Loading...
4A Wichita Falls Economic Development Minutes - 05/19/2011MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION May 19, 2011 PRESENT: Gary Shores, President § Members Dick Bundy, Vice President/Sec.- Treasurer § Dave Lilley § Gary McLendon § Glenn Barham, Mayor § City Council Darron Leiker, City Manager § City Staff Kevin Hugman, Asst. City Manager § Jim Dockery, CFO /Asst. City Manager § Miles Risley, City Attorney § John Burrus, Director, AT &T § Lin Barnett, MPO Director § Dennis Burket, Transit Administrator § Linda Merrill, Recording Secretary § Tim Chase, President § Chamber of Commerce & Industry Kevin Pearson, Vice President § ABSENT: Lanham Lyne § Member 1. CALL TO ORDER President Gary Shores called the meeting to order at 4:00 p.m. 2.a. APPROVAL OF MINUTES (MARCH 10, 2011) Dick Bundy moved for approval of the minutes. Seconded by Dave Lilley, the motion carried. 2.b. REPORT OF FINANCIAL CONDITION Kevin Hugman presented an updated financial statement. The only change is the addition of the Pratt Whitney Canada project approved by the City Council this week. Sales tax revenues are at an increase for the year of just under four percent. 3. WICHITA FALLS TRANSIT CENTER PROJECT John Burrus thanked the Corporation for its 2008 funding of the purchase of four buses. Today's request is for $211,815 for the Transit Center. The City has incurred $614,179 in expenses to date. The construction cost could total $3.2 million for the approximately 5,000 sq. H: \_legal \4A & 413\4A Corp\Minutes\201 1\5.19.1 1\2011.5.19 - 4a minutes.doc RECEIVED IN CITY CLERK'S OFFICE ATE: — BY: TIME: 2 1 3y.SP'_V`- WFEDC — Minutes of May 19, 2011 ft. facility for municipal buses, Greyhound, Jefferson, Sharp Lines and TAPS. Construction is to commence in early 2012. Twenty percent of the local match of $211,815 will go toward property acquisition, demolition and design. The City has $2.5 million in FTA funds committed to this construction. TxDOT funding opportunities will also be available. He wants to get a Construction Manager at Risk ( "CMaR ") in place, and keep the skill set local. Mr. Bundy asked if the CMaR could be required to use as much local construction as possible. Mr. Burrus replied that the City is prohibited from establishing this criteria. However, the CMaR process is designed to get away from strict low bidder requirements. There is discretion in the selection process of a CMaR through the request for qualifications. Miles Risley added there is an Attorney General opinion that prohibits excluding bidders who are not local. In addition, State and FTA regulations prohibit discrimination against non -local bidders. Mr. Risley explained the findings' necessary to be accepted by the Corporation if they intend to approve this request. In 2007, the Texas Legislature expanded the ability of 4A Corporations to fund motor bus systems, but did not require that the project create primary jobs. Three weeks later, the Legislature did a non - substantive recodification of the affected statute. This recodification repealed the expanded language. Without it, 4A funds can be used only for motor bus systems if it is determined the project will benefit property acquired for a project that has another primary purpose. The finding is written to show that the transit system would provide workers for other projects funded by the 4A Corporation, and thereby benefit them. Tim Chase expressed concern that this finding may open up 4A fund eligibility to roads not in close proximity as long as they are linked to another project. Gary Shores asked if it would be possible to insert the word "specific" in front of project in the findings. Mr. Risley replied it would still meet the terms of the statute. Darron Leiker assured the Corporation that the request to fund this project, and its related findings, is not a pretense to grab 4A money for street improvements. Leo Lane addressed the Corporation. He feels betrayed that 4A funds are used to fund City projects, when they should only be used for projects devoted to primary job creation. He is opposed to the WFEDC funding this project. Mr. Shores thanked him for his comments, adding that he is addressing an issue that all the Corporation members have in their own minds. Dave Lilley moved to approve the findings. Seconded by Dick Bundy, the motion unanimously carried. To the extent the project constitutes a project whose primary purpose is to provide a transportation facility, said facility is hereby determined to benefit property acquired for a project that has another primary purpose. For purposes of this paragraph, "property acquired for a project that has another primary purpose" shall include: (1) all property acquired by the WFEDC (including, but not limited to, the ATCO building and business park) for WFEDC projects; (2) all of WFEDC's currently existing security interests (such as deed of trust interests in private property and security interests in equipment) acquired to secure debt for all previous projects of the WFEDC that provided assistance resulting in the enhancement of privately owned real property or the acquisition of privately owned real property or equipment, and (3) all property acquired by private owners and the federal government (including, but not limited to, Sheppard Air Force Base) related to projects assisted by the WFEDC. WFEDC— Minutes of May 19, 2011 Dave Lilley said that he supports this project as a private citizen, but not in his position as a member of the WFEDC. He will not vote in favor of it because: (1) the project is not consistent with the desires of the taxpayers or with the reason for creation