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					Victoria Sales Tax Development
      Corporation Budget
     Fiscal Year 2007-2008




       October 25, 2007
                       ANNUAL BUDGET

VICTORIA SALES TAX DEVELOPMENT CORPORATION

                  FISCAL YEAR 2007-2008



                              CONTENTS

                   •   Highlights and Assumptions
                   •   Budget
                   •   Financials
                   •   Projects To Date
                   •   VEDC Proposal
                   •   Other Proposed Projects
                   •   Notes




      Gilbert P. Reyna, Jr., C.P.A., Director of Finance; VSTDC Treasurer

            Andrew K. Jacob, Assistant Director of Finance
CITY OF VICTORIA, TEXAS
VICTORIA SALES TAX DEVELOPMENT CORPORATION
BUDGET WORKPAPER HIGHLIGHTS/ASSUMPTIONS
FOR FISCAL YEAR 2007-2008

Staff has assembled the proposed budget for Fiscal Year 2008 that is financially sound and adequately addresses a wide range of
priorities.
The attached budget highlights and assumptions are presented in two sections. The first section is an executive summary of the
Victoria Sales Tax Development Corporation Fiscal Year 2007 financial operations. The second section is an executive summary of
the Victoria Sales Tax Development Corporation Fiscal Year 2008 projected financial operations.

    Section I – Victoria Sales Tax Development Corporation Fiscal Year 2007 Financial Operations:

            •   Fiscal Year 2007 ending fund balance is projected at $723,245 compared to the Original Fiscal Year 2007 Fund
                Balance of $0. The main reason for this $723,245 increase in Fund Balance was due to sales tax rebate revenue and
                interest income coming in $265,344 and $633,789 higher than expected, respectively.
            •   Sales Tax Development Corporation (STDC) successfully issued $8.4 million in Sales Tax Revenue Bonds (Bonds)
                in order to construct a Youth Sports Complex. The sale of Bonds occurred in December 2006. The project is
                expected to be completed in the summer of 2008 with an estimated cost of $10.08 million. The difference between
                the $10.08M cost and the $8.4M bond proceeds will be financed by the City of Victoria ($820K) and STDC
                ($860K).
                The City of Victoria is in the process of developing a Request for Proposal for the Youth Sports Complex
                concession stand and developing game/play and entrance fees for the Youth Sports Complex.
            •   The projected sales tax rebate revenue for Fiscal Year 2007 is expected to “come in” approximately 4.2% or
                $265,344 above the Fiscal Year 2007 original budgeted revenue amount.
            •   Miscellaneous revenue came in $64,715 higher than expected. This unexpected increase was due to the sale of the
                Northcrest land – property own by the STDC as well as a refund of escrow funds on the Lone Tree Business Center.
            •   Interest revenue for Fiscal Year 2007 came in $633,789 higher than expected. The main reason for such a large
                increase is due to several large projects not being contracted out until the later part of the STDC 2007 Fiscal Year.
            •   Fiscal Year 2007 Budget was amended for $3,629,533 for new projects, which consists of the following:
                         (1) $1,600,000 for the Youth Sports Complex Project. This increases the total project cost
                             from $8.4mm to $10mm. The difference in funding will be contributed by the City and
                             STDC.
                         (2) $1,083 for development of land on Mallette Drive. This project was originally
                             allocated $10,000 to develop land originally purchased by STDC during the Northcrest
                             Drainage project in FY 2002. These funds were to cover costs associated to
                             infrastructure improvements necessary to sell the land. The STDC Board chose to
                             accept an offer made during this project, so only a portion of the engineering costs
                             were spent. This project is complete and the land has since been sold.
                         (3) $1,500,000 for the acquisition of surface water rights and industrial development. This
                             project includes the industrial development in land next to the Guadalupe River and
                             the Victoria Barge Canal. These funds were combined with $838k in City funds to
                             purchase 4,676 acre/feet of surface water rights.
                         (4) $528,450 for the development of a hike and bike trail along Lone Tree Creek. (Note:
                             the bids were opened on the Lone Tree Creek Trail Project, it was deemed that these
                             funds will not be needed; thus, these funds will be allocated back to Fiscal Year 2007-
                             2008 Budget.)
  •     Status of allocated expenses / projects for Fiscal Year 2007:

                                                          FY 2007         FY 2007
      Name & Description of FY ’07 Expense                Original        Projected
              Account/Projects                           Budget Cost     Budget Cost            Status of Project
(1) Contract Administration Fees – fee/fees              $    300,000    $ 125,000     Due to a timing difference in awarding
    charged by the City of Victoria in supervising                                     various project contracts, Sales Tax
    and managing a contract for the Sales Tax                                          Development Corporation (STDC) is
    Development Corporation. (Note: 5% of the                                          only expecting to pay approximately
    total project cost is charged for those contracts                                  $125,000 in Fiscal Year 2007;
    that are supervised and managed by City staff;                                     however, in FY 2008, the STDC is
    and, 10% of the total project cost is charged for                                  expecting to pay out approximately
    those contracts that are engineered, supervised                                    $675,000 in administration fees.
    and managed by City staff.)
(2) Industrial Park Maintenance & Operation –                  25,000        16,214    STDC is expecting to come in under
    shredding, mowing and landscape maintenance                                        budget for Industrial Park Maintenance
    of the Lone Tree Business Park.                                                    & Operating expense account.
(3) VEDC Fees – amount paid to Victoria                       254,650       254,650    The VEDC fee has been paid.
    Economic Development Corporation in order to
    attract new industry to the area and expand
    existing industry.
(4) Loop 463 Project – construction costs for                  85,826        85,826    This project was included as a change
    relocation of utility lines to facilitate widening                                 order to the existing West Outfall
    of Loop 463 south of Salem Road.                                                   Phase II project. This work has been
                                                                                       completed.
(5) Lone Tree Creek Channel Improvements                     3,303,692    3,303,692    These additional funds will be
    Project – culvert and ditch construction, storage                                  combined with a prior FY 2005
    basin construction and other expenses to                                           allocation of $3.2mm to fund the
    increase the drainage capacity of Lone Tree                                        Channel Improvement project as well
    Creek.                                                                             as the Trail project. These contracts
                                                                                       will be awarded in October 2007.
(6) Laurent Street Reconstruction Project –                  1,261,997    1,261,997    These additional funds will be
    engineering and construction costs related to                                      combined with a prior FY 2006
    the reconstruction and widening of parts of                                        allocation of $1.9mm to fund a portion
    Laurent Street.                                                                    of the Laurent Street Phase I project.
                                                                                       The construction contract was awarded
                                                                                       in September 2007.
(7) Youth Sports Complex Construction Project –              8,400,000   10,035,541    1) Contract 1 was awarded in
    constructing, acquiring and equipping a sports                                     December 2006 and is approximately
    venue.                                                                             60% complete with an estimated
    This project consists of three individual                                          completion date of March 2008.
    contracts.                                                                         2) Contract 2 was awarded in August
    1) Contract 1 included construction of twelve                                      2007 and is approximately 5%
    ballfields and associated components.                                              complete with an estimated completion
                                                                                       date of April 2008.
    2) Contract 2 included construction of the
    concession/restroom building, maintenance                                          3) Contract 3 was awarded in August
    building and front entrance.                                                       2007 and is approximately 5%
                                                                                       complete with an estimated completion
    3) Contract 3 included construction of the                                         date of April 2008.
    parking facilities, signage and security lighting.
(8) Northcrest Land Development Project -                            -        1,083    This project was originally funded
    develop land originally purchased by STDC                                          $10,000; however, the STDC Board
    during the Northcrest Drainage project in FY                                       chose to accept an offer made during
    2002. These funds were to cover costs                                              this project, so only a portion of the
    associated to infrastructure improvements                                          engineering costs were spent. This
    necessary to sell the land.                                                        project is complete and the land is
                                                                                       sold.
        •     Status of allocated expenses / projects for Fiscal Year 2007 - continued:

                                                               FY 2007          FY 2007
            Name & Description of FY ’07 Expense               Original         Projected
                    Account/Projects                          Budget Cost      Budget Cost              Status of Project
      (9) Victoria Water Rights Development Project -                    -       1,500,000     These funds were combined with
          industrial development in land next to the                                           $838k in City funds to purchase 4,676
          Guadalupe River and the Victoria Barge Canal.                                        acre/feet in surface water rights in
                                                                                               March 2007. This project is complete.
      (10) Lone Tree Creek Trail Project – construction of               -         528,450     These funds were allocated based on
           a hike and bike trail along the Lone Tree Creek.                                    current estimates for this project;
                                                                                               however, the construction contract will
                                                                                               be awarded in October 2007 and is
                                                                                               under budget. These funds will be
                                                                                               allocated back to Fiscal Year 2007-
                                                                                               2008 Budget.
                                                   Total:     $13,631,165     $17,112,453


Section II – Victoria Sales Tax Development Corporation Fiscal Year 2008 Projected Financial Operations:

        •     Fiscal Year 2008 beginning fund balance is projected at $723,245 and Fiscal Year 2008 ending fund balance is
              projected at $500,000 - this amount will be reserved for upcoming debt payment in December 2008.
        •     Sales tax rebate revenue for Fiscal Year 2008 ($6,709,775) assumes a 7.4% increase over the original budgeted
              Fiscal Year 2007 sales tax rebate revenue. The projected sales tax rebate revenue for Fiscal Year 2007 is expected to
              “come in” approximately 4.2% above the Fiscal Year 2007 original budgeted amount. The total percentage increase
              from Fiscal Year 2007 projected sales tax rebate revenue to the proposed Fiscal Year 2008 budget is 3%.
        •     Interest income is projected at $350,000 for Fiscal Year 2008.
        •     Proposed expenses / projects for Fiscal Year 2008:

                                                                                                                             FY 2008
                                                                                                                             Original
               FY ’08 Expense Account / Projects                     Description of Expense Account / Projects              Budget Cost
      (1) Contract Administration Fees                         Fees charged by the City of Victoria for supervising          $ 675,000
                                                               and managing a contract for the Sales Tax
                                                               Development Corporation.
      (2) Maintenance of Industrial Park                       Shredding, mowing and landscape maintenance of the               26,000
                                                               Lone Tree Business Park.
      (3) Victoria Economic Development Corporation Fee        Amount paid to Victoria Economic Development                    270,000
                                                               Corporation in order to attract new industry to the area
                                                               and expand existing industry.
      (4) Youth Sports Complex Construction Project            Constructing, acquiring and equipping a sports venue.            50,000
      (5) Debt Service Payment                                 Debt service payments associated to the issuance of           1,070,181
                                                               Revenue Bonds to fund the Youth Sports Complex.
      (6) Downtown Utility – Phase II, Project No. 6           Replacing water main & replacing or rehabilitating              998,000
          Construction Project                                 sewer mains in parts of Water Street, South Main
                                                               Street, West Second Street, South Bridge Street, and
                                                               East Third Street.
      (7) Downtown Utility – Phase I, Project No. 3 & 4        Engineering services for replacing water mains &                579,110
          Engineering Project                                  replacing or rehabilitating sewer mains in parts of
                                                               South Williams Street, East Goodwin Avenue, East
                                                               Forrest Street, North Wheeler Street, East Santa Rosa
                                                               Street, East Juan Linn Street, South De Leon Street and
                                                               South Wheeler Street.
  •    Proposed expenses / projects for Fiscal Year 2008 - continued:

                                                                                                                  FY 2008
                                                                                                                  Original
        FY ’08 Expense Account / Projects                    Description of Expense Account / Projects           Budget Cost
(8) Ball Airport/Mallette Drive Annexation Project      Construction of water & sewer mains in Mallette Drive      136,000
                                                        to serve areas annexed for economic development.
(9) E. Loop 463 Corridor Annexation Project             Construction of water & sewer mains from                   230,000
                                                        Mockingbird Lane across Loop 463 right-of-way to
                                                        serve areas annexed for economic development.
(10) Star Tek Telephone Call Center Incentive Project   Providing funds for the purchase of equipment for a        300,000
                                                        telephone call center at 1309 E. Red River.
(11) Future Capital Improvements Programs               Reserved for future capital improvements programs.        3,078,533
(12) Future Economic Development Programs               Reserved for future economic development programs.        1,000,000
                                                                                                        Total:   $8,412,824
                                          VICTORIA SALES TAX DEVELOPMENT CORPORATION
                                                         COMBINED FUND
                                                     AS OF SEPTEMBER 30, 2007

                                                                        Fiscal Year           Fiscal Year         Fiscal Year
                                                                        2006-2007             2006-2007           2007-2008
                                                                         Original              Projected           Proposed
                                                                          Budget                Actual              Budget

BEGINNING FUND BALANCE

          Undesignated Fund Balance                                 $         793,429     $         805,131   $         163,110
          Reserved for Operating Fund Balance                                       -                     -             500,000
          Reserved for Debt Service Fund Balance                                    -                     -              60,134
TOTAL BEGINNING FUND BALANCE, OCTOBER 1                             $         793,429     $         805,131   $         723,245

  DE-ALLOCATED PROJECTS:
        Industrial Park Maintenance & Operation                                10,949                10,949                   -
        Allen Miller Drive Construction Project                                43,338                43,338                   -
        Navarro Street Corridor Preservation Project                          151,845               151,845                   -
        Downtown 2020 Project                                                  24,083                24,083                   -
        Industrial Park Maintenance & Operation                                     -                     -               8,331
        Loop 463 Project                                                            -                     -              18,450
        Lone Tree Creek Trail Project                                               -                     -             528,450
        Lone Tree Creek Channel Project                                             -                     -             530,000
        Water & Wastewater Master Plan Project                                      -                     -                 100
        Lake Forest Sewer Line Project                                              -                     -              38,236
        VEDC KPMG Strategic Planning Project                                        -                     -               4,000
        VEDC Texas Japan Office Project                                             -                     -               2,238

  TOTAL PROJECTS DE-ALLOCATED                                                 230,215               230,215           1,129,805

ADJUSTED FUND BALANCE, OCTOBER 1                                    $       1,023,644     $       1,035,346   $       1,853,050

  REVENUES
       Sales Tax Rebate Revenue                                             6,249,000             6,514,344           6,709,775
       Sales Tax Bond Proceeds                                              8,400,000             8,457,503                   -
       Transfer from Sales Tax Operating Fund                                       -               530,000           1,010,047
       General Fund Proceeds                                                        -               410,000                   -
       Water/Wastewater Fund Proceeds                                               -               410,000                   -
       Interest Revenue                                                       300,000               933,789             350,000
       Miscellaneous Revenue                                                   10,000                74,715                   -

  TOTAL REVENUES                                                           14,959,000            17,330,351           8,069,821

TOTAL FUNDS AVAILABLE FOR PROJECTS                                  $      15,982,644     $      18,365,698   $       9,922,871

PROJECT ALLOCATIONS:
          Administrative Fees                                                 300,000               125,000             675,000
          Industrial Park Maintenance & Operation                              25,000                16,214              26,000
          VEDC Fees                                                           254,650               254,650             270,000
          Loop 463 Project                                                     85,826                85,826                   -
          Lone Tree Creek Channel Improvements Project                      3,303,692             3,303,692                   -
          Laurent Street Reconstruction Project                             1,261,997             1,261,997                   -
          Youth Sports Complex Construction Project                         8,400,000            10,035,541              50,000
          Northcrest-Land Development Project                                       -                 1,083                   -
          Victoria Water Rights Development Project                                 -             1,500,000                   -
          Lone Tree Creek Trail Project                                             -               528,450                   -
          Transfer to Construction-Youth Sports Complex                             -               530,000                   -
          Transfer to Debt Service Fund                                             -                     -           1,010,047
          Debt Service Payments                                                     -                     -           1,070,181
          Downtown Utility-Ph II Project 6 Construction Project                     -                     -             998,000
          Downtown Utility-Ph I Project 3 & 4 Engineering Project                   -                     -             579,110
          Ball Airport / Mallette Drive Annexation Project                          -                     -             136,000
          E. Loop 463 Corridor Annexation Project                                   -                     -             230,000
          StarTek Telephone Call Center Incitive Project                            -                     -             300,000
          Future Capital Improvement Programs                               2,000,000                     -           3,078,533
          Future Economic Development Programs                                351,479                     -           1,000,000

  TOTAL EXPENDITURES                                                       15,982,644            17,642,453           9,422,871

          Undesignated Fund Balance                                                   -             163,110                   -
          Reserved for Operating Fund Balance                                         -             500,000             500,000
          Reserved for Debt Service Fund Balance                                      -              60,134                   -
ENDING FUND BALANCE, SEPTEMBER 30                                   $                 -   $         723,245   $         500,000
                                          VICTORIA SALES TAX DEVELOPMENT CORPORATION
                                                    SALES TAX OPERATING FUND
                                                     AS OF SEPTEMBER 30, 2007

                                                                        Fiscal Year           Fiscal Year         Fiscal Year
                                                                        2006-2007             2006-2007           2007-2008
                                                                         Original              Projected           Proposed
                                                                          Budget                Actual              Budget

BEGINNING FUND BALANCE

          Undesignated Fund Balance                                 $         793,429     $         805,131   $         163,110
          Reserved Operating Fund Balance                                           -                     -             500,000
          Reserved for Debt Service Fund Balance                                    -                     -                   -
TOTAL BEGINNING FUND BALANCE, OCTOBER 1                             $         793,429     $         805,131   $         663,110

DE-ALLOCATED PROJECTS FROM FY 2006 & 2007
        Industrial Park Maintenance & Operation                                10,949                10,949                   -
        Allen Miller Drive Construction Project                                43,338                43,338                   -
        Navarro Street Corridor Preservation Project                          151,845               151,845                   -
        Downtown 2020 Project                                                  24,083                24,083                   -
        Industrial Park Maintenance & Operation                                     -                     -               8,331
        Loop 463 Project                                                            -                     -              18,450
        Lone Tree Creek Trail Project                                               -                     -             528,450
        Lone Tree Creek Channel Project                                             -                     -             530,000
        Water & Wastewater Master Plan Project                                      -                     -                 100
        Lake Forest Sewer Line Project                                              -                     -              38,236
        VEDC KPMG Strategic Planning Project                                        -                     -               4,000
        VEDC Texas Japan Office Project                                             -                     -               2,238

  TOTAL PROJECTS DE-ALLOCATED                                                 230,215               230,215           1,129,805

ADJUSTED FUND BALANCE, OCTOBER 1                                    $       1,023,644     $       1,035,346   $       1,792,916

  REVENUES
       Sales Tax Rebate Revenue                                             6,249,000             6,514,344           6,709,775
       Interest Revenue                                                       300,000               645,617             300,000
       Miscellaneous Revenue                                                   10,000                74,715                   -

  TOTAL REVENUES                                                            6,559,000             7,234,676           7,009,775

TOTAL FUNDS AVAILABLE FOR PROJECTS                                  $       7,582,644     $       8,270,022   $       8,802,690

PROJECT ALLOCATIONS:
          Administrative Fees                                                 300,000               125,000             675,000
          Industrial Park Maintenance & Operation                              25,000                16,214              26,000
          VEDC Fees                                                           254,650               254,650             270,000
          Loop 463 Project                                                     85,826                85,826                   -
          Lone Tree Creek Channel Improvements Project                      3,303,692             3,303,692                   -
          Laurent Street Reconstruction Project                             1,261,997             1,261,997                   -
          Northcrest-Land Development Project                                       -                 1,083                   -
          Victoria Water Rights Development Project                                 -             1,500,000                   -
          Lone Tree Creek Trail Project                                             -               528,450                   -
          Transfer to Construction-Youth Sports Complex                             -               530,000                   -
          Transfer to Debt Service Fund                                             -                     -           1,010,047
          Downtown Utility-Ph II Project 6 Construction Project                     -                     -             998,000
          Downtown Utility-Ph I Project 3 & 4 Engineering Project                   -                     -             579,110
          Ball Airport / Mallette Drive Annexation Project                          -                     -             136,000
          E. Loop 463 Corridor Annexation Project                                   -                     -             230,000
          StarTek Telephone Call Center Incitive Project                            -                     -             300,000
          Future Capital Improvement Programs                               2,000,000                     -           3,078,533
          Future Economic Development Programs                                351,479                     -           1,000,000

  TOTAL EXPENDITURES                                                        7,582,644             7,606,912           8,302,690

          Undesignated Fund Balance                                                   -             163,110                   -
          Reserved Operating Fund Balance                                             -             500,000             500,000
          Reserved for Debt Service Fund Balance                                      -                   -                   -
ENDING FUND BALANCE, SEPTEMBER 30                                   $                 -   $         663,110   $         500,000
                                          VICTORIA SALES TAX DEVELOPMENT CORPORATION
                                            YOUTH SPORTS COMPLEX CONSTRUCTION FUND
                                                     AS OF SEPTEMBER 30, 2007

                                                                  Fiscal Year           Fiscal Year           Fiscal Year
                                                                  2006-2007             2006-2007             2007-2008
                                                                   Original              Projected             Proposed
                                                                    Budget                Actual                Budget

BEGINNING FUND BALANCE

         Undesignated Fund Balance                           $                  -   $                 -   $                 -
         Reserved Fund Balance                                                  -                     -                     -
TOTAL BEGINNING FUND BALANCE, OCTOBER 1                      $                  -   $                 -   $                 -

DE-ALLOCATED PROJECTS FROM FY 2006
                                                                                -                     -                     -

  TOTAL PROJECTS DE-ALLOCATED                                                   -                     -                     -

ADJUSTED FUND BALANCE, OCTOBER 1                             $                  -   $                 -   $                 -

