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4A Wichita Falls Economic Development Minutes - 10/17/2019MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION October 17, 2019 PRESENT: Leo Lane, President David Toogood, Vice -President Phyllis Cowling Reno Gustafson, Secretary -Treasurer Darron Leiker Stephen Santellana, Mayor Bobby Whiteley, Councilor at Large Paul Menzies, Assistant City Manager Blake Jurecek, Assistant City Manager R. Kinley Hegglund, Jr., City Attorney Terry Floyd, Director of Development Services Karen Montgomery -Gagne, Planning Administrator Linda Merrill, Recording Secretary § WFEDC Members § City Council § City Staff Henry Florsheim, CEO § CCI Travis Haggard, V.P., Business Retention & Expansion § Taylor Davis, Director, WF Talent Partnership § Ripley Tate, Past -Chair, Board of Directors § Jana Schmader, Executive Director § Downtown WF Development Gary Butler, Judge, County Court at Law #1, President § Jeanette Charos, Marketing Director for DWFD § Scott Manley § ideaWF Glenn Barham § SMAC 1. Call to Order Leo Lane called the meeting to order at 3:00 p.m. 2. Financial Report The City Council ratified the 4A budget at its October 1 meeting. The October sales tax report (reflective of August receipts) shows an increase in revenues of 4.5% over the same period last year. 3. Approval of Minutes (September 19, 2019) With a change noted to the attendee portion of the minutes, David Tooaood moved for annroval. Seconded by Reno Gustafson, the motion carried.. 4. Presentations related to third -party economic development contracts Downtown Wichita Falls Development Jana Schmader said the DWFD's total ask for the 2019-2020 fiscal year was $95,650. The request was divided into two categories: Operations — that portion of salary for herself and Jeanette Charos devoted to economic development ($42,000) Economic Development Activities ($53,650) • Website/Property Platform Maintenance • Targeted Search Engine Optimization/Marketing • Technology/Software • Training/Membership • Travel • Targeted Events • Overhead They help property owners or developers work with the City. In turn, if the City needs to reach downtown property owners, the DWFD can help to disseminate that information. As the marketing information arm for downtown Wichita Falls, they have taken on the project of matching investors to inventory. Since the downtown properties platform was launched, they have included 17 properties and received 85,000 hits on the site. They have shown/scouted 24 properties, which has led to four predevelopment meetings with the City. Two properties are now in contract, and one has already closed. Phyllis Cowling asked how this request aligns with Market Street's recommendations regarding downtown economic development. Ms. Schmader replied that DWFD is the Business Retention and Expansion arm of what the Chamber's new economic development position will do. Ms. Cowling asked Henry Florsheim if the Chamber will request additional economic development resources in support of downtown. Mr. Florsheim replied affirmatively, stating the request would be specifically in support of the downtown economic development position. He said Ms. Schmader's request is exactly what is needed from an existing business program for downtown. It is a lot for a two -person office to accomplish, in addition to their other roles for downtown. One position cannot do all of that and also recruit new businesses. It will take this new economic development position to fill out the program. Everything that the DWFD organization is doing is setting the stage for this new individual to come in and be successful. Ms. Cowling said the Chamber's budget is still to come, but will presumably include an increase for this new position. Mr. Lane said that Mr. Florsheim has been planning for this new position. There will be some increase, but it dovetails nicely. Mr. Florsheim said the main thing to consider is that the Chamber will provide a full -service economic development program, but it will take more than one organization to be responsible for pieces of that program for downtown. Mr. Toogood asked if DWFD would provide twice yearly updates to the Board. Ms. Schmader agreed. Mr. Florsheim said the new economic development position would do the same. 2 ideaWF Scott Manley said ideaWF just completed its 10�" year. It was patterned after the West Texas Enterprise Challenge in Lubbock. It, in turn, was duplicated in Midland/Odessa and Abilene. Those programs give away $250,000 to $500,000 per year, and have budgets for administration of their programs. Although ideaWF can track 95 primary jobs that have been created as a result of this program, and $8 million in annual sales, the program is not in total compliance with the requirements of the laws governing the WFEDC. The new proposal is an award program strictly based on cash for primary jobs created, structured in the form of forgivable loans. The total request is for $300,000, itemized below: • Up to $250,000 for prizes, with $4,000 for each job created • $30,000 for salaries and benefits of an SBDC employee to administer the program part-time • $15,000 for program marketing • $5,000 to create a student chapter of either Enactus or Sigma Nu Tau, which are both entrepreneurial organizations for undergraduate business students Mr. Toogood asked the current source of marketing funds. Dr. Manley replied that he solicits the community. He would continue to do so, but would like to use those funds for an additional prize for those start-ups that do not fit into the primary job category, such as retail. Mr. Florsheim noted that cash for jobs and forgivable loans are two different economic development mechanisms. Dr. Manley said the details