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4B Sales Tax Corporation Minutes - 03/20/2007MINUTES OF THE 4B SALES TAX CORPORATION March 20, 2007 Present: Warren Ayres, President Leon Mallonee, Vice - President Darron Leiker Bob Seabury Alan Donaldson Randy Schaffner Matt Benoit, Assistant City Manager Bob Sullivan, Director of MPEC Cheryl Elliott, Recording Secretary Absent: Ray Gonzalez 1. CALL TO ORDER 0 RECEIVED IN CITY CLERK'S OFFICE Date k � By Time 6 AU MW Corporation Board Members City Staff Corporation Board Member President Warren Ayres called the meeting to order at 8:32 a.m. 2. APPROVAL OF MINUTES (9/25/06 AND 2/8/07) Leon Mallonee moved, seconded by Randy Schaffner, for approval of the minutes. The motion carried. 3. CONSIDER A PRESENTATION ON THE PURCHASE OF A CURTISS JENNY Douglas James and Barry Macha of the Museum of North Texas History appeared before the Board. Mr. James noted the importance of playing up what is unique to Wichita Falls. Wichita Falls had one of the first World War I training bases. Bob Seabury found this World War I plane, and requested the Museum of North Texas History be the vehicle by which it could be brought to Wichita Falls as a museum display. Mr. James believes having a Curtiss Jenny on display here would only serve to increase heritage tourism. When City leaders talk to the BRAC Commission about maintaining Sheppard Air Force Base here, it wouldn't hurt to see the "Spirit of Wichita Falls" flying around. Mr. James noted the City Council passed a resolution, authorizing the use of a hangar at Kickapoo Hangar if the efforts to obtain the aircraft are successful. He would view this hangar exhibit as a satellite museum of the Museum of North Texas History. 46 Minutes — March 20, 2007 2 The Museum has merged with the Fire and Police Museum, for a more efficient effort to attract tourist dollars into the community. The Museum has also been given a Spudder that was built by Clark. This will be an exhibit identifying the area's oil heritage. The Museum has a ladder truck that was originally pulled by horses, which was later converted to be pulled by a Wichita truck. Mr. Macha agreed the Museum is on board. It is a marvelous idea to recognize people who served at Call Field, and to educate people who have no idea that Wichita Falls had an army air base at Call Field. It will be a good tie to Sheppard Air Force Base. He noted there is a marker by the Southwest Boys' Club that names the individuals killed while learning to fly the Curtiss Jenny planes. Mr. James noted it takes two to three attractions to tilt the scales to make an area a tourist destination. This is just one more attraction to add to existing ones, such as the Littlest Skyscraper. Mr. Macha urged that there be developed a Memorandum of Understanding between the Museum and the City. The Museum will want to insure the plane and maintain it as an exhibit, but the City would be responsible for maintaining the facility. Mr. Seabury noted the price of $350,000 includes the dismantling, delivery, and reassembly of the aircraft. He stated this would be a living museum; everything in it has to operate. He continued, stating that, while it was imperative that the Board purchase the aircraft for the $350,000, he still needs to receive money from other sources for maintenance of the aircraft, refurbishing, insulating the hangar, providing heat and air conditioning, and purchasing a Model -T to be displayed along with the Jenny. Both the Priddy and Bridwell Foundations are excited about this project. However, those Foundations do not fund until September. This aircraft has to be purchased now or it will be sold to another buyer, as the owner had held off selling it since last September. Mr. Seabury opined that it would be such a privilege to have this World War I living exhibit. Waco, Fort Worth, and San Antonio had World War I air bases, but none of them have a Curtiss Jenny. It will be the star attraction of the exhibit. He believes Texas Monthly and various aircraft magazines would present a very positive image for the City of Wichita Falls and for Kickapoo Airport. Mr. Mallonee asked if the 4B Board were being asked to fund the purchase price as well as maintenance of the plane. Mr. Seabury said foundations would be approached for maintenance costs. Mr. Mallonee thought there was already some seed money available. Mr. Seabury stated that funding would not be available under September. Mr. Mallonee wondered, if the 4B Board gave all the money that was being requested, would that affect the motivation of those foundations. Mr. Seabury said the foundations are being asked to pay for refurbishment of the hangar and maintenance of the aircraft. 