4A Wichita Falls Economic Development Minutes - 04/18/2012MINUTES OF THE
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION
April 18, 2012
PRESENT:
Gary Shores, President
Dick Bundy, Vice President/Sec.- Treasurer
Dave Lilley
Lanham Lyne
Gary McLendon
Glenn Barham, Mayor
Darron Leiker, City Manager
Kevin Hugman, Assistant City Manager
Jim Dockery, Asst. City Manager /CFO
Miles Risley, City Attorney
Linda Merrill, Recording Secretary
Tim Chase, President
Kevin Pearson, Vice President
Jay Carter
Mark Arciero
Matt Carter
Kerri Robertson
Dusty Johnston, President
Tom Tryer
Jonathan Tryer
1. CALL TO ORDER
§ Members
§ City Council
§ City Staff
§ Chamber of Commerce & Industry
§ Carter Aviation
§ Vernon College
§ Tryer Process Equipment
President Gary Shores called the meeting to order at 8:00 a.m.
2. APPROVAL OF MINUTES
Gary McLendon moved that the minutes of March 30, 2012 be approved. Seconded
by Dick Bundy, the motion unanimously carried.
3. DISCUSSION OF POTENTIAL CHANGES TO CARTER AVIATION
PERFORMANCE AGREEMENT
Jay Carter provided an update on the activities of Carter Aviation. Carter Aviation, AAI,
and the City of Wichita Falls (through the WFEDC) partnered together beginning in 2008. AAI
was keen to license the technology, but also wanted Carter Aviation to participate in the
manufacture of the product. AAI provided Carter Aviation with $8 million ($6 million for the
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WFEDC — Minutes of April 18. 2012
license, and $2 million for a prototype aircraft). The City of Wichita Falls agreed to fund $4
million. Carter Aviation would provide the technology, but also seek additional outside funding.
The agreement was based on milestones, which were difficult to meet. AAI changed its
method to a progress payment method. A total of $7.5 million of the $8 million has been paid.
Mr. Carter insisted that if the City will make its progress payments, he can get the two aircraft
finished this year without the need for additional funding. They are a year behind schedule, but
they will finish the aircraft by the end of this year. Mr. Risley said five out of eight progress
payments have been made by the WFEDC.
He is talking to local investors, as the company needs another $5 to $7 million to carry on
through next year. He expects to sell stock in the company, but that has not yet happened.
AAI stated in their contract with Carter Aviation that Carter is its preferred manufacturer,
but that does not mean that AAI cannot go elsewhere if Carter cannot supply good value. He
believes Wichita Falls can provide good value through a lower cost of living and no unions.
Mr. Chase asked Mr. Carter to look into Bell providing a public endorsement. Mr. Carter
said they would not do that.
Carter Aviation currently employees 37 people, including three part-time positions.
4. DISCUSSION OF POTENTIAL VERNON COLLEGE FUNDING
Dusty Johnson, President of Vernon College, said the College has undertaken a major
renovation project, and he made funding requests to both the 4A and 4B Boards. However, the
City Attorney explained to him the legal issues regarding the fact that the renovation was
undertaken prior to the request for funding assistance. Nevertheless, he wanted to apprise the
WFEDC regarding the activities of Vernon College.
He looks upon himself as the CEO of a business with 200 employees. He is always
looking to expand that business. The percentage of business is broken down as follows: 66% in
Wichita County, 24% in 10 other counties, and only 10% in Wilbarger County, the College's
taxing district. Vernon College has experienced tremendous growth, and for that reason, it took
on the renovation and expansion at its Wichita Falls campus, and issued $5 million in revenue
bonds. The next project the College will be considering is a parking lot renovation.
The current renovation will result in eight new positions (faculty and custodial staff).
Approximately 1,800 students attend the Wichita Falls campus and Skills Training Center.
5. TRYER PROCESS EQUIPMENT 2012 PROJECT
Tom and Jonathan Tryer are engineers who manufacture pressure vessels for the oil
industry. Their business is on the Old Iowa Park Road. They recently purchased property on City
View Drive consisting of a 6,000 sq. ft. office building and a 15,000 sq. ft. workshop. They have
no current plans for the workshop, but needed the office space for draftsmen and engineers.
In 2009, the 4A Board funded $7,000 per job for 16 positions created at Tryer. After
those employees were hired, Tryer requested an additional economic incentive, and the 4A
WFEDC —Minutes of April 18, 2012
Board again agreed to fund $7,000 per job for 16 more employees. All 32 jobs have been
created, and a request for cash-for-jobs incentive for a third round of 16 positions is before the
Board today. The average wages are approximately $20 per hour.
Discussion then ensued as to whether a new performance agreement should be executed,
or the original MOU amended.
6. EXECUTIVE SESSION
Mr. Shores adjourned the meeting into executive session at 9:42 a.m. pursuant to TEXAS
GOVERNMENT CODE § §551.071, 551.072, and 551.087. He announced the meeting back into
regular session at 10:25 a.m. The subjects posted in the Notice of Meeting were deliberated, and
no action was taken on these items in executive session.
Mr. Bundy moved that the WFEDC consider Item 3.e. of the performance
agreement with Carter Aviation as successfully completed and approve the payment of
$468,750 as per the a reement He further moved that the WFEDC continue discussions
with Carter Aviation on the remaining two payments Seconded by Dave Lilley, the motion
carried (Note: Lanham Lyne had left the meeting prior to the executive session and did not
vote on this or any motion before the WFEDC today. He has rinancial interest in Carter
Aviation, and therefore signed a Conflict of Interest Affidavit, now on rile in the Office of the
City Clerk.)
Mr. Bundy said he would like the performance agreement with Carter Aviation to have
language that would allow for Wichita Falls to be in a stronger position to gain more jobs out of
the success of the technology, as the City took the financial risk on the technology. Mr. Chase
said if the company the WFEDC has helped is successful, there could be language included that
would require the WFEDC to be reimbursed. No harm would come to the company, and the
funds would be replaced and available for the next venture.
Mr. Bundy then moved that the WFEDC pay to Tryer Process Equipment a total of
$112,000 for 16 gobs ($7,000 per gob). Seconded by Mr. McLendon, the motion carried.
Mr. Chase urged that the motion include language to the effect that this would be the end
of such a cash - for -gobs arrangement. Mr. Risley said the performance agreements
routinely have such language included. Mr. Shores said he wants to encourage them to
come back if they have additional employment opportunities. The motion carried.
7. ADJOURN
The meeting adjourned at 10:35 a.m. %
Ga hores, President