  REVENUES
       Sales Tax Bond Proceeds                                        8,400,000             8,400,000                     -
       Transfer from Sales Tax Dev Operating                                  -               530,000                     -
       General Fund Proceeds                                                  -               410,000                     -
       Water/Wastewater Fund Proceeds                                         -               410,000                     -
       Interest Revenue                                                       -               285,541                50,000
       Miscellaneous Revenue                                                  -                     -                     -

  TOTAL REVENUES                                                      8,400,000            10,035,541                50,000

TOTAL FUNDS AVAILABLE FOR PROJECTS                           $        8,400,000     $      10,035,541     $          50,000

PROJECT ALLOCATIONS:
   Youth Sports Complex Construction:

         Engineering, including additional services                     455,000               469,487                       -

         Surveying                                                       16,800                16,800                       -

         Land acquisition-VEC property                                          -              12,588                       -

         Phase I Contract 1                                           4,377,221             5,158,060                       -
          (Twelve ballfields and site preparation)

         Phase I Contract 2                                           1,498,297             1,447,300                       -
          (Concessions, restrooms & maintenance building)

         Phase I Contract 3                                           2,052,682             2,575,891                       -
          (Parking signage & security lighting)

         Scoreboards for fields                                                 -             100,000                       -

         Equipment to furnish concession stand                                  -              30,000                       -

         Reserved for projects costs                                            -             225,416                50,000


  TOTAL EXPENDITURES                                                  8,400,000            10,035,541                50,000
         Undesignated Fund Balance                                              -                     -                     -
         Reserved Fund Balance                                                  -                     -                     -
ENDING FUND BALANCE, SEPTEMBER 30                            $                  -   $                 -   $                 -
                                            VICTORIA SALES TAX DEVELOPMENT CORPORATION
                                              SALES TAX REVENUE BOND DEBT SERVICE FUND
                                                        AS OF SEPTEMBER 30, 2007

                                                                               Fiscal Year                  Fiscal Year           Fiscal Year
                                                                               2006-2007                    2006-2007             2007-2008
                                                                                Original                     Projected             Proposed
                                                                                 Budget                       Actual                Budget

BEGINNING FUND BALANCE

           Undesignated Fund Balance                                    $                    -      $                     -   $               -
           Reserved for Debt Service Fund Balance                                            -                            -              60,134
TOTAL BEGINNING FUND BALANCE, OCTOBER 1                                 $                    -      $                     -   $          60,134

DE-ALLOCATED PROJECTS FROM FY 2006
                                                                                             -                            -                     -

  TOTAL PROJECTS DE-ALLOCATED                                                                -                            -                     -

ADJUSTED FUND BALANCE, OCTOBER 1                                        $                    -      $                     -   $          60,134

  REVENUES
       Sales Tax Bond Proceeds                                                               -                     57,503                     -
       Transfer from Sales Tax Dev Operating                                                 -                          -             1,010,047
       Interest Revenue                                                                      -                      2,632                     -
       Miscellaneous Revenue                                                                 -                          -                     -

  TOTAL REVENUES                                                                             -                     60,134             1,010,047

TOTAL FUNDS AVAILABLE FOR PROJECTS                                      $                    -      $              60,134     $       1,070,181

PROJECT ALLOCATIONS:
    Debt Service Payments:

         * Principal                                                                         -                            -             535,000

         * Interest                                                                          -                            -             535,181

           Paying Agent Fees                                                                 -                            -                     -

  TOTAL EXPENDITURES                                                                         -                        -               1,070,181
           Undesignated Fund Balance                                                         -                          -                       -
           Reserved for Debt Service Fund Balance                                            -                     60,134                       -
ENDING FUND BALANCE, SEPTEMBER 30                                       $                    -      $              60,134     $                 -

* Debt Service payments due June 15th and December 15th. First Interest payment of $356,788 due 12/15/07.
VICTORIA SALES TAX DEVELOPMENT CORPORATION
BOND MATURITY SCHEDULE
SALES TAX REVENUE BONDS, SERIES 2006
REQUIREMENTS TO RETIRE


                                                                                Balance of
   Fiscal Year Ending      Total                                                 Principal
      September 30      Requirements         Interest       Principal           Outstanding

                                                                            $     8,395,000.00

         2007                      0.00              0.00            0.00         8,395,000.00
         2008              1,070,181.25        535,181.25      535,000.00         7,860,000.00
         2009              1,069,050.00        334,050.00      735,000.00         7,125,000.00
         2010              1,067,812.50        302,812.50      765,000.00         6,360,000.00
         2011              1,070,300.00        270,300.00      800,000.00         5,560,000.00
         2012              1,066,300.00        236,300.00      830,000.00         4,730,000.00
         2013              1,071,025.00        201,025.00      870,000.00         3,860,000.00
         2014              1,069,050.00        164,050.00      905,000.00         2,955,000.00
         2015              1,070,587.50        125,587.50      945,000.00         2,010,000.00
         2016              1,070,425.00         85,425.00      985,000.00         1,025,000.00
         2017              1,068,562.50         43,562.50    1,025,000.00                 0.00




                          10,693,293.75      2,298,293.75    8,395,000.00
                            VICTORIA SALES TAX DEVELOPMENT CORPORATION
                                           BALANCE SHEET
                                       AS OF SEPTEMBER 30, 2007


                                               ASSETS


CURRENT ASSETS:
  Cash                                                                   $       10,279
  Investments, at Cost                                                       20,034,942
  Sales Tax Receivable                                                          504,207
  Other Miscellaneous Receivable                                                  5,058

           Total Current Assets                                          $   20,554,485

RESTRICTED ASSETS, CASH AND INVESTMENTS:
  Cash                                                                   $            -
  Due To / From Other Funds                                                           -

           Total Restricted Assets                                                    -

PROPERTY, PLANT & EQUIPMENT:
  Construction in Progress                                               $    5,899,098
  Land                                                                        2,027,059
  Building                                                                            -
  Improvements Other than Buildings                                               1,325
  Accumulated Depreciation on Assets                                         (7,927,483)

           Total Property, Plant & Equipment                             $            -

TOTAL ASSETS                                                             $   20,554,485


                                     LIABILITIES & FUND EQUITY


CURRENT LIABILITIES (PAYABLE FROM CURRENT ASSETS):
  Accounts Payable                                                       $         940
  Accrued Interest Payable on Bonds                                             25,768

           Total Current Liabilities (Payable from Current Assets)       $      26,708

CURRENT LIABILITIES (PAYABLE FROM RESTRICTED ASSETS):
  Accounts Payable                                                       $            -

RETAINED EARNINGS:
  Reserved for Prior and Current Year Projects                           $   19,389,493
  Reserved for FY 2007 Adminstration Expenses                                   300,000
  Unallocated / Unreserved - available for future projects                      838,284


           Total Retained Earnings                                       $   20,527,777

TOTAL LIABILITIES AND FUND EQUITY                                        $   20,554,485
                         VICTORIA SALES TAX DEVELOPMENT CORPORATION
                        STATEMENT OF REVENUES, EXPENSES AND CHANGES
                                    AS OF SEPTEMBER 30, 2007


OPERATING REVENUES:
        Sales Tax                                                     $     6,514,344
        Bond Proceeds                                                       8,431,735

           Total Operating Revenues                                   $    14,946,079

OPERATING EXPENSES:
    584 FY 2007 VEDC Admin Fees                                       $        254,650
     n/a FY 2007 Bond Issue Costs                                               20,407
    511 Loop 463 Project                                                    429,151.25
    528 Allen Miller Drive Project                                           58,952.62
    548 Water & Wastewater Master Plan                                       10,500.00
    555 Loop 463 Industrial Park Project                                     16,214.45
    556 Navarro Street Water/Sewer Line Replacement Project                 253,093.72
    557 Lone Tree Creek Flood Protection Project                                   -
    562 Youth Sports Cntr Project - Pre-Engineering                                -
    550 Northcrest Drainage-Land Development Project                          1,082.50
    571 Downtown 2020 Project                                                      -
    573 La Salle Street Improvement Project                                        -
    574 Brownson Street Utility Project                                            -
    577 Laurent Street Pre-Engineering Project                                     -
    578 Lake Forest Sewer Line Project                                      161,764.00
    580 VEDC Texas Japan Office Project                                      11,762.08
    582 Glascow Street Widening Project                                            -
    583 Youth Sports Complex Improvement Project                          3,490,011.73
    585 Victoria Water Rights & Industrial Development Project            1,500,000.00

           Total Operating Expenses                                   $     6,207,589

              Operating Income/(Loss)                                 $     8,738,490

OTHER INCOME
  Interest Income                                                             933,789
  Misc Revenue                                                                 74,715

           Total Other Income                                         $     1,008,504

           Net Income                                                 $     9,746,994

Unreserved Fund Balance as of October 1, 2006                         $       805,131
Reserved for Prior Year Projects as of October 1, 2006                      9,975,652

Retained Earnings as of October 1, 2006                               $    10,780,783

Retained Earnings as of September 30, 2007                            $    20,527,777
           CITY OF VICTORIA, TEXAS
          ONE-HALF CENT SALES TAX
          AS OF SEPTEMBER 30, 2007

                                                                             MONTHLY                                             MONTHLY
                                                         ANALYSIS           INCREASE/        MONTHLY          MONTHLY             EXPEND.           FARM               MONTHLY             MONTHLY
                                                         OF CASH           (DECREASE)       SALES TAX         INTEREST           ON APPR.           LEASE            INVESTMENT          INVESTMENT
           DESCRIPTION OF ACTIVITY                       ACCOUNT              IN CASH       RECEIPTS           INCOME            PROJECTS          EXPEND.           PURCHASES            MATURITIES

             FISCAL YEAR 2005-2006

September 30, 2006 Cash Balance:                     $      48,368

October 31, 2006 Cash Balance                               34,493     $       (13,875) $       511,819   $            -     $      (650,694) $              -   $       (500,000) $          625,000
November 30, 2006 Cash Balance                               8,197             (26,296)         565,114                -            (316,911)                -        (18,809,500)         18,535,000
December 31, 2006 Cash Balance                              34,036              25,840          491,922                -            (541,082)                -                  -              75,000
January 31, 2007 Cash Balance                               34,576                 540        8,961,286                -            (203,243)                -         (8,957,503)            200,000
February 28, 2007 Cash Balance                              69,518              34,942          732,171                -            (262,717)                -        (16,434,513)         16,000,000
March 31, 2007 Cash Balance                                 15,882             (53,636)         474,330            5,058          (1,738,004)                -           (520,000)          1,724,980
April 30, 2007 Cash Balance                                 52,925              37,044          491,002                -             (88,958)                -           (490,000)            125,000
May 31, 2007 Cash Balance                                   32,234             (20,692)         621,533           12,600            (431,455)                -        (33,543,805)         33,320,436
June 30, 2007 Cash Balance                                  65,562              33,328          450,492           52,000            (159,165)                -           (310,000)                  -
July 31, 2007 Cash Balance                                   4,327             (61,234)         523,684                -             (34,918)                -           (550,000)                  -
August 31, 2007 Cash Balance                                 8,358               4,030          641,897                -            (581,204)                -        (19,312,855)         19,256,192
September 30, 2007 Cash Balance                             10,279               1,922          493,802                -            (878,945)                -           (490,000)            877,065

