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4A Wichita Falls Economic Development Minutes - 08/17/2023 MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION AUGUST 17, 2023 PRESENT: Leo Lane, President § WFEDC Members David Toogood, Vice President § Phyllis Cowling, Secretary-Treasurer § Darron Leiker § Stephen Santellana, Mayor § Mayor& Councilors Paul Menzies, Assistant City Manager § City Administration Blake Jurecek, Assistant City Manager § Kinley Hegglund, City Attorney § Jessica Williams, CFO/Finance Director § Stephen Calvert, Senior Budget Analyst § Terry Floyd, Director of Development Svcs § Chris Horgen, Public Information Officer § Paige Lessor, Executive Legal Assistant § Ron Kitchens, CEO § Wichita Falls Chamber of Commerce Moriah Williams, § Vicki Pratt, § Carol Murray, Candidate for Mayor § ABSENT: § Brent Hillery § WFEDC Member 1. CALL TO ORDER Mr. Lane called the meeting to order at 2:31 p.m. He welcomed everyone and thanked the Mayor for joining the meeting. 2. CONSENT AGENDA a. Approval of Minutes (July 20, 2023) Mr. Lane stated that there were corrections to be made to the minutes and provided the correct amounts for funding in the FY2024 Budget that were noted and approved at the July 20th meeting. He read the correct amounts into the record again as follows: SMAC: $150,000 i.d.e.a.WF: $50,000 DWFD: $126,500 WF Chamber: $1,135,650 plus $72,000 for Sheppard AFB consultant fees Mr. Lane asked if there were any other comments or corrections needed. WFEDC MINUTES 08/17/2023 PAGE 1 OF 4 Hearing none, Mr. Leiker moved to approve the July 20th Minutes as amended. Seconded by Mr. Toogood, the motion carried 4-0. b. Financial Report Mr. Menzies provided a summary of the financial report, highlighting that while sales tax was slowing down, the City was still on track to have the highest revenue ever from sales tax. He mentioned that sales tax revenue was running about 1% above the same time last year. Mr. Lane inquired of Mr. Menzies about the City's current performance compared to other cities, such as Abilene and Tyler, and whether there were signs of a slowdown in revenue among most cities. Mr. Menzies confirmed that sales tax revenue across the state is slowing down. Mr. Menzies stated the Board has approximately $12.5 million in unencumbered funds for new projects in the current year. He further updated the Board about a $60,000 payment to Tryer for employee recruitment and retention that had been approved a couple of years ago. Ms. Cowling moved to approve and accept the financial report as presented. Seconded by Mr. Tooqood, motion carried 4-0. 3. DISCUSSION AND POSSIBLE ACTION RELATED TO THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION'S FY 2024 PROPOSED BUDGET Mr. Menzies clarified that the Chamber's budget number pertained to the calendar year, incorporating a blend of the current year's contract for the last three months and the recently approved contract for the first nine months of the following year, along with an additional $72,000 for the base consultant. Mr. Menzies also mentioned that when reviewing the bottom line on page two of the budget, it might appear lower than the current year's, which was indeed the case. However, he explained that the budget was calculated as of October 1, 2023, and at that point, all known projects were encumbered despite no revenue having been received for the next year. He reminded everyone that is consistent with previous years and that, theoretically, if no new projects were taken on, the bottom line would stand at $16.5 million after adding the anticipated revenue of$6.2 million for the next year. Mr. Toogood asked about the assumption used for the revenue forecast for the upcoming year, to which Mr. Menzies replied that they had assumed a flat sales tax revenue for the next fiscal year. He added that this assumption was in line with the City's general fund forecast for sales tax. Mr. Menzies then highlighted that the only variable of note was interest income, which had seen significant increases in the current year but was expected to decrease due to anticipated Federal Reserve actions regarding interest rates. Mr. Toogood also inquired about the nature of the investments generating interest income. Ms. Williams explained that the interest was earned on pooled funds in short-term liquid investments, with a typical duration of 24 hours. Ms. Cowling commented that currently, those investments probably yielded the best return, around 5%. But everyone agreed those rates would move with the market. Mr. Lane asked if there were any further questions or comments about the budget. Hearing none, Ms. Cowling moved to approve the WFEDC's FY2024 Budget. Seconded by Mr. Leiker, the motion carried 4-0. WFEDC MINUTES 08/17/2023 PAGE 2 OF 4 4. DISCUSSION AND POSSIBLE ACTION RELATED TO AUTHORIZING BOARD PRESIDENT TO EXECUTE AN AMENDMENT TO THE CONTRACT WITH PANDA BIOTECH, LLC, REGARDING CONTRACT TERM DATE Mr. Kitchens began the discussion by addressing the proposed amendment to the contract with Panda Biotech. He outlined two key issues. Firstly, Panda Biotech's original agreement had anticipated hiring starting two years ago, but due to the impact of COVID-19 and other delays, they could not meet this timeline, Therefore, they requested to extend the agreement by three years while maintaining the same terms. The construction is progressing well, with cranes installing trusses and equipment being rapidly installed, including electrical and ventilation systems. There is some variation in the expected completion date, with one source mentioning October 15t and another suggesting November 1st An open house showcasing the production lines is planned for the near future. Mr. Kitchens stated that the company has hired eight full-time employees who are actively working on building and developing the systems as planned. They are making progress in line with their previous commitments. However, they've encountered unexpected costs related to improving the rail line, initially estimated at $150,000 but now projected to cost around $500,000. The company has requested a pricing adjustment for this, and discussions are ongoing regarding a potential shared cost increase. Additionally, there have been interpretation issues with their four agreements, including the original agreement and two subsequent follow-on agreements. To ensure clarity on the terms and agreements, the Chamber has engaged an economic development incentive specialist, who is also a lawyer based in Austin. This specialist is working on summarizing all the terms into a concise document, although it may not be just one page due to its complexity. The goal is to have a clear and accurate document in about a week. It is recommended that if the Board is interested in changing the terms, especially regarding job hiring, a special meeting could be arranged to approve the contract. The company is eager to move quickly, given its ongoing hiring efforts. Also, the Chamber has asked that the company's representatives be present at the city council meeting when discussing any changes to the agreement. Mr. Lane asked for clarification as to whether the contract terms would be renegotiated at this time. Mr. Kitchens explained that they intend to renegotiate but need feedback before finalizing a document for approval. The idea is to take it in two steps: first, authorize extending the contract's end date by three years, and then repackage and clarify the agreements in a new document. Mr. Kitchens additionally confirmed that they will come back with one comprehensive new agreement addressing various issues, including the railroad matter and payment schedules on the loan. Mr. Kitchens then reiterated the need for the company's management from the company to address the City Council and provide updates on their facility. Mr. Kitchens confirmed with Ms. Cowling that the Chamber is not asking for any formal action at this time, only guidance and direction from the Board on the new document and the rail issue. Mr. Hegglund confirmed the process, indicating that the Board could discuss it in the executive session and provide guidance on extending the contract and addressing the rail cost increase. A new agreement would be drafted, encompassing all the terms and any changes, which would be presented to the Board for approval at a later date. Mr. Lane inquired about whether the new document would be an addendum, amendment, or a new agreement. Mr. Kitchens clarified that it would be a restatement of the terms, providing clarity and a point of understanding for both parties moving forward. Ms. Cowling sought clarification on whether the new document would supersede the existing ones. Mr. Kitchens explained that it wouldn't invalidate the existing agreements but would WFEDC MINUTES 08/17/2023 PAGE 3 OF 4 serve as a point of agreement on current terms. No further questions were asked or comments made. 5. EXECUTIVE SESSION Mr. Lane adjourned the meeting into executive session at 2:51 p.m. pursuant to Texas Government Code §§§ 551.087, 551,071, and 551.074. He announced the meeting back into regular session at 3:42 p.m. The subjects posted in the Notice of Meeting were deliberated, and no votes or further actions were taken on the items in executive session. 6. ADJOURNED. Mr. Lane asked for any questions or comments from the public. Being none, he adjourned the meeting at 3:43 p.m. Leo Lane, President WFEDC MINUTES 08/17/2023 PAGE 4 OF 4