413 Minutes — March 20, 2007 3 Mr. Leiker noted the hangar is the first one on the right off Jacksboro Highway. It is not in museum quality shape and will need a lot of repairs. The City will forever lose any rent revenue on that hangar. The FAA gave approval to the museum, as it is aviation — related. Chairman Ayres asked if the Museum of North Texas History has prepared a budget. Mr. James stated that when Mr. Seabury was alone on this project, he worked up a budget. Now that it will be operated under the Museum, it may just be available for display, and not also operation. If it is flown, maintenance would be necessary, as well as insurance, and it would be necessary to determine who would fly the aircraft. Chairman Ayres asked if the City would be the owner. Mr. Leiker noted that the Museum would own the aircraft. The City would enter into a Memorandum of Agreement for a long -term lease for the hangar space. Mr. Macha noted the foundations will be impressed if the Museum is available to obtain the funding for the purchase of the aircraft. He has no doubt they would complement that effort by the establishment of an endowment to help maintain the exhibit. Chairman Ayres suggested that the City own the aircraft and lease it to the museum. In the event other monies were not able to be raised, the City would have an asset that could be resold. Mr. Leiker noted he intended to give that more thought himself. If the rest of the funding doesn't materialize, the City would still have that asset. Chairman Ayres noted he is all for the project. Although the Museum of North Texas History is off to a good start, it still does not have funding for all it wants to do. Based on the value of the aircraft alone, he would hate to donate it, and then two years from now, the project folds, the Museum sells the airplane for $350,000, and the City gets nothing. If the City owned the aircraft and leased it to the Museum, that asset could be sold and the 4B recoup its investment. Mr. Leiker concurred. If the rest of the funds and the exhibit do not materialize, the City would still have the asset. Mr. Leiker noted that an agreement could be drafted which reverts the ownership of the aircraft back to the City within a certain period of time if the Museum fails to develop the exhibit. Mr. Macha agreed that the Jenny should revert back to the City in that event. Chairman Ayres stated that the worst that would happen would be that the 4A Board had some money tied up for a while, but it would at least have an asset available for sale. Mr. Leiker stated the agreement should be structured that if it is sold, the funds would go back to the 4B Board. He will speak to Bill Sullivan about drafting such language. Mr. Schaffner asked about preservation of the asset, since the hangar is not museum ready. He wondered what deterioration the aircraft would face until it the refurbishment of the hangar is completed. Mr. James noted the plane would be out of the weather; more than likely, it is not stored in an air conditioned hangar now. 46 Minutes — March 20, 2007 4 4. CONDUCT A PUBLIC HEARING ON THE PURCHASE OF A CURTISS JENNY Chairman Ayres opened the public hearing at 8:55 a.m. Matt Benoit stated that state law requires that 60 days expire before he can expend any money for this project. Perhaps some thought needs to be given about what guarantee this gentleman who owns the aircraft would need in advance of the 61St day, when he can receive a check. Options include: (1) letter telling him that money is approved, but not yet available; or (2) $350,000 be put up in advance (interest charges would carry) until the 61St day, and the City could pay then. Mr. Seabury opined the letter should work. Chairman Ayres felt it prudent to enter into a contract for the Museum to purchase it, but the contract cannot close until funding is received from the 413 Board. If the owner of the aircraft has waited this long he wan wait another 60 days if he knows the sale is definite. Mr. Sullivan noted this will be added to his list of attractions for different tours of the area for events that are scheduled at MPEC. The public hearing closed at 8:57 a.m. 5. CONSIDER PROJECT APPROVAL FOR THE PURCHASE OF A CURTISS JENNY Chairman Ayres noted there was