      September 30, 2007 Cash Balance        Total          10,279     $       (38,089) $    14,959,052   $       69,658     $    (5,887,295) $              -   $    (99,918,176) $       90,738,673

August 31, 2007 Cash Balance                         $        8,358

September's Sales Tax Rebate                                493,802    $       493,802 $       493,802    $                  $                 $                 $                   $
Farm Lease Payment/Miscellaneous Revenue                          -                  -                                   -                                   -
September's Investment Purchases                                  -                  -                                                                                          -
September's Investment Maturity                                   -                  -                                                                                                              -
September's Deposit into Investment Pool                   (490,000)          (490,000)                                                                                  (490,000)
September's Withdrawal from Investment Pool                 877,065            877,065                                                                                                        877,065
September's Industrial Park Project                          (1,880)            (1,880)                                              (1,880)
September's Youth Sports Complex Project                   (877,065)          (877,065)                                            (877,065)
September's Water/Wastewater Master Plan Project                  -                  -                                                    -
September's Navarro St Water/Sewer Line Project                   -                  -                                                    -
September's Lake Forest Sewer Line Project                        -                  -                                                    -

      September 30, 2007 Cash Balance        Total   $      10,279     $        1,922   $      493,802    $              -   $     (878,945) $               -   $       (490,000) $          877,065
     CITY OF VICTORIA, TEXAS
VICTORIA SALES TAX CORPORATION
    AS OF SEPTEMBER 30, 2007
            (IN $1,000s)

                                                                                                                                                                                                                                       PREVIOUS
                                        (A)                   (B)                          (C)                          (D)                          (E)                       (F)                              (G)          (H)       MONTHLY       FY 06-07
                                     BUDGETED               ACTUAL                       ACTUAL                       ACTUAL                       ACTUAL                    ACTUAL                          MONTHLY        CUMM.        YEAR        BUDGET
                                     RECEIPTS              RECEIPTS                     RECEIPTS                     RECEIPTS                     RECEIPTS                  RECEIPTS                         % CHANGE     % CHANGE     % CHANGE     COLLECTED
            DATE                      FY 06-07              FY 02-03                     FY 03-04                     FY 04-05                     FY 05-06                  FY 06-07                        COL: A / F   COL: A / F   COL: E & F     $6,249

OCTOBER                          $           515 $                     414         $                   483           $               490          $           504           $             565                     9.71%        9.71%       12.10%        9.04%
NOVEMBER                                     441                       348                             397                           393                      432                         492                    11.56%       10.56%       13.89%       16.91%
DECEMBER                                     453                       341                             369                           394                      444                         524                    15.67%       12.21%       18.02%       25.30%
JANUARY                                      667                       526                             569                           608                      652                         732                     9.75%       11.42%       12.27%       37.01%
FEBRUARY                                     461                       338                             371                           414                      450                         474                     2.82%        9.85%        5.33%       44.60%
MARCH                                        473                       342                             363                           383                      462                         491                     3.81%        8.90%        6.28%       52.46%
APRIL                                        621                       441                             482                           528                      606                         622                     0.16%        7.41%        2.64%       62.41%
MAY                                          468                       324                             388                           415                      458                         450                    -3.85%        6.12%       -1.75%       69.61%
JUNE                                         503                       377                             383                           420                      492                         524                     4.17%        5.91%        6.50%       78.00%
JULY                                         620                       440                             497                           563                      606                         642                     3.55%        5.63%        5.94%       88.27%
AUGUST                                       504                       360                             395                           430                      493                         494                    -1.98%        4.96%        0.20%       96.18%
SEPTEMBER                                    523                       398                             394                           440                      512                         504                    -3.63%        4.24%       -1.56%      104.24%

                                 $          6,249 $                4,649 $                     5,091 $                              5,478         $          6,111          $            6,514




                                                                         Sales Tax Rebate Analysis
                                     $800


                                     $700


                                     $600


                                     $500


                                     $400


                                     $300


                                     $200


                                     $100


                                       $0
                                              OCTOBER


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                                                                                                             MARCH



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                                                                                                                                                                                                 SEPTEMBER




                                                                      Fiscal Year 05-06                                  Fiscal Year 06-07
             CITY OF VICTORIA, TEXAS
      SALES TAX DEVELOPMENT CORPORATION
              TOTAL PROJECT STATUS
             AS OF SEPTEMBER 30, 2007


                                                            AMOUNT                AMOUNT              REMAINING
                           PROJECT                         APPROVED               PAID TO              PROJECT
                             TYPE                          BY BOARD                DATE                BALANCE

      Streets Projects                                         25,626,696            18,856,762            6,769,934

      Utilities Projects                                       11,963,238            11,860,036                103,202

      Sports Venue Projects                                    10,050,000             3,559,741            6,490,259

      Drainage Projects                                         9,191,797             3,218,105            5,973,692

      Economic Development Projects                             3,765,857             3,765,857                      -

      Water Rights Projects                                     1,500,000             1,500,000                      -

      Traffic Signal Projects                                     874,639              822,233                  52,406

      Building Infrastructure Projects                            152,900              152,900                       -

      Parks Projects                                              150,000              150,000                       -

      VEDC Administration                                       1,100,300             1,100,300                      -


              TOTAL PROJECTS TO DATE                           64,375,426            44,985,933 (1)       19,389,493




(1)   Amounts represent cumulative totals beginning with projects funded in FY 1995 - 1996. Does not include
      cummulative costs paid to City of Victoria for administration and engineering of $866,734.
           ONE-HALF CENT SALES TAX
       DETAIL OF ALL APPROVED PROJECTS
           AS OF SEPTEMBER 30, 2007

                                                             ORIGINAL         AMEND.        ADJUSTED                            AMOUNT         REMAINING
                                                              AMOUNT          TO THE         AMOUNT             CONTRACT        PAID ON         PROJECT
ACCT               PROJECTS APPROVED:                        APPROVED        PROJECT        APPROVED            AWARDED        CONTRACT         BALANCE

       FISCAL YEAR 1995 - 1996:

505    Thoroughfare Master Plan                         $       78,000   $      (9,650) $      68,350     (1)     yes      $       68,350 $            -
501    North Navarro Street Lights                             152,965               -        152,965     (2)     yes             152,965              -
502    Ben Wilson Seal Coat                                    100,000         (12,929)        87,071     (3)     yes              87,071              -
532    Water-Wastewater Overflow Mang. Study-EPA               470,000         (15,122)       454,878     (4)     yes             454,878              -
                          Totals For Fiscal Year 1995-96 $     800,965   $     (37,701) $     763,264                      $      763,264 $            -

       FISCAL YEAR 1996-1997:

504    Community Center Portico                         $      152,900 $             - $      152,900     (5)     yes      $      152,900 $            -
503    Water Treatment Plant Study                             180,500               -        180,500     (6)     yes             180,500              -
513    Stormwater Drainage Master Plan                         475,000               -        475,000     (7)     yes             475,000              -
520    1997 Traffic Signal Project                             150,000         (11,768)       138,232     (8)     yes             138,232              -
506    1997 Street Rehabilitation Project                      850,000         (56,327)       793,673     (9)     yes             793,673              -
N/A    Paving Mach. - Administration Cost                       10,000         (10,000)             -             n/a                   -              -

                          Totals For Fiscal Year 1996-97 $    1,818,400 $      (78,095) $    1,740,305                     $     1,740,305 $           -

       Fiscal Year 1997-1998:

507    Miori Lane Project - Pre-engineering             $        36,000 $      (19,582) $       16,418   (10)     yes      $        16,418 $           -
508    1998 Left Turn Lane-Signal Improv. Project                54,925        (11,229)         43,696   (11)     yes               43,696             -
521    Traffic Signal Upgrade at Ben Jordan & Laurent            55,000         (3,395)         51,605            yes               51,605             -
518    High Accident Intersection Project                        26,250         (1,233)         25,017   (13)     yes               25,017             -
509    Navarro-US 77 Railroad Underpass                         525,000              -         525,000   (20)     yes              525,000             -
510    Guy Grant Street Improvements Project                    176,000        (23,463)        152,537   (15)     yes              152,537             -
522    98 Traffic Signal Interconnect System                    132,000        (27,141)        104,859   (16)     yes              104,859             -
523    Traffic Signal Preemption System                         143,000         (7,085)        135,915            yes              135,915             -
514    Drainage Easement Mapping Project                         42,000        (41,069)            931            yes                  931             -
507    Miori Lane Improvements Project                        3,700,000         91,329       3,791,329   (19)     yes            3,791,329             -
525    School Flasher Upgrades Project                          207,350              -         207,350            yes              207,350             -
515    Lone Tree Creek Improvements Project                      88,000        (86,800)          1,200            yes                1,200             -
516    Hand Road Railroad Ditch Project                          18,700        (16,800)          1,900            yes                1,900             -
524    Gradall Ditch Excavator                                  218,835              -         218,835            yes              218,835             -
519    Ethel Lee Tracy Park Improvements                        150,000              -         150,000            yes              150,000             -

                          Totals For Fiscal Year 1997-98 $    5,573,060 $     (146,468) $    5,426,592                     $     5,426,592 $           -
           ONE-HALF CENT SALES TAX
       DETAIL OF ALL APPROVED PROJECTS
           AS OF SEPTEMBER 30, 2007

                                                                ORIGINAL        AMEND.         ADJUSTED                     AMOUNT         REMAINING
                                                                 AMOUNT         TO THE          AMOUNT      CONTRACT        PAID ON         PROJECT
ACCT               PROJECTS APPROVED:                           APPROVED       PROJECT         APPROVED     AWARDED        CONTRACT         BALANCE

       Fiscal Year 1998-99:

511    Loop 463 Project                                    $     1,300,000 $     481,550 $      1,781,550     yes      $     1,781,550 $           -
512    Metropolitan Transportation Plan                             39,850             -           39,850     yes               39,850             -
526    Proposed Sewer Main Extension - Design                      330,000             -          330,000     yes              330,000             -
517    Lone Tree Creek-Miori Detention                           1,000,000      (335,109)         664,891     yes              664,891             -

                              Total For Fiscal Year 1998-99 $    2,669,850 $     146,441 $      2,816,291              $     2,816,291 $           -

       Fiscal Year 1999-2000:

533    Guy Grant Construction Project                      $     2,000,000 $      (58,265) $    1,941,735     yes      $     1,941,735 $           -
528    Allen Miller Drive Construction Project                     200,000        (43,338)        156,662     yes              156,662             -
529    Whispering Creek Construction Project                     1,700,000     (1,700,000)              -     n/a                    -             -
530    Vine St Sewer Oversizing Project - Diversion              2,100,000        (43,300)      2,056,700     yes            2,056,700             -
536    Workforce Education Program                                 325,000              -         325,000     yes              325,000             -
535    West Hwy 59 Water/Sewer Extension Project                   890,000       (508,550)        381,450     yes              381,450             -
537    Johnson Manufacturing Co. Project                           150,000              -         150,000     yes              150,000             -

                         Total For Fiscal Year 1999-2000 $       7,365,000 $   (2,353,453) $    5,011,547              $     5,011,547 $           -

       Fiscal Year 2000-2001:

541    Vine St Sewer Extension Project                     $     2,985,057 $           -        2,985,057     yes      $     2,985,057 $           -
542    Sam Houston Reconstruction Project                        1,000,000             -        1,000,000     yes            1,000,000             -
546    High Service Water Pipeline                               1,000,000             -        1,000,000     yes            1,000,000             -
543    Hwy 59 & Loop 463 Utility Extension Project                 315,000      (173,350)         141,650     yes              141,650             -
538    South Victoria Pub Safety Improv Project                     36,200       (14,458)          21,742     no                21,742             -
539    Business Dev Needs Analysis Project                          10,000             -           10,000     no                10,000             -
540    Workforce Education Project                                 157,076       (10,580)         146,496     no               146,496             -
509    Navarro St Corridor Preservation Project                    633,175      (151,845)         481,330     yes              481,330             -
552    VEDC Project Promotion Costs                                 15,000             -           15,000     yes               15,000             -
553    Tejas Production Services, Inc. Project                      20,000             -           20,000     no                20,000             -

                         Total For Fiscal Year 2000-2001 $       6,171,508 $    (350,233) $     5,821,275              $     5,821,275 $           -
           ONE-HALF CENT SALES TAX
       DETAIL OF ALL APPROVED PROJECTS
           AS OF SEPTEMBER 30, 2007

                                                              ORIGINAL        AMEND.         ADJUSTED                     AMOUNT         REMAINING
                                                               AMOUNT         TO THE          AMOUNT      CONTRACT        PAID ON         PROJECT
ACCT               PROJECTS APPROVED:                         APPROVED       PROJECT         APPROVED     AWARDED        CONTRACT         BALANCE

       Fiscal Year 2001-2002:

548    Water & Waste Water Master Plan                    $       75,000 $        (100) $        74,900     yes               60,400         14,500
549    Ben Jordan Reconstruction Project                       3,100,000             -        3,100,000     yes            3,100,000              -
544    VEDC Fees                                                  75,000             -           75,000     no                75,000              -
545    US HWY 59N & 59 Bus Bore Project                          475,000        (4,209)         470,791     yes              470,791              -
547    Water Tower #1 Interconnect Project                       350,000       (18,278)         331,722     yes              331,722              -
550    Northcrest Drainage Outfall Project                        75,000             -           75,000     yes               75,000              -
551    Sam Houston Reconstruction Project                        400,000             -          400,000     yes              400,000              -
554    Arterial Overlay Projects                                 500,000             -          500,000     yes              500,000              -
555    Loop 463 Industrial Park                                1,657,300             -        1,657,300     yes            1,657,300              -

                         Total For Fiscal Year 2001-2002 $     6,707,300 $     (22,587) $     6,684,713                    6,670,213         14,500

       Fiscal Year 2002-2003:

 556   Navarro St Water/Sewer Line Replacement Proj       $      230,000 $           -   $      230,000     yes      $       230,000 $            -
 557   Lone Tree Creek Flood Protection Project                1,000,000             -        1,000,000     yes            1,000,000              -
 558   Mallette St Improvement Project                           174,000             -          174,000     yes              174,000              -
 559   Ben Jordan Rehabilitation Project                         320,000             -          320,000     yes              320,000              -
 560   Airline Road Reconstruction Project                       500,000             -          500,000     yes              500,000              -
 561   Mockingbird Lane Improvement Project                      732,000             -          732,000     yes              732,000              -
 562   Youth Sports Cntr Improve Proj - Pre-Engineering           50,000             -           50,000     yes               50,000              -
 563   VEDC Fees - FY 2003                                       110,000             -          110,000     no               110,000              -
 564   Toyota Supplier Recruitment Research Project              118,000             -          118,000     no               118,000              -
 565   Cabinet Manufacturing Equip & Job Training Proj            37,500             -           37,500     no                37,500              -
 566   High Collision Intersection Research Project               15,000             -           15,000     no                15,000              -
 567   Main & Constitution Intersection Design                    15,472             -           15,472     yes               15,472              -

                         Total For Fiscal Year 2002-2003 $     3,301,972 $           -   $    3,301,972              $     3,301,972 $            -
           ONE-HALF CENT SALES TAX
       DETAIL OF ALL APPROVED PROJECTS
           AS OF SEPTEMBER 30, 2007

                                                             ORIGINAL        AMEND.        ADJUSTED                     AMOUNT         REMAINING
                                                              AMOUNT         TO THE         AMOUNT      CONTRACT        PAID ON         PROJECT
ACCT               PROJECTS APPROVED:                        APPROVED       PROJECT        APPROVED     AWARDED        CONTRACT         BALANCE

       Fiscal Year 2003-2004:

 556   Navarro St Water/Sewer Line Replacement Proj     $     2,500,000 $           - $     2,500,000     yes      $     2,500,000 $             -
 557   Lone Tree Creek Flood Protection Project               1,000,000             -       1,000,000     yes            1,000,000               -
 568   John Stockbauer Reconstr - Pre-Engineering               200,000      (200,000)              -     yes                    -               -
 569   Laurent Reconstruction - Pre-Engineering                 300,000      (300,000)              -     yes                    -               -
 570   VEDC Fees - FY 2004                                      198,000             -         198,000     no               198,000               -
 555   Industrial Park Maintenance & Operation                   30,000       (29,544)            456     yes                  456               -
 555   Industrial Park - Ph II Land Acquisition                       -             -         989,651     yes              989,651               -
 571   Downtown 2020 Project                                          -                        50,917     yes               50,917               -

                         Total For Fiscal Year 2003-2004 $    4,228,000 $    (529,544) $    4,739,024              $     4,739,024 $             -
       Fiscal Year 2004-2005:
572    VEDC Fees - FY 2005                              $       208,000 $           - $       208,000     no       $      208,000 $              -
555    Industrial Park Maintenance & Operation                   35,000       (16,908)         18,092     yes              18,092                -
556    Navarro St Water/Sewer Line Replacement Proj             213,000             -         213,000     yes             210,124            2,876
557    Lone Tree Creek Flood Protection Project               3,800,000      (600,000)      3,200,000     yes                   -        3,200,000
573    La Salle Crossing (Hathaway) Project                     675,500             -         675,500     yes             675,500                -
574    Brownson Street Utility Project                          365,000             -         365,000     yes             365,000                -

                         Total For Fiscal Year 2004-2005 $    5,296,500 $    (616,908) $    4,679,592              $     1,476,716 $     3,202,876

       Fiscal Year 2005-2006:

575    VEDC Fees - FY 2006                              $       254,650 $           - $       254,650     no       $      254,650 $              -
555    Industrial Park Maintenance & Operation                   35,000       (10,149)         24,851     yes              24,851                -
576    Lone Tree Road Reconstruction Project                  2,204,562     1,531,049       3,735,611     yes                   -        3,735,611
577    Laurent Street Reconstruction (PreEng) Project           330,000             -         330,000     yes             330,000                -
578    Lake Forest Sewer Line Prjct (orig Northwest)            200,000       (38,236)        161,764     yes             161,764                -
579    VEDC KPMG Strategic Planning Project                       4,000        (4,000)              -     no                    -                -
580    VEDC Texas Japan Office Project                           14,000        (2,238)         11,762     no               11,762                -
581    VEDC Marketing/Advertising Folder Project                  4,800             -           4,800     no                4,800                -
573    La Salle Crossing (Hathaway) Project                           -       113,393         113,393     yes             113,393                -
582    Glascow Street Widening Project                                -       950,000         950,000     yes             950,000                -
583    Youth Sports Complex Improvement Project                       -             -               -     yes                   -                -
577    Laurent Street Reconstruction Project                          -     1,910,558       1,910,558     yes                   -        1,910,558

                         Total For Fiscal Year 2005-2006 $    3,047,012 $   4,450,377 $     7,497,389              $     1,851,220 $     5,646,169
           ONE-HALF CENT SALES TAX
       DETAIL OF ALL APPROVED PROJECTS
           AS OF SEPTEMBER 30, 2007

                                                            ORIGINAL        AMEND.       ADJUSTED                     AMOUNT         REMAINING
                                                             AMOUNT         TO THE        AMOUNT      CONTRACT        PAID ON         PROJECT
ACCT              PROJECTS APPROVED:                        APPROVED       PROJECT       APPROVED     AWARDED        CONTRACT         BALANCE


       Fiscal Year 2006-2007:

584    VEDC Fees - FY 2007                             $       254,650 $           - $      254,650     no       $       254,650 $             -
511    Loop 463 Project                                         85,826             -         85,826     yes               85,826               -
555    Industrial Park Maintenance & Operation                  25,000        (8,786)        16,214     yes               16,214               -
557    Lone Tree Creek Flood Protection Project              3,303,692      (530,000)     2,773,692     yes                    -       2,773,692
577    Laurent Street Reconstruction Project                 1,261,997             -      1,261,997     yes                    -       1,261,997
583    Youth Sports Complex Improvement Project              8,400,000     1,600,000     10,000,000     yes            3,509,741       6,490,259
550    Northcrest Drainage-Land Development Project                  -         1,083          1,083     yes                1,083               -
585    Victoria Water Rights Development Project                     -     1,500,000      1,500,000     no             1,500,000               -

                        Total For Fiscal Year 2006-2007 $   13,331,165 $   2,562,297 $   15,893,462              $     5,367,514 $    10,525,948

                        Accumulated Projects Funding $      60,310,732 $   3,024,126 $   64,375,426              $    44,985,933 $    19,389,493
September 19, 2007

Victoria Sales Tax Development Corp.
Victoria City Council


Dear VSTDC Board and Council:

On behalf of the Victoria Economic Development Corporation’s Board of Directors, I
want to thank you for your continued support of the economic development of the
Victoria region. Your investment with VEDC has helped us attract new industry to the
area and expand existing industry as well as helped to get our community noticed at an
increasing rate by those companies who are looking for locations to grow. The VEDC
investment request for 2008 from the VSTDC is $270,000.00. This level of investment
represents an increase of $15,350.00 over the funded level in 2006 and 2007.