of the WFEDC; and (2) he does not want to set a precedent approving this type of project. Gary McLendon moved, seconded by Dick Bundy, that the expenditure be approved. Ayes: Gary McLendon, Dick Bundy, Gary Shores. Nays: Dave Lilley 4. LATEX INTERNATIONAL PROJECT Tim Chase stated that Latex International ( "LI ") has asked for reconciliation of the cash- for-jobs incentive and training expenses. LI's supporting documentation was its payroll for the first few months for all employees, as well as the expenses for those employees who traveled to Connecticut for training. He did not feel the intent of the performance agreement was to pay wages for people who were in Wichita Falls during the training period. He wonders if the Corporation ought to rethink those expenses that were more directly applicable to training, whether done here or in Connecticut, and maybe a couple of weeks' worth of wages rather than several months, would be reasonable. came up with spreadsheet which shows trainees who were involved in the training and travel expenses. He said the Skills Development Fund program allows for a reasonable amount of scrap created during the training period to be assessed against the grant. Using such a formula with LI, the scrap amount was elevated about 24% of their norm. The total tally is $109,803. The performance agreement caps reimbursement at $90,000. Mr. Chase continued, stating that Kevin Hugman pointed out that although the performance agreement is broad in nature, it does state up to $3,000 per new position as a reimbursement for actual training costs, including, but not limited to, travel (for a maximum of 30 new hires). He supposed wages could be included for 30 people for the training period until the $90,000 cap is reached, but he does not like that precedent. He would prefer to reimburse for specific tangible training expenses. Kevin Hugman said that he tries to look at the intent of each performance agreement, and tie all costs to job creation. In this instance, it is payment for training for new positions created in Wichita Falls, up to 30 positions. He understands the intent of the training, but the performance agreement language does not go along with that. He is not comfortable paying for scrap, but that is the Corporation's prerogative. If he has to justify authorizing that expense, he wants to be clear he is following the Corporation's intent. Gary Shores said he agrees with trainers being reimbursed, but not employees. Mr. Chase said this was used for the first time as a recruiting tool, and was an integral part of the process. LI was not initially eligible for a Skills Development Fund Grant because it did not already have a company in Texas. The WFEDC used its resources to assist in getting a trained workforce in a timely fashion, without specifics on how that was to be accomplished. Mr. Shores asked if the training grants are inclusive of salaries for newly -hired individuals. Mr. Chase said no; scrap and wages for trainers is included, but not wages for the trainees. I ., WFEDC — Minutes of May 19, 2011 is it a maximum of $3,000 per position? The language of the performance agreement says per position. Mr. Risley said there are two questions: (1) whether to eliminate the $3,000 limit per person and (2) whether to allow scrap (still including the $90,000 cap). If the $3,000 limit per employee were eliminated, the trainer costs could be paid. Mr. Shores recalled the intent was to pay whatever the skills development fund grant would have paid, hdd LI been eligible to apply for a grant at that time. That would have included trainers. Mr. Chase said that is what he had in his mind, but the total was capped because they did not want to leave it open- ended. If the Corporation's intent is to stay with the performance agreement, then the payment will be $3,000 times seven people. Mr. Shores suggested it be amended to allow for payment of $90,000 for training and incidentals. Mr. Leiker expressed concern that the Corporation would probably want to tie payment to job creation in some fashion. Mr. Shores agreed, stating that future agreements would be specifically worded to match the Corporation's intent. Mr. Shores noted that since the agreement caps payment at $90,000, even if LI hires an additional 23 employees, the WFEDC would not pay them $3,000 per employee at that time. Mr. Risley said the payment is capped at $90,000 because that is all that was approved by the WFEDC and the City Council. Mr. Chase said it is the intent to apply for a Skills Development Fund grant for the second phase. However, the WFEDC will not back stop in the event they are not successful with their grant application. Dick Bundy moved, seconded by Dave Lilley, to pay Latex International $90,000 and address the language in any future MOU. D & O Insurance Mr. Chase asked the Corporation if it wished to renew its D &O insurance policy. Miles Risley said that this is not general liability insurance; it is protection against breach of duty for actual or allegedly wrong decisions. As the Business Park Association has no employees and does not own property, he does not feel this is a necessary policy. The WFEDC members decided not to seek renewal. 5. EXECUTIVE SESSIONS Mr. Shores adjourned the meeting into executive session at 5:22 p.m. pursuant to TEXAS GOVERNMENT CODE § §551.071, 551.072, and 551.087. He announced the meeting back into regular session at 5:40 p.m. He noted that the subjects posted in the Notice of Meeting were deliberated, and no action was taken on these items in executive session. 6. ADJOURN The meeting adjourned at 5:40 p.m. ^ Gary Sh res, President