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4A Wichita Falls Economic Development Minutes - 02/11/2008MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION FEBRUARY 11, 2008 PRESENT: Gary Shores, Chairman § Bo Stahler, Vice- Chairman/Sec. /Treasurer § Dick Bundy § Members Gary McLendon § Lanham Lyne, Mayor § Charles Elmore, Council, District 5 § City Council Matt Benoit, Assistant City Manager § Bill Sullivan, City Attorney § Dave Clark, Dir. of Community Development § Linda Merrill, Recording Secretary § City Staff Tim Chase, President § Kevin Pearson, VP, Economic Dev. § BCI David Dunn § Atmos Energy Randy West § Larry Drennan § AT &T ABSENT: Dave Lilley § Member I. CALL TO ORDER The meeting was called to order at 4:02 p.m. II. APPROVAL OF MINUTES — JANUARY 25, 2008 Dick Bundy moved, seconded by GM McLendon, that the minutes be approved. The motion unanimously carried. WFEDC — Minutes of February 11, 2008 2 III. DISCUSSION AND POSSIBLE ACTION ON THE EXTENSION OF UTILITIES FOR THE WICHITA FALLS BUSINESS PARK Gas Installation David Dunn, the project manager for Atmos Energy, showed the Board two maps: (1) gas coverage for the entire Park, and (2) coverage only to serve Old Dominion. It will take 8,100 feet to serve the entire Park, and 4,800 feet to serve only Old Dominion. The coverage is designed with a two -way feed to ensure volume and pressure. Mr. Bundy asked if 8 inch poly would be used no matter what coverage is requested, to which Mr. Dunn replied affirmatively. Chairman Shores commented on the wide variance in the price estimate of $202,000 to $283,000. Mr. Dunn said the bids will come in between $25 to $35 per square foot. If the installation is handled through a three -way contract, and the Board pays the contractor, the franchise fee would not have to be paid, which would add another 30% to the cost. Mr. Dunn noted that Atmos would pay all inspection and design costs if the three -way contract is executed. And, if the Board so wishes, he could send out the bids and have the contractors deal directly with him. Randy West of Atmos Energy interjected that the part of the Park already developed will be more expensive to cover than the undeveloped portions. City Councilor Charles Elmore opined that it would be better to loop the entire Park, rather than simply serve Old Dominion. Mr. Bundy asked who the pipe would belong to, and Mr. Dunn replied that the Board would sign a bill of sale to Atmos for the pipe. Mr. West added that Atmos would assume all liability and responsibility. Mr. Dunn added, however, that any right -of -way clearing and staking of the right -of -way is the responsibility of the Board. Kevin Pearson stated the land clearing cost is estimated to be $3,500. Mr. Chase said the maps show the pipe running alongside a road that does not currently exist, and asked what would happen if the plan for the road is changed. Mr. Dunn replied that Atmos' work is predicated on this particular road placement. Mr. Chase reflected that if the placement is arbitrary, the road could be moved farther north. Mr. Bundy noted that road has to be aligned with Midwestern Parkway. Mr. Clark noted it would have to be further south to line up with Midwestern Parkway. Mr. Bundy expressed his opinion that, if it is flexible, then the curve should be left out of the road. However, if the road is adjusted, there is frontage for only one lot. Chairman Shores asked if Atmos has a problem boring under a road. Mr. Dunn replied that it can be done, but each such case is handled on an individual basis. Mr. Clark said the thoroughfare map will show the bigger picture, and left the meeting to get that map. Mr. Dunn said he thought the road placement was set in stone. He would rather it be designed to provide Atmos with better access. Mr. Chase suggested the Board approve funding for the looping of the entire Park at the high end of the estimate. In the meantime, he would get with Jim Biggs to confirm whether the placement of the road is arbitrary. WFEDC — Minutes of February 11, 2008 Mr. Dunn expressed concern that Atmos does not want to install the lines and find out some platting changes have occurred and the lines are not where they should be. Mr. Chase said there is no way to know how these particular properties will eventually plat. The properties will be platted to accommodate future users, and urged Atmos to provide installation with flexibility in mind. Mr. Dunn replied that Atmos would prefer to follow the road. Mr. Chase noted that he and Mr. Pearson have been at opposite ends on this issue. He has been opposed to platting in order to keep flexibility at the Park, but he now