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4A Wichita Falls Economic Development Minutes - 09/17/2020MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION September 17, 2020 PRESENT: Leo Lane, President § WFEDC Members David Toogood, Vice -President § Reno Gustafson, Secretary -Treasurer § Phyllis Cowling § Darron Leiker § Stephen Santellana, Mayor § Mayor and Council Bobby Whiteley, Councilor at Large § Paul Menzies, Assistant City Manager § City Administration R. Kinley Hegglund, City Attorney § Terry Floyd, Director of Development Services § Linda Merrill, Recording Secretary § Henry Florsheim, CEO § CCI David Leezer, V.P, Business Attraction § Travis Haggard, V.P., BR&E § Katie Britt, Director of Marketing § Taylor Davis, Director of Talent Partnership § Karen Bivona, Office Manager § Jasmine Arno, Intern, Economic Development § Glenn Barham & SMAC Jana Schmader § DWFD Jeanette Charos § 1. Call to Order Leo Lane called the meeting to order at 3:00 p.m. 2. Presentations related to third -party economic development contracts SMAC Glenn Barham said SMAC is making a request of $150,000 from the WFEDC for its 2020-21 operating year. This is the same amount requested last year. Burkburnett, Iowa Park, and Wichita County have committed to their same funding levels as last year. During the COVID-19 pandemic, SMAC continued to enhance relations between the community and Sheppard AFB. While traveling and events were canceled, virtual visits at the local, state and national level continued and will continue into the new year. SMAC will also educate Texas legislators on the importance of protecting the statewide low-level military training routes. The capital campaign drive is moving forward; they have collected $189,652, or 63% of the goal of $300,00. Expenditures are anticipated at $290,440, with increases in insurance, office space rental, and computer maintenance costs. Savings realized from the canceled October event will be used to provide airmen in training a dinner in early 2021 prepared by the Mavericks. DWFD Jana Schmader said the DWFD organization has undergone an evolution. Prior to 2018, its core competency was in marketing, special events, historical preservation advocacy and projects. She was hired in 2018, and it was paramount that DWFD take a more active role in economic development. That year, the new branding campaign was rolled out, repositioning Wichita Falls for business development, locals and visitors. October 2019 brought about a new strategy of business recruitment, retention and expansion. They have helped over 40 businesses and investors. She has scouted and/or toured 45 properties for local and regional investors. The DWFD has facilitated predevelopment meetings, prepared seven incentive packages for the 4B Sales Tax Corporation (100% of which were approved). There have been 8 closing on properties downtown, with 12 in the development phase or under construction. DWFD has developed a virtual tour of buildings to be sent off to investors. DWFD assists in project management from start to finish, including code compliance, as a liaison between equity partners/lenders, putting together proposals for 4B presentation, and providing consultation on historic tax credits. Each down business has different needs. DWFD provides training and education, and acts as the marketing information arm of downtown. COVID-19 was a blow to the district and to the organization. The first thing DWFD was to distribute real time information, and current rules/regulations. They connected several businesses to PPE vendors, and researched state/national funding available to businesses. DWFD and the Chamber of Commerce and Industry have spent this past year working on a collaborative, complementary effort. They are aware it is vitally important to have role clarity. The proposal is close to that of last year, but with more added value. There is an increase in salaries, and they are requesting software for customer relationship management. This software allows for logging in information on developers, as well as downtown building inventory, and pairing the two. IdeaWF Mr. Lane said IdeaWF has suspended its program for one year, but asks that the WFEDC extend an offer next year equal to last \ ear's contribution. Chamber of Commerce and Industry Henry Florsheim said this year has been exciting in terms of economic development: The Stanley building was sold, and the city landed Pamlico Air and Panda Biotech. The talent partnership won a statewide workforce excellence award. It was announced today that the Pamlico/Stanley Tools project won a community development award from the Texas Economic Development Council. This is the second time in four years Wichita Falls has won the award (first for the Vitro Glass project). 