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4A Wichita Falls Economic Development Minutes - 07/03/2001r, I / RECEIVED IN CITY Cl...ERK'S OFFICE Date 0q - I -�_6 1 A ff, � Time MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION Meeting of July 3, 2001 Present: Members: Gary Shores, President Ray Clymer, Vice President Bo Stahler Lou Rodriguez City Staff: Jim Dockery, Director of Finance Bill Sullivan, Acting City Attorney Linda Merrill, Recording Secretary Guests: Ron Mertens, BCI Tim Chase, BCI Leo Lane, Chairman, BCI Bruce Parker, EMD, Inc. I. Call to Order. President Gary Shores called the meeting to order at 9:00 a.m. II. Approval of Minutes (March S, 2001). Vice - President Ray Clymer moved the March 5, 2001 minutes be approved as written. The motion was seconded by Lou Rodriguez, and unanimously approved. III. Consider Economic Development Incentive Agreement with EMD, Inc. Regarding Expansion of their Facilities Located at 1411 Twin Oaks, Wichita Falls. (Before the WFEDC Board is a proposed Memorandum of Understanding with EMD, Inc., outlining each party's obligations toward EMD's expansion of operations in Wichita Falls. A copy of the Memorandum of Understanding is attached for further clarification.) Wichita Palls Economic Development Corporation July 3, 2001 Meeting Minutes Page 2 of 4 President Gary Shores noted that Bruce Parker of EMD had not yet arrived. He directed the Board to Item IV of the day's agenda (Consider Approval of the FY 2001 -02 Budget), and stated that this item would be delayed until the Board's next meeting. Mr. Parker then entered the room, so President Shores gave the floor to Ron Mertens to begin the discussion of this item. Mr. Mertens stated the request is basically for the expansion of EMD, Inc., a company that has existed in Wichita Falls for many years. EMD has good growth potential, and an incentive package has been crafted similar to those offered to Pratt - Whitney, Magic Aire, and Cryovac. He then allowed Mr. Parker the opportunity to provide the Board with more information about his company. Mr. Parker stated that his business is in automated control for heavy industrial companies, such as Exxon, Vetrotex, Alamo Cement, Capital Cement, Duke Energy, and Unical. Basically, his company looks at a process to determine how it can be automated for safety, to increase production, or to meet quality standards. EMD will design a package that improves the process, and build a custom control panel that contains a computer. This control panel is installed by an electrical contractor. It is then programmed and started up. The problem his company is facing today is one of lack of space. Mr. Parker states that his building and parking lot are full. He tried over a period of years to buy the Kickapoo Airpark property from John Coppage, but was unsuccessful. He has two new employees coming to work next week. Due to the lack of space, his employees are working in cramped quarters, which is not conducive to the high -level concentration required for their jobs. Mr. Parker noted another problem his company faces is the difficulty in hiring and retaining electrical engineers. He has a standing job advertisement in Lawton and Wichita Falls newspapers for electrical engineers. Most of the engineers want to live in Dallas. He understands that this is a problem for his business, and not a problem for the City of Wichita Falls. He has opened an office in Dallas, but he has to contend with a cutthroat atmosphere there, and would prefer to keep the business in Wichita Falls. Mr. Clymer asked if there was land available. Mr. Mertens stated that, while they were talking today about an economic incentive package, another very important piece of this project is the physical expansion of EMD. EMD is to appear before the Airport Board of Adjustment on July 25. He believes the restriction on construction near the Airpark is a local control, not one legislated by the FAA. (EMD will appear before the Airport Board of Adjustment to request a variance to expand to the east of its current location. This expansion would place the company within the SO foot buffer established for the approach /departure zone for Kickapoo Airpark.) This matter has been looked into, and while there seems to be no opposition to this waiver request, it must be officially heard by the Board of Adjustment. In addition, there must be a lease /lease - purchase agreement between the City and EMD for construction to begin. If the Wichita Falls Economic Development Corporation July 3, 2001 Meeting Minutes Page 3 of 4 variance is not granted, EMD may have to appear before the 4A Board again to look at other possible options. Mr. Stahler asked if EMD was north of Bailey Meissner. Mr. Parker replied it is north of the runway, kitty - corner from Bailey Meissner. It is across the street from the old Pepsi Cola Bottling Plant. Lou Rodriquez asked Mr. Parker how much space was needed. He replied that EMD needs 8,000 square foot of building space, so about an acre to an acre and one -half. Mr. Clymer stated that he must find fault with the statement that Mr. Parker made earlier, that his difficulties in hiring and retaining electrical engineers was not the City's problem. He believes it is the City's problem. Wichita Falls is pro business, and if additional good employment