4A Wichita Falls Economic Development Minutes - 02/20/2020MINUTES OF THE
WICHITA FALLS ECONOMic DEVELOPMENT CORPORATION
February 20, 2020
PRESENT:
Leo Lane, President § WFEDC Members
David Toogood, Vice -President §
Reno Gustafson, Secretary -Treasurer §
Phyllis Cowling §
Darron Leiker §
Stephen Santellana
§ Mayor
Paul Menzies, Assistant City Manager
§ City Staff
R. Kinley Hegglund, Jr., City Attorney
§
James McKechnie, Senior Assistant City Attorney
§
Terry Floyd, Director of Development Services
§
Jessica Williams, Director of Finance
§
Linda Merrill, Recording Secretary
§
Henry Florsheim, CEO § Ca
David Leezer, Vice President of Business Attraction §
Travis Haggard, V.P., Business Retention & Expansion §
Scott Poenitzsch, Chair, Board of Directors §
Scott Manley § ideaWF
Vanda Cullar § SBDC
1. Call to Order
Leo Lane called the meeting to order at 3:00 p.m.
2. Financial Report
Paul Menzies said the sales tax revenue reflective of December's receipts showed an S%
increase over the same period from the prior year. The statewide average is 9%. Two years ago,
the sales tax revenues totaled $3.9 million; last year's receipts totaled $4.15 million. The fund is
4.73% ahead of last year, so at this point, the Board would be looking at $4.35 million in sales tax
revenues for this year.
3. Approval of Minutes (January 16, 2020)
Phyllis Cowling moved to approve. Seconded by David Toogood, the motion carried 5-0.
4. Discussion and possible action regarding Braun Intertec's proposal for additional
work at ATCO building
Travis Haggard noted that Mr. Lane had requested a timeline of the WFEDC's association
with Braun Intertec, which is as follows:
Date
Action
December 16, 2005
WFEDC entered a lease contract with ATCO Structures for 10 years
($8.900/month. 8 month rent-free period) Total: $2,064,800
January 2006
WFEDC purchased the property from Fleetwood Homes for S1.135
million
November 1, 2016
ATCO vacated the property
February 2, 2017
WFEDC budgeted $144,000 per year for ownership/operatingownership/operating budget
September 8, 2017
Purchase/Sale agreement with Clayton Homes for $1.5 million. This was
terminated in December 2018 when the Phase 2 environmental study
revealed issues.
January 4, 2018
First contract with Braun Intertec (BI) to clean up/evaluate. Total:
$50,665
June 19, 2018
Second contract with Braun Intertec to move forward with BSP;
voluntary clean-up process and well monitoring, and report to TCEQ.
Total: $91,770
March 14, 2019
Third contract with Braun Intertec for MSD. Total: $139,660
September 2019
New Purchase/Sale agreement with Clayton Homes. Total: $1.1 million,
with a due diligence period of 240 days (ending May 14, 2020)
October 2019
Notice from Clayton Homes' environmental attorney, Chris Williams,
that the two monitoring wells are located on adjoining property to the
south. TOTAL Industries.
January 29, 2020
Austin Heider, BI Project Manager, noted that TOTAL has agreed to the
inclusion in the MSD the property on which the wells are located.
If all goes as planned, the MSD approval and BCP should be received from TCEQ by Jule
or August of this year. Ms. Cowling asked if an extension of the due diligence agreement is
necessary. Mr. Haggard said there is an automatic extension built into the contract.
5. Discussion and possible action regarding IdeaWF
Scott Manley thanked the WFEDC for the past 10 years of support. He noted IdeaWF had
helped about 28 businesses get started. At least 105 primary jobs have been created under this
endeavor, and over $9 million in revenues were generated by these businesses in 2018. He
understands the necessity of creating primary jobs in order to qualify for 4A funding, and is
committed to making this work.
This program was considered revolutionary when it first began, but other cities replicated
it, and now give away much greater sums of money. He thanked Vanda Cullar for representing the
SBDC and for their invaluable assistance in the program. However, due to retirements and changes
in job duties, there is no one left to help the new ideaWF businesses. West Texas communities are
giving away $500,000 as well as funding an entity to administer the program.
