Loading...
Res 021-2001 3/20/2001RESOLUTION NO. RESOLUTION AUTHORIZING AN ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT WITH WICHITA FALLS REFURBISHMENT AS RECOMMENDED BY THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION AND APPROVING AN AMENDMENT TO THE CORPORATION'S FY 2000 -2001 BUDGET; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS RESOLUTION WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW. WHEREAS, On March 5, 2001, the 4A Corporation Board of Directors met to consider a memorandum of understanding with Wichita Falls Refurbishment (WFR) to expand operations in Wichita Falls; and WHEREAS, WFR proposes to create a minimum of twelve new jobs and make a minimum investment of $500,000 in order to expand operations in Wichita Falls; and WHEREAS, The 4A Board recommends approval of the proposed MOU, a copy of which is attached hereto. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: SECTION 1. An economic development incentive agreement with Wichita Falls Refurbishment, dated March 5, 2001, a copy of which is attached hereto, as recommended by the Wichita Falls Economic Development Corporation, is hereby approved. SECTION 2. The FY 2000 -2001 Budget of the Wichita Falls Economic Development Corporation is hereby amended in the amount of $186,200 for the economic development incentive agreement with Wichita Falls Refurbishment dated March 5, 2001. SECTION 4. It is hereby officially found and determined that the meeting at which this resolution was passed was open to the public as required by law. PASSED AND APPROVED this the 201h day of March 2001. ATTEST: CA City Clerk &"' X1�� ��/ / MAYOR f i i21r,;�i r? L Memorandum of Understanding March 5, 2001 This is a Memorandum of Understanding (MOU) between Wichita Falls Refurbishment (WFR) and the Wichita Falls Economic Development Corporation (WFEDC). The purpose of the MOU is to provide details of the respective party's intentions as they work toward establishing a new production line to assemble, maintain and/or repair industrial gas turbine engines (IGTE) in Wichita Falls, Texas. * For the purpose of this MOU, a new job is defined as one that is located in Wichita Falls, Texas; has been in place for a minimum of 6 months, paving a minimum of $12.00 per hour excluding overtime and benefits; and is a result of the addition of the new IGTE pro* ect. I. As part of establishing a new industrial gas turbine engine assembly, maintenance, and/or repair facility and the renovation of existing facilities in Wichita Falls, Texas, Wichita Falls Refurbishment will: A. Create between 12 and 49 new jobs related to the IGTE project that are separate from the jobs related to their existing business operations. B. Make investments of at least $1.3 million including building renovations, equipment purchases, and the possible installation of a test bench for the ST5 unit. C. Complete these improvements and job creation no later than December 31, 2006. D. Facilitate a meeting between the BCI and representatives from companies that might benefit from co- locating with WFR to discuss the potential for additional job creation and investment in Wichita Falls. E. Assist WFEDC in their efforts to secure incentives on behalf of WFR. Memorandum of Understanding Wichita Falls Economic Development Corporation — Wichita Falls Refurbishment Page 2 of 3 II. In an effort to encourage this project to be completed in Wichita Falls, the WFEDC will recommend to the Wichita Falls City Council that they approve the use of Section 4A Sales Tax proceeds as described below. A. Resulting from a presentation by WFR to the WFEDC evidencing the creation of 12 new jobs* and that at least $500,000.00 has been invested, the following scale will be used to calculate a payment by the WFEDC to WFR: Hourly Wages Payment Per Job $12.00 $3,000 $15.00 $4,000 $18.00 $5,000 B. Resulting from a presentation by WFR to the WFEDC evidencing the creation of an additional 5 new jobs* bringing the total new jobs* created to 17, the above mentioned Payment Per Job scale will be used to calculate a second payment by the WFEDC to WFR. The payment will be the sum of the five additional new jobs multiplied by the appropriate Payments Per Job. C. Subsequent presentations can be made by WFR to the WFEDC through December 31, 2006 and they will result in similar payments being made according to the same Payment Per Job scale for each additional new job above 17, until a maximum of 49 jobs* have been created. D. For each newly created position resulting from the IGTE project that earns between $50,000.00 and $100,000.00 per year, excluding overtime and benefits and that has been in place for a minimum of 6 months, an additional one -time payment of 5% of that position's annual salary will be paid. E. Following the same frequency as outlined above, a payment of $800.00 will be made for each job* that receives training not to exceed 49 trainees. This benefit is designed to supplement reimbursements from state training grants. III. Both parties acknowledge that the size and scope of this project could grow significantly if WFR, in partnership with other companies, establishes a test bench for the ST5 unit in Wichita Falls, Texas. To encourage the establishment of this test bench, the WFEDC will recommend to the Wichita Falls City Council that they approve the use of Section 4A Sales Tax proceeds in the following manner: 0, f Memorandum of Understanding Wichita Falls Economic Development Corporation — Wichita Falls Refurbishment Page 3 of 3 III. (cont'd) A. An additional payment of $1,000 per new job* created, not to exceed $175,000, will be paid to WFR. This per job incentive will be calculated using all jobs* created by WFR and their partner companies on the ST5 project beginning as early as March 1, 2001 and continuing through December 31, 2006. B. The first reconciliation and payment for this incentive will be made after the test bench becomes operational in Wichita Falls. C. Subsequent payments will be made each time WFR makes a presentation to the WFEDC evidencing that at least 5 additional jobs* have been created since the preceding reconciliation. D. No later than December 31, 2006, a final reconciliation will be made. The formula for this reconciliation will be as follows: The total number of jobs* - - not to exceed 175 -- resulting from the IGTE project that are in place on 12/31/06 multiplied by $1,000 minus all previous $1,000 per job payments. A positive number will represent the final amount to be paid to WFR by the WFEDC. A negative number will represent a refund to be paid to the WFEDC by WFR. IV It is understood that WFR's entrance into industrial gas turbine engine assembly may lead to the assembly of generators and associated equipment in Wichita Falls and may result in substantial growth beyond the 49 jobs referenced in this agreement. It is the intention of the WFEDC to encourage such future growth through the renegotiation or the extension of term in this agreement. Wichita Falls Economic Development Corporation AI B G Shores Chairman Wichita Falls Refurbishment mac_