.
Attachments
Agreed-Upon Procedures Report - Convention Center Reserve


    

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