thinks it will have to be platted. Vice - Chairman Stahler asked why he is of this opinion. Mr. Chase stated that in order to get infrastructure in place, right -of -way is necessary. Property owners need to grant easements so that utilities can know where they can put their pipes. Councilor Elmore asked where the railroad spur would come into the Park. Mr. Chase indicated on the map. Mr. Clark returned with a thoroughfare map. He noted the lines are not exact dimensions. Mr. Chase asked if the curve in the road is a real jog, and Mr. Clark replied it will have to jog if things are in the way, such as towers. Mr. Bundy noted the benefit of placing it in its proposed position is that it would better serve properties on both its sides. Vice - Chairman Stahler questioned whether it would limit the use of one of the parcels. Mr. Bundy noted it would be a 16 -acre tract, which is a good -sized parcel. Chairman Shores asked, even if the road placement is set in stone, would it not be better to run the easement straight through on the back side. Mr. Bundy said following the right -of -way would provide for servicing of both pieces of property. The main objective is to serve both sides of the right -of -way. Mr. Chase encouraged the Board to approve funding the looping of the entire Park at the maximum estimated cost. He will double -check with the engineers to make sure this is the right design curve. If so, then there will be enough money to go forward. Mr. Dunn opined that it probably makes more sense to run the lines all along the perimeter of the Park. He indicated on the map where the pipe could be installed. Atmos would follow the road, installing a stub with a valve to keep going west, and a stub to go south, to be covered both ways. Mr. Chase asked if the cost estimates include repair to any landscape that might be damaged during installation. Mr. Dunn replied that will be included. Mr. Chase then asked if there is any advantage to Pratt/Whitney having a redundant loop versus its current radial system. Mr. Dunn replied there would be no advantage. Mr. Bundy moved that the Board approve the extension of an eight inch gas line looped all the way around to Hammon Road by coming straight (indicating on map) instead of following the proposed Midwestern Parkway extension, and that the full loop to cover the entire Park be approved. Vice - Chairman Stahler stated that he would second the motion, subject to the bids coming in somewhat in line with the discussion held today. Chairman Shores added that the motion should include that the 4A Board act as its own contractor. The motion unanimously WFEDC —Minutes of February 11, 2008 4 carried. Mr. Benoit urged that the funding for this project be adjusted to the highest denominator in the letter, to which Mr. Chase replied that figure is $280,000. Mr. Dunn asked if he is to change the design and send out bids. Mr. Bundy advised that he wait until Jim Biggs has been contacted. Mr. Dunn said the right -of -way will still have to be staked. Mr. Pearson stated the process for clarification: Atmos will prepare the bid specs, and farm it out to approved contractors. The bid prices will come in, and 4A will give its final approval. Mr. Chase asked if this project should go through the City's bid process. He added that every other project done in the Park has been handled in that manner. Mr. Benoit asked the length how long the project will take. Mr. Dunn replied three to four weeks. It was decided that Mr. Benoit should receive the bids. Mr. Bundy asked if this is going to be bid as a public works project, and if there is any problem with sending the bids to Mr. Benoit. Mayor Lyne stated that it would not be a public works project, and Mr. Benoit would receive them in his capacity as a liaison for the 4A Board. Mr. Dunn noted that he had provided Mr. Pearson with a list of Atmos approved contractors. It is a large list, and he does not intend to send the request for bids to all of them. A lot of them would not respond with a bid, or their prices would be too high. These contractors work all over the state. There are certain ones to which they normally send out their requests. However, he wants documentation for his files that would cover him should there be some question as to why he did not send the specs out to all of those listed. Mayor Lyne suggested that he, Mr. Benoit, and Mr. Pearson coordinate the list. Mr. Pearson asked that Mr. Dunn target those companies he would desire, and they will then discuss whether that list is broad enough. Mr. Chase opined it would be good for Atmos to receive some correspondence from the City, as it seems there are