would have to be ironed out, wherein the funds would be disbursed upon front, and forgiven later. Kinley Hegglund said a cash for jobs scenario entails jobs being created and held for a period of time, and the 4A pays a certain amount for the creation of those jobs. Mr. Florsheim said a forgivable loan is backed up by collateral, and if the company does not meet its requirements, it owes money back to the 4A Board. Dr. Manley said the 4A Board would have to be heavily involved in the decision -making of these awards. He assumed the winner would have to give a personal guarantee. The level of collateralization does come back to the size of the award. If it is three jobs at $4,000 each, is the 4A Board going to take the time and effort to attempt to recoup those funds? Ms. Cowling asked if the West Texas communities' programs are fully funded by their economic development corporation, and whether they have similar criteria around their cash for jobs or forgivable loans. Dr. Manley said they say they do, but they have so much sales tax money, they are spending marketing dollars. Mr. Leiker asked if this project would compete for 4A's 10% marketing dollars. Mr. Hegglund said it would not count against the 10%, which is $410,000. The entire DWFD request is part of that 10%, he noted. Dr. Manley added that with a $250,000 prize package, there should be less marketing required in order to give those funds away. Sheppard Military Affairs Committee Glenn Barham said SMAC's request this year is $150,000, which is $1,175 less than last year's request. Its 2019 revised budget is $297,000, and the 2020 projected budget is $299,600. They will begin their capital campaign in November for years 2020-2022. The goal is $100,000 for each of those three years. Wichita County, Burkburnett Development Corporation, and Iowa Park Development Corporation also provide funding for SMAC. Expenditures include the following: • The annual October event, which costs will be reduced over the next 2-3 years from $66,000 to $55,000 • Accounting fees • Awards and gifts — decreased • Event insurance • Office rental • Social media/web page • Telephone/Internet Mr. Toogood asked if these expenses are aligned with the SWOT analysis. Mr. Barham replied affirmatively, noting he is working with the Chamber on a SAFB spouse program. 5. Discussion and possible action related to Cobra Kai Flight School expansion project Ms. Cowling asked if Martin Bohn had provided a pro forma or cash flow statement, as requested by Mayor Santellana at the September meeting. Travis Haggard said he had not. Further discussion on this item was held in executive session. 6. Discussion and possible action related to incentive proposal for Pamlico Air This item was discussed in executive session. 7. Discussion and possible action related to employee recruitment incentive proposal Mr. Florsheim said a few tweaks were made to this proposal based upon the discussions held during the Board's September meeting. This program will be open to companies in Wichita County, and employees recruited by these companies must be brought in from outside the MSA. All NAICS codes allowed under 4A legislation will be allowed to apply. There would be no requirement that this incentive be issued. The request is for the Board to allot $200,000 toward this proposal. The Chamber will manage it and provide regular feedback and do follow-up afterwards. Ms. Cowling asked if this would be an open project line item. Mr. Florsheim said it would be considered an annual program, and have its own line item. 8. Discussion and possible action related to a request to extend the contract with the Guernsey Group for project oversight and on -site representation services for the SAFB Main Gate Project Karen Gagn6 said that Guernsey's original contract as on -site representative was set up as an either/or of 816 hours or 34 weeks. They have worked through those hours as of October 3, and have been working in good faith ever since. They are on -site three days per week, eight hours per day. Their presence has been very helpful to the 4A Board, the owners of the project. She distributed a proposed amendment to the professional services agreement between the WFEDC and Guernsey, whereby Guernsey would continue to work three days per week, eight hours per day, through December 27. She is hopeful the project will be completed by that date. The contract addendum is in an amount not to exceed $23,616, or an additional 12 weeks/288 hours. 9. Executive Session Mr. Lane adjourned the meeting into executive session at 3:48 p.m. pursuant to Texas Government Code §§551.072 and 551.087. He announced the meeting back into regular session at 4:53 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 SMAC Mr. Tooaood moved to amend the WFEDC budget to approve $150,000 for the Sheppard. Military Affairs Committee. Seconded by Mr. Leiker, the motion carried unanimously. DWFD Mr. Tooaood moved to amend the WFEDC budget to approve $95,650 for Downtown Wichita Falls Development, noting that 100% of such funds are to be considered as promotional expenses. Seconded by Ms. Cowling, the motion carried unanimously. Employee Recruitment Incentive Proposal Mr. Leiker moved to amend the WFEDC budget to approve up to $200,000 for the employee recruitment incentive proposal, as outlined. Seconded by Mr. Tooaood, the motion_ carried unanimously. Guernsey Group Mr. Tooaood moved to amend the professional services agreement between the WFEDC and Guernsey to adiust the compensation by an amount not to exceed $23,616. Seconded by Mr. Gustafson, the motion carried unanimously. 11. Adjourn Mr. Gustafson moved, seconded by Ms. Cowling, to adiourn the meeting. The meeting adjourned at 4:57 p.m. Leo Lane, President