2 This year's budget request includes increases in salaries and related benefits. The Chamber had held off filling its vacant research position and the downtown economic development position due to the downturn in sales tax collections because of the COVID-19 pandemic. But since the WFEDC gave the go-ahead to fill these positions, he can report that the research position has been filled, and they will start in the near future to recruit a downtown business attraction person. He agrees that there is a good relationship between the Chamber and DWFD, and they are actively working together on projects. Alysia Cook of Opportunity Strategies just delivered a document that outlines action items regarding economic development strategy, and provides for specific deliverables. That document will help guide the Chamber and the Board in figuring out their next steps. The Chamber is offering to take on the role of administrative support for the Board at no extra charge, despite Ms. Cook's advice that the Chamber request more funding for this task. He and office manager Karen Bivona believe they can absorb those duties. Between DWFD and the Chamber, only a small portion of the 10% promotional cap dollars are budgeted. The Chamber requests that the WFEDC budget $50,000 (reduced from last year's $200,000) to offset the cost to recruit outside employees for businesses unable to fill positions locally. 3. Discussion related to performance agreement for Panda Biotech/Panda High Plains Hemp Gin LLC Mr. Gustafson and Mr. Lane left the meeting-, during this topic of discussion due to conflicts of interest. Mr. Florsheim said the question of collateral needs to be resolved before the performance agreement can be completed, but the topic today concerns the due date for job creation. Initially set for the end of the 4ch quarter, Panda is requesting that it be moved to the end of the first quarter of 2022. The Chamber has worked nearly every day on this project, taking Panda to the Commissioners Court for tax abatement, introducing them to the farming community, and coordinating discussions with bond counsel. Things are still progressing positively. Kinley Hegglund said no vote is required on this issue today. Once the topic was closed for discussions, Mr. Lane and Mr. Gustafson returned to the meeting. 4. Discussion related to performance agreement for DuPlooy Farm & Trucking LLC Mr. Haggard said DuPlooy Trucking is requesting an amendment to its performance agreement signed in February 2020. The company was originally operating out of Oklahoma and Byers, Texas. The performance agreement was predicated on the company locating its business inside the city limits of Wichita Falls. They have purchased NRG Trucking, which includes that company's building at 1701 Scott Street. A transaction with Halliburton for property within the city limits fell through, so they signed a lease on property on Highway 281, just outside the city limits. Mechanical work is performed on the trucks at this location, as well as driver training. Their goal is to build inside the city limits, but they are requesting the performance agreement be amended to expand the acceptable location to Wichita County. In addition, the performance agreement initially called for 90 truck drivers and 2 dispatch administrative personnel. DuPlooy Trucking requests that these numbers be amended to require only 72 truck drivers, and move those 18 positions to the administrative side, moving that number of personnel to 20. Next, the company requests that the cash for job and relocation benefit, which was originally at a 12-month requirement, be reduced to a 6-month time frame. Finally, the company is requesting leniency from the WFEDC for residency requirements for over -the -road truckers whose permanent address is the truck itself. These truckers have mail delivered to addresses of family members, but have no fixed address other than their vehicle. 5. Discussion related to Clayton Homes project Mr. Haggard said the topic for discussion is ongoing cleanup efforts at the proposed future site of Clayton Homes Manufacturing. Clayton Homes had its own environmental agency, Strata, do vapor barrier and air quality tests. Those results show a higher level of TCP than recommended in one area. Braun Intertec said Strata had done more tests than are normally performed, and only one sample site revealed that higher level. The air quality test did not show the quality of air was jeopardized; the concentration was high in one spot, but not throughout the entire building. Clayton Homes wants TCEQ to review the sampling performed by Strata, and ackno\\ ledge that it is aware of that higher level of TCP. That would relieve some liability, and efforts would be made to get rid of the toxins so that employees would have a safe working environment. There are some issues with this request: (1) It is unknown whether TCEQ will accept Strata's test results, as it is not the agent of record (which is Braun Intertec); (2) the lab that performed the tests is not accredited; and (3) the air quality test findings concur with what TCEQ has already evaluated. However, Clayton Homes is the buyer and creator of jobs, so there are two proposals to present to the Board: Option 1 More tests are performed and large areas are treated to mitigate the TCP levels. This option is potentially costlier. Option 