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4B Sales Tax Corporation Minutes - 02/06/2012MINUTES OF THE WICHITA FALLS 4B SALES TAX CORPORATION February 6, 2012 PRESENT: Jim Ginnings, President § Members Charles Elmore, Vice President/Sec.- Treasurer § Alan Donaldson § Tony Fidelie § Darron Leiker § Joe Nieto § Dustin Nimz § Glenn Barham, Mayor § City Council Rick Hatcher § Darron Leiker, City Manager § City Staff Kevin Hugman, Assistant City Manager § Jim Dockery, Asst. City Manager /CFO § Miles Risley, City Attorney § Linda Merrill, Recording Secretary § Ben Filer § Attendees Andy Lee § John Boyd, Realtex Dev. Corp. § Dusty R. Johnston, Vernon College § 1. CALL TO ORDER Charles Elmore called the meeting to order at 3:12 p.m. 2. APPROVAL OF MINUTES Tony Fidelie moved that the minutes of November 21, 2011 be approved. Seconded by Alan Donaldson, the motion unanimously carried. Kevin Hugman presented to the Board a current financial statement, noting that sales tax revenues are 3% above projection. 3. DISCUSSION OF AFFORDABLE HOUSING DEVELOPMENT AT 3601 MCNEIL Jim Ginnings entered the meeting, and opened the discussion on item 3. John Boyd, Vice President of Realtex Development Corporation, appeared before the Board. His company develops, owns and manages affordable apartment complexes. They currently have two in Wichita Falls — Woodview on 32nd Street and Washington Village on Flood Street. H: \_legal \4A & 4B \4B Corp\minutes\2012\2012.2.6 RealtexNemon CollegeNinutes.4B 2012.2.6.doc WFEDC — Minutes of February 6, 2012 2 His company makes application to the Texas Department of Housing and Community Affairs for housing tax credits. These tax credits are awarded annually in a competitive process among the regions across the state. Wichita Falls competes with Abilene in Region 2. The tax credits available total $500,000, which will be granted to one applicant. The tax credits are awarded based upon several criteria. A new criteria gives points for local government support in the way of funding. Mr. Boyd is requesting a three -year loan that would be secured with a Letter of Credit. Another new way to earn points is to develop property in a high opportunity area, which is an area of less poverty than the traditional qualified census tracts. Realtex has eight acres under contract to purchase at 3601 McNiel, where Maplewood would extend to McNiel. The property, within TIF #2, would have access on North and South Regent. The funding required under the scoring criteria is $2,000 per unit. They are contemplating a 64 -unit complex. There are income and rent restrictions, including criminal and credit background checks, and employment verifications. Criminal background checks preclude anyone convicted of violent misdemeanors, sex crimes, drug crimes, and felonies. Residents are recertified on an annual basis. Dustin Nimz asked how many Realtex properties have received 4B funding. Mr. Boyd said none, but they have received CDBG and Housing Finance Corporation funds. Mr. Fidelie asked if local contractors would be used. Mr. Boyd said probably one -half of the subcontractors would be local. Mr. Ginnings expressed concern that the Washington Village complex generates an average of 30 calls to the police per month. Mr. Boyd said a lot of calls are domestic disputes or welfare checks. Staff is encouraged to call the police, as well, regarding anything suspicious. Mr. Nieto asked if the empty space indicated on the plat was for an eventual expansion. Mr. Boyd said the civil engineer has not designed the detention basin requirements. Also, the transfer station and a radio tower are to the east of the property. He is trying to give some buffer on the east. Monthly rent would range from $318 -$753 for a three - bedroom unit, and $283 -$660 for a two - bedroom unit. The maximum number allowed per bedroom is 1.5 residents. The property would be fenced with controlled access. They have made application to the City to rezone the area from Light Industrial to General Commercial. Mr. Hugman said staff will initiate a broader zoning change request for that area, as General Commercial is more restrictive than Light Industrial. 4. DISCUSSION OF REQUEST FROM VERNON COLLEGE FOR FUNDING Dusty Johnston, President of Vernon College, addressed the Board. Vernon College issued $5 million in bonds for the expansion of its Wichita Falls campus, and is renovating the sites of the former nightclub and movie theater it now owns. However, items not included in the bond package (including an energy management system, a new phone system, and a keyless WFEDC — Minutes of February 6, 2012 entry system) left a shortfall of approximately $1.75 million. They are asking $500,000 from the 4B Board, and are also seeking to raise funds from the private sector. Construction began in late September. Tony Fidelie asked if local workers were being utilized. Mr. Johnston said State- mandated bidding requires an open bid process. The construction company is not local, but about 65% of the subcontractors are local. Mr. Fidelie asked if the College is seeking a lump sum from the 4B Board. Mr. Johnston said it would not have to be in one payment. He added that if the College is not successful in raising the required funds, it has enough money to get by if it is frugal with its funds. This expansion will be paid for through grants, private donations, and/or higher tuition fees. The College has three sources of funding: state funding, tuition fees, and its local tax base. Its tax base is Wilbarger County, which has the sixth highest tax rate, but third lowest tax base, of 50 community colleges. Wilbarger residents pay 22.67 cents per $100 valuation, while only 10% of Vernon College's students come from Wilbarger County. Seventy percent of its students come from Wichita County. State funding has decreased from 42 percent to 29 percent. Vernon College has 1,800 students in Wichita Falls. He estimates this expansion will result in an increase of students to 3,000 within five years. 