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4A Wichita Falls Economic Development Minutes - 07/19/1999MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION July 19, 1999 Present: Members: Gary Shores, President Ray Clymer, Vice - President Ron Bullock, Secretary- Treasurer Bo Stahler Lou Rodriguez City Staff: Kay Yeager, Mayor Jim Berzina, City Manager Robert Powers, Assistant City Manager Gregory D. Humbach, City Attorney Linda Merrill, Recording Secretary Others Present: Ron Mertens, BCI Tim Chase, BCI Gary Shores called the meeting to order at 8:32 a.m. He then called for approval of the February 8, 1999 minutes. Ray Clymer moved, and Bo Stahler seconded, that the minutes be approved. The members unanimously approved the motion. As not all Board members were present at the beginning of the meeting, the Board opted to postpone Item I, the election of officers, and move on to Item VI of their agenda. This item involved Consideration of an Amendment to the Corporation's Bylaws at Article IV, Section 3(c), Books, Records, Audits. Robert Powers addressed the Board. He stated that Mathis, West Huffines performed the 4A Corporation's audit at a cost of $2,000. This firm also performed the audit of the 4B Corporation, again at a cost of $2,000, as well as the City of Wichita Falls' audit. The auditors recommend the amendment to the bylaws as a cost - saving measure. The audit of the finances of the City of Wichita Falls is required, and within that audit is a component unit which is an audit of the 4A Board. The City's audit also includes an audit for the 4B Board. The amendment to the bylaws would give the Board the option to spend the extra money for a separate audit, for which the Board would have to budget for the cost of the audit. Otherwise, the Board has the option of simply using the 4A component of the larger City of Wichita Falls audit, thereby saving the $2,000 in audit fees. Bo Stahler moved that such amendment to the bylaws be accomplished. Ron Bullock seconded the motion, which was unanimously approved. Wichita Falls Economic Development Corporation July 19, 1999 Meeting Minutes Page 2 of 4 With the entire Board present, President Shores then turned back to Item II, Elect Officers. Bo Stahler commended the current officers for their fine work, and moved that they continue to serve in their present positions, which are as follows: Gary Shores, President; Ray Clymer, Vice - President; and Ron Bullock, Secretary- Treasurer. Lou Rodriguez seconded the motion, and it was approved unanimously. Item IV, Financial Report, was the next topic for discussion. Mr. Powers informed the Board that the sales tax receipts and interest, minus expenditures of the audit and the contract with the BCI, equals approximately $1.6 Million. The sales tax is doing better than anticipated, with an fiscal year -end projection of $2,437,138 in sales tax, plus $100,000 in interest. The Board next discussed Item V, Consider FY 1999 -00 Budget. Mr. Powers stated the beginning fund balance for the upcoming fiscal year is an estimated $4,265,773. The anticipated sales tax receipts and interest earnings amount to $2,627,822. The projected available assets total $6,893,595. The only proposed expenses are for the BCI contract at $89,960, and $30,000 for professional fees, approved mid -year for unanticipated professional expenses. At this point in the budget discussions, President Shores suggested the Board turn its attention to Item VII, Economic Development Update, to accommodate the schedules of BCI visitors, Ron Mertens and Tim Chase. The Board agreed. Mr. Chase lead the discussion by presenting an update on the employment picture. There is a 3 % to 4.2 % unemployment rate, which equates to 2,800 persons unemployed. The total number of people registered with the Texas Workforce Commission is about 5,700. The registration of former Levi's employees is not included in this figure until October. Mr. Chase states that 10% of those employees have found employment. It is difficult to determine what the balance of those employees will do, but some will go back to school, others will wait to act until their compensation plays out, and still others will start their own businesses. Mr. Chase then turned the conversation to bills passed by the Legislature which will affect the community. One bill addressed the franchise tax credit. The franchise tax has a credit against it provided you invest in research and development. This is a statewide credit, and it cannot exceed 50% of your franchise tax liability. Also in that same bill a provision for an investment tax credit, but Wichita Falls does not meet the criteria for this tax credit. Another bill passed by the Legislature dealt specifically with training. The money available in the unemployment compensation pool is decreasing. The allocation granted is the same as last year, $1.8 Million. Anticipated expenditures are 20% below what has been expended historically. The State will not allow expenditures for any jobs that pay less than the county's average, which is $10.60. The skills development fund was to be increased, but it ultimately received the same allocation. This will result in a tightening of the belt. These two pieces of legislation will make job training harder. Language within the 4A statute allows its funds to be used to facilitate training, and to maintain properties. Wichita Falls Economic Development Corporation July 19, 1999 Meeting Minutes Page 3 of 4 The 4B Corporation statute language allows for the ability to own property. the 4A Corporation does not have that capability, or rather, the ability to own property is specifically stated in the 4B Corporation, but the 4A statutory language is silent on this point. On a brighter note, Mr. Chase noted the BCI has received a good number of inquiries this year, and about 25 % have resulted in a site visit. Interest comes from both small and large manufacturers, in addition to telecommunications. One inquiry was from a privately -held company searching for a small community of around 3,000. The company visited Iowa Park, Burkburnett, Henrietta and Seymour. They ultimately chose Oklahoma because the state offered tax credits for jobs of $3 Million over a 10 -year period. The Call Center area has generated interest, as well. Some interested persons will return for a second visit in August. Mr. Chase expects a decision to be made by the end of that month. President Shores questioned the 4A Board's level of commitment. Mr. Chase replied it would be $2,000 per full time job which pays $8 per hour. This company has a base wage, and bonus wages based upon productivity. Jim Berzina questioned how many employees would be needed to meet the $2,000 criteria. Mr. Chase stated they are talking about 200, perhaps 336, but not full -time. President Shores stated the company is considering opening two sites, and they are being urged to open one larger store rather than two stores. Mr. Stahler questioned what size of building would be needed, and Mr. Chase responded they have looked at the Food Lion and K -Mart buildings on the north side of town. Ron Mertens reiterated the BCI's concern over the lack of a competitive edge for training. He bemoaned the fact that state -level incentives are virtually non - existent. Oklahoma will pay 100% of training costs, while Texas will only pay 50%. A starting wage in a manufacturing job will not be $10 or $11 per hour. He stated their first thought was to turn to local funds, but the Legislature put the same restrictions on the use of local funds. He stated that we are still trying to determine what this all means, as far as attraction and expansions. The Board thanked the gentlemen from the BCI and turned again to discussion of the budget. President Shores questioned when the budget is due to be sent to Council. Mr. Powers stated it is due 60 days in advance of October 1, but it is on tomorrow's Council agenda in the event the Board approved the budget today. Bo Stahler moved, and Lou Rodriguez seconded, that the budget be approved and submitted to the Council. There was unanimous approval. Mr. Rodriguez then questioned Mr. Mertens and Mr. Chase if a shortage of manpower was a serious issue. Mr. Chase responded there are a few people who say that. There is a high turnover rate in the first six months. Those employers who have increased the entry -level wage are experiencing less turnover, however. He reported that 77% of the companies sampled have increased entry -level wages for at least one level of workers. Texas Workforce Commission numbers show they are going up 50C to $1 on entry level wages. Mr. Mertens stated it really isn't the quantity of workers, but the quality of workers, that may be in short supply; those employees who will show up for work, pass the drug test, and be trainable. Wichita Falls Economic Development Corporation July 19, 1999 Meeting Minutes Page 4 of 4 President Shores commented on the benefits the 4A sales tax has granted the City to entice businesses and industries to consider and choose Wichita Falls. The meeting adjourned at 9:20 a.m. Recording Secretary &0_�k /_ 9�� Secretary- Treasurer