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4A Wichita Falls Economic Development Minutes - 11/21/2019MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION November 21, 2019 PRESENT• Leo Lane, President David Toogood, Vice -President Reno Gustafson, Secretary -Treasurer Phyllis Cowling Darron Leiker Stephen Santellana, Mayor Jeff Browning, Councilor, District 3 Paul Menzies, Assistant City Manager Blake Jurecek, Assistant City Manager R. Kinley Hegglund, Jr., City Attorney James McKechnie, Senior Assistant City Attorney Jessica Williams, Director of Finance Terry Floyd, Director of Development Services Linda Merrill, Recording Secretary § WFEDC Members § City Council § City Staff Henry Florsheim, CEO § Cci Travis Haggard, V.P., Business Retention & Expansion § 1. Call to Order Leo Lane called the meeting to order at 3:00 p.m. 2. Financial Report The November sales tax report (reflective of September's receipts) shows an increase in revenues of 4.4% over the same period last year. The fund finished the year at $4.152 million, close to the projected $4.158 million figure. This report does not show the Pamlico project approved by the City Council this week, but the next report could show a $2.4 million revenue from the sale, and a $2.3 million encumbrance from the incentive agreement. Property taxes were recently paid on both the Stanley ($60,000) and Atco ($40,000) buildings. Mr. Lane assumed the tax payment for the Stanley building would be reconciled at the closing. Mr. Menzies affirmed. Mr. Menzies noted the City Council also approved the hotel development agreement with O'Reilly.1-lospitality Management. He reminded the Board that it contributed $500,000 to the hotel project for replacement parking, as the hotel will be displacing some current parking spaces. 3. Approval of Minutes (November 7, 2019) David Toogood moved for approval. Seconded by Darron Leiker, the motion carried 5-0. 4. Discussion and possible adoption of Opportunity Strategies Organizational Assessment recommendations Mr. Toogood moved to adopt the assessment recommendations. Seconded by Phyllis Cowling, the motion carried 5-0. 5. Discussion of WFEDC Improvement Initiative Task List Mr. Lane noted that Mr. Toogood outlined the items of the assessment. The goal now is to decide where to start. Mr. Florsheim noted that the document on page 43 is meant to lay out the Chamber's responsibilities. The entire list of recommendations prepared by Mr. Toogood begins on page 49. He did not use Mr. Toogood's document, but the two documents should overlap. He will make sure they read the same. Mr. Lane asked if the Chamber needs more direction from the Board regarding what it needs to see regarding an offer. Mr. Florsheim said the WFEDC president is always in the loop, to make sure projects are crafted in the spirit of what the Board hopes to accomplish. If the Board is comfortable with what has been offered in the past, then the Chamber is all right without any guidelines. The companies know that what is offered will require a public approval process, as that language is included in every offer made. The question is how much structure the Board desires. Ms. Cowling said her time on the Board has made her realize that deals cannot be standardized. However, it would be helpful to have a cover sheet with the different deal points, and how they compare with other deals that have been done, to the extent they can be comparable. Aim toward consistency, with flexibility. Mr. Toogood said he thinks that is covered in sections 3.2.1 and 3.2.2. Ms. Cowling agreed, and also referenced section 1.5.1. Mr. Toogood noted that Mr. Lane created Section 1, and then he went through the report and extracted anything that he had not covered that could be considered a recommended task. The priority numbering is based on his opinion and might need to be reviewed by the Board. Mr. Leiker said he sees the staff (i.e., City and Chamber) being the lead on most of these items, with approval by the Board. Mr. Florsheim said the Chamber is willing to take on more responsibilities, as long as all items are prioritized. Ms. Cowling said this is a great document, but requested that the page numbers be added as a reference. Mr. Toogood said he would do so and send the document back out. Mrs. Cowling said basic documents need to be drafted. Simultaneously, conversations need to take place regarding strategy. It was agreed that Mr. Leiker and Mr. Lane would work with staff on the bylaws, while Ms. Cowling would put her efforts toward strategic planning. 6. Discussion and possible action related to economic development contract with the Wichita Falls Chamber of Commerce Henry Florsheim said he recently met with Kinley Hegglund and Paul Menzies. The City is on a fiscal year, and the Chamber operates on a calendar year. Mr. Hegglund is going to rework the agreement to a calendar year, which would be presented to the Board at its December meeting. Mr. Hegglund said the Board is being asked to extend the contract through December 31, 2019, and next month grant authority for a contract for the Chamber from January -December 2020. Mr. Florsheim said an item was added a couple of years ago to the contract whereby if the Chamber did not spend all of the salary funds, that money would be returned. He will have that portion of the contract amended to read that all 4A monies not used will be returned. The 19 recruitment position has been vacant for six months. That salary, plus the money that would have been spent toward activities that position would have been doing, will be paid back. He was happy to report that position has now been filled, and the individual will report to work on December 2. 7. Discussion and possible approval of incentive proposal of JPAG expansion Travis Haggard reminded the Board that the request from Martin Bohn was for $500,000 in the form of a forgivable loan for a build -out to accommodate the training of fighter pilots. More documents and information were requested of Mr. Bohn, and he has developed a written business plan and financial projections with assistance from the Small Business Development Center. He has obtained a signed Letter of Intent from Oman and an MOU with Saudi Arabia. He has scaled back on the job numbers: 15-20 pilot trainers at $120,000; 10 aircraft maintenance at $85,000; and 5 administrative personnel at $70,000. The economic impact of those wages would be $4.7 million. Although it is a very unique project, it does fit into the strategic plan. Mr. Bohn could still pledge the flight simulator as collator. Mr. Leiker asked if he had the ability to sign a letter of credit. Mr. Haggard said he could not; he is too leveraged at this point. Mr. Leiker noted that during the last meeting, the Board agreed it did not want to take on the flight simulator as collateral. He asked about a personal guarantee. Mr. Haggard said that Mr. Bohn is unable to make a personal guarantee, as he had put all his money into Cobra Kai. Grob is injecting cash into the business right now, although it is not considered a loan. They are trying to get this project up and going. Mr. Toogood pointed out that the letter of intent is not from the Sultan of Oman, but from a third -party for -profit consulting firm, stating that they can make a connection with the government. Mr. Haggard affirmed. 8. Executive Session Mr. Lane adjourned the meeting into executive session at 3:37 p.m. pursuant to Texas Government Code §§551.072 and 551.087. He announced the meeting back into regular session at 4:12 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. 10. Motions Economic Development Contract with the Chamber of Commerce Mr. Leiker moved to extend the current contract with the Wichita Falls Chamber of Commerce and Industry through December 31, 2019. Seconded by Mr. Toogood, the motion carried 5-0. 11. Adjourn Mr. Gustafson moved to adjourn the meeting. The meeting adjourned at 4:13 p.m. Leo Lane, President