5. RADIO CONTROL AiRcRAFT FIELD IMPROVEMENTS PROJECT This item was tabled. 6. EXECUTIVE SESSION Mr. Ginnings adjourned the meeting into executive session at 4:38 p.m. pursuant to TEXAS GOVERNMENT CODE § §551.071, 551.072, and 551.087. He announced the meeting back into regular session at 5:11 p.m. The subjects posted in the Notice of Meeting were deliberated, and no action was taken on these items in executive session. Vernon College Mr. Nimz asked how the Vernon College request qualifies for 4B funding. Mr. Risley said there is a special provision that allows for funding of a career center, provided it is not in a junior college district. Mr. Leiker said Vernon College has already bid out the project, and declared it would use its reserve funds if it did not obtain sufficient outside funding. He tends to think it should request funds from the 4A Board, rather than from the 413 Board. Mr. Fidelie said he believes Vernon College plays a pivotal role in the community and the Board needs to take a look at it. He'd prefer to fund a not - for - profit entity, all things being equal. Mr. Hatcher reminded the Board that Vernon College gets a benefit from many of the economic development deals put together for 4A financing through job training. Mr. Hugman said the difference between the Board's expected revenues and approved expenditures is $365,000 (not counting reserves). WFEDC — Minutes of February 6, 2012 4 Realtex Mr. Leiker said the City has provided general letters of support of the project. There is a second project seeking these tax credits; if the 4B Board helps this project, then it would open the door to other similar requests. Only one will get funded. Mr. Hugman said all of the competing projects are over $500,000, so no project would even be funded entirely. Mr. Hatcher worries about the multitude of affordable housing units on the market that could eventually create urban blight. He has some discomfort with this idea. Mr. Ginnings said he would prefer to see a proposal to extend Maplewood and see what projects might develop. Mr. Leiker agreed, stating he would like to see a higher quality retail commercial enterprise generating of sales tax, rather than an apartment complex generating property tax. Mr. Dockery said it is a timing issue. TIF #2 will eventually be able to fund some of the Maplewood extension, but unless the 4B Board is prepared to take on all the funding for a while, he would hesitate to issue bonds at this time. The $3 million Maplewood extension would result in about $240,000 per year on a 20 -year debt service. The TIF #2 zone only exists until 2026, so the 4B Board would be expected to pick up the full end of the debt service after 10 years. Mr. Hugman said Realtex is requesting the TIF #2 to reprioritize its capital improvement list to move the Maplewood extension to the top of its list. Staff will support such reprioritization. Although the Board did not take a vote on either request before them today, it was the general consensus of the members that they were not in favor of granting either request. Mr. Ginnings requested the staff take a look at what TIF #2 could fund in the next six months, and determine what the 4B Board might be expected to do regarding extending Maplewood to McNiel. 7. ADJOURN The meeting adjourned at 5:30 p.m. These minutes were approved by the Wichita Falls 4B Sales Tax Corporation at its meeting held March 27, 2012. Jim Ginnings, President WFEDC — Minutes of February 6, 2012 Realtex Mr. Leiker said the City has provided general letters of support of the project. There is a second project seeking these tax credits; if the 4B Board helps this project, then it would open the door to other similar requests. Only one will get funded. Mr. Hugman said all of the competing projects are over $500,000, so no project would even be funded entirely. Mr. Hatcher worries about the multitude of affordable housing units on the market that could eventually create urban blight. He has some discomfort with this idea. Mr. Ginnings said he would prefer to see a proposal to extend Maplewood and see what projects might develop. Mr. Leiker agreed, stating he would like to see a higher quality retail commercial enterprise generating of sales tax, rather than an apartment complex generating property tax. Mr. Dockery said it is a timing issue. TIF #2 will eventually be able to fund some of the Maplewood extension, but unless the 4B Board is prepared to take on all the funding for a while, he would hesitate to issue bonds at this time. The $3 million Maplewood extension would result in about $240,000 per year on a 20 -year debt service. The TIF #2 zone only exists until 2026, so the 4B Board would be expected to pick up the full end of the debt service after 10 years. Mr. Hugman said Realtex is requesting the TIF #2 to reprioritize its capital improvement list to move the Maplewood extension to the top of its list. Staff will support such reprioritization. Although the Board did not take a vote on either request before them today, it was the general consensus of the members that they were not in favor of granting either request. Mr. Ginnings requested the staff take a look at what TIF #2 could fund in the next six months, and determine what the 4B Board might be expected to do regarding extending Maplewood to McNiel. 7. ADJOURN The meeting adjourned at 5:30 p.m. RECEIVED IN FIq5 CITY CLEJ �'O f O DATE"�� 4"