On the attached 2008 VEDC Proposed Budget, as approved by our board, you will see
that our overall budget will increase by 5%. The majority of our increase comes in the
form of staff salaries and associated benefits including medical insurance. VEDC and
our staff are the face of Victoria to many national and international companies and
organizations that will likely have an opportunity to influence where future investment is
made. We know you want that investment in the Victoria region whenever possible;
therefore, we need the best people on the job. Our primary asset to help influence these
investment decisions is the professionalism of our staff. Our goal has always been to
provide Victoria with the highest level of economic development services. This level of
service is made possible by hiring and maintaining a high performance staff at all levels.
Our ability to bring decision makers to the community is evidenced by some of the
projects that have and are currently evaluating our community. Examples include:

Project Freedom (SNF) - $400 million project with 400 jobs, if we are selected.
Exelon Nuclear - we are being seriously considered for this $4 billion project.
StarTek - over $4 million renovation of the Albertson’s building employing up to 500.
NuCoastal - $60 million plant renovation and 20 to 30 new jobs to the City of Victoria.

I appreciate your consideration of our request. We look forward to continuing to
strengthen the partnership we share with the community as together we grow Victoria.

Sincerely,


D. Dale Fowler
President
                                              2008 VEDC Proposed Budget

                  VEDC Budget
                                             2007 Budget        2008 Proposed    2007 vs 2008     % Difference


Revenue
Public Funds
     Victoria County                               $15,000             $20,000           $5,000            33%
     Sales Tax Development Corporation            $254,650            $270,000          $15,350             6%
     Navigation District                           $10,000             $10,000              $0              0%
Investment - Private                              $115,000            $110,000          -$5,000             -4%
Special Projects Grant Income                              $0           $3,000           $3,000
Interest Income                                     $3,630              $6,534           $2,904            80%
Total Income                                      $398,280            $419,534          $21,254             5%


Operating Expenses
Staff Salaries                                    $245,700            $263,500          $17,800             7%
Payroll Tax Expense                                $24,570             $23,979            -$592             -2%
401K Matching Funds/Expense                         $7,331              $7,905            $574              8%
Employee Benefits Insurance - Medical              $24,886             $27,000           $2,114             8%
Insurance - Commercial                              $7,243              $7,500            $257              4%
Legal and Accounting                                $3,000              $3,000              $0              0%
Staff Development/Travel/Lodging                    $8,000              $8,000              $0              0%
Postage                                             $2,000              $2,000              $0              0%
Office Rent                                        $13,650             $13,650              $0              0%
Telephone                                           $4,200              $4,600            $400             10%
Office Supplies                                     $5,000              $5,500            $500             10%
Dues Business & Professional                        $2,600              $3,300            $700             27%
Repairs & Maintenance                                 $500                $500              $0              0%
Meeting Expenses                                      $500                $800            $300             60%
Miscellaneous Expense                                      $0               $0              $0              0%
Total Operating Expenses                          $349,180            $371,234          $22,054             6%

Prospect Development                                $6,000              $6,000              $0              0%
                 Special Projects
Publications & Subscriptions                          $800                $800              $0              0%
Promotional Material                                $2,000              $2,000              $0              0%
Business Incentive Expense                                 $0               $0              $0              0%
Travel -Air, Entertainment, Lodging                $33,000             $33,000              $0              0%
Direct Mail Campaign                                       $0               $0              $0              0%
Local Promotion                                     $5,000              $5,000              $0              0%
Contract Services                                     $500                $500              $0              0%
Non-budgeted Line Item                                     $0               $0              $0              0%
Advertising                                         $1,800              $1,000            -$800            -44%
Total Prospect Development                         $49,100             $48,300            -$800             -2%
Total Operating and Prospect Dev.        $      398,280.00            $419,534          $21,254             5%
SELLING VICTORIA: A MARKETING PLAN
   DEVELOPED FOR THE PURPOSE OF
       BUSINESS RECRUITMENT
                             2008




                        Prepared For:

The Victoria Economic Development Corporation Board of
                       Directors



                        August, 2007



                               By:

    The Victoria Economic Development Corporation




                           2008 Marketing Plan
             VICTORIA ECONOMIC DEVELOPMENT CORPORATION
                             Table of Contents


   A Marketing Plan Developed For the Purpose of Business
                       Recruitment




Executive Summary



Market Analysis



Community Advantages



Marketing Strategies



Projected Marketing Efforts




                                     2008 Marketing Plan
                       VICTORIA ECONOMIC DEVELOPMENT CORPORATION
                I.    EXECUTIVE SUMMARY



Overview
The Victoria Economic Development Corporation continues to move
forward in our goal to improve the economic vitality of the Victoria and
surrounding communities through the creation of new jobs and new tax base.
We have developed and are implementing an aggressive campaign targeting
corporate decision makers with direct mail and personal on-site visits
whenever possible. This promotional activity has included participation in
target market industry trade shows and recruitment trips.

Though we have had success building relationships in specified industries
(auto-related), this activity is just a portion of what VEDC has been working
on and the success we have enjoyed over the past year. We are currently
working on projects that, should they come to fruition, would cumulatively
represent billions of dollars in capital investment and the creation of
hundreds of primary jobs in a variety of industries including energy/power
generation, back office operations/call center, steel industry, warehouse and
distribution, and general light and heavy manufacturing.

The following is a summary of VEDC’s goals over the past year and where
we finished with respect to reaching those goals:

VEDC Summary of Work (2006 Goals)
Continue to research and identify potential supplier companies for
Toyota San Antonio and qualify these prospects for direct marketing.
In addition, we will qualify prospects in other industries with our
research efforts.

Our quest to identify supplier companies in the auto industry and qualify
them as prospects continues. Furthermore, VEDC has worked to develop
relationships and conduct research in other industries of growth.



                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
VEDC continues to follow up with the relationships we have developed with
these suppliers to find ways in which Victoria can play a role in partnering
with them to grow their supplier network in South Texas. Furthermore,
Victoria continues to be considered by auto suppliers that are considering
investment in Texas.

In an effort to expand upon this goal, VEDC also continues to respond to
and follow up with leads that come from the state economic development
and tourism office. In 2006, VEDC developed proposals for 20 state leads
and 17 self-generated leads. This year (2007), VEDC has submitted
proposals for 13 leads that have come from the state. VEDC has worked
with 11 self-generated prospects. These clients have called requesting
specific information on Victoria’s demographics and sites, most of which
have been generated through their research on the VEDC website or
through relationships we have built in various industries. These industries
include energy/power generation, back office operations/call centers,
warehouse and distribution, aviation, and general light/heavy
manufacturing. Many of these projects are at varying stages of progress.


Prepare promotional package to sell the Victoria area to the identified
prospect companies. We also want to update and refresh the look of our
marketing materials so that there is continuity of message and “feel”.

Clean, relevant, and professional promotional and packaged marketing
pieces are key to any successful marketing campaign. To that end, VEDC
yearly reviews its marketing materials to ensure their freshness and efficacy.

This year VEDC initiated and completed a freshening of our Lone Tree
Business Center – Victoria brochure marketing piece. The brochure now
takes on a “feel” and look more consistent with our other marketing pieces
to include our website. Proposals we use to market our community have
undergone a similar freshening to promote a consistent look across all of
our marketing pieces.




                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
Initiate efforts to target particular firms in varied industries as
prospects by identifying changing business circumstances and
environments in other communities that may lead those firms to
consider relocation. We will present them with the opportunity to
consider Victoria.

It is important for VEDC to develop and maintain a pipeline of projects and
prospects. With that said we continue to research market trends and
changing business circumstances that might open up an opportunity for
Victoria to attract a new business within our targeted industries. VEDC
closely monitors all of our targeted industries for movement and growth
indicators.

We continue to research large retailers that may be in need of warehouse
and distribution center in our area. Recently, we have found that there is a
shortage of water and sewer pipe across the United States. That
information, coupled with the fact we have received multiple RFI’s from the
state concerning pipe manufacturing projects, has prompted VEDC to
conduct research on the largest pipe manufacturers in the world and begin
developing a prospect list.


Travel to company home offices to meet with decision makers. We also
want to continue to travel abroad if needed to show our level of
commitment to prospects considering investment in Victoria.

We believe that what separates VEDC from other economic development
organizations is our marketing orientation: our willingness to follow up and
our ability to develop relationships with prospects. A large part of
succeeding in these goals is calling on prospects at their location.

 This year, VEDC has conducted marketing trips to Georgia, South Carolina,
and Tennessee in an effort to identify and develop prospects in targeted
industries. During these visits, VEDC has initiated 12 new face-to-face
relationships in addition to following up with relationships we have already
established. With trips planned in the fourth quarter of this year to
Kentucky and Michigan, VEDC plans to be in front of an additional 10-15
prospects.



                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
Last summer, VEDC made its second marketing trip to Japan with the help
of Mrs. Naoko Shirane and the Texas Japan Office. This year we decided
not to travel to Japan unless the trip was needed due to progress we were
making with a Japanese client. VEDC fully anticipates that we will continue
to reap the benefits from our past international marketing trips to include
one company that is continuing their investigation of Victoria for capital
investment.


Coordinate site visits to Victoria by interested companies.

VEDC must continue to aggressively seek out relationships with prospects in
targeted industries. One of our main goals in developing these relationships
is to get the prospect into the community for a site visit. Getting the
prospect into the community to make an objective assessment of the
opportunities available to them is our initial goal.

2006 proved to be the busiest year that VEDC has ever had. Building upon
the successes achieved in 2006, in 2007 we had 30+ site visits from 8
companies from targeted industries. Those 8 companies include Exelon
Nuclear, Maverick Aviation, TXU, StarTek, and Projects Fisher, Overseas,
Freedom, and GSL. There are currently a number of projects at various
stages of their site investigation process. 1 company VEDC has worked with
(NuCoastal) announced plans and has already begun work on construction
of their $60 million investment and creation of 20-30 full-time jobs. StarTek,
the Colorado-based call center operation, has already begun work on the
reconstruction of the former Albertsons building and will begin hiring its’
first employees soon. South Texas Steel is another manufacturer that has
already finished construction at the Crestwood facility and opened its’ doors
for business. There are a couple of other prospects that could potentially
announce a decision as early as late 4th quarter of 2007.


Identify and attend appropriate trade shows/conferences.

VEDC continues to identify trade show/conferences that provide the most
value for our marketing efforts. This year, VEDC attended the semi-annual
Automotive News Conference and SEDC Conference. Furthermore, VEDC
has looked for opportunities to accompany Texas One and former Secretary
of State Roger Williams on state marketing trips. Through the remainder of

                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
the year and going forward, we will continue to seek out opportunities to
partner with Secretary of State Phil Wilson to market the State of Texas.
Through our networking efforts at these conferences and participation at
select marketing trips VEDC was able to make new contacts, follow up on
leads, and gain a better understanding of the changing dynamics in our
targeted industries.



Continue to look for opportunities to partner local businesses with
suppliers who are looking to outsource work.

