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4A Wichita Falls Economic Development Minutes - 02/23/2015MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION February 23, 2015 PRESENT: Dick Bundy, President § Members Reno Gustafson § Leo Lane § Darron Leiker § Dave Lilley § Glenn Barham, Mayor § Mayor Jim Dockery, Asst. City Manager /CFO § City Staff R. Kinley Hegglund, Jr., City Attorney § John Burrus, Director, Transportation § Linda Merrill, Recording Secretary § Henry Florsheim § Chamber of Commerce and Industry Michael Paris § Kevin Pearson § Bill Brunetta, Plant Manager § Pratt & Whitney Oku Okeke, Operations Manager § Greg Yost, Engineering /Quality Manager § Martin Bohn § Cobra Kai Flight School Uwe Zeizinger § Krystal James § Candidate, City Councilor -at -Large 1. CALL TO ORDER Dick Bundy called the meeting to order at 4:00 p.m. 2. APPROVAL OF MINUTES (JANUARY 23, 2015 and FEBRUARY 13, 2015) Leo Lane moved for approval. Seconded by Reno Gustafson, the motion carried. 3. DISCUSSION OF REQUEST FOR A $140,000 FORGIVABLE LOAN FOR COBRA KAI FLIGHT SCHOOL ( "COBRA KAI ") FOR THE PURCHASE OF A FLIGHT SIMULATOR Martin Bohn of the Cobra Kai Flight School is anticipating a $641,000 expansion to the flight school, and is seeking WFEDC assistance to purchase a Redbird Flight Simulator for $141,000. The terms would be a forgivable loan for five years with 0% interest, the creation of five new jobs, and the retention of 13 jobs throughout the term of the loan. Cobra Kai began in 2012 and is recognized by the FAA as a professional flight school, and is working on obtaining its charter certificate to offer air taxi service to any U.S. location. In the past two years, the company has built a hangar at Kickapoo Airport that houses seven airplanes, and 3,000 square feet of office space, classrooms, and a lounge. His goals for the school are to establish both civilian and military training. He is working to obtain EASA licensing in order to become a professional flight school under European law, as well. Every nation has an initial flight screening program prior to ATP training; many are not happy with the results they are receiving. The money spent paying for flying leased planes last year left very little cash for expansion. Therefore, he purchased another hangar, and is in the process of purchasing four planes, and is requesting financial assistance from the WFEDC for the purchase of the flight simulator. The flight simulator would be helpful to the flight school in many ways: • The cost to operate the simulator is much cheaper than training in actual airplanes. • Simulator training can be used in insurance - recognized workshops. • Intensified flight instructor courses can occur in a simulator. • Civilians may want to have fun in a simulator who may never intend to actually fly an airplane. • This piece of equipment could substitute for up to three airplanes that would not need to be purchased at the present time. The Board members thanked Mr. Bohn for his presentation. 4. DISCUSSION OF REQUEST FOR A $1,815,000 FORGIVABLE LOAN FOR PRATT & WHITNEY CANADA COMPONENT REPAIR WICHITA FALLS ( "PRATT & WHITNEY" )FOR THE PURCHASE OF THREE PIECES OF EQUIPMENT Michael Paris said Pratt & Whitney is planning a $2.9 million expansion at the plant, and is seeking WFEDC assistance in the form of a forgivable loan of $1.8 million. He introduced Plant Manager Bill Brunetta. Mr. Brunetta explained that Pratt & Whitney is in the aircraft engine and component and accessories repair business. The Wichita Falls plant operates in the "hot section" of the engine, where the flame is initiated back to the exhaust. The technology Pratt & Whitney intends to purchase includes the following: I . 3D mapping of parts in need of repair. Cost: $290,000 2. Direct metal laser sintering operation, allowing for application of repair material on the parts in a precise manner and only where necessary. Cost: $1.2 million 3. Interactive machining equipment to look at what was established at the beginning, the defects, and the repairs made. Cost: $325,000. This new technology is present in the large engineering and OEM side of the business, but not practiced in their small engine business size, and would set them up with a massive differentiator for the foreseeable future. Customers will be excited, as parts are currently subjected to thermal processing now, and that can take life off the parts. This new technology pinpoints repairs and does not distress the part nearly as much, and the could survive longer than current repair practices allow. They anticipate full implementation within 15 -16 months after they place the order for the laser. ffl Simultaneous with these technological advances, they intend to redeploy personnel into other new program launches in the factory in order to increase manufacturing hours and drop their line rates, which will make them even more competitive in the market. The Board thanked the gentlemen from Pratt & Whitney for their presentation. 5. EXECUTIVE SESSION Mr. Bundy adjourned the meeting into executive session at 4:39 p.m. pursuant to TEXAS GOVERNMENT CODE §551.087. He closed the executive session and announced the meeting back into regular session at 5:22 p.m. He declared that the subjects described in the certified agenda were deliberated and no further action was taken. 6. ACTION ON COBRA KAI FLIGHT SCHOOL Leo Lane moved that (a) the WFEDC finds that the Cobra Kai FIight School is a career center, as that term is defined in Texas Local Government Code §501.105; (b) the WFEDC agrees to grant to Cobra Kai Flight School a forgivable loan up to $140,000 for the purchase of a Redbird Flight Simulator, with the terms of the loan being five years at 0% interest, with the creation of five new jobs and 13 jobs retained during the term of the loan; (c) the WFEDC authorizes the President of the WFEDC to executed related instruments in a form to be approved by the attorney for the WFEDC; (d) specifically, the WFEDC finds the agreement to be entered into shall include the following three terms: (1) , Cobra Kai will pay for all utilities associated with the flight simulator; (2) Cobra Kai will not be permitted to bring aviation fuel, but it shall be permitted to bring motor fuel, onto Kickapoo Airport; and (3) Cobra Kai shall not remove the simulator from Kickapoo Airport during the term of the loan. Seconded by Dave Lilley, the motion unanimously carried. 7. ACTION ON PRATT & WHITNEY Darron Leiker moved to approve the incentive agreement with Pratt & Whitney for a forgivable loan in an amount up to $1,815,000, for the purchase of three pieces of equipment (31) Measuring Equipment and Software System, Direct Metal Laser Sintering Equipment, and Interactive Machining Equipment), the terms of the loan being seven years, 0% interest, with 170 retained jobs during the term of the loan. Seconded by Reno Gustafson, the motion unanimously carried. S. ADJOURN Mr. Lilley moved that the meeting be adjourned. The meeting was adjourned at 5:25 p. m. Dick Bundy, President