4A Wichita Falls Economic Development Minutes - 12/12/2013 r_,k
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MINUTES OF THE
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION
December 12, 2013
PRESENT:
Gary Shores, President § Members
Dick Bundy, Vice President/Sec.-Treasurer §
Darron Leiker §
Dave Lilley §
Glenn Barham, Mayor § City Council
Kevin Hugman, Assistant City Manager § City Staff
Miles Risley, City Attorney §
Jim Dockery, Assistant City Manager/CFO §
Linda Merrill, Recording Secretary §
Henry Florsheim, President/CEO § Chamber of Commerce & Industry
Kevin Pearson, Executive Vice President, §
Economic Development §
Michael Paris, Vice President, §
Workforce Development §
ABSENT:
Reno Gustafson § Member
1. CALL TO ORDER
President Gary Shores called the meeting to order at 4:05 p.m.
2. APPROVAL OF MINUTES/REPORT OF FINANCIAL CONDITION
Dave Lilley moved for approval of the November 26, 2013 minutes.
Seconded by Dick Bundy, the motion carried.
Kevin Hugman said the financial statement has not changed appreciably since
the Board's last meeting. Mr. Leiker added that the sales tax figures for December
increased 4.3%.
3. CONSIDER CHANGES TO THE EXCALIBUR PAINT & COATINGS RETENTION &
EXPANSION PROJECT
Randy Funston said at the time the Performance Agreement was
executed, the company's gross revenues were $825,000, and employed 5-6
people. After hiring a sales manager in January 2012, revenues increased to
$2.3-2.4 million ($100,000 shy of the Phase 2 revenue requirements) and 15-17
people work for the company. He recently hired a specialized chemist with 35
years' experience.
H:\_legal\4A&4B\4A Corp\4a Minutes\2013\2013.12.12 4a minutes\2013.12.12 4a minutes.doc
WFEDC—Minutes of December 12, 2013 2
He was recently approached again by Pueblo, Colorado, making him an
offer in real property valued at $3.5 million.
He is requesting to be allowed to enter into Phase 2 at this time. The
company's sales are very close to the requirements of Phase 2 ($2.5 million),
and he is seven employees short of the required level. He intends to increase the
employment level on an as-needed basis. Mr. Funston said he would like to also
extend Phase 2's length from 18 to 30 months. Mr. Shores asked if the company
wants the extension in order to reach the employment level. Mr. Funston said
yes, but it won't take nearly that long.
Mr. Funston said he could easily hire seven more employees to meet the
requirement; it would be a cheap investment to gain access to WFEDC funds.
However, he does not conduct business in such a fashion. He is currently trying
to hire three more sales people. It will be three to six months before they start
producing, so the company will experience a negative cash flow during that time.
He believes the company will be sufficiently stable financially at the end of
Phase 2 that it will not require the Phase 3 funding. He suggests that phase be
eliminated, and the Board consider letting the company enter Phase 2 early.
Mr. Bundy asked if the agreement would be rewritten to cap funding at
$1 million. Mr. Risley said an amendment to the agreement would be executed.
Mr. Bundy continued, stating the previously approved open projects would be
reduced to $1 million. Mr. Risley replied that money would go away, anyway, if
the Board did not further extend the agreement.
Mr. Funston said Excalibur has to carry the WFEDC funds on its books as
a contingent liability. After reaching and retaining for two years the first phase of
17 employees, those first-phase monies would be forgiven and written off the
balance sheet. After reaching 34 employees and retaining them for two years,
that phase of money would also be written off.
The company is currently selling its product to Cessna and Weatherford
International, and is in testing with NASA.
Mr. Leiker asked if all patents had been secured. Mr. Funston said the
main one is still open — the water-based paint that contains isocyanate. He does
have the patent for the isocyanate-free paint. It is a very long process.
Mr. Funston thanked the Board for their time.
WFEDC—Minutes of December 12, 2013 3
4. EXECUTIVE SESSION
Mr. Shores adjourned the meeting into executive session at 4:21 p.m. pursuant
to TEXAS GOVERNMENT CODE §§551.071, 551.072, and 551.087. He closed the
executive session and announced the meeting back into regular session at 5:40 p.m.
5. ADJOURN
The meeting adjourned at 5:40 p.m.
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Gary Shores, President