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4A Wichita Falls Economic Development Minutes - 06/20/2005,wv, MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION June 20, 2005 Present: Members: Gary Shores, President Bo Stahler, Vice - President Jim Berzina, Secretary- Treasurer Lou Rodriguez, Member Bill Altman, Member City Council: Charles Elmore, District 5 City Staff: Darron Leiker, Interim City Manager Linda Merrill, Recording Secretary BCI: Tim Chase, President Kay Yeager Darrell Coleman I. Call To Order. President Gary Shores called the meeting to order at 8:03 a.m. II. Approval of Minutes — January 3, 2005. Bo Stahler moved, seconded by Gary Shores, that the January 3, 2005 minutes be approved. The motion carried. III. Consider Request for Consulting Services Fees. Kay Yeager noted that the changes recommended for Sheppard AFB by the Department of Defense (DoD) would have a very hard economic impact on Burkburnett, Iowa Park and Wichita Falls. Due to the large amount of data involved, as well as the politics (both military and civilian), it is necessary to hire a consultant at least through the July 11 hearing in San Antonio. The Military Affairs Committee is requesting financial help to fund part of the cost for such consultant. Ms. Yeager noted this round of BRAC decisions is frustrating, because no one saw this coming. It will be difficult to overcome the plan that's been put forth. Tim Chase and (consultant) John Phillips are looking for any "kinks" in the analysis to bolster any argument to maintain the 882nd training wing. BRAC Commissioner James Hill will be in town today. Ms. Yeager was pleased to note that Senators Cornyn and Hutchison, as well as Representative Thornberry, r Wk;hita Falls Economic Development Corporation June 20, 2005 Meeting Minutes Page 2 have provided great support to this effort. The Secretary of State was in town last week, as were members of the Texas Military Preparedness Commission. Bo Stahler asked for information regarding the consultant. Ms. Yeager stated that John Phillips is a retired major general. He lives in the Washington, D.C., area. He has good connections in the Pentagon and the DoD. Darrell Coleman remarked that Gen. Phillips' last military job was under the Secretary of Defense. He then became a Vice President for Home Depot. He added that the gentleman the State retained to work with the statewide strike force considers Phillips his mentor in the military. Mr. Stahler asked if there have been any communities that have been successful in reversal of BRAC closings. Bill Altman declared that Robins AFB was on the first BRAC list to close. Ms. Yeager added that Moody AFB has been on and off the BRAC list for the past 20 years. Ms. Yeager noted that there has been little opportunity for input. There will be no opportunity for discussions with Commissioner Hill this afternoon during his tour of the base. There will be a press conference at the end of the tour, at which point she hopes there will be some time for discussion. The big opportunity, at least publicly, is in San Antonio on July 11. After that, it is certain that trips will be made to Washington, D.C. The city is facing a couple of problems in this issue, Ms. Yeager opined. This round of base realignments and closures is about consolidation, realignment, and joint training. The proposed consolidation of medical training makes sense. In addition, it is an intrastate move of the training. If the fight to maintain the 882nd is lost, it could tarnish the community's reputation, and there would be no support from legislators. There is a fine line to walk in this effort. In order to fight to keep the 882 "d, there must be a flaw in the analysis of consolidation. Jim Berzina asked Mr. Chase if any flaw had been discovered at this point. He replied that he and Gen. Phillips have found some flaws, but whether those flaws are enough to change anyone's mind is yet to be determined. Some of the data used to make decisions may have been 18 -20 months old. One key piece of data is Sheppard's ability to "berth and mess" (feed and sleep) people. That has changed dramatically since the construction of several facilities. Mr. Stahler asked whether the 2,600 jobs figure is based on future enrollment, or is a net loss of 2,600 people. Mr. Chase noted that a portion of the 2,624 figure is an allocation for the joint strike fighter, if it were to be placed in operation at Sheppard. That project does not exist anywhere today, so it is hard to be specific on that number. Ms. Yeager declared there is not an answer to that question right now. Mr. Stahler states he understands the Air Force enlistment is down. Ms. Yeager noted the community has already suffered a negative economic impact. Mr. Shores noted it is not job loss, but a loss of student trainees. Ms. Yeager noted the newspaper ran an article this morning indicating there are 5,000 permanent party personnel at the base. They train 70,000 to 80,000 students a year. There is a huge economic impact from the students. There are around 650 permanent party Wichita Falls Economic Development Corporation June 20, 2005 Meeting Minutes Page 3 personnel in the 882nd medical training wing. Mr. Shores