2 More testing to seek the areas showing the high concentration of TCP; find the leakage and mitigate it. This is costlier upfront, but on the backside, it could lower the cost of mitigation. The request is for $65,000 for the testing, and remediation on top of that is the potential of $265,000. David Toogood asked if the Board has any liability if an environmental issue arises after Clayton Homes has closed on the property. Mr. Haggard said Clayton Homes will buy a five-year environmental insurance policy, and will include the City of Wichita Falls as an additional insured. There will be a restriction from TCEQ that no drinking water will come from this site. Mr. Lane said this project to get TCEQ and Clayton Homes satisfied will take longer and cost more money. Mr. Haggard agreed. Mr. Lane said he would prefer to wait for the test results before agreeing to the remediation funds. Ms. Cowling agreed; stating she would feel more comfortable knowing an actual dollar amount before voting on that aspect. 4 Ms. Cowling asked the current due diligence deadline. Mr. Haggard said it is November 10. 6. Discussion and possible action related to appointment of officers Mr. Gustafson nominated the following slate of officers through 2021: Leo Lane, president; David T0000d. vice president. and Phyllis Cowling. secretary/treasurer. Seconded by Mr. Leiker, the motion carried 5-0. 7. Approval of Minutes (6/30/20 and 8/14/20) David Toogood moved for approval. Reno Gustafson noted the starting time of the meeting was incorrect on the AuE4ust 14. 2020 minutes. With that correction. the motion carried 5-0. 8. Financial Report Paul Menzies reminded the Board that the practice has been to project the sales tax revenue number as flat based on the current year's figure. Staff is still projecting a 6% reduction on sales tax revenues for next year. That may change, as there are still two months left in the year. However, the Board will stay consistent with the practice of the City Council. The number could possibly be $4.1 million. Annual programs are consistent with the current year. Earlier this year, the Chamber switched from a fiscal year to a calendar year. A request today for the Chamber contract would start January 1. For budget purposes, the Board has money in this fiscal year budget to cover the 41h quarter of the Chamber's existing contract (about $260,000). If next year's contract is approved, 75% would be earmarked in the Board's next fiscal year budget. SMAC and DWFD are not yet included, but will be if approved today. The Board typically pays $140,000 for debt service for the municipal airport terminal. Mr. Florsheim's request that the Board set aside $50,000 for the employee recruitment program is not reflected in the budget, but that change will be made if the Board so desires. The estimated unreserved cash for new projects next year is at $4.1 million. That number is based on the estimated year-end cash from about a year ago. That number is running way ahead, so it will probably be $3.5 million higher than that. 9. Executive Sessions 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 5:28 p.m. The subjects posted in the Notice of Meeting were deliberated, and no votes or further action was taken on the items in executive session. 10. Motions SMAC Mr. Gustafson moved to approve the expenditure of $150,000 to the Sheppard Military Affairs Committee for the 2020-21 operating year. Seconded by Mr. Toogood. the motion carried 5-0. DWFD Mr. Leiker moved to approve the expenditure of $110.000 to Downtown Wichita Falls Development for the 2020-21 operating year. Seconded by Ms. Cowling, the motion carried 5-0. CO Mr. Toogood moved to approve the expenditure of $1,099,830 to the Chamber of Commerce and Industry for the 2021 calendar year. Seconded by Mr. Gustafson, the motion carried 5-0. Clayton Homes Ms. Cowling moved to approve the expenditure of $65.056 for additional testing at the proposed site of Clayton Homes Manufacturing. Seconded by Mr. Leiker, the motion carried 5-0. DuPlooy Trucking Mr. Leiker moved to amend the DuPlooy Trucking incentive agreement as follows: 1. Reallocate the cash for iobs incentive bv: a. Reducing the number of truck drivers from 90 to 72 b. Increasing the number of dispatch personnel from 2 to 20 2. Approve a six-month cash -for jobs incentive at one-half the original rate. The second half of that original rate would be made from months 6-12, providing the company moves all operations into the city limits or enters into a payment in lieu of tax agreement with the City. (The first payment to the company shall be paid as outlined in the original performance agreement.) Seconded by Ms. Cowling, the motion carried 5-0. 2020-21 Budget Mr. Toogood moved to accept the 2020-21 WFEDC budget as presented, with the following changes: 1. Add a $50,000-line item in support of the Chamber's relocation incentive program 2. Include all of the projects approved at today's meeting Seconded by Mr. Gustafson, the motion carried 5-0. 11. Adjourn The meeting adjourned at 5:34 p.m. Leo Lane, President