Equally as important as bringing new industry in to create new jobs and
new tax base in the community is facilitating the growth and success of
existing companies. Our commitment to growing existing businesses is
evident through the implementation of our BEST program in which we visit
significant employers in the community to determine their needs. Over the
past year VEDC has come to the aid of existing businesses by facilitating tax
phase-in for over $60 million of investment and the addition of at least 40
new jobs. VEDC’s involvement in these projects helps demonstrate the
community’s pro-business environment. Companies include NuCoastal and
South Texas Steel Service. Lone Star Ethanol, a company brought to VEDC
by the Port of Victoria, is another company VEDC has worked with to
secure tax abatement from Victoria County. This project is still in process.

We also look for opportunities to grow existing businesses by partnering
them with other businesses seeking to outsource work. GEMCO is a
manufacturer of pelletizing dies that VEDC worked with to locate across
from the Lone Tree Industrial Park over 2 years ago. GEMCO has a
worldwide customer base, but has struggled to develop business
partnerships with regional petrochemical manufacturers that could benefit
from the work that GEMCO does. We have been involved with facilitating
discussion between GEMCO and petrochemical manufacturers in the region
to find if a partnership can be reached.


Seek out other opportunities throughout the auto industry.

The Port of Victoria Industrial Park South remains a prime industrial
property that has piqued the interest of many prospects considering South

                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
Texas for a large scale manufacturing project. We continue to aggressively
market this property and look for ways to make it more attractive to
potential prospects. While there haven’t been any auto manufacturers that
have expressed interest in the property, there have been several other large
industrial prospects that have.

The Port of Victoria Industrial Park South is currently in the final stages of
consideration by a large industrial prospect that wishes make a substantial
capital investment.

Final Remarks/Successes
In all, Victoria is well positioned to take advantage of the opportunity that is
before us and we continue to aggressively move forward with our marketing
efforts. It is critical that we continue our efforts in marketing on behalf of
this community as well as offer a strong, significant level of support to
active projects in an effort to close the sale. The following is a list of
projects VEDC has worked with that have announced plans to locate in
Victoria or are in the final stages due diligence:

Exelon Nuclear

Exelon has announced that Victoria County is one of two counties being
considered for the construction of a nuclear plant. Through relationships
VEDC have built at the Governor’s Office, Victoria was able to quickly get
on the radar screen of this company. For nearly 12 months, VEDC has been
intimately involved with this project making trips to meet with company
representatives in Austin as well as facilitating community site visits for
Exelon executives. During the last community site visit (August 2007)
VEDC organized and hosted a dinner for Exelon that offered an opportunity
for the client executives to meet with community leaders. In addition, VEDC
has been before the city council, county commissioners, the Victoria
Chamber, and the African American Chamber to secure resolutions that
would embrace the project Exelon is considering. All entities have
unanimously passed resolutions and VEDC is now in the process of
organizing and leading a delegation to hand deliver the resolutions to Exelon
executives at their headquarters in Chicago, IL. Preliminary, conservative
estimates suggest Exelon will invest $4 billion and create 600 new jobs.



                                    2008 Marketing Plan
                      VICTORIA ECONOMIC DEVELOPMENT CORPORATION
Lone Star Ethanol

Lone Star Ethanol was brought to VEDC by the Port of Victoria. VEDC has
been working with Lone Star Ethanol for approximately 7 months. VEDC
has already secured acceptance of Lone Star Ethanol’s tax abatement
application from the Victoria county commissioners. Currently, Lone Star
Ethanol is awaiting final approval of funding before moving forward. The
company expects to invest $170 million and create 65-70 new jobs.

NuCoastal

VEDC worked with NuCoastal for almost 3 years before they finally made
an announcement to locate in Victoria. NuCoastal will be putting back into
service the mothballed Victoria Power Plant. After locating NuCoastal,
VEDC worked with the company to secure tax abatement from the city of
Victoria and Victoria County. The company is currently well into the
construction phase of their project. They expect to invest $60 million and
create 20-30 new jobs.

StarTek

VEDC has worked with StarTek for over 2 years and have hosted the
company on a number of site visits during that span of time. This past
summer the company announced plans to locate in Victoria and refurbish the
old Albertsons building. The company is currently undergoing construction
and making arrangements to partner with local organizations to conduct
training. StarTek expects to invest $5 million and create 600 new jobs.

South Texas Steel

South Texas Steel is a manufacturer that VEDC has worked with for over a
year. They have refurbished the Crestwood facility and have already begun
fabricating steel. South Texas Steel will hire approximately 20-25
employees and commit an investment of $1.75 million. VEDC is in the final
stages of working with the company to receive tax abatement from the City
of Victoria and Victoria County.




                                  2008 Marketing Plan
                    VICTORIA ECONOMIC DEVELOPMENT CORPORATION
Project Freedom

VEDC has worked with Project Freedom for over a year. The company has
been hosted on over 15 site visits by VEDC. VEDC has also coordinated
and facilitated meetings between the company and the Governor’s Office of
Economic Development and Tourism in Austin, TX. This past year, VEDC
secured an agreement from the Bloomington Independent School District to
consider approval of an HB 1200 tax incentive for the company. The
company is currently in its final stages of due diligence. The company is
considering a total investment of $400 million and creation of 400 jobs in
Victoria County.




                                  2008 Marketing Plan
                    VICTORIA ECONOMIC DEVELOPMENT CORPORATION
                  II. MARKET ANALYSIS

A. Target Market
1. Our target customers are:

   • Auto Industry

   • Auto Parts Manufacturers

   • Energy

   • Light and Heavy Manufacturing

   • Warehouse and Distribution

   • Site Locators

   • Government Officials




                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
          III. COMMUNITY ADVANTAGES


1. Victoria vs. the Competition:

   Partnerships. Organizations such as the Port of Victoria, Victoria
   Economic Development Corporation, Texas Workforce Solutions of the
   Golden Crescent, Victoria Regional Airport, City & County, the Victoria
   College, University of Houston-Victoria, and the Victoria Chamber of
   Commerce have partnered to seek better solutions for a better business
   climate.

   VEDC has also continued to explore opportunities for more regional
   cooperation. Over the years, VEDC has participated in a number of
   efforts to encourage a more regional approach to developing partnerships
   that would enhance the marketability of the region and specifically the
   Victoria area. This past year VEDC became participants in a regional
   effort to attract skilled workforce to the area. Due to low unemployment
   and a declining availability of skilled workers, VEDC felt it was
   important to participate in the development of a marketing plan that
   would ultimately attract skilled workers to the area.

   In addition to VEDC's interest in growing the availability of skilled
   workers throughout the area; VEDC has also partnered with the City of
   Victoria in their community branding initiative. There is tremendous
   value in developing a positive perception of our community. Doing so
   promotes and supports VEDC's efforts to recruit new businesses and
   potential workers to the Victoria area.

   Unique, Skilled Workforce. The Victoria area is home to companies
   such as Dow, Invista, DuPont, Formosa, Alcoa and others within the
   petrochemical industry.

   Lone Tree Business Center – Victoria. The Lone Tree Business Center-
   Victoria has been completed. The Lone Tree Business Park is a readily
   available site with infrastructure in place that offers a quick solution for
   businesses in need of immediate expansion. In an April 2007 article

                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
published in Fortune magazine, Mark Sweeney wrote about the value of
community preparedness. He says “…the site selection process places a
much higher value on communities that are ready. The attraction of
investment and employment is highly competitive, and being prepared
creates a competitive advantage for a community. This state of
preparedness applies to a wide variety of factors, the most noteworthy
being the physical factors – sites and infrastructure.” Mark goes on to
say that “firms now gravitate quickly to those candidate locations that
have ‘ready’ sites – those with clear ownership and availability,
completed site studies, and adequate infrastructure availability.” Mark
Sweeney is senior principal of McCallum Sweeney Consulting, providing
site selection and incentive negotiation services to firms worldwide.
Mark Sweeney is also a friend to Victoria.

Ability to Train Workforce. The Victoria College will tailor a workforce
training curriculum to fit a specific business’ needs. In August 2007,
Exelon executives visited the Victoria College’s technical training
facilities. They were amazed and complimentary of the real-world
technical processes and simulation available on-site as a testimonial to
Victoria College’s level of partnership with industry.

Multi Modal Transportation. Whether the use of air, road, water or rail
is needed, Victoria makes all options available. Major state highways 87,
77, and 59 (future I-69) all pass through Victoria connecting us to the
metro areas of Houston, Austin, San Antonio, Corpus Christi, and the Rio
Grande Valley. In addition the Port of Victoria provides an excellent
option for moving material by barge. Rail is abundant in the area with
tracks served by Union Pacific and Burlington Northern Santa Fe. The
Victoria Regional Airport also continues to be an asset to the community
providing commercial air service.

Medical Community. The strength of the medical community adds to the
overall quality of life in Victoria. Both DeTar and Citizens Medical
Center hospital systems have continued to invest in this community,
growing facilities and a number of healthcare services.

University of Houston-Victoria. The university also adds to Victoria’s
quality of life. UHV offers bachelor’s degrees, master’s degrees, and
professional certification programs that support the growth of degreed
professionals in this community.

                               2008 Marketing Plan
                 VICTORIA ECONOMIC DEVELOPMENT CORPORATION
            IV. MARKETING STRATEGIES

A. Image
We will enhance these perceptions of our community image.

   o Victoria’s business friendly economic climate.

   o Victoria offers customer service of the highest quality so that any
     business looking to expand will find it easy to do so.

   o Victoria will partner with industry and ease the burdens associated
     with expansion into a new community or maintaining a business
     within the community.


B. Features
The features we will emphasize are:

    Variety of industrial sites to include the expansion of our site inventory
    outside of the Victoria area.
    • Lone Tree Business Center-Victoria, Port of Victoria Industrial Park,
       Port of Victoria Industrial Park South, Victoria International
       Commerce Airpark, and Aloe West.

    Multiple large green field sites
    • Tracts of land located off of Old Bloomington Rd. / Highway 185,
      Loop 463 and Highway 87

    Multi-modal transportation system
    • Major Highway (U.S. 87, U.S. 59 – future I-69, U.S. 77), Port of
      Victoria / Barge Canal, Victoria Airport, Railroad (Union Pacific,
      Burlington Northern Santa Fe)

    Partnerships among higher education, workforce development, local
    government and business organizations. We have partnered this past


                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
    year with regional organizations and the city of Victoria to develop a
    plan to recruit skilled workers to the area and create a positive image of
    the community.

    Pro Business Attitude
    • This year we initiated and secured tax phase-in for NuCoastal and
       South Texas Steel Service Company. We are currently working with
       Lone Star Ethanol and StarTek to execute a tax phase-in at the
       County level. VEDC also petitioned the city and county of Victoria,
       the Victoria Chamber, the African American Chamber and the
       Guadalupe Blanco River Authority (GBRA) to adopt a resolution in
       support of Exelon Nuclear considering a new project in Victoria
       County.