still questions. Mr. Benoit agreed there needs to be further coordination. Telecommunications Mr. Pearson declared there is a simple way to get telecom services to Old Dominion, with relatively no cost to the 4A Board. However, having fiber available at the Park would be a tremendous marketing asset. There are several companies that would benefit from its use. The Board is being asked to consider whether the cost to do so would benefit marketing of the Park. Larry Drennan of AT &T noted that if a high data user located in the Park and needed a lot of bandwidth, that company would bear the brunt of the cost to bring fiber connectivity to the Park. Mr. Pearson had mentioned some customers in that area have expressed interest in having fiber connectivity, but they do not want to bear the cost to have it brought to the vicinity. If the 4A Board would fund this, AT &T could place "dark fiber" at a cost of $60,000. That is a good faith estimate. Once this project is approved, AT &T would then do a custom work order and provide an exact cost and binding contract. Fiber would not be put in service until there was a need for it, but it would be available. Vernon College has wanted fiber at their Skills Training Center. They get a discount on services that would be provided to them, called an "E- Rate," and WFEDC —Minutes of February 11, 2008 5 AT &T could build whatever size is needed to accommodate them. This fiber would be enough connectivity to carry the Business Park well into the future. The cost will probably come in under the estimated $60,000. Mr. Drennan noted that the $60,000 estimate covers the material, as well as boring under 287, which will be a large expense. Vice - Chairman Stahler asked if the Board is being asked to pay for companies such as Empire Paper to hook into the fiber connectivity. Mr. Drennan said this is simply the backbone for fiber telecommunication services. The Board would pay for the material and material placement. It would then become AT &T's property. Vice - Chairman Stahler asked for confirmation that the 4A Board is not extending service to companies at its cost, but simply providing them the opportunity to get it, if they wish to pay for it. Mr. Drennan agreed, adding that the cost is minimal. AT &T does require a conduit out to the right -of -way boundary, and the placement of a backboard in the building. Unless there is a large amount of footage involved, AT &T would not charge those companies for the connectivity; rather, that cost would be figured into the rates. Mr. Pearson noted that 4A money would be spent, but several businesses would benefit, such as Empire Paper, Beacon Insurance, Admiral Linen, and Covercraft. Therefore, the fiber would not sit "dark." Mr. Pearson asked Mr. Drennan to explain where the fiber would be placed. Mr. Drennan noted his engineer was unable to attend today's meeting, but he believes it would be at the detention pond at the entrance to the park. Mr. Pearson stated he believes the detention pond at the south end of Fisher Road was actually where it would be placed. Vice - Chairman Stahler asked if it would be placed underground. Mr. Drennan said that it would. Chairman Shores remarked that Comcell has a fiberoptic cable in the Park. Mr. Pearson stated that AT &T's engineer, Randy Wallace, said that is a fiber line that cannot be tapped into. Mr. Drennan added that it serves Community Telephone from Windthorst. That line is their umbilical to get its traffic into AT &T's toll switch for this region. Mr. Pearson did note that Time Warner Cable was requested to give a quote on the project. They are about a mile away from the Business Park. It would cost them well over $200,000 to provide the fiber connectivity, so they declined to bid. Mr. Bundy asked what is the benefit to doing it now. Mr. Drennan stated that it would be ready if a customer needs it. Mr. Pearson stated that, if fiber optic connectivity is not immediately available, many companies disqualify that site from further consideration. Councilor Elmore asked how long the process would take. Mr. Drennan said the bid process would take two weeks, and another two to three weeks for placement. Councilor Elmore opined that the $60,000 investment is minimal compared to the amount of money already invested in the Park. Mr. Pearson agreed, pointing out that $1 Million had been spent on landscaping alone. Mr. Bundy asked if Old Dominion has a need for the fiber, and Mr. Pearson replied they did not. WFEDC —Minutes of February 11, 2008 Mr. Bundy moved, seconded by Gary McLendon, to expend up to $60,000, the final amount to be determined by a custom work order, for AT &T to