reasoned there is a potential loss of 650 permanent party and 2,000 students. Mr. Chase added there would also be a loss of approximately 80 civilians. Mr. Berzina pronounced that two of his neighbors, who work at the base hospital, have known for five months they were leaving. There used to be eight physical therapists on base; now there is only one. Downsizing is already happening. Mr. Stahler noted that, as a taxpayer, he cannot argue with the idea of consolidation. Ms. Yeager quoted Phyllis Cowling (President and CEO of URHCS) as saying she could not argue against the move, because that is what they're doing at the medical facility. However, Ms. Yeager cautioned, there still has to be a fight. Mr. Berzina asked if Gen. Phillips could help get a new mission at Sheppard, if the 882nd is truly lost. He agrees the Board has to assist in this effort. Ms. Yeager said he could assist in replacement operations, but it will be a challenge to replace that many jobs in this community. Mr. Shores asked how much money the BCI was requesting. Mr. Chase noted that Gen. Phillips' fees and expenses will run about $31,000 between now and July 11. Mr. Shores asked how much money Burkburnett and Iowa Park had promised to contribute. Ms. Yeager noted that Burkburnett has put up $15,000. Mr. Chase has spoken with the Iowa Park mayor; that city will hold a meeting to discuss this issue. In response to Mr. Shores' query, Ms. Yeager noted that this money would not include a trip to Washington, D.C. Mr. Chase noted that many communities are busing their citizens to the hearing, in order to show support. There is an advertisement in Abilene's newspaper, encouraging people to show up at the CVB and ride the bus to San Antonio at no charge, to support their community at the July 11 hearing. Mr. Berzina noted that Texarkana is organizing its community, as well. Bill Altman asked if the BCI will approach its members for financial support. Mr. Chase noted the Military Affairs Committee has talked about the need to raise money to support the initiative. There is the possibility of asking 100 businesses to each give $500. Mr. Altman acknowledged this is a secondary issue. Ms. Yeager concurred, stating those involved in this issue need to focus attention on strategy in San Antonio, rather than worry about raising money at this time. Mr. Stahler noted that if the 4A Board contributed $25,000, along with the $15,000 from Burkburnett and whatever sum to be contributed by Iowa Park, the total should be close to $50,000. Mr. Chase stated that would be enough to get through the July 11 meeting. At that point, they would have a better feel for additional expenses. The meeting on July 11 is just the starting gate; the process ends on November 11. Mr. Berzina asked what Gen. Phillips charges for his services. Mr. Chase stated he charges $3,500 per day, plus expenses. Mr. Berzina asked if it was conceivable that Wichita Falls Economic Development Corporation June 20, 2005 Meeting Minutes Page 4 he could work 30 days a month and submit a bill in excess of $100,000. Mr. Chase stated he is currently operating under a specified contract amount. Ms. Yeager noted it is extremely important, on July 11 and beyond, to lay the groundwork to bring future missions to Sheppard AFB. Cynthia Hall, Kay Bailey Hutchison's aide, concurs. If the 882nd leaves, there will be 765,000 square feet of available space. Ms. Yeager noted that it will be important to make a case for the joint strike fighter, and perhaps get in the hunt for a new squadron of F22 Raptors. Mr. Stahler asked if this wipes out the hospital. Mr. Coleman noted it is not the hospital, but rather, training that is anticipated to be realigned. Ms. Yeager added it is the biomed field training. Mr. Altman interjected it is on the field out by the municipal airport terminal. Mr. Coleman added that it is one of the biggest schools on base. Mr. Stahler noted that approximately $700 million had been spent on buildings over the last 10 -12 years at the base. He asked if they are all occupied. Mr. Coleman stated they are at the present time. Mr. Altman pronounced that Gen. Phillips is a close friend with the general who is in charge of logistics for all programs and troops coming from overseas. According to Darrell Sims, he is one of the most popular retired generals. Mary Sims, according to Mr. Altman, said General Phillips is tremendously popular and well respected. Mr. Berzina asked if Gen. Phillips is working for any other airbase. Ms. Yeager stated he is not. Mr. Rodriguez worried that, with charging $3,500 and a cap on his contract, he cannot be giving this project much of his time. Mr. Chase stated that he has assured him that he will stick with us in preparation for the San Antonio meeting. If there is a need to go forward with his services, then additional (and significant) funding will be needed. Mr. Shores verified they are just asking today for funding through July 11. Ms. Yeager affirmed, stating that no doubt several trips to Washington, D.C., will have to be made after that date. Mr. Shores added there will also be the $3,500 per day charge of Gen. Phillips. Ms. Yeager agreed, but noted that once a particular consultant