C. Advertising/Promotion
1. These are points to emphasize about Victoria:

   ♦ Strong presence of manufacturing industry (petrochemical plants,
     plastic bag and film, metal fabrication, and oil field services
     companies)/quality workforce
   ♦ Industrial business park with infrastructure in place

   ♦ Multi-modal transportation system

   ♦ Geographical location with respect to larger metro areas

   ♦ An abundance of available water for industrial use



2. Advertising/promotion sources:


   Brochures
   Marketing brochures are used extensively not only through direct mail
   efforts, but also when personally visiting prospects. Each brochure gives
   a clean, professional visual to the product we are selling. Brochures are

                                   2008 Marketing Plan
                     VICTORIA ECONOMIC DEVELOPMENT CORPORATION
also included in proposals that are sent directly to prospects or to the
Governor’s office. Last year we initiated and completed the development
of a new folder/brochure to replace our older folder. This year we
followed up the development of our brochure marketing pieces with a
freshening of the Lone Tree Business Center-Victoria brochure.

Conferences / Seminars
Site consultants say “know your clients.” Our attendance at conferences
and seminars is crucial to gain knowledge of the industry and/or
educating VEDC board members/local government officials. VEDC also
uses conferences and seminars as a way to get in front of and market
directly to industry decision makers.

Direct Mail to Site Locators and Prospects
Direct mail will be used as a follow up to e-mail and/or telephone
correspondence. Generally-speaking direct mail will consist of a
proposal on our community and community assets that might be of
interest to the prospect.

Prospecting Trips
Prospect visits are used to gauge interest in expansion to our community
as well as to show our commitment and reciprocate our interest in their
project. Prospect visits are generally taken after there has been
substantial correspondence with the prospect.

Telemarketing
Telephone calls are used as a follow up to our direct mail efforts and as a
means to personally stay in touch with prospects. Through email and
telephone calls we are able to update prospects on any positive press our
community has received as well as relevant data to the prospect including
economic factors, demographic information or business growth.

Webpage
Economic development professionals from around the country including
site locators all agree that web-based marketing is the most effective way
economic development organizations can market themselves. Our
webpage will continue to be refreshed and will include new features to
make navigation through our site and access to useable information easier.
One such feature is a new interactive map that allows users to familiarize
themselves with Victoria and its’ assets.

                                2008 Marketing Plan
                  VICTORIA ECONOMIC DEVELOPMENT CORPORATION
  V. PROJECTED MARKETING EFFORTS

A. Our Goals

  Continue to research and identify potential companies that would
  support growth industries in Texas and qualify these prospects for
  direct marketing. In addition, we will qualify prospects in other
  industries with our research efforts.

  Prepare promotional package to sell the Victoria area to the identified
  prospect companies. We also will continue to update and refresh the
  look of our marketing materials so that there is continuity of message
  and “feel”.

  Initiate efforts to target particular firms in varied industries as
  prospects by identifying changing business circumstances and
  environments in other communities that may lead those firms to
  consider relocation. We will present them with the opportunity to
  consider Victoria.

  Travel to company headquarters and regional offices as appropriate to
  meet with decision makers. We also will continue to travel abroad if
  needed to show our level of commitment to prospects considering
  investment in Victoria.

  Coordinate site visits to Victoria by interested companies.

  Identify and attend appropriate trade shows/conferences.

  Continue to look for opportunities to partner local businesses with
  suppliers looking to outsource work.




                               2008 Marketing Plan
                 VICTORIA ECONOMIC DEVELOPMENT CORPORATION
A. Where We Are Going

  Travel
  VEDC has already significantly raised a level of awareness of
  Victoria. Our message is simple “Victoria is a great place to do
  business and it wants to develop a long-standing, mutually beneficial
  partnership with you.” Such a message is diluted and largely
  ineffective on the pages of a magazine or on the header of our website.
  The only way we can hope to effectively communicate that message
  and be certain our target audience is hearing it, is to personally deliver
  the message. Furthermore, VEDC feels that it is important to involve
  local leadership and encourage their participation on these marketing
  events when appropriate.

  It is critically important to follow up our telephone and e-mail
  correspondence with personal visits. Additionally, we expect to
  generate more leads through our research as well as follow through
  with our regular leads from the state. Funding will be required to
  allow for the necessary follow-up visits. Realistically, demand will
  determine the number of trips made in the coming year.

  Listed below are planned marketing efforts for the coming year.
  These trips are exclusive of any travel associated with a specific
  project.

  First Quarter
  Michigan – Automotive News Event
  South Carolina – Marketing Trip

  Second Quarter
  Indiana – Marketing
  SEDC Conference
  San Antonio – Toyota Plant Tour for Victoria leadership

  Third Quarter
  State of Texas Marketing Event (TBA)

  Fourth Quarter
  Kentucky – Toyota Opportunity Exchange
  Michigan – Marketing Trip




                                2008 Marketing Plan
                  VICTORIA ECONOMIC DEVELOPMENT CORPORATION
Marketing
Hosting Events
Another component of our marketing efforts will be to draw attention
to our area through a campaign of events. In previous years VEDC
has partnered with groups such as the University of Houston-Victoria,
Victoria College, and Texas Workforce Solutions to host a Regional
Economic Development seminar. Such efforts put Victoria on the
radar screen and further strengthen relationships with key regional and
state economic development offices. Both of these offices can be
instrumental in the encouragement of new investment into a state,
region, or community. It is important for these organizations to be
familiar with Victoria and understand that Victoria is ready to forge
partnerships with new businesses. We will continue to look for
opportunities to host events that will further and grow an awareness of
Victoria’s assets.

Familiarization Tours
In addition to hosting events that will create a “buzz” about Victoria,
we will look for opportunities to bring in consultants and/or business
prospects individually for site visits. One of the more significant
visits we have had this year was from Exelon. Exelon has sent
company representatives to Victoria on several occasions this past
year. The relationship Victoria built with Exelon through these visits
culminated in the announcement that Victoria County was one of two
finalists being considered for a $4 billion power plant.

Although this marketing effort will not be sufficient on its own, it will
assist in sharpening a consultant/site locator or prospect’s interest in
our area as well as providing an avenue for developing relationships
and positive perceptions of Victoria. We have also explored and may
have an opportunity to bring in more prospects directly.




                             2008 Marketing Plan
               VICTORIA ECONOMIC DEVELOPMENT CORPORATION
POTENTIAL ANNEXATION AREAS




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                                                     AREA # 1
                                            Ball Airport/ Mallette Drive

This proposed annexation consists of land between Glascow Street and Spring Creek, along Ball Airport
Road and Mallette Drive. This entire area is undeveloped agricultural land owned by three families.
Recent drainage improvements in this area have created the capacity for new development. The area is
considered a prime potential growth area by the Victoria 2020 Comprehensive Plan.

Acres:        604.83

Housing Units: 0

Pros:       1) Local ordinance control over undeveloped tracts.
            2) Tax revenue from existing development.

Cons:         Growth in this area will place significant pressure to develop the Ball Airport Road extension
              from US 87 to US 77.

Cost to Serve: $135,677. Small water and sewer service extensions are necessary to serve the Scherer
property. The remainder of the annexation area is served by existing utilities. Other existing services are
adequate to serve the area.


PROPERTY OWNER                        TRACT         ACRES       APPRAISED        TAXABLE        REVENUE
                                      NUMBER                         VALUE          VALUE*        GAINED
Abstract 12
Arthur Kenne                           T-82            215.32     $322,980.00      $16,150.00        $111.43
Arthur Kenne                            -                 2.0       42,560.00       42,560.00         293.66
Mark Scherer                           T-22          295.076       442,610.00        8,850.00          61.06
Patrick Welder, Jr                     T-78            92.43       184,860.00        6,930.00          47.82
TOTAL                                                604.826      $993,010.00      $74,490.00        $513.97
* Value of land after Ag Exemption.




2007 Annexation Service Plan                                                                        Page 2
                                                   AREA # 2
                                              E. Loop 463 Corridor

This proposed annexation consists of land fronting on the northeast side of Loop 463 from near
Mockingbird Lane to just south of Ben Jordan Street. The majority of the land is undeveloped,
agricultural land owned by the Wedemeier Family.

Acres:        182.579

Housing Units: 0

Pros:         1) Tax revenue from existing development.
              2) Local ordinance control over undeveloped tracts.

Cons:         None.

Costs to Serve: $229,368. Water and sewer services will need to be extended across Loop 463 at
Mockingbird Lane and Ben Jordan Street to serve the large tracts on the north side; other existing
resources are adequate to serve the area.


PROPERTY OWNER                        TRACT        ACRES      APPRAISED         TAXABLE       REVENUE
                                      NUMBER                         VALUE        VALUE*        GAINED
Abstract 170
South Texas Electric Coop               T-8            0.50          7,500.00      7,500.00          51.75
South Texas Electric Coop              BPP               0      146,000.00       146,000.00       1,007.40
Oscar Wedemeier                         T-5         179.115     301,294.00        14,355.29          99.05
Junie Gilster,
T. Donald O’Connor Estate
Kathryn Gilster                         T-4           2.964      17,763.00           219.00           1.51
TOTAL                                               182.579    $472,557.00      $168,074.29      $1,159.71
* Value of land after Ag Exemption.



Text highlighted in blue represents Business Personal Property (BPP). BPP is equipment and inventory
taxed at the same tax rate as real property; therefore, the amount of revenue gained may vary from year to
year.




2007 Annexation Service Plan                                                                      Page 3
  Engineering for Downtown Utility Improvement Project Phase I, Projects 3 & 4




The engineering for Phase I, Projects 3 & 4 will involve the design, bidding and
construction phase services for a construction project that will replace and or rehabilitate
the water and sewer lines in sections of William Street, North DeLeon Street, Wheeler
Street, North Navarro, East Juan Linn Street, East Santa Rosa Street, East Constitution
Street, East Forest Street and East Goodwin Avenue. The age of these lines ranges from
75 to 100 years of age, with deficiencies in the sanitary sewer lines which include
sagging lines, cracks, root intrusion, and blockages to water pipe deteriorations and
deficiencies which include multiple line breaks, low water flow and pressure from
tuberculation, and undersized lines. The estimated cost for the engineering services for
these projects is $579,110.
             Downtown Utility Improvement Project Phase II, Project 6




The scope of work for Phase II, Project 6 of the Downtown Utility Replacement Project
involves replacing approximately 1750 linear feet of water line and replacing and/or
rehabilitating approximately 2700 linear feet of sewer line in Water Street, South Main
Street, West Second Street, and South Bridge Street. This project will be combined with
Phase II, Project 8 of the Downtown Utility Replacement Project. Project 8, however, is
being funded from the Utilities Department’s Fiscal Year 2008 operating budget. The age
of these lines range from 75 to 100 years of age, with deficiencies in the sanitary sewer
ranging from sagging lines, cracks, root intrusion, and blockages and water pipe
deteriorations and deficiencies which include multiple line breaks, low water flow and
pressure from tuberculation, and faulty water valves. The estimated construction cost for
Project 6 is $998,000.
NOTES
NOTES

				
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