bring fiberoptic connectivity to the Business Park. The motion unanimously carried. Mr. Drennan noted that Randy Wallace will contact Mr. Pearson and issue a custom work order request for a firm price. Mr. Chase advised Mr. Pearson to take no action on this matter until the Council has official approved the expenditure. Chairman Shores noted that this should take care of all utilities to the Park. Mr. Chase stated that rail service is all that remains. Mr. McLendon expressed concern over the unsightliness of aerial utilities at the Business Park. Mr. Chase said everyone is in agreement that lines should go underground, unless the cost is ridiculously high. Mr. McLendon expressed concern that there will be overhead lines going down the roadway to Old Dominion. Mr. Pearson stated that would not be going down the roadway, but would run behind Wichita Clutch. Mr. McLendon responded that, as one comes into town, the front view of the Park is smooth and clean, but the view from the expressway is ruined due to the overhead lines. Oncor is going to run aerials into the Park. Mr. Chase noted that there will not be new poles; the poles are already there. He doesn't know of any other way to do this. Chairman Shores agreed it could be a nicer looking park, but it could get awfully expensive. Mr. McLendon asked how Alliance Park handles overhead lines. Mr. Chase replied he did not know. Mr. McLendon suggested as an incentive, have a prospective user of the Park pay the cost for overhead lines, and the 4A Board could pick up the difference between that cost and the cost to move forward with underground installation. Mr. Bundy replied that, while he believes underground lines are aesthetically pleasing, he is aware that less than a quarter of a mile away there is a huge transmission line. IV. DISCUSSION AND POSSIBLE ACTION ON ANNEXATION VERSUS NON- ANNEXATION OF THE WICHITA FALLS BUSINESS PARK Mr. Chase provided a handout comparing the standard tax abatement policy, standard non - annexation policy, and a suggested new abatement policy. Mr. Pearson stated this scenario assumes a $10 Million project between the land, building, and equipment. Mr. Chase noted that, regardless of the investment, the incentive would be the same. In the standard abatement, the tax would be abated 100% for the first year, and descending through the next nine years. The dollar value of $59,246 is the City's portion of the taxes. The current system allows a 55% discount to the business. In the non - annexation scenario, a first generation agreement is for seven years, and payment is 25% in lieu of taxes. The second generation payment is 40% in lieu of taxes. He calculated a 10 -year period, and this agreement allows for a 73% discount to the business. The third scenario provides similar benefits to a company, in the city limits, that it would receive under a non - annexation agreement. A front -end loaded tax abatement agreement allows for a 76% discount to the business. WFEDC — Minutes of February 11, 2008 7 There is no single rule how companies calculate incentive values into the capital budget: some say three years, others say five years. Forecaster software does not extend beyond seven years. For depreciation purposes, schedules change depending upon the type of equipment, but generally it is seven years. He proposes that the Business Park be annexed into the City for various reasons: • Park users would have City police protection • The 4A Board would not be responsible for maintaining the infrastructure • Non - annexation agreements are very cumbersome to explain to businesses • If companies do not look beyond 10 years, the property tax abatement agreement would be sufficient. However, his recommendation to annex the Park is contingent upon the City agreeing to three items: 1. With 4A Board and BCI input, the City could develop a new policy, which would also include the County's position on tax abatement. This policy would allow for abatements at 100% for the 10 years of the agreement. Chairman Shores noted that figure could be anywhere between 0% and 100 %, to which Mr. Chase agreed. 2. If there is fierce competition with Oklahoma, for example, and Okaaahoma was prepared to abate 100% of the company's taxes, the 4A funds could be applied to level the playing field. In the example shown on the comparison handout, the total city property taxes is $592,460. This abatement grants the company a discount of $450,270. The 4A funds could be applied to the difference between those sums ($142,000). It is conceivable, in addition to cash for jobs, development, or training, there could also be a property tax write -down. Chairman Shores stated that could be as much as 100 %, if the City elected to not give any tax abatement. Mr. Chase replied that is true, but it goes back to his recommendation to have the three groups arrive at a workable policy. This would give the BCI more flexibility, when it is out selling, to either ask the City to increase the abatement, or to approach the 4A Board for funds. 