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4A Wichita Falls Economic Development Minutes - 06/20/2019MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION June 20, 2019 PRESENT: Leo Lane, President David Toogood, Vice -President Reno Gustafson, Secretary -Treasurer Darron Leiker Bobby Whiteley, Councilor at Large Jeff Browning, Councilor District 3 Steve Jackson, Councilor District 5 Paul Menzies, Assistant City Manager Jessica Williams, Director of Finance James A. McKechnie, Senior Assistant City Attorney Linda Merrill, Recording Secretary Henry Florsheim, CEO Travis Haggard, V.P., Business Retention & Expansion Debbie Dobbins ABSENT: Phyllis Cowling 1. Call to Order Leo Lane called the meeting to order at 3:30 p.m. 2. Financial Report § WFEDC Members § City Council § City Staff § CCI § Members of the Public WFEDC Member Paul Menzies addressed the Board regarding the financial report. He introduced Jessica Williams, the City's new Finance Director. The City is in the middle for fiscal year 2020 budget preparations, and it is obvious that she was an excellent hire. He and Ms. Williams are working their way through the financial report, and will provide it to the Board when it is completed. They do have the report available on sales tax receipts. The June payment (from the month of April) reflect a receipt of $323,211, or a 6.4% increase from April 2018. The fund is up almost 5.3% for the year, and will close the year over $4.1 million if that trend continues. Reno Gustafson asked when sales tax receipts had ever been so high. Darron Leiker said if the fund continues to track at this pace, it will be the highest year ever experienced. Mr. Menzies noted some payouts that had been made since the Board's last meeting: • Owens Corning - $820,000 on its forgivable loan • Eagle Rail - $450,000 on its forgivable loan • MagicAire/United Electric - $500,000 on its forgivable loan Henry Florsheim noted that Eagle Rail has also submitted information on its cash -for -jobs incentive for Phase 4. They are working through that information and will submit it to Mr. Menzies upon completion. He added that Mr. Menzies has been very responsive during this period of transition. 3. Approval of Minutes (5/16/19 and 6/17/19) Mr. Toogood moved for approval. Seconded by Mr. Leiker, the motion carried 4-0., 4. Discussion regarding the Opportunity Strategies report and possible action regarding its recommendations. Mr. Lane noted the report is a draft. Alysia Cook wanted the Board to make any desired comments or changes before the final version is released to the Council and made public. There are a lot of steps to the process involved in this report, and the Board has to determine how to approach it. Ms. Cook will be of assistance. It might be helpful to pick out the low -hanging fruit in the beginning to make the biggest impact. The Chamber is already advertising for its new hire (Vice President of Business Attraction). Mr. Leiker said there is a lot of good information contained in the report; he needs an opportunity to re -read it and let it soak in a bit more. One recommendation was that the Board meet again and look at its strategic plan. He asked Mr. Lane when this might occur. Mr. Lane feels it will be difficult to move as a whole group and suggests the Board split into subcommittees of two -member groups. That way, they could reach into the community for experts in the area they are working on and form a three -member group. Mr. Toogood said he feels the Board should meet again soon to divide up the areas upon which each Board member would like to focus. Mr. Leiker said the Board needs to be comfortable with what the report reflects. Once that has occurred, then it would be time to divide up the tasks. Mr. Lane said he felt the report was a little disjointed. He would like some clarity about the CEO discussion, as it was not always clear as to which organization she was referring. He feels there are three parts: 1. The 4A Board getting its house in order — what is permissible/not permissible under the statute; the Board's mission. 2. The Chamber's goals 3. The in-between section to work on together. Mr. Leiker suggested everyone take time to review the document, and contact Ms. Cook with any questions. At some point, the report will need to be put on the agenda and publicly endorsed. Mr. Toogood suggested that Mr. Lane run the formatting structure so that Ms. Cook is not running in different directions from all the Board members. Mr. Gustafson asked how all of this will be handled with (incoming 4A Board member) Phyllis Cowling. She will need to be briefed and receive an orientation. Mr. Lane said something needs to be put together on her behalf. He will notify her of what is discussed today. Mr. Leiker said he assumes Ms. Cook would be comfortable with direction conversations with Ms. Cowling to brief her, since she was not at the June 17 meeting. He and staff will visit with her on the status of various projects, as well as the budget and service contracts. Mr. Florsheim said that is one of the most urgent pieces, as he assumes within the next couple of months, the Board will be asking for proposals from external agencies for the fiscal year 2 2020 budget. He would like to have more guidance before putting together the Chamber's budget. Mr. Lane said he is concerned after the last few weeks' discussions about downtown expenditures. Mr. Leiker noted that the Board traditionally presents its budget to the Council in August. Throughout the year, there are budget amendments as projects materialize. If some service contracts are delayed to a later date, it would not be a huge issue. It would allow the Board to take them one at a time. It would just be a matter of telling the service agencies that the funds would not be available October 1, and would not be decided in August. There is no finite window in which these decisions must be made. The Board next discussed the possibility of attending state training programs on 4A/4B tax organizations. The closest city offering training is in Abilene; Mr. Gustafson noted the fall would be a better time for him to attend. 5. Discussion and possible action on the sale of the ATCO building located at 2400 Burkburnett Road, Wichita Falls, Texas. Travis Haggard said the ATCO building was offered for sale in 2017 for $2.1 million. Clayton Homes looked at the property and a purchase price of $1.5 million was agreed upon. However, contamination was found in the environmental phase, so they backed out of the purchase, noting they might still be interested, depending upon the success of the cleanup. They are back, with an offer of $1.1 million, contingent upon the following: • Acceptable results from the additional vapor monitoring that is needed inside the plant. Cost of the testing to be paid for by Clayton. • Acceptable results from the testing of TCE levels on 6 wells. Cost of testing to be paid for by Clayton. • Obtaining an Innocent Owner/Operator Certificate through TCEQ. Costs associated with obtaining the certificate to be paid by Clayton. • The economic incentives offer in the original 2017 agreement equaling approximately $2,088,000. Clayton Homes intends to do renovations in preparation for installation of manufacturing and equipment and begin hiring employees with anticipation of development their workforce of 240 employees within 36 months of the closing date. These employees would have an hourly wage of $15 to $20 per hour. Mr. Toogood asked if an economic impact study had been done. Mr. Haggard said he had seen one on Kevin Pearson's computer, and can email it to the Board. Mr. Florsheim added that it would be well over $10 million from payroll per year, not even considering management or executives. Mr. Leiker asked what the original incentives package contained. Mr. Florsheim reminded the Board: • 10-year property tax abatement • Sales tax exemption on manufacturing equipment • Enterprise designation • Triple Freeport exemption Cash outlays from 4A ($905,000 for cash for jobs, and $288,000 for skills training grant) 6. Executive Session Mr. Lane adjourned the meeting into executive session at 4:04 p.m. pursuant to Texas Government Code §§551.072 and 551.087. He announced the meeting back into regular session at 4:36 p.m. The subjects posted in the Notice of Meeting were deliberated, and no votes or further action were taken on these items in executive session. 7. Motions Sale of the ATCO building Mrs Leiker moved to approve the sale of the ATCO buildingto o Clayton Homes for the purchase price of S 1.1 million, inclusive of the original incentive package offered to Clayton Homes in 2017. Seconded by Mr. Toogood. the motion carried 4-0. 8. Adjourn Mr. Gustafson moved to adjourn the meeting at 4:40 p.m. Leo Lane, President 4