is being discussed, the City will support it. Mr. Parker agreed, stating that if did have to move his business to Dallas, it would be a problem for Wichita Falls. Mr. Clymer queried whether there would be a possibility of a second location on which to expand. Mr. Parker stated that there would not be much incentive for him to move his business elsewhere in Wichita Falls. Mr. Clymer reiterated Mr. Mertens' earlier comment that this incentive package is in line with that offered to other local industries. Mr. Stahler interjected that these are high - paying jobs, as well. Mr. Clymer continued, moving that the Wichita Falls Economic Development Corporation recommend to the City Council that 4(a) sales tax funds, as outlined in the attached Memorandum of Understanding, be used to encourage EMD's expansion of operations in Wichita Falls. Mr. Stahler seconded, noting that this is all subject to approval of the variance by the Airport Board of Adjustment. Mr. Parker replied that, even if the Board of Adjustment does not grant the variance, he still does not want to move the company to Dallas. Mr. Clymer stated that the City will do what it can to keep the business here. He allowed that, while Wichita Falls does not have entertainment such as the Texas Rangers or the Dallas Mavericks, it does have its selling points. Mr. Parker added that it also does not have 635. Mr. Stahler commented that it appears EMD is going to double its workforce. Mr. Parker replied that he hopes to be able to do that, provided the quality of workers is available. EMD currently has five electrical engineers on the payroll. For every engineer, four other positions are filled - one designer, one draftsman, and two shop people. President Shores opined that this type of project is right down the line for what the 4A Board was created — help existing businesses expand and create high - paying quality jobs. He called for a vote on the motion. The motion was unanimously approved. Wichita Falls Economic Development Corporation July 3, 2001 Meeting Minutes Page 4 of 4 Mr. Stahler asked whether EMD received any assistance from the area schools. Mr. Parker stated not so far; rather, he had recruited some experienced workers from existing manufacturing facilities. Mr. Stahler asked him about the drafting program at Vernon Junior College. Mr. Parker acknowledged that he does send his employees to that drafting program; in fact, two of his employees are currently enrolled. EMD sends those employees who show a level of aptitude on to drafting school, then to math classes, and further if their skills warrant. In this fashion, his workforce is cross - trained. Mr. Stahler queried Mr. Mertens if much land was still available in the industrial development districts. Mr. Mertens replied negatively, stating this issue would need to be addressed in the future. IV. Consider Approval of the FY 2001 -02 Budget. As previously mentioned, this item was delayed until the Board's next meeting. V. Adjourn. There being no further business, the meeting was adjourned at 9:25 a.m. C� Linda Merrill, Recording Secretary "Gary Shores, President Memorandum of Understanding July 3, 2001 This is a Memorandum of Understanding (MOU) between EMD. Inc. and the Wichita Falls Economic Development Corporation ( WFEDC). The purpose of the MOU is to provide details of the parties' intentions as they work toward the expansion of EMD, Inc.'s current primary manufacturing operation in Wichita Falls, Texas. * For the purpose of this MOU, a job is defined as one that results from the expansion of EMD, Inc.'s primary manufacturing operation located in Wichita Falls, Texas, and has been in place for at least 6 months, paying a minimum of $10.00 per hour excluding overtime and benefits. I As part of expanding their operations in Wichita Falls, EMD, Inc. will: A. Create up to 20 jobs in addition to their existing base employment of 17 as of June 30, 2001. B. Expand the current size of their facility by 8,000 square feet. C. Complete the expansion and create new jobs no later than December 31, 2002. D. Assist WFEDC in their efforts to secure incentives on behalf of EMD, Inc. II In an effort to encourage this project the WFEDC will recommend to the Wichita Falls City Council that they approve the use of Section 4(a) Sales Tax proceeds as described below. A. Resulting from a presentation by EMD, Inc. to the WFEDC evidencing at least 7 net new jobs* have been in place for a minimum of 6 months and the completion of the new space, the following scale will be used to calculate a payment by the WFEDC to EMD, Inc.: Hourly Wages Payment per Job* $10.00 to $11.99 $2•000 $12.00 to $14.99 $3,000 $15.00 to $17.99 $4•000 $18.00 and up $5,000 B. Subsequent presentations can be made to the WFEDC through December 31, 2002 and they will result in similar payments being made for net new jobs* until a maximum of 20 jobs* have been created. C. In addition to the scale used above, a one -time payment of 5% of annual salaries, not to exceed $5,000.00 per job, will be paid for each newly created position resulting from EMD, Inc.'s expansion that earns a minimum of $50,000.00 per year excluding overtime and benefits and that has been in place for a minimum of 6 months. Wichita Falls Economic Development Corporation M. Gary Shores Chairman LIM EMD, Inc. Bruce Parker President