Res 061-2002 5/21/2002RESOLUTION NO. (o t -
RESOLUTION CERTIFYING COMPLETION OF PHASE 1 OF AN ECONOMIC
DEVELOPMENT INCENTIVE AGREEMENT AND AUTHORIZING PAYMENT
TO CRYOVAC CORPORATION; FINDING AND DETERMINING THAT THE
MEETING AT WHICH THIS RESOLUTION WAS PASSED WAS OPEN TO THE
PUBLIC AS REQUIRED BY LAW.
WHEREAS, Cryovac Corporation has completed phase 1 of an economic
development incentive project as outlined in a Memorandum of Understanding with the
Wichita Falls Economic Development Corporation ( WFEDC); and
WHEREAS, the WFEDC met on May 13, 2002, certified project completion of
phase 1, and has recommended payment to Cryovac in the amount of $276,000.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
SECTION 1. Cryovac has completed the terms of phase 1 of an economic
development incentive program and payment in the amount of $276,000 is approved.
SECTION 2. 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 21St day of May 2002.
ATTEST:
City Clerk
Memorandum of Understanding
November 10, 2000
This is a Memorandum of Understanding (MOU) between Cryovac, Inc. (Cryovac) and the Wichita
Falls Economic Development Corporation ( WFEDC). The purpose of the MOU is to provide detailed
descriptions of each party's intentions as they work to locate a new manufacturing plant. For the
purpose of this MOU, a new job is defined as one that has been in place for a minimum of 6 months
and resulted from the location of a new manufacturing plant at Cryovac's I -44 location in Wichita
Falls, Texas.
I. The use of Section 4(a) Sales Tax proceeds will be contingent on Cryovac completing the
following:
A. During Phase One, which will take place at the I -44 location in Wichita Falls, Texas and is
scheduled to be completed no later than December 31, 2001, Cryovac will;
a) Create 69 new jobs that each pay at least $11.50 per hour before benefits are included.
These jobs are to be in addition to the average base employment at their Iowa Park,
Texas facility.
b) Invest a total of at least $15,000,000.00 in making building improvements at the I -44
location and in the purchase of equipment.
B. In the event Phases Two, Three, and Four are implemented at the 1 -44 location and are
completed prior to December 31, 2002, Cryovac will:
a) Create an additional 32 new jobs during each phase that pay at least $11.50 per hour
before benefits are included.
b) Make additional investments of $6,000,000.00 in equipment for each Phase.
II. The WFEDC will recommend to the Wichita Falls City Council that they approve the use of
Section 4(a) Sales Tax proceeds as described below.
A. As a result of a presentation being made by Cryovac to the WFEDC evidencing the creation of
new jobs and capital investment for Phase One as defined above, a payment of $276,000 will
be made to Cryovac.
B. Subsequent presentations can be made by Cryovac to the WFEDC evidencing the creation of
new jobs and capital investment for Phases Two, Three, and Four as defined above. The
completion of each of these subsequent Phases will result in a payment of $128,000.00 to
Cryovac for each phase completed. If employment and investment levels are less than
projected for Phases Two, Three, and/or Four the WFEDC will renegotiate the payment
amount to reflect the actual employment and /or investment.
III. In addition, if requested by the City, the WFEDC will recommend that the City's portion of
any Sales Tax Refund due Cryovac resulting from an "Enterprise Project" designation by
the Texas Department of Economic Development be paid to Cryovac using 4(a) Sales Tax
proceeds. The City's portion of the Sales and Use tax refund is estimated to be $65,000.
Wichita Falls Economic Cryovac, Inc.
Development Corporation
By: By:
Gary Shores
Chairman
Raymond Youngblood
Vice President of Manufacturing
Cryovac North America
9 C �a ■'�i OVAL 1301 W. Magnolia Ave.
Sealed Air Corporation Iowa Park, TX 76367 -1499
USA
May 7, 2002 DRAFT
Mr. Gary Shores
4 -A Board, Chairman
P. O. Box 1860
Wichita Falls, TX. 76307
Re: Memorandum of Understanding (MOU)
Mr. Shores:
In accordance with the terms of the MOU (Phase 1) between Cryovac and the Wichita Falls
Economic Development Corporation, sales tax proceeds would be contingent upon the following:
1) creation of 69 new jobs that pay at least $11.50 /hr. by year end 2001 and 2) invest a total of at
least $15,000,000 for building improvements and equipment purchases.
Year -end employment numbers reflect an actual headcount of 56, a variance of 13 or 82% of the
agreement. While this was disappointing, there were two specific events that we can assign to
this deficit that was difficult to predict or beyond our control. The market in general did not
mature as rapidly as hoped and overall conditions in the national economy to include the
September 11th tragedy resulted in a far - reaching impact on our business. However, it is
noteworthy that pay rates before benefits for the I -44 location employees is $17.00/hr. and
investment on building improvements and equipment is currently at $18,000,000. Fifty -six (56)
jobs at $17.00/hr are equivalent to 69 jobs at $13.80/hr or 82 jobs at $11.50/hr.
Even though we did not meet the total employment number, we exceeded the investment
objective and the total payroll dollars that go into the local economy. We do remain optimistic
that the national economy will improve and the Case Ready market will continue to grow and
allow us to make further investments in the operation as stated in the MOU. To that end, I
respectfully request a favorable consideration of our case and subsequent disbursement of funds.
Your attention and support on this matter is greatly appreciated.
Sincerely,
Rakesh Malhotra
Plant Manager