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4A Wichita Falls Economic Development Minutes - 02/22/2010MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION February 22, 2010 Present: Gary Shores, President Dick Bundy Lanham Lyne Gary McLendon Charles Elmore, Liaison Dave Clark, Director of Community Dev. Miles Risley, City Attorney Jim Dockery, CFO /Assistant City Manager Kevin Hugman, Assistant City Manager Linda Merrill, Recording Secretary Tim Chase, President Kevin Pearson, Vice President Tom Whaylen Linda Beltchev Absent: Dave Lilley § Members § City Council § City Staff § Chamber of Commerce & Industry § Sheppard Military Affairs Committee 1. CALL TO ORDER President Gary Shores called the meeting to order at 4:00 p.m. 2. APPROVAL OF MINUTES (2/11/10) Lanham Lyne moved seconded by Gam McLendon to approve the minutes. The motion carried. 3. SHEPPARD AIR FORCE BASE INTERVENTION PROJECT Tom Whaylen reported that Oncor has proposed routes along the east boundary of Sheppard Air Force Base to place its electric transmission lines. Sheppard officials are uncomfortable with the height of the present towers, and the proposed towers are significantly taller, maybe 185 feet. They would negatively impact any future and perhaps current flying missions at Sheppard. The Sheppard Military Affairs Committee (SMAC) recommends the City file an intervention with the PUC, which will determine the transmission line placement. Miles Risley said the City has used the Austin firm of Lloyd Gosselink on various utility issues over the years. Their fee to represent the City as a landowner in this matter is $15,000 to $25,000. Mr. Risley suggests budgeting an extra $5,000 for travel to Austin (including for Sheppard officials). The City could appear as a Protestant rather than as an Intervenor. It could put on evidence at this lesser level, but would have no right to receive notices of meeting, to participate in discovery, or to make arguments. Mr. Shores asked if any other entities will join in the intervention and contribute toward the cost. Mr. Risley said the City has only 35 days to intervene once Oncor files. Persuading other entities to contribute within that time could be problematic. Mr. Shores said it is important to support Sheppard, but if other entities join the intervention, they should contribute toward the cost. Dick Bundy moved to approve the expenditure of up to $30,000 to intervene in the PUC proceedings with such amount to be decreased by contributions of any other intervenor, and that other potential intervenors be urged to contribute to the costs of such intervention. Seconded by Mr. Lyne the motion was unanimously approved. Updated Financial Statement Jim Dockery presented an updated financial statement of the 2008 -2010 fiscal years. Sales tax collections have dropped, as have the interest earnings on the City's investments. The Board's beginning cash balance was $23 Million. If it paid for every project currently budgeted, it would end the year with $7.2 Million. Its budget authority is $6.385 Million. The Board may take on that much more this year, and $3 Million in additional projects annually from this point forward. Bond Issuance Mr. Dockery said the 4A Corporation has the ability to borrow money. If the City were to help issue bonds, it would utilize its in -house bond advisor and bond counsel to put together a marketing package to sell the bonds to the public. There are some issuance costs associated with that. The timeframe is 90 -120 days. The revenue bonds would be backed by sales tax collections. When bonds were issued for 4B projects, the City used its bonding capacity and the Board agreed to pay the debt service. Those projects were City assets (such as Castaway Cove). He is not sure bond counsel would permit the issuance of bonds for intangibles, such as cash for jobs. Mr. Risley said there must be a specific project for which to issue bonds. Mr. McLendon questioned the effect of the 90 -120 days timeframe on business recruitment. Mr. Chase said that amount of time would kill any project. Mr. Chase said that City staff needs to clear all hurdles regarding the issuance of bonds within the next 30 days. He also requested direction from the Board if cash for jobs is no longer at the top of the list of incentives, but is now secondary to the purchase of tangible assets. Mr. Bundy wondered aloud about issuing bonds on a current project that involves a capital asset, thereby keeping the WFEDC's coffers full. Mr. Shores said there is little equity in anything the Board has already approved. He asked whether bond issuance has "shelf registration" (basically a line of credit in corporate finance). Mr. Risley said he would check with bond counsel. 4. EXECUTIVE SESSION President Shores adjourned the meeting into executive session at 4:39 p.m. pursuant to TEXAS GOVERNMENT CODE § §551.071 and 551.087.1 He announced the meeting back into regular session at 5:00 p.m. He noted that the subjects described in Footnote 1 were deliberated, and no action was taken on these subjects in executive session. Incentive for Potential Business Kevin Pearson has dealt with the State since January regarding a company in the insurance business. Wichita Falls is one of the cities this company is considering as it decides where to locate. It would create 400 jobs in the first year, and 600 total in the second year. It would pay $13 to $15 per hour with benefits, and would begin hiring in September 2010. It will cost $9,500 to train these employees so that they may become licensed by the State. The cash for jobs offer is $4,000 per job ($2.4 Million). A company can get up to $1,200 per new job from the Skills Development Training Fund (Fund). The 4A could pay up to half of the training fee, less the $1,200 from the Fund. That offer would range from $3,550 (Fund grant) to $4,500, and would apply only to the first 400 jobs ($1.9 Million). He has drafted an incentive letter of $4.3 Million. Another incentive is designation as an enterprise zone, whereby the company could receive up to $2,500 sales tax credit against a property it purchases over a five -year period. The former Sears building was suggested to the company. There had been discussion about buying the building for the company, but the letter does not include such incentive. 5. ADJOURN The meeting adjourned at 5:15 p.m. A i/ // GA Y SHOWS, 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 the development, retention, or expansion of Sheppard Air Force Base involving preservation of airspace in the vicinity thereof by intervening in and administering issues related to the competitive renewable energy zone proceeding that will be filed with the Texas Public Utilities Commission, light manufacturing, medical device refurbishment, 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 § 551.087, 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, light manufacturing, medical device refurbishment, 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)).