He understands that retail and service businesses do not create primary jobs. Hm� ever, the
program will still assist them. Historically, the money from the WFEDC funded the prizes, and
they raised funds from community partners to advertise/administer the competition, and also had.
in -kind services from la\\ firms, accountants, and IT firms. Those monies will be directed to the
businesses that the 4A cannot fund.
They have a $25,000 target for cash prices, to be raised 100% from fundraising. The request
of the 4A Board is for up to $250,000. They are also requesting $50,000 to fund a position to
administer the program.
The goal is to create approximately 65 jobs. Dr. Manley believes the change from $30,000
to a possible $250,000 prize will result in a change in the types of businesses attracted to the
program. They will require a minimum credit score of 680, and set the cash for jobs at $4,000 per
job, with a six-month timeframe of employment. If a winning business requests an advance on
funding, they must furnish an irrevocable letter of credit so that the WFEDC has recourse to recoup
its money if necessary.
David Toogood asked the definition of primary jobs. Kinley Ile4oglund said it is an
extremely broad definition, generally thought of as manufacturing jobs n here the majority of the
product produced is exported out of the area. Henry Florsheim noted the cover page of the
relocation incentive notes the ' AICS codes allox ed by the legislature. Dr. Manley said he
followed the statutory definition as much as possible, shortened for brevity. Mr. Hegglund said the
definition could include anything from breweries, woodworking, to manufacturing complex
machinery.
Dr. Manley said the winning business would be vetted through the judges, including
himself and a 4A Board member appointed to serve, and then come before the full WFED(' Board.
Mr. Hegglund noted that the proposed winners would also have to be approved by the Cit\ ('ounc 11.
Mr. Florsheim questioned how the xvinner would be announced if it has to get prior approN al from
both entities. Mr. Lane suggested the winners could be announced as candid ites I'«r 4A Funding.
Ms. Cowling asked how this new funding would be measured as a succc�'s. Dr. Manley
said that since primary jobs must be created, that would be a good guidepost. Mr. Lane added that
89 jobs would go for $3,300 per job. The Board would do that for any company. Scott Poenitzseh
said he has already had a lot of respect for this program. His company just went through the
process, and that respect is tenfold. This process provides mentorship and some rigidity to help
businesses succeed, as well as helping in business plan writing. This is a good grass roots program
for Wichita Falls.
Ms. Cowling said that job creation is key. But it is also a different avenue from the more
direct job creation. She wondered if there was a threshold the Board would like to reach. Mr. Leiker
said he understands the $250,000 for jobs. If they are eligible, perhaps the Board would do it,
anyway. He is not sure, however, about the $50,000 for the position to administer the program.
That is where measuring success comes into play. If only five jobs are created, and $50,000 is
expended, he is not sure it is worth it.
Dr. Manley said he appreciates this concern. However, if there is no money to hire someone
to administer the position, then this program cannot continue. He volunteers about 300 hours of
his time to this program, not to mention the hours donated by those at the SBDC.
Ms. Cowling said someone would go through this program l'or potentially less money than
if they approached the Board directly, for that extra value addition of the consultation and business
planning. Dr. Manley said in his orientations, he tells the prospective businesses that if they are
going through this process for money, it's the wrong reason. The most they've ever given to one
business is $12,000.
6. Discussion and possible action regarding the use of Opportunity Strategies for
program development
This item was discussed during executive session.
7. 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 4:38 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.
8. Motions
Braun Intertec
Mr. Toogood moved to approve an amended contract with Braun Intertec to finalize the
work that has been previously greed to in the three prior contracts, coupled with the new proposal
with an addendum stating that the monies owed will not exceed $90,000. Seconded by Ms.
Cowling, the motion carried 5-0.
ideaWF
Mr. Toogood moved to approve the expenditure of $50,000 to manage the ideaWF
program, and to fully endorse the ideaWF program structure and criteria as outlined in today's
presentation. Seconded by Reno Gustafson, the motion carried 5-0.
Opportunity Strategies
Mr. I eiker moved to approve the addendum as presented in an amount not to exceed
$4,000, Seconded by Ms. Cowling, the motion carried 5-0.
9, Adjourn
Mr. Gustafson moved for adjournment. The meeting adjourned at 4:45 p.m.
Leo I.ane. President