is hired, there is no reason to change to another. Mr. Coleman reminded Mr. Stahler that he had earlier stated that enlistment is down in the Air Force. It is more an issue that the pipeline of students to Sheppard has been shut off. They are down to 1,300 students, the normal student load is 6,000. The student impact has been felt over the last eight months in retail and used car sales. It is necessary to focus time and attention on what happens now. The Air Force will be smaller in the future. Sheppard needs to be positioned for the long term. Mr. Stahler asked if housing is an issue. Mr. Coleman replied affirmatively. He noted that Wherry housing is in a shambles. Some of the structures along the base golf course have been razed. Ft. Hood is doing a privatization experiment now, as could Wichita Falls Economic Development Corporation June 20, 2005 Meeting Minutes Page 5 Wichita Falls. Mr. Chase counted off four criteria involved in the decision to go realign to Ft. Sam Houston: (1) buildable acreage; (2) excess capacity, (3) proximity to a hospital; and (4) they already do joint training. Mr. Chase believes the data collected here was prior to the time the BCI had agreed to buy 40 acres of land, making such data for buildable acreage untimely. Ms. Yeager urged the importance of being able to buy more property where adjacent to the field training by the airport entrance. Sheppard has a huge advantage over Ft. Sam Houston, which has encroachment issues. That base utilizes Camp Bullis, 30 minutes away. On the other hand, Ms. Yeager regrets, she realizes that the DoD has already reviewed the various scenarios. Mr. Shores asked if the BCI would help to fund expenses after July 11. Ms. Yeager stated that is the more appropriate time for a public fund drive. Mr. Stahler asked if $25,000 is being requested today. Mr. Altman suggested the Board offer $30,000 (twice what Burkburnett has contributed). Mr. Shores expressed concern that Iowa Park contributes to this effort, as well. Mr. Altman's thought was that the Board contribute $30,000; Burkburnett $15,000; and Iowa Park, $5,000. That would get the BCI the sum of $50,000. Mr. Chase stated this has happened so quickly that the BCI board has not yet met, although the Military Affairs Committee has met several times. The BCI has a role to play in this, and he would be an advocate to go to the Board to request members to help fund this effort. Mr. Stahler moved that the Board allocate $30,000 to begin this process, and strongly encourage Iowa Park to also provide financial participation. Mr. Altman seconded the motion. The motion carried. Mr. Chase noted that Iowa Park now has a sales and use tax, even if it is a small annual collection. Randy Catlin is their new mayor. He feels Iowa Park will be receptive. Mr. Berzina noted that a City of Wichita Falls employee (Arlene Eaton) is on the Iowa Park board. IV. Consider Reconciliation of Sharp Iron, Inc., Project. Mr. Chase stated the BCI requires further information from Sharp Iron before the reconciliation can occur, so this topic was tabled for the meeting. V. Discussion and Possible Action on Texas One Marketing. Mr. Chase informed the Board that states do not use taxpayer dollars in general funds to subsidize marketing initiatives for creating new jobs. Instead, not - for - profit corporations are formed, which request contributions from a variety of ways to assemble money to market the state for new job creation. Wrchita Falls Economic Development Corporation June 20, 2005 Meeting Minutes Page 6 The Governor of Texas created the Texas One Corporation. There are other corporations, as well. The BCI pays $2,000 annually to be a member of the Texas Marketing Team. Many communities with sales tax for economic development are contributing anywhere from $1,000 to $10,000 into the Governor's Texas One Corporation. The money is used for a variety of programs, mostly geared to getting large corporate entities to come to the state. It can also serve as an initiative to get CEOs of companies that are doing business in Texas, or who are looking to expand. That is called the CEO Event. The BCI participated last August in this event with representatives from PPG. They met the Governor. It can have some effect on the decision - making process of corporations. Mr. Chase proposes the 4A Board contribute $2,500 to the Texas One Corporation. He is not asking for a decision today; if the Board desires, he can provide them with additional information. Mr. Shores asked that he provide the Board with that information, and it can be placed on the agenda for the next meeting. Mr. Altman asked if there was any question about that funding being a permissible use. Mr. Chase stated it is part of the 10% that can be used for marketing. VI. Other Business. Mr. Stahler asked for an update on CertainTeed. Mr. Chase stated that Ron Lane had made a report to the corporate folks. They challenged him on some of his strategies, and asked that he make some amendments. That has happened twice now. The decision has not been made. It is still in the hunt, and Mr. London is working as quickly and aggressively as he can. V11. Adjourn. The meeting adjourned at 8:40 a.m. Gary hores, President