4A Wichita Falls Economic Development Minutes - 08/24/2000rRECEIVED IN
CITY CLERK'S OFFICE
Date
MINUTES OF THE I3v Time SAY
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORA
August 24, 2000
Members: Gary Shores, President
Ray Clymer, Vice - President
Ron Bullock, Secretary- Treasurer
Bo Stahler
Lou Rodriguez
City Staff: Jim Berzina, City Manager
Robert Powers, Assistant City Manager
Greg Humbach, City Attorney
Linda Merrill, Recording Secretary
Guests: Ron Mertens, BCI
Tim Chase, BCI
Magic Aire Division- United Electric Company
Brian Bill, COO /President
Debbie Wells
I. Call to Order.
President Gary Shores called the meeting to order at 8:28 a.m.
II. Approval of Minutes (February 9, 2000)
Bo Stahler moved that the February 9, 2000 minutes be approved as written. The
motion was seconded by Ron Bullock, and unanimously approved.
III. Consider Economic Development Incentive Agreement with United
Electric Company, Inc., Located at 501 Galveston, Wichita Falls, Texas
(Before the 4A Board today is a proposed Memorandum of Understanding, which
would authorize 4A sales tax revenues in the amount of $30,000 be paid to Magic Aire. This
Wichita Falls Economic Development Corporation August 24, 2000 Meeting Minutes Page 2 of 4
payment would be contingent upon Magic Aire 's creation of 15 new jobs and a minimum
investment of $1 million no later than December 31, 2001.)
Brian Bill of Magic Aire made a presentation, giving a quick overview of the
company, which is a subsidiary of Carrier. Magic Aire manufactures air - handling equipment for
commercial applications, such as schools, hotels, shopping centers, and other light industrial and
light commercial businesses. The company has both domestic and international customers (such
as Mexico and Brazil).
Magic Aire is achieving a 17% sales growth this year. Their future plans reflect a
targeted growth rate of 80% through 2003. Its wage impact for 2000 is estimated to be
approximately $6.5 million, with 287 employees.
Magic Aire is sole supplier of Vertical Packed Unit ventilators to Carrier. It is also
in the process of manufacturing a hydronic product, which Carrier has been purchasing from its
competition.
Half of their building is used for raw materials, and work in progress. However, as
they have 60 acres, there is room for expansion. Ron Mertens interjected that it is a long -term
goal to carry out this expansion. They have looked at new and existing plant sites. He added that,
hopefully, this will become a major industry in this area, and this is just one step in that process.
Bo Stahler questioned Mr. Bill about the employment level in five years. Mr. Bill
estimated a growth rate of 20 % -25 %. Lou Rodriguez asked what is the skill level requirement for
the 15 jobs. Mr. Bill stated the individuals would need to understand wiring schematics, with
probably a vo -tech background. Mr. Mertens commented that he is attempting to get an
amendment to the current training contract with the State through VRJC. Mr. Bill noted that two
manufacturing, and two design engineer positions will also be available. Magic Aire has a base
product, to which they will apply the customer's exact specifications.
Gary Shores queried as to the average wage rate. Mr. Bill stated that he has a
proposal to restructure the total wage packet, but estimates the salaried positions to be in the
$40,000 - $50,000 range, while the others would be in the $9- $11/hour range.
Ray Clymer expressed the opinion that the City and this Board want to encourage
development in every way possible. He questioned whether Magic Aire felt they received
adequate cooperation. Mr. Bill replied affirmatively, stating that Ron Mertens has helped him
tremendously.
Ron Bullock asked about the availability of the workforce and quality of
employees in this area. Mr. Bill stated it is not always easy, but there is an adequate workforce
here. It is up to him and his organization to pose Magic Aire as a quality place to work. That is
Wichita Falls Economic Development Corporation August 24, 2000 Meeting Minutes Page 3 of 4
one reason they have air - conditioned their plant. Mr. Bullock asked what makes it not always
easy to find sufficient workers, asking whether it is market saturation, training level, drugs, or
numbers. Mr. Bill stated it is the numbers, as they specialize training to their needs.
Mr. Clymer moved that the memorandum of understanding be approved. The
motion was seconded by Mr. Stahler, and approved unanimously by the Board. Mr. Mertens
mentioned that, as they are looking at tax abatement and an enterprise project, as well, it may be
a couple of Council meetings off before this issue is addressed. Jim Berzina commented it will
likely be the September 19 Council meeting.
Mr. .Mertens then added that if Wichita Falls is to maintain its manufacturing
base, it is essential to look at basic educational needs. Six million dollars have been nun through
the skills training, but we are not turning out skilled basic machine technologists, which is vital.
IV. Consider Budget for FY 2000 -01
Robert Powers stated that sales tax collections are up nearly 8% over last year.
His conservative estimate of sales tax revenue is $2.54 million, with interest totaling $2,845,000.
The only proposed commitment in next year's budget is continuation of the BCI contract. A total
of $30,000 is budgeted for professional fees. The major part of the budget is in the contingency
fund, totaling $2.7 million. The unreserved fund balance and contingency total $8 million. The
only contingency money reserved is for Budget, which still has a potential $400,000. This money
is encumbered in the current year, so that does not affect these figures.
Mr. Rodriguez approved, seconded by Mr. Stahler, that the budget as presented be
approved. The motion was unanimously approved.
On another subject, Mr. Bullock mentioned the possibility of funding the Small Business
Development Corporation with 4A money, and referenced Lubbock as possibly having done so.
Mr. Berzina clarified that Lubbock does not have the 4A sales tax, but they have taken a 3% tax
levy and put it in an economic fund. Mr. Bullock noted to the Board that this topic may come up
before the Board at some future date.
Mr. Stahler questioned what are the duties of the SBDC Corporation. Mr. Rodriguez
stated it counsels people who want to start a business on how to structure or market the business,
and oftentimes urges individuals not to start the business at all. The Corporation counsels
established businesses, as well. Mr. Bullock noted that Vive Paris is one business aided by the
SBDC.
Mr. Rodriguez commented that Midwestern State University has discussed the possibility
of establishing an engineering program. He feels it is vital to continue the engineering tech
program, but also add the engineering degree program. Mr. Mertens agreed, but also noted that
s
�. Wichita Falls Economic Development Corporation August 24, 2000 Meeting Minutes Page 4 of 4
for Wichita Falls' plants, we must keep our engineering tech program. Mr. Rodriguez
commented that the engineering degree is a rigorous program, and it was explained to him that
the difference is that engineers are "design people," while engineering techs are "apply people,"
with a little less science and math experience.
V. Adjourn
Mr. Clymer moved, seconded by President Shores, that the meeting adjourn. The Board
agreed, The meeting adjourned at 9:11 a.m.
t , 0 2
Linda Merrill, Recording Secretary
Ron Bullock, Secretary- Treasurer