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4B Sales Tax Corporation Minutes - 10/14/2004MINUTES OF THE 4B SALES TAX CORPORATION October 14, 2004 Present: Warren Ayres, President § Leon Mallonee, Vice - President § Benay Ayers, Secretary- Treasurer § Ray Gonzalez § Arthur Bea Williams § Rick Boone § Tommy McCulloch § Bill Altman, Mayor § Jim Berzina § Matt Benoit, Assistant City Manager § Linda Merrill, Recording Secretary § John Hirschi § Jim Estes § Beverly Williamson § Julia Whitmire § Call To Order Corporation Board Members City Council City Staff Visitors on behalf of River Bend Nature Works President Warren Ayres called the meeting to order at 8:10 a.m. II. Approval Of Minutes (July 29, 2004) Rick Boone's motion to approve the minutes of July 29, 2004, was seconded by Leon Mallonee. The motion carried. III. Consider Request from River Bend Nature Works Beverly Williams introduced Jim Estes, the Interim Executive Director of River Bend Nature Works. She noted he comes to River Bend via Oklahoma and Nebraska. She also noted that John Hirschi is her co -chair of the capital campaign committee. 4B Minutes — October 14, 2004 2 Mr. Estes thanked the Board for this opportunity to discuss the proposed project. He opined that this investment of $900,000 could net the City of Wichita Falls a $5 Million project. The proposed design includes a conservatory, visitor's center, and gardens. All of the improvements would be added to the City's inventory. The glass conservatory would be a visually stunning addition to the city's skyline. It would glitter in the sun in the daytime; and would glow from lights at nighttime. The conservatory would enhance visitation by tourists, as well as science education for both students and adults. It would also create a gathering center for the city. Revenue to the City would be increased through tourism. The center would also create a sense of place for Wichita Falls, and enhance the areas' knowledge of the rolling plains. The focus would be on the natural history of the area. Ms. Williamson discussed the packet provided to the Board members. They have finished the final design. The final plans are anticipated to be completed next week. The design provides for an indoor conservatory. At the present time, River Bend draws about 24,000 visitors annually, the majority of whom are children under 10 years of age. They want to attract the casual tourist. The conservatory will provide a stunning exhibit of rolling plains, grasses, and forest area. There will also be a visitor's center and restrooms. The middle portion will be the Bridwell Terrace, a huge gathering area to be landscaped with native plants. The existing Elizabeth Prothro Pavilion will remain. There will be live and fabricated animal exhibits (butterflies, birds, amphibians, reptiles, turtles, and lizards). The Center will be a combination botanical center /natural history museum /zoo, but less expensive. There will be didactical teaching through exhibit kiosks. There will be a pond stocked with fish. There will be a stroller - friendly, ADA- accessible hillside trail. The center is not a self - guided tour, as is often the case in art museums. There will be staff available to answer questions, as well as special programs prepared for each day. Ms. Williamson also noted to the Board that she has made several attempts to receive grant money from across the State to fund this project. There is about a one in seven chance of getting any particular grant; it is not an easy place to get money. Some of the grant representatives encouraged her to write back for another grant, after the project has been constructed. Inside Wichita Falls, however, River Been has been very successful in terms of receiving support from local foundations. The River Bend Nature Center is owned by the City of Wichita Falls, and is leased by the River Bend Nature Works for $1.00 per year. The City provides mowing services, changes the lights in the parking lot, and pays for utilities. However, the lease agreement does not say the City will continue to pay the utilities; the assumption is that 4B Minutes — October 14, 2004 3 it will not pay the utilities for any future expansions to the Center. Ms. Williamson did point out that River Bend Nature Works and the City have a very good working relationship. Sanitation, Parks and Recreation, and City Administration have been extremely helpful and positive throughout this endeavor. A covered, climate - controlled facility is essential. River Bend now operates about seven months out of the year. Hundreds of children are turned away each year due to not enough good- weather days. The Center has nothing to attract visitors in the summer. This expansion would make a big difference in River Bend's ability to generate income and stabilize its revenue stream. She then provided a list of major investors to this point, and noted that more money is coming in every day. Local foundations, individuals, and corporations have promised $3,776,899. An additional $100,000 is