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4A Wichita Falls Economic Development Minutes - 04/07/2010MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION Present: Gary Shores, President Dick Bundy Lanham Lyne Gary McLendon Charles Elmore, Liaison Darron Leiker, City Manager Miles Risley, City Attorney Kevin Hugman, Assistant City Manager Linda Merrill, Recording Secretary Tim Chase, President Kevin Pearson, Vice President J. W. Oliver James Waite Bobby Schaaf Absent: Dave Lilley April 7, 2010 § Members § City Council § City Staff § Chamber of Commerce & Industry § Buydentalequipment.com § Attendee § Member 1. CALL TO ORDER President Gary Shores called the meeting to order at 4:02 p.m. 2. APPROVAL OF MINUTES (3/16/10) Lanham Lyne moved, seconded by Gary McLendon, to approve the minutes. The motion carried. 3. AMENDMENT TO ACCOUNT FOR BUDGET REDUCTION OF AMOUNTS PAYABLE PURSUANT TO BEDDING MANUFACTURER PROJECT FROM $9,900,000 TO $9,300,000. J. W. Oliver gave an overview of his company. He has been in the business of refurbishing dental equipment for 23 years. Sixty -eight percent of his sales are of refurbished equipment; the other 32% is new equipment or parts. He also owns smartcabinets.com, which manufactures, installs and delivers dental cabinetry. He mails 6,000 catalogs weekly to dental offices. The biggest part of his business is conducted through buydentalequipment.com. and he forecasts the business to grow 10% annually. He is also focusing on digital technology, involving sensors rather than film x -ray. That technology is growing 16% a year. His is the only company getting into the secondary market for z digital technology. He has deals with Kodak, Owandy, Suni, and SmartPractice. He has hired three employees in the digital integration area, and plans to have 8 -10 employees in this area by the end of the year. They have 53 local employees, and one who lives in Arkansas and sells for the company from his home. In addition, they have a network of 250 dental service providers nationwide (independent contractors) who sell and install equipment. Obstacles faced by the company include knowledge -based employees in the dental industry. They have approached Vernon College to establish a technical training program for jobs paying between $12 to $18 per hour. Their business office is at 9`h and Indiana, while the operations are in the former Wilson Manufacturing plant. He wants a location that will combine both sides of the business, and provide access to different types of transportation. Tim Chase said the company's need to expand led Mr. Oliver to look for a new location. The company has received significant interest from other Texas and Oklahoma cities. During executive session, Mr. Chase will recommend a cash for retained jobs incentive, predicated on the company making an investment in a new location. If the company grows at this new location, a second cash for jobs incentive would be recommended. Application assistance for skills development fund money would be provided. Mr. McLendon asked the number of similar companies nationwide. Mr. Oliver said there are only two others of any size. Mr. McLendon asked if he had locations in mind in Wichita Falls. Mr. Oliver replied he is considering certain locations. 4. BUDGET AMENDMENTS Kevin Hugman said when the Natura project was approved, it was not clear whether Burkburnett would participate. Therefore, the sum of $9.9 Million was budgeted. Subsequently, Burkburnett agreed to finance $600,000 of the project. Dick Bundy moved, seconded by Lanham Lyne... approve a budgetary amendment to reflect a $9.3 Million expenditure for Natura. The motion unanimously carried. Mr. Shores noted a request to add $30,000 to the professional fees line item. The original appropriation was $30,000; however, one project will require this amount to be exceeded so that due diligence may be performed. Lanham Lyne moved, seconded by Gary McLendon, that this be approved. The motion unanimously carried. 5. WICHITA CLUTCH 1,500 HP TEST STAND UPGRADE Kevin Pearson said this project had been discussed at the Board's March 16 meeting. The equipment cost is $440,000, with installation costs at $110,000. Wichita Clutch will pay for the installation, and requests the 4A Board to pay for the test stand. The five -year performance agreement includes immediate forgiveness of 40% of the funds from the 4A Board; the remaining 60% would become a forgivable loan every year Wichita Clutch maintains its current number of employees (80), along with the two positions to be created as a result of this equipment addition. The 4A Board would also have a security interest in the test stand. Dick Bundy moved, seconded by Lanham Lyne, that the performance agreement be approved. The motion unanimously carried. 6. EXECUTIVE SESSIONS President Shores adjourned the meeting into executive session at 4:27 p.m. pursuant to TEXAS GOVERNMENT CODE § §551.071, 551.072, and 551.0871. He announced the meeting back into regular session at 5:18 p.m. He noted that the subjects described in Footnote 1 were deliberated, and no action was taken on these subjects in executive session. Lanham Lyne moved that the agreement with J. W. Oliver (buydentalequipment.com) be approved; seconded by Dick Bundy, the motion unanimously carried. Mr. McLendon asked at what point bonds could be issued. City Attorney Miles Risley said the Board's financial adviser said the Board would need to have an asset for which it would issue bonds, rather than for a cash for jobs expenditure. However, there may be a Texas fund that would not require such an asset. Mr. Chase said the Governor's office has a section called the Texas Bank, through which all federal money passes. There is a bond pool system that can only be used by 4A and 4B boards. Shelf registration is not possible, but there is a rapid turnaround of 30 -45 days. Mr. Shores asked for updates on Carter and Natura. Mr. Chase said Carter is going very well; they plan to fly the plane the last week of May. Natura has hired 20 employees and is evaluating the many job applications received. They are making improvements to the building, and will install a sign. 7. ADJOURN The meeting adjourned at 5:29 p.m. GAR HORES, PRESIDENT Executive Session in accordance with Texas Government Code §551.071, consultation with attorney on matter involving pending or contemplated litigation or other matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Texas Open Meetings Act (including, but not limited to, legal issues related to potential projects for the development, retention, or expansion of clutch manufacturing, aircraft manufacturing, washing machine manufacturing, dental equipment refurbishment, biodiesel manufacturing, teleservice operations, coating manufacturing & distribution, heat exchanger assembly and manufacturing, and projects with other entities named in this agenda for creation and retention of primary jobs (as defined by Tex. Local Gov't Code § 501.002)). Executive Session in accordance with Texas Government Code §551.072, to deliberate the purchase, exchange, lease, or value of real property interests due to the fact that deliberation in an open meeting would have a detrimental effect on the position of the City in negotiations with a third party (including, but not limited to, the purchase and /or value of various real property interests to be used for incentive agreements with aircraft manufacturing project, air conditioner manufacturing project, and projects with other entities named in this agenda for creation and retention of primary jobs (as defined by Tex. Local Gov't Code § 501.002)). Executive Session in accordance with Texas Government Code §551.087, to discuss or deliberate the offer of a financial or other incentive to a business prospect that the WFEDC seeks to have, locate, stay, or expand in or near the territory of the City of Wichita Falls and with which the WFEDC is conducting economic development negotiations (including, but not limited to potential projects for the development, retention, or expansion of clutch manufacturing, aircraft manufacturing, washing machine manufacturing, dental equipment refurbishment, biodiesel manufacturing, teleservice operations, coating manufacturing & distribution, heat exchanger assembly and manufacturing, and projects with other entities named in this agenda for creation and retention of primary jobs (as defined by Tex. Local Gov't Code § 501.002)).