a proposal on the floor to purchase the Curtiss Jenny for the sum of $350,000, delivered to Wichita Falls. Mr. Leiker asked the Chairman if the Board had an idea of the timeframe to attach to the MOU — six months, 12 months — before the plane reverts back to the ownership of the City. Chairman Ayres noted that it will take some time to develop a plan. He believes that if the exhibit has not materialized within two years, the Curtiss Jenny should revert back to the City. Mr. James noted that the Museum started five years ago with nothing, but has a lot going now. According to the recent study of downtown, the Museum will be a vital part. The volunteers have been frugal and worked hard, and accomplished quite a bit. He agrees that if it has not happened within two years, it will not happen. Mr. Seabury noted the museum would have a glass wall so that the aircraft could be observed 24 hours a day. He envisions easels displaying information about the history of Call Field, and one or two old cars. Mr. Macha noted the museum has military exhibits. Mr. James added it has quite a bit of information on Call Field. Mr. Seabury moved that the 413 Board allocate $350,000 of unencumbered funds for the purchase of the Curtiss Jenny. Seconded by Mr. Leiker, the motion unanimously carried. 413 Minutes — March 20, 2007 5 6. CONSIDER A REQUEST FOR REPAIR AND REPLACEMENT ITEMS FOR THE MULTI - PURPOSE EVENT CENTER Mr. Bob Sullivan noted to the Board that the repair and replacement items discussed at the Board's February meeting are essentially the same as what he is requested today. There are two exceptions, however. The marquee was originally estimated at $100,000. During conversations with sign manufacturers subsequent to the February meeting, the prices fluctuated greatly. He feels comfortable with the $100,000, but it could be more. He is now asking for a not -to- exceed figure of $225,000. 2. The Council is concerned there is no signage around the facilities for daily events. People may see a lot of cars around MPEC, but not have an idea what is happening at the facilities at that particular time. So, the Council requested that Mr. Sullivan put in an additional $100,000 for signage advertising the events as they occur. Mr. Ayres asked if that signage is intended to be electronic, to which Mr. Leiker replied yes, but of a smaller scale than the marquee. He believes the signs could cost approximately $50,000, but the cost depends upon the structures involved. Therefore, Council requested a not -to- exceed $100,000 budgeted item. Mr. Sullivan reiterated that he still thinks he can come in around $100,000 for the marquee sign. A lot of the cost has to do with the size; the existing marquee is a custom fit. A better price might come with a standard size. In addition, he will specify amber lighting; it is more efficient and will also help drop the cost. Mr. Mallonee asked if the marquee sign is located on a site with a long -term lease. Mr. Leiker noted the City owns that property. Mr. Sullivan added that the City owns the structure itself. Only the sign portion is being changed; the pole structure itself will stay in place. Mr. Schaffner asked if any local companies perform this work. Mr. Sullivan noted that anyone would be welcome in the bid process. He knows there are four to five national companies. He wants good competitive bids on what needs to be done. Mr. Schaffner asked how many signs are anticipated around the perimeter of the MPEC facilities. Mr. Sullivan deliberated having a sign on each structure, which would look fine now. However, the trees would eventually obscure the signage. He thinks perhaps a sign at 5th and Burnett Streets might be the way to go. 7. CONDUCT A PUBLIC HEARING ON THE REPAIR AND REPLACEMENT ITEMS FOR THE MULTI - PURPOSE EVENT CENTER Chairman Ayres opened the public meeting at 9:10 a.m. 4B Minutes — March 20, 2007 g Mr. Leiker noted that during Bob Sullivan's presentation in February, it was mentioned that since MPEC is under City management, staff is looking into short-term and long -term maintenance programs. Funds were virtually cobbled together in the beginning to build the facilities, and some structures are 9 -10 year old. The roof and HVAC will need to be placed on a list for replacement, and there needs to be some funds available for those and other projects. Hotel /motel fund are still paying off the debt to construct the facility and make up the operating subsidy, continued Mr. Leiker. There are other funding sources that are available, including the 4B and the City's general fund. These repairs need to be made. The City just increased the food and beverage prices substantially for the first time in four years. Staff is deliberating a fee on tickets dedicated to specific costs. He does not want the 4B Board to think staff will always be coming to it for maintenance costs. Randy Schaffner asked how long this shortfall would continue. Mr. Leiker noted the City is subsidizing all of the facilities at over $1 Million per year. The light at the end of the hotel /motel tunnel is that when some of the debt is retired, and it can pick up some of these other costs. Staff is continually looking to grow the attractions and adjust the fees accordingly. Bob Sullivan added that so much of MPEC's revenue is derived from people attending events. The more people attend means that much more revenue for the bottom line. He is looking to diversify the event schedule to attract more people. Mr. Seabury noted that most cities have a facility such as the MPEC. Do they all run short of funds, he wondered? Mr. Sullivan noted he thought that MPEC is actually doing pretty well. But it is very rare that these centers make enough revenue to cover or make a profit. If they do, it is through a naming right program, such as the American Airlines Center. Mr. Leiker noted that he knows of none that are totally self sufficient. There are some that are close, and he gave the downtown arena in Wichita Kansas as an example. The County is responsible for this project, not the City. They issued a dedicated sales tax at 2% for 24 months to just wipe out the debt. They won't have to subsidize debt service, but they'll still fax operating costs. He urged the Board to look at the tax dollars the MPEC bring into the community that are not visibly tallied back into that facility — 400,000 per year use the facilities, and more money is spent at hotels, restaurants, and while shopping. Mr. Sullivan noted the opportunities for various activities provided by the existence of the MPEC facilities add to the quality of life. However, staff is still trying to find ways to minimize the amount of money needed to operate. Mr. Seabury noted the City needs to make the community aware of the benefits derived from having such a facility. Mr. Sullivan agreed, noting that the MPEC facilities can play a vital part in attracting new businesses to the area. 46 Minutes — March 20, 2007 7 Mr. Schaffner asked how much more shortfall from the hotel /motel fund should be expected. Mr. Leiker noted the original intent when MPEC was constructed was to have the hotel /motel funds make up any operating subsidy so that the City would not have to use any money from the general fund. He is still hopeful this will not happen. He did add, however, that MPEC will never be self- sufficient. Mr. Schaffner asked about additional land on the north side of the river that is owned by the City; are there plans to lease that land to create a cash flow? Mr. Leiker stated there are plans to develop that area, whether or not they materialize is unknown at this time. But no, this area has not been considered as a revenue generator. Chairman Ayres closed public hearing at 9:18 a.m. 8. CONSIDER PROJECT APPROVAL FOR REPAIR AND REPLACEMENT ITEMS FOR THE MULTI - PURPOSE EVENT CENTER Commissioner Ayres noted that before the Board is a handout from Bob Sullivan, outlining the estimated expenses, not to exceed $500,000, for the repair and replacement of certain items at the Multi- Purpose Events Center that have previously been discussed. Leon Mallonee moved, seconded by Darron Leiker, that this project be approved at a cost not to exceed $500,000. The motion carried. Mr. Benoit informed the Board that the City had received proposals from MDT; they are not easy reads, but staff is working through them. A pre- construction meeting was held at Weeks Park yesterday, and they anticipate moving earth on Monday. Mr. Mallonee asked about the contractor. Mr. Benoit noted that Landscapes Unlimited, from Nebraska, have won golf course builder awards for four consecutive years, and the City is lucky to have them. Mr. Mallonee asked if staff was comfortable with the management contract. Mr. Benoit stated he is happy with the contract. The group will soon start in the process and earn their stripes. He is still convinced that is the way to go. 9. ADJOURN The meeting adjourned at 9:25 a.m. Warren T. Ayres President