anticipated from a public campaign, and potentially $410,000 from other foundations and grants. A balance of $713,951 is needed to finish the project. Ms. Williamson noted that this request for $900,000 is extremely important to the success or failure of this project. The Meadows Foundation is waiting for this Board's decision. That Foundation, and the Perkins /Prothro Foundation, both meet in mid - November to consider River Bend's requests of them. Mr. Benoit asked for clarification, as the request before the Board is for $900,000, while the balance shown to finish the project is $713,000. Ms. Williamson stated that $750,000 is probably a fallback position from their request of $900,000. There is no guarantee that River Bend will get all of the other anticipated funding. She pointed out there is a need for additional parking at River Bend, as well as for some other components that have been pulled from the project in order to keep it under budget. She also noted that the public campaign begins shortly; brochures will be mailed to thousands of households over the next few weeks. Ms. Williamson informed the Board that River Bend has been working with the Texas Tourist Bureau for the past couple of years. Wichita Falls needs to capture the interest of those persons traveling through on Central Expressway and 1 -44. She has looked at dozens of other butterfly conservatories. Not a single one sees less than 200,000 visitors per year. There is a definite following from a tourist standpoint for this type of facility. She believes River Bend Nature Works is the strongest education center of any butterfly conservatory in the United States, as it started out as a nature center. Ms. Williamson provided financial forecast information. She was conservative in her estimates. She anticipates the City's share of the utilities will not increase from the current rate. She also based the center's income upon 85,000 visitors, deliberately using a low -end estimate. In addition, she used the sum of $55,000 for grant funding, similar to the sum that has been received over the past several years. The listing for cash donations is very close to what is normally received. 4B Minutes — October 14, 2004 4 Tommy McCullough asked what the proposed admission fee would be to the center. Ms. Williamson stated they would try to hold a child's admission to $3; adult admission will be $5, and senior admission, $4. Mr. Ayres asked what percentage of visitors are schoolchildren. Ms. Williamson stated they see about 65% of the schoolchildren in a 12- county area, K through 4t" grades. Mr. Ayres asked what percentage of the 24,000 visitors are schoolchildren. She replied approximately 80 %. Mr. Estes noted that River Bend is only marketed to schools in Region IX. They may pursue marketing to schools in southwest Oklahoma, or other school districts /counties. Ms. Williamson noted that the Region IX boundaries go south to Graham, west to Munday and Childress, east to Saint Jo. She noted that visitors come from Nocona, and they'll make a marketing effort to Decatur. This new conservatory will increase the tour from one to two hours to a half -day experience. Mr. Boone noted there is a lot of glass in this building, and asked if there would be an issue in cooling the building. Ms. Williamson noted there will be air conditioning, and shading on the windows. Mr. Estes added that the shades will be automated. Everything will be computerized, but that system can be overridden. The design team worked within the parameters of 85° maximum in the summer. Ms. Williamson added the minimum temperature will be 630. She noted they are using native plants, so heat should not be an issue for them. The comfort zone is strictly a people issue. Mr. Estes warned that plants are not quite as hardy in artificial conditions as when they are outside. Ms. Williamson added there will be a misting system for the plants. Mr. Ayres asked if the shades will be on the inside or outside. Mr. Estes replied they are indoor shades. Leon Mallonee noted the $36,000 utility budget, asking what the City will share above that. Ms. Williamson said the City will continue to pay the utility bill for the structures already in place, but no more. Mr. Boone stated the $36,000 total utility bill seems to be a low projection. Ms. Williamson stated they are working with PPG to supply the glass. Mr. Ayres asked if there will be any type of concessions. Ms. Williamson stated they will have vending machines, but do not intend to go into the food service business. Arthur Bea Williams asked if the forecast of $15,000 in rental fees is what is currently taken in. Ms. Williamson stated it is an increase; they currently have about $6,000 worth of rentals, for events such as weddings, receptions, reunions, and birthday parties. 4B Minutes — October 14, 2004 5 Mr. McCullough brought up the issue of parking. Ms. Williamson stated that for day -to -day, parking is fine. Parking only becomes a problem for events. People do not like having to park down in Lucy Park and walk up the hill. They need to acquire the land to the south, between 3`d and 4th Streets. Mr. McCullough asked who is going to run the conservatory. Ms. Williamson said it is probably going to be someone they don't even know at this point. They will look for someone with a lot of experience. Ms. Williams asked the salary range for this employee. Ms. Williamson said the salary of Executive Directors is typically directly related to the organization's income. She expects the salary to be in the range of $35,000 to $100,000. Mr. Ayres asked if they anticipate a need for lots of volunteers. Ms. Williamson stated that volunteers could be used to man the gift shop and take tickets. Mr. Mallonee asked if the Priddy Foundation funding is a one -time grant, or would they be interested in funding operations. Ms. Williamson stated she does not anticipate the Foundation would provide operating expenses. Mr. McCullough commended the group on their very thorough presentation. John Hirschi stated there is no facility like this one in the area. People would have to go to Denver, St. Louis, Houston or Galveston to find anything approaching it. They feel very confident it will be a tourist magnet. Mr. Ayres asked about the marketing plans. Ms. Williamson stated they are looking at statewide saturation of all Texas Tourist Bureau visitors' centers, billboards, and placement of a brochure in every hotel /motel /restaurant. There has got to always be something going on at River Bend. They intend to advertise in New Mexico, Oklahoma, and Louisiana. Mr. Ayres noted the advertising budget of $30,000 seems too low. Ms. Williamson said they get a lot of free advertising; in addition, today's marketing budget is $5,000, and they are able to do a lot with that. The media has been wonderful to them. Mr. Hirschi added that advertisement would be placed in the Dallas Guide, and it goes way outside the Metroplex. Mayor Altman noted this facility would be a huge draw for conventions, as something for the spouses of the convention attendees to do, in addition to tours of antique shops. Mr. Estes envisions a package deal with hotels and restaurants. If River Bend was holding a special event, the hotels and restaurants can advertise it. Those attending the event could get a ticket for a free breakfast, and they would share the profits. 4B Minutes — October 14, 2004 6 He noted that the majority of visitors that are not local would come from states that are along the interstate highway system that moves through the city. There needs to be adequate signage provided by the Texas Department of Transportation to get people to the conservatory. Mr. Ayres noted his concern that, if the Board gives River Bend the requested $900,000, it would take away their impetus to go hustle to get more money. Mr. Hirschi noted there are lots of other places to spend the money. Ms. Williamson assured the Board that all grants or foundations who said no this year will receive another request next year, and into the future. She also noted a curious fact that people really start to give when something actually starts to become a reality; they can sometime be reticent to give until they see some concrete proof that the project will succeed. Mr. Hirschi noted the need for more funding for additional parking. Ms. Williamson agreed, and added they needed to hire new staff as well. Mr. Ayres asked if they intended to use capital funds for such needs. Ms. Williamson stated no, ethically and legally, there must be separate accounts for the capital campaign and operating expenses. Mr. Ayres asked who pays the admission fee for the children. Ms. Williamson stated that most children bring their own money. In the past couple of years, however, the PTA has picked up part of the cost. Sometimes, the principal of the school has some extra money, and will help fund the visits. River Bend provides the 4th grade's outdoor educational component; the schools pay $5.50 a child for each 4th grade student. They sometimes get grants to pay for the schoolchildren's transportation. Mr. McCullough noted there was nothing negative about this project, except for the cost. He is glad, however, to have the opportunity to do good for the community and for economic development. Jim Berzina noted that River Bend Nature Works has done more with less than any other group he has seen. Mr. Ayres noted it would be a good draw for conventions. Mr. Boone asked how the Council feels about this project. Councilor Williams stated she feels sure they would approve the project, but was not sure about the amount of funds. Mr. McCullough made a motion to approve River Bend Nature Works' request for funding of $900,000. For the sake of discussion, Mr. Boone seconded his request. 4B Minutes — October 14, 2004 Works IV. Consider Public Hearing on the Request from River Bend Nature Mr. Ayres thanked the River Bend representatives for their request, and opened the public hearing. Julia Whitmire urged the Board to look favorably upon this request, noting that this would be a most wonderful project for children. There being no further members of the public wishing to comment on this project, Mr. Ayres called the public hearing closed. V. Consider Project Approval for the Request from River Bend Nature Works Mr. McCullough asked Mr. Hirschi when they needed the money. Mr. Hirschi replied they would need the money by the end of 2005, but would need the commitment this year. Mr. Benoit had prepared a financial forecast for the Board, to show the effect of the proposed granting of the $900,000. For the public safety training center and communication projects, the Board issued debt in 5, 10 and 15 -year series. The annual obligation for debt service will drop off every one -third of the life of that debt, the biggest rate of which drops off after the first five years. The annual debt obligation now is about $900,000. After payoff of the five -year notes, the debt drops to about $550,000 to $600,000 on an annual basis for another five years. At the start of the 11th year, it drops to $150,000 to $200,000. Mr. Boone asked what the Board's total debt would be next year. Mr. Benoit stated the total debt would be about $6 million. The Board would have issued a little over $7 million, and will have paid $900,000 by then. He pointed out that the financial forecast he prepared in May did not include this expenditure, or the previously- approved fire truck. Those represent $1.5 million in encumbrances. Mr. McCullough noted that if the Board agrees to fund this request, the ending balance bottoms out in September at $4.1 million. Mr. Benoit stated he wanted to make sure the Board realized "available balance" meant available for spending. That is the ending balance minus the ending encumbrance. As Mr. McCullough pointed out, in September, the available balance is $4.1 million. Mr. McCullough added, that is after spending the $900,000. Mr. Benoit stated the last debt service payment for that fiscal year had just been paid. Therefore, it is not unusual in the October /November timeframe to have lower available balances. In May 2005, with the radio project complete and all payments made, the available balance jumps back in the $3 million range. Until then, Mr. Benoit continued, encumbrances weigh down the budget. 4B Minutes — October 14, 2004. He noted that River Bend probably has some flexibility in when the money could be granted. He forecasted a linear payment of 12 equal installments over the course of the construction. Mr. Boone opined that it appeared to be a very good project, but the question was whether to fund the requested $900,000, or the bottom line figure of $713,000. Ms. Williams stated she preferred the lesser amount, or perhaps $750,000. Mr. Boone concurred; as he was concerned the public perception would be that the Board gave River Bend more than what they actual need. Ms. Williams continued, stating that giving almost a quarter of a million dollars more than what River Bend shows is needed just does not make sense. She would have no trouble explaining the granting of funding toward this project, but would have trouble explaining the extra funding. Mr. Boone agreed, and stated that not giving the entire request might make someone else step up to the plate. Mr. McCullough stated that he would hate to see this project fail because the Board did not fund their full request. He stated they could have presented a financial report that would reflect the need for the $900,000. They need to solve parking issues, and that will take money. Mr. Boone reiterated his concern that if the Board gave the $900,000, it might curtail other people from giving. Mr. Berzina suggested going with the lesser amount. He wants to have more distance between the City funding the project and any acquisition of property for parking. River Bend can come back before the Board later if they come up short. He wants to keep the condemnation process clean. Mr. McCullough amended his motion to approve the River Bend Nature Works' request for funding to $750,000, rather than $900,000. Mr. Boone seconded that amendment. Mr. Benoit asked if the Board wanted to make that approval contingent upon the project. At this point, they do not have a contractor, so there is a possibility they could still come in over budget. Mr. Ayres stated the Board should make this commitment subject to the full funding of the project. Mr. Benoit stated he can give River Bend money to pay invoices as submitted, and suggested payments begin when the radio project and fire truck are paid off, contingent upon a contract for construction fees. The motion carried unanimously. 4B Minutes — October 14, 2004 VI. Other Business N Mr. Benoit furnished the Board with copies of the Economic Development Guide from the AG's office. He requested the Board contact him or City Attorney Bill Sullivan if they have any questions. There was no other business to come before the 4B Corporation Board of Directors. VII. Adjourn. The meeting adjourned at 9:28 a.m. Linda Merrill Recording Secretary Warren Ayres President