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4B Sales Tax Corporation Minutes - 11/13/2009a MINUTES OF THE 4B SALES TAX CORPORATION November 13, 2009 Present: John Alexander § Alan Donaldson § Charles Elmore § Jim Ginnings § Corporation Board Members Darron Leiker § Randy Schaffner § Bob Seabury § Lanham Lyne, Mayor § Rick Hatcher, Liaison § City Council Miles Risley, City Attorney § Carla Bolin, Public Information Coordinator § Linda Merrill, Recording Secretary § City Staff Jessica Langdon, Times Record News § Media Ed Michel § Dave Simon § Castaway Cove Stephen Vaughn § 1. CALL TO ORDER Jim Ginnings called the meeting to order at 9:02 a.m. 2. APPROVAL OF MINUTES (AUGUST 21, 2009) Charles Elmore moved, seconded by Randy Schaffner, that the minutes be approved. The motion carried unanimously. 3. APPOINTMENT OF OFFICERS Bob Seabury nominated Randy Schaffner to serve as Vice - Chairman to preside over the meetings when the Chairman is absent. Seconded by Charles Elmore, the motion unanimously carried. ,'Y C Ur :..,�_,�.: i s Dme .t 413 Meeting Minutes — November 13, 2009 2 4. PUBLIC HEARING AND CONSIDERATION OF THE CASTAWAY COVE WATERPARK PROJECT Alan Donaldson asked about the City's intended use of the additional acreage. Mr. Leiker said there are no current plans. It would take work to clear and level the land, but there is potential for park trails or expansion of the existing water park. That acreage includes frontage off the existing access road and behind the water park connecting to Windthorst Road. Bob Seabury asked if 4A funds may be used for 4B projects. Mr. Leiker said they could be used, but it would take a referendum, and the City Council is not interested in this option. Mr. Leiker distributed informational material regarding the acquisition. Sales Tax Collections: Sales tax collections are at 4.22% less than the prior fiscal year. At present, the 4B estimated sales tax collections are $3,551,795. He believes that should be dialed back to a more realistic number of $3,306,605 ($245,000 less than the original estimate). The budget revenue figure of $30,000 for TIF No. 2 reimbursement has been greatly exceeded. The fiscal year 2010 estimate is $265,000. Expenditures: The sum of $2,835,170 in encumbered funds annually include the following projects: Backdoor Theatre ($60,000); Mobile Data Terminals ($2.135 Million); River Bend Nature Works ($40,810); and the South Weeks Park Pond Project (just under $600,000). The 4b Board issued debt for TIF 2 and the Champions Course at Weeks Park at just under $600,000 a year. Debt Service: $1.6 Million in annual debt service for four years (pre- Castaway Cove). That lowers to $1.5 Million at year five, and to $1.1 Million at year seven. The last debt service schedule pays off in 2029. The additional debt issued for Castaway Cove with 15 year Certificates of Obligation estimates a debt service at $385,000 a year. Staff has looked at interest rates and talked to financial advisors and bond experts. The 4B Board will still have $2.9 Million in its fund balance, for an annual net income of $1.1 Million for other projects. Mr. Leiker advised the 4B Board not to expect any reimbursement from "profits" from the water park. If the water park revenues exceed expenditures, those excess funds will be put into a capital reserve fund. The Water Park has $6 Million in assets that are aging. In addition, there should be money available to add attractions to the park to keep up the excitement level. It will be run as an enterprise fund similar to water and sanitation funds. Mr. Schaffner asked if there is an appraisal of the Water Park. Mr. Leiker said no appraisal was done. They looked at the Appraisal District value and depreciated schedule, as well as value of the land. It is a staff estimate. Mr. Schaffner passed out a feasibility study. Although it is regarding the building of a Water Park, some of the 46 Meetinq Minutes — November 13, 2009 3 points are applicable to an existing Water Park. It is a burden on City staff to appraise this property; further, it is good business practice to have a third party appraisal. This is a specialized type of asset and there are companies who provide appraisals. Mr. Leiker responded that the study furnished by Mr. Schaffner provides good information. However, this Water Park has been in operation six full years. The attendance level and expenditures are known factors. He couldn't ask for better information. Mr. Seabury said he has built a lot of projects, many of which have required feasibility studies. The rate of accuracy on these studies is about 50 percent. Charles Elmore moved that the 413 Board approve the City's application to issue 15 year Certificates of Obligation in the sum of $3,900,000 for the purchase of the Castaway Cove Water Park and adjacent 49 -acre tract. Randy Schaffner seconded the motion. Mr. Schaffner asked if the City will retain the management company to run the Water Park. Mr. Leiker replied that AMG is an expert in this type of operation, and will run the daily operations, training and hiring, at least for the first year. Mr. Donaldson asked if there will be a professional inspection of the property. Mr. Leiker said the City's maintenance staff inspected the facilities. They feel confident. The slides require an annual inspection. Chairman Ginnings called for a vote on the motion before the Board. It carried unanimously. Mayor Lyne noted the City formed Vision 20/20 one and one -half years ago, and the Chamber of Commerce had a similar organization. Both entities realized Wichita Falls was not presenting an adequate case as to why it is a great place to live. Missing is a consistent language and look from the City, CVB, Chamber of Commerce, and Downtown Wichita Falls. To get that consistency, they hired hck2, a marketing firm from Fort Worth, to brand Wichita Falls. There is a fundraising campaign planned to pay the expenses associated with this program. The 4B Board will be asked to pay $60,000 for the City and CVB's share of costs. It will cost $100,000 for the kickoff campaign. Carla Bolin said this project has been delayed because it was important to determine initially how the City was to be branded. If this piece of the process is wrong, any amount of money spent on the campaign won't make it a success. 5. ADJOURN The meeting adjourned at 10:12 a.m.