3. The covenants and restrictions agreed to for the Park cannot be thrown out in favor of the City's zoning, landscape, sign and subdivision ordinances. Councilor Elmore asked if the City can annex the property into the city limits, and yet give any users of the Park a "special deal" as compared to other entities. City Attorney Bill Sullivan opined that would be hard to do. He is not sure where the conflicts would arise. From the zoning perspective, it would not be an issue. The covenants and restrictions for the Park already imply that users of the Park will meet the City's building and other codes. Vice - Chairman Stahler wondered what existing businesses might think when they hear about the 4A Board picking up the difference in taxes for a company under an abatement agreement. He believes this could open Pandora's Box. Mr. Chase compared it to the 4A Board paying money for jobs created by Company A, but not paying money to Company B, which also created more jobs. Vice - Chairman Stahler remarked that the 4A Board has been paying money WFEDC —Minutes of February 11, 2008 8 for existing businesses to create more jobs. Mr. Chase responded that payment has been made only because some factor gave the company an alternative to do that elsewhere. Mr. Bundy noted that non - annexation agreements treat companies differently from one another. Vice - Chairman Stahler noted that potentially, the suggested new abatement policy could give a company a free ride for 10 years on city taxes. If an existing industry hears about that, they would no doubt ask why they could not receive such treatment. Mr. Chase replied that if an existing business does something to raise its assessed value, there is a potential for taxes to be discounted resulting from that expansion. Taxes already on the books cannot be abated. PPG added a $38 Million project to its plant, and a non - annexation agreement was negotiated to give that company a discount on their taxes. Vice - Chairman Stahler noted it received a discount, not a total abatement. Mr. Chase replied he is not personally advocating for total abatement, unless that is what it takes to close the deal. Chairman Shores agreed the City, 4A Board, and the BCI would need to meet concerning this issue. Mr. Bundy noted that the covenants and restrictions were written with the idea that the Park would not be annexed. Mr. Clark stated the covenants are more restrictive than City ordinances. The covenants more heavily address quality and aesthetics. The bottom line for the City is adherence to the International Building Code and some setback regulations. Mr. Chase noted that the Development Review Board (the 4A Board) can waive restrictions at its discretion. Mr. Clark replied that could still be done, as far as aesthetics. Mr. Chase asked what would occur if a user at the Park wanted a sign that did not comply with City ordinance. Mr. Bundy said a waiver would be necessary. Mr. Chase stated that now, while not being annexed into the City, decisions concerning the Park can be made by the Board. Vice - Chairman Stahler asked why Mr. Chase is now advocating annexation. Mr. Chase stated these areas in question would have to be worked out in order for him to fully support annexation. Mayor Lyne interjected that if a major company wanted to install a 1,000 foot sign, it would be approved. Mr. Chase stated it is not a matter of whether it can mechanically be done. It is a matter of a CEO of a potential Park user having the option of two choices — one community that has to go through the approval process, and one that does not. Vice - Chairman Stahler stated he does not see the need for annexation. Mr. Clark stated there are several reasons to annex the Business Park: • The City cannot make water connections to commercial projects located outside the city limits • The 4A Board will have to maintain water, sewer, and the roadways at its cost • The Park's covenants and restrictions are more restrictive than City regulations. He added that he cannot see an issue with any sign that may be installed in the Park. • Police service would be provided by the City if the Park is in the city limits. • Fire service would be provided by the City if the Park is in the city limits. Insurance rates are significantly higher for companies located outside the city limits, even if there is a non - annexation agreement that provides for municipal fire protection. WFEDC — Minutes of February 11, 2008 9 Chairman Shores asked what began this discussion regarding annexation. Mr. Clark noted it is the prohibition against the City making water connections outside the city limits. Chairman Shores observed that water service was provided to the prison before it was annexed into the city. Mr. Clark stated that was before his time, but there was apparently a special circumstance. Vice - Chairman Stahler noted the special circumstance was the creation of 2,200 jobs. Mr. Chase observed that the City can charge 200% more for water and sewer for users outside the city limits. Mr. Bundy asked why the City would charge such rates, if they really want an industry to locate in this area. Mr. Chase replied that it's been done that way for the past 20+ years. The average is 150% for the first seven years, and up to 175% for the second seven years. That could be a big disincentive for a company that uses a lot of water. Mr. Pearson declared that companies do not mind paying taxes if they get services in return. The lack of municipal police and fire protection can be deal killers. Vice - Chairman Stahler asked how police protection is handled for the plants on the north. Mr. Chase replied that if 911 is called, the County is dispatched. If it is a felony offense, Chief Bachman has the discretion to respond. Mr. Chase has been told that the County does not have an investigative staff. Municipal fire protection is written into non - annexation agreements. When he asked if municipal police protection could be written into the agreements, he was told that is a political and legal decision. Vice - Chairman Stahler reflected that the plants that were not annexed into the city probably should have been. Mr. Chase agreed, noting the higher fire insurance rates they must pay. Mayor Lyne noted that non - annexation agreements were once the trend. Chairman Shores acknowledged that City staff had a Town Hall meeting tonight, and declared this topic could be tabled for now. Mr. Bundy asked for a starting point before this item is discussed during a future meeting, something that would show the pros and cons of annexation. Mr. Chase furnished information to Mr. Bundy during the meeting that he developed. It shows the pros and cons, and the maximum allowable discounts under abatement and non - annexation agreements, and the impact of both on the company, the City, and the 4A Board. Vice - Chairman Stahler thought non - annexation agreements were a marketing tool. Mr. Chase stated that, if one only looks at property taxes, the non - annexation agreements are better than abatement agreements. However, if one looks at the total cost of doing business, it will always cost users more to buy water and sewer outside the city limits. Vice - Chairman Stahler asked why those companies outside the city limits have not yet been annexed. Mr. Chase replied they are not contiguous to the city limits. Vice - Chairman Stahler asked how the prison was annexed. Mr. Clark noted that was part of a large scale annexation. Chairman Shores declared that Vetrotex should be contiguous and a large water user. Mr. Chase stated that company is in the 5t' generation non - annexation agreement; there would be virtually no difference for it to be annexed versus left outside the city limits. WFEDC —Minutes of February 11, 2008 10 Mr. Benoit noted there comes a point in the legacy of these agreements that companies are paying 100% in lieu of taxes, and water and sewer costs, but they lack the services that everybody else gets who pay the same amounts. Vice - Chairman Stahler stated there had to be some incentive at the start. Mr. Chase replied that there is, in the first generation agreement. By the 27`' year, there is no advantage to being outside the city limits. Mr. Bundy noted there was a time when those industries preferred to be outside the city limits, because they did not have to go through the building permit process. However, the International Building Code will more than likely be a statewide code in 10 years. Mr. Bundy asked what made non - annexation agreements seem less desirable. Mr. Chase replied that in today's business environment, businesses do not plan for more than 10 years. Investors look at a three to five year timeframe. He believes it is necessary to front end load benefits in that timeframe. He does not think the City would ever agree to a 100% property tax abatement for 10 years, as that is not politically palatable. But it would have to agree to something in between that and the agreements of today. Chairman Shores questioned the City's motivation to offer a great incentive through a tax abatement agreement (other than to attract the industry), if they knew the 4A Board was prepared to pay the tax bill. Mr. Benoit stated the 4A Board is not being asked to pay any company's tax bill. The Board may have to pay more for cash for jobs or for capital investment, to make up the difference between a non - annexation benefit and an annexation benefit. Vice - Chairman Stahler noted the comparison handout reflects income to the City, and the 4A Board paying $142,000. Mr. Chase replied that, in order to level the playing field between City A, which has zero property taxes for 10 years, and the Wichita Falls, whose property tax would cost the company an additional $142,000, the 4A Board could use its funds to make up that difference. Mr. Benoit replied the funds would not be going to the City; they would go to the company to make up for what another city may be offering. Vice - Chairman Stahler said this is all predicated on getting the City to buy into the 76% abatement. Mr. Bundy asked that Mr. Chase find out how 10 other cities in Texas are handling this. Mr. Chase replied that he would. He also said that very few cities utilize the non - annexation agreement. Wichita Falls has used it in a good way. When large companies came to the area, there was no land available inside the city limits, and annexation was not an option. The companies had to be served by City water and sewer. The City had to invest to get the infrastructure to the companies, and then needed to be reimbursed for that expense. The infrastructure is in place now. The business cycle has become compressed. Chairman Shores asked if it was determined whether PPG could be annexed into the city. Mr. Clark replied that it could not, but the City would have that ability if it annexed another piece of property that abutted PPG. Mr. Benoit stated that non - annexation agreements are staggered. The City would have to methodically work them. The reality is that they are terminal. Chairman Shores asked if Mr. Clark could put something together to assist with the dilemma of whether or not to annex. Mr. Benoit replied it has already been done. WFEDC -Minutes of February 11, 2008 11 V. DISCUSSION AND POSSIBLE ACTION ON PURCHASING D &O AND LIABILITY INSURANCE FOR THE WICHITA FALLS BUSINESS PARK ASSOCIATION Mr. Chase said that Allred Thompson Mason Daugherty quoted D &O insurance at $1,800 per year, and $3,800 per year for liability insurance. The policy was reviewed by attorney David Tate. Chairman Shores asked what were the limits on liability. Mr. Chase replied that he did not know, but can get a copy of the binder. Chairman Shores asked why the D &O coverage was required, as he thought the Association fell under the state law exempting charitable funds. Mr. Chase replied that the Association is a Texas not for profit corporation, as opposed to a charitable organization. Chairman Shores reiterated that he would like to know the limits of liability. Vice Chairman Stahler assumed that, since this is a cost of the Association, it would be prorated among new businesses that become part of the Association. Mr. Chase concurred that it would be an operating cost of the Association. He will get the binder, but asked in the meantime if the Board would like to vote to allow Chairman Shores to make such purchase. Vice Chairman Stahler moved to approve the purchase of the insurance coverage, provided Chairman Shores, upon reviewing the binder, is satisfied there is adequate coverage. Mr. Chase asked if the motion ought to include a budget amount up to $6,000. Chairman Shores preferred some leeway in the amount of money necessary to purchase such coverage, in the event the proper amount of coverage costs more money. Chairman Shores suggested the motion include the amount of $5,600, with a $2,000 cushion in the event more coverage is needed. Vice Chairman Stahler stated he is comfortable not including an amount, but simply leaving it to Chairman Shores' discretion. Dick Bundy seconded the motion, which unanimously carried. VI. ADJOURN Mr. Bundy asked that the minutes not be printed in boldface, as his printer is low on ink. Linda Merrill noted that the minutes are not done in boldface. The appearance of the minutes is transformed when Mr. Benoit forwards them to the Board by email. She will experiment using Times New Roman font to determine if that will allow for transmission of the minutes in their true form to the Board. The meeting adjourned at 6:00 p.m. frrjr Sh.0reS- Erman Bo Stahler, Vice Chairman