4A Wichita Falls Economic Development Minutes - 07/15/2015MINUTES OF THE
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION
July 15, 2015
PRESENT:
Dick Bundy, President
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Members
Leo Lane
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Darron Leiker
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Dave Lilley
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Glenn Barham, Mayor
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Mayor
Jim Dockery, Asst. City Manager/CFO
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City Staff
R. Kinley Hegglund, Jr., City Attorney
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Linda Merrill, Recording Secretary
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Henry Florsheim
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Chamber of Commerce and Industry
Michael Paris
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Kevin Pearson
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Ann Arnold -Ogden
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Darrell Coleman
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Britt Gourley, Managing Principal
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Crosslake Investment Group
John Buanno, Director/CFO
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Crosslake/Amfuel
Michael Viscosi, President and CEO
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Amfuel
John Ingle, Business Editor
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Times Record News
Stephanie Garland, Anchor/Reporter
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KFDX Channel 3
Joseph Saint, Photographer
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KAUZ Channel 6
Brittany Costello, Reporter
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KAUZ Channel 6
Warren T. Ayres, CFO
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Eagle Oil
Mike Bernhardt
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ABSENT:
Reno Gustafson
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Member
1. CALL TO ORDER
Dick Bundy called the meeting to order at 4:00 p.m.
2. APPROVAL OF MINUTES (APRIL 16, 2015)
Leo Lane moved for approval. Seconded by Darron Leiker, the motion carried.
Jim Dockery provided a financial statement. Sales tax revenues are .84% below this same
time last year. If this trend continues, sales tax revenues could reach only around $3.73 million
for this fiscal year; the adopted budget was $3.798 million. It is hoped that the ending of the
drought will help to rebound those figures to some degree.
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Other Revenues
• Rents from Atco lease - $80,000
• Reimbursements — ad valorem taxes associated with the property Atco leases
• Interest earnings
• Project repayment from travel center loan - $81,000
The Board has an adopted revenue budget of $4.021 million. Mr. Dockery anticipates
revenues coming in slightly under that figure.
Expenditures
• Eagle Rail Car has met the terms of its first agreement and will receive all payments
allocated in its performance agreement. The only item remaining is training through
Vernon College.
• Arrow Manufacturing has met a portion of the terms of its agreement and has
received $118,000 of the $208,000 allocated in its performance agreement.
• Lone Star Milk Products has met the terms of its agreement and will soon receive
payment of $305,000 pursuant to its performance agreement.
• Eagle Rail Car Project has purchased equipment under a second agreement, so the
WFEDC will reimburse the company up to $500,000. The company has yet to go
through the six months' requirement on job creation, but has exceeded expectations
and additional payments will probably be made later this year.
• Cobra Kai has purchased the simulator and received the funds ($140,000) allocated
under its performance agreement.
The Board has $1.4 million in excess revenues through this fiscal year. This increases the
Board's current cash balance to $18.9 million, but the Board reserves over $6 million for various
ongoing projects until they are completed or those encumbrances are released.
The Board has an unreserved fund balance of $12.7 million, and if all expenditures were
exhausted and all anticipated revenues brought in, would end the year with $12.3 million.
3. DISCUSSION AND POSSIBLE ACTION CONCERNING INCENTIVES' TO AMERICAN
FUEL CELL & COATED FABRIC COMPANY (AMFUEL)
Kevin Pearson introduced Michael Viscosi and Britt Gourley of Amfuel. He first began
talking with Mr. Viscosi about this project in August 2013. Mr. Gourley stated he is the
Managing Principal for Crosslake Investment Group. He purchased Amfuel on June 1, 2015; his
i (a) a forgivable loan of $800,000 over a term of 10 years at 0% interest, secured by a purchase money, first security interest in
an autoclave valued at $1.2 million;
(b) said loan to be forgiven on an annual basis provided 280 primary jobs are created and maintained in Wichita Falls;
(c) payment of up to $844,740 for creation of new primary jobs that are created and maintained in Wichita Falls;
(d) the pursuit of a Skills Development Fund Training Grant of $1,200 per new job up to $366,000;
(e) and including making the ate Findings and Allocations and Authorizations and authorizing execution of a
Performance Agreement between the Wichita Falls Economic Development Corporation and said entity and authorizing
the President of the WFEDC to execute related notes, leases, investment agreements, and other documents in a form to be
approved by the attorney for the WFEDC.
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partners are John Buanno, Interim CFO for Amfuel and Mike Viscosi, President and CEO of
Amfuel.
Mr. Gourley said they are excited at this possibility. Wichita Falls is perfectly sized for
their company, and well suited geographically and through its infrastructure.
Mr. Viscosi said Amfuel builds fuel cells, or fuel bladders, that are used in commercial
and military aircraft. They have already hired three mechanical engineer graduates from
Midwestern State University. They are looking at buildings now, and hope to start hiring hourly
employees within two to three months. They anticipate hiring 320 employees in the hourly ranks.
Robinson Helicopter is an exciting growth area. They will perform all the work on those
helicopters here, which will involve retrofitting to install the fuel cell on their aircraft. This will
be a two-year, $12 million project.
Zodiac Aerospace, the previous owner of the company, allowed the truck -mounted tanks
and embankment tank side of the business to atrophy, but they are eager to expand into this area.
It was rumored the opening of the operation in Wichita Falls meant the closure of the
facility in Magnolia, Arkansas. Actually, this plant would be an expansion of the Arkansas
facility. Zodiac Aerospace had announced it would no longer produce fuel cells and was looking
for someone to buy the business; otherwise, it would be shut down. Britt Gourley and a group of
"Wichita Falls Angels" put together a package to buy the company (Amfuel Holdings, LLC)
from Zodiac. Warren Ayres said there are probably 25 investors, from $350,000 down to
$10,000.
It is a $26 million company now; through growth and expansion, they expect to be a $35
to $40 million company in two to three years. The liquid logistics will be equal to or greater than
the fuel cell side of the business within three years.
Mr. Gourley said one of his jobs has been to reassure customers of the continuity of
business and gauge their interest in Amfuel. There is a lot of demand, and the main restraint now
is capacity. Wichita Falls is attractive in that it will allow the company to expand relatively
quickly and provide access to an educated, skilled workforce.
Mr. Bundy said the WFEDC is equally excited about the project. He hopes they have
shown they are anxious to get a business like this, and also thanked Kevin Pearson for his work
on this for the past few years.
4. EXECUTIVE SESSION
Mr. Bundy adjourned the meeting into executive session at 4:35 p.m. pursuant to TEXAS
GOVERNMENT CODE §551.087. He closed the executive session and announced the meeting back
into regular session at 5:12 p.m. He declared that the subjects described in the certified agenda
were deliberated and no further action was taken.
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5. ACTION
Mr. Leiker moved to approve the incentive agreement with Amfuel as outlined in the
WFEDC's agenda notice (and in footnote 1). Seconded by Mr. Lane, the motion carried.
6. ADJOURN
p. M.
Mr. Lilley moved that the meeting be adjourned. The meeting was